Gesualdi et al v. Laws Construction Corp.

Filing 55

OPINION & ORDER: Summary judgment is granted against the defendant on the plaintiffs' remaining claims. The plaintiffs shall submit a proposed judgment and any renewed application for fees no later than December 14. (Signed by Judge Denise L. Cote on 12/5/2012) (ft)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------X
THOMAS GESUALDI, LOUIS BISIGNANO,
:
ANTHONY PIROZZI, DOMINICK MARROCCO,
:
ANTHONY D’AQUILA, FRANK FINKEL, JOSEPH :
FERRARA, MARC HERBST, THOMAS PIALI, and :
DENISE RICHARDSON, as Trustees and
:
fiduciaries of Local 282 Welfare,
:
Pension Annuity, Job Training and
:
Vacation and Sick Leave Trust Funds,
:
:
Plaintiffs,
:
-v:
:
LAWS CONSTRUCTION CORP.,
:
:
Defendant.
:
----------------------------------------X

09 Civ. 1067 (DLC)
OPINION & ORDER

Appearances:
For the plaintiffs:
James Robert Grisi
Trivella & Forte, LLP
1311 Mamaroneck Avenue, Suite 170
White Plains, NY 10605
For the defendant:
Paul T. Vink
Andrew Greene & Associates, P.C.
202 Mamaroneck Avenue
White Plains, NY 10601

DENISE COTE, District Judge:
This is an action under the Employee Retirement Income
Security Act (“ERISA”), 29 U.S.C. §§ 1001 et seq., in which
certain union benefit funds (the “Funds”), through their
trustees, seek to recover unpaid contributions allegedly owed by
defendant Laws Construction Corp. (“Laws”), a general

contractor.

The Funds’ claim is predicated on a collective

bargaining agreement (“CBA”) between Laws and Local 282 of the
International Brotherhood of the Teamsters.

As relevant here,

the Funds allege that Laws employed a non-union subcontractor,
Jo-Di Trucking, Inc. (“Jo-Di”), whose employees were not
appropriately compensated under the CBA.
In an Opinion and Order of December 22, 2010, summary
judgment was entered against the defendant on all of the
plaintiffs’ claims (the “December 22 Order”).

On June 4, 2012,

the Second Circuit issued a summary order vacating in part the
December 22 Order and remanding the case to this Court for
further proceedings.

See Gesualdi v. Laws Const. Corp., ---

Fed. Appx. ---, 2012 WL 1970454 (2d Cir. June 4, 2012).

Once

jurisdiction was restored to this Court, the defendant was
afforded the opportunity to take additional discovery and show
cause why summary judgment should not again be entered for the
plaintiffs.

Having considered the defendant’s submission and a

responsive filing by the plaintiffs, the Court concludes, for
the reasons that follow, that the plaintiffs are entitled to
summary judgment.

BACKGROUND
This Court has already issued two Opinions in this
litigation.

See 759 F. Supp. 2d 432 (S.D.N.Y. 2010); 759 F.

2

Supp. 2d 447 (S.D.N.Y. 2011).

Familiarity with those Opinions

is assumed; only those facts necessary to explain the present
decision are recited below.
As noted, the plaintiffs assert that Laws failed to make
required benefit plan contributions in connection with its
employment of a trucking subcontractor, Jo-Di.

Two provisions

of the CBA are relevant to this claim.
First, Section 6(D) of the CBA prohibits “the Employer,”
here Laws, from hiring outside trucks or equipment “unless all
[its] available suitable trucks and equipment are in use.”

If

that is the case, the Employer must “hire only from truck or
equipment suppliers whose drivers receive wages, working
conditions, benefits and standards of employment no less
favorable than those” applicable to union labor (the “No Less
Favorable Clause”).
Second, Section 7 of the CBA specifically addresses
subcontracting and provides:

In the event that any subcontractor, or subcontractor
of a subcontractor, fails to pay the wages required by
this Agreement, or to make contributions to the Local
282 Welfare, Pension, Annuity & Job Training Funds
. . . , as required by this Agreement, and if the
Union, by an Officer, by written notice with report of
delivery, notifies the Employer that a truck or
equipment supplier is not complying, the Employer
shall be responsible for such non-compliance for the
period only beginning two (2) working days after the
day of receipt of such notice.

3

In order to enforce the No Less Favorable Clause and
Section 7’s imposition on the Employer of vicarious liability
for non-compliance, the CBA requires that, if an employer hires
outside trucks or equipment, it must notify the Union on a
weekly basis of the “identity and address of the truck or
equipment supplier, the number of trucks supplied and the hours
of work involved for each truck.”

In addition, for any

subcontract work, the Employer must submit to the Union “monthly
reports of all hours worked for each Employee, in all
classifications covered by [the CBA], whether that work is
performed by an Employee of the Employer or an Employee of a
subcontractor, or any subcontractor of a subcontractor.”
The CBA specifies procedures for handling “any dispute as
to the existence or amount of any delinquency resulting from a
truck or equipment supplier’s non-compliance” and provides that
“the Employer and/or Contractor, and truck or equipment supplier
may be held jointly and severally liable and may have to pay to
the person or funds entitled thereto the amount of any
delinquency arising after” the Employer has been given notice of
non-compliance.
Laws has never disputed that it failed to make the
reporting required by the CBA regarding its use of Jo-Di.

Nor

has it disputed the plaintiffs’ contention that Jo-Di did not
make contributions to the Funds for its employees.

4

In light of

these concessions and reading Section 6(D)’s reference to
“benefits . . . no less favorable” to require plan contributions
on behalf of Jo-Di employees, this Court entered summary
judgment for the plaintiffs on December 22, 2010.

The same

Opinion and Order granted the plaintiffs summary judgment on
their claim that Laws failed to contribute to the Funds for
certain hours worked by its own employees.
In its June 4 Order, the Court of Appeals disagreed with
this Court’s reading of Section 6(D):

It is not clear from Section 6(D) . . . that the only
way for Laws to fulfill that commitment is to
contribute to the Funds. . . . It appears that Laws
would be in compliance with Section 6(D) if the
company it retained: directly provided its employees
conforming wages, conditions and benefits; contributed
to other funds similar to the Fund on its employees’
behalf; paid its employees a lump-sum at least equal
to the value of the contribution to the Funds for
Laws’s employees; or provided at least equal wages,
conditions, and benefits some other way.
Gesualdi v. Laws Const. Corp., 2012 WL 1970454, at *2.

Given

its view that the CBA did not “clearly and unambiguously
obligate Laws to contribute to the Funds for hours worked by JoDi,” the court concluded that the record as it then existed did
not permit entry of summary judgment.

Accordingly, it vacated

that portion of the December 22 Order that entered summary
judgment against Laws for violating the CBA with respect to JoDi employees and remanded the case for further proceedings.

5

Following the Second Circuit’s decision and restoration of
jurisdiction to this Court, a conference was held with the
parties on July 27, 2012.

Laws was permitted to take additional

discovery in an effort to establish that Jo-Di employees were
compensated in accordance with the terms of the CBA as
interpreted by the Court of Appeals.

With the benefit of any

additional discovery it might take, Laws was ordered to show
cause why summary judgment should not be entered for the
plaintiffs.

On October 12, Laws filed a seven-page

“Supplemental Declaration in Opposition to Motion for Summary
Judgment.”

The plaintiffs responded with a four-page submission

on October 26.

DISCUSSION
Summary judgment may not be granted unless all of the
submissions taken together “show that there is no genuine issue
as to any material fact and that the movant is entitled to
judgment as a matter of law.”

Fed. R. Civ. P. 56(c).

The

moving party bears the burden of demonstrating the absence of a
material factual question, and in making this determination, the
court must view all facts “in the light most favorable” to the
nonmoving party.

Celotex Corp. v. Catrett, 477 U.S. 317, 323

(1986); see also Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d
Cir. 2008).

6

In vacating the December 22 Order, the Court of Appeals
concluded that the CBA’s No Less Favorable Clause was ambiguous
and thus, even with the concession that Jo-Di made no
contributions to the Funds, a potential factual dispute existed
as to whether Jo-Di and Laws breached the CBA.

Nonetheless, the

Second Circuit did not question the conclusion of the December
22 Order that the burden of any uncertainty with regard to
whether Jo-Di employees were properly compensated should fall on
Laws, due to its admitted failure to make the reporting
regarding outside truck and subcontractor usage required by CBA.
See Gesualdi, 759 F. Supp. 2d at 443; Brown v. C. Volante Corp.,
194 F.3d 351, 357 (2d Cir. 1999).

In the prior Opinion, this

conclusion led to the rejection of defendant’s argument that, in
order to obtain summary judgment, the plaintiffs were required
to “identify each Jo-Di employee by name” and make a showing
with respect to each that no contribution to the Funds was made
on his behalf.

759 F. Supp. 2d at 443.

As was explained there,

[i]t being Laws's failure to notify the Union of the
work performed by Jo–Di that made verification
impossible, the burden of demonstrating that Jo–Di
employees were appropriately compensated or that all
appropriate benefits were paid on their behalf may not
be placed on the Union or the Benefit Funds.
Id.

Put differently, Laws’s failure to make the required

reporting, combined with an auditor’s assessment that Jo-Di had
not contributed to the Funds, raised a presumption that the CBA

7

was violated and shifted the burden of production to Laws to
come forward with evidence tending to show that Jo-Di employees
were appropriately compensated.

Cf. Anderson v. Mt. Clemens

Pottery Co., 328 U.S. 680 (1946) (adopting, in suits under the
Fair Labor Standards Act, a similar burden-shifting rule for
employer record-keeping failures).
That approach is no less appropriate in the wake of the
Second Circuit’s ruling that Laws may point to a broader
category of facts in order to raise a factual dispute as to
whether “all appropriate benefits were paid” where Jo-Di
employees were concerned.

The purpose of affording Laws the

opportunity on remand to take additional discovery was to enable
it to make such a showing, if possible.

Laws’s October 12

submission is not supported by a single scrap of new evidence,
however.

Rather, the submission consists entirely of legal

arguments that, as explained below, are meritless.

Thus, based

on the evidentiary record before the Court, there is no dispute
that Jo-Di employees were not compensated in accordance with the
CBA.
As noted, rather than take advantage of the opportunity to
present new evidence, Laws uses its October 12 submission to
make two legal arguments, both of which are unavailing.

First,

Laws argues that the Funds lack standing to assert the claims at
issue because, “[t]he Fund does not have the right to recover,

8

on its own behalf, contributions for work performed by non-union
subcontractor employees.”

As explained above, however, the CBA

assigns the Funds an active role in policing compliance with the
No Less Favorable Clause and explicitly envisions that they may
be entitled to recover any delinquency arising from the
Employer’s use of non-union labor.
Laws’s remaining argument is that the Second Circuit’s
summary order requires that the claims against it stemming from
the Jo-Di employees be dismissed.

There is no indication on the

face of the order that this is so, however.

Indeed, had the

appellate court concluded that the plaintiffs’ claims could not
succeed as a matter of law, it would have reversed this Court’s
judgment rather than vacating and remanding.

See John O.

Newman, Decretal Language: Last Words of an Appellate Opinion,
70 Brook. L. Rev. 727 (2005) (observing that there is “virtual
unanimity” that when “the appellate ruling orders the complete
opposite of what the district court has ruled . . . the decretal
language should include the word “reversed”).

Noting that the

Court of Appeals found the No Less Favorable Clause ambiguous,
Laws asserts that “[t]he law is clear that where the CBA does
not unambiguously create a contractual obligation to contribute,
the defendant is entitled to dismissal of those claims.”

But it

cites no controlling authority for this proposition, and the
cases that it does cite are inapposite.

9

CONCLUSION
Summary judgment is granted against the defendant on the
plaintiffs' remaining claims.

The plaintiffs shall submit a

proposed judgment and any renewed application for fees no later
than December 14.

SO ORDERED:
New York, New York
Dated:
December 5, 2012

United

10

Judge