CARPENTERS COMBINED FUNDS, INC. v. LUCCI et al
OPINION AND ORDER denying 39 Motion for Summary Judgment. Signed by Chief Magistrate Judge Maureen P. Kelly on 9/13/17. (bb)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
CARPENTERS COMBINED FUND,
INC., by James R. Klein, Administrator,
JOHN LUCCI, and THOMAS VELOTTA, )
Civil Action No. 13-1287
LABORERS’ COMBINED FUNDS OF
JOHN LUCCI, and THOMAS VELOTTA, )
Civil Action No. 13-1288
OPINION AND ORDER
KELLY, Chief Magistrate Judge1
Plaintiff Carpenters Combined Funds, Inc. (“the Carpenters Fund”) and Plaintiff
Laborers’ Combined Funds of Western Pennsylvania (“the Laborers Fund”) (collectively
“Plaintiffs” or “the Funds”) filed these related actions against John Lucci (“Lucci”) and Thomas
Velotta (“Velotta”) for recovery of certain unpaid fringe benefit contributions and related
interest, liquidated damages and attorneys’ fees pursuant to the Employee Retirement Income
Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq.
In accordance with the provisions of 28 U.S.C. § 636(c)(1), the parties have voluntarily consented to have a United
States Magistrate Judge conduct proceedings in this case, including the entry of a final judgment. (ECF Nos. 18, 19).
Presently before the Court are the Motions for Summary Judgment against Defendant
Velotta filed by Plaintiffs. ECF No. 39.2 For the following reasons, both motions will be denied.
The Carpenters Fund Action
The Carpenters Fund brought its action at Civil Action No. 13-1287 under ERISA for
fringe benefit contributions related to work performed by carpenters during the period from 2012
to 2013, which all were due and owing to the Carpenters Fund by Concrete Restoration Services,
LLC (“CRS” or “Concrete Restoration Services”) by virtue of a collective bargaining agreement
(“CBA”) and trust agreements incorporated therein. See C.A. No. 13-1287: ECF No. 3
(generally) and ¶ 3. The Carpenters Fund seeks to hold Velotta liable under ERISA, alleging that
he was an ERISA fiduciary during the relevant time period regarding the fringe benefit payments
The Laborers Fund Action
Plaintiff Laborers Fund brought essentially the same action at Civil Action No. 13-12883
under ERISA for fringe benefit contributions related to work performed by Laborers for CRS
between 2012 and 2013. See C.A. No. 13-1288: ECF No. 3 (generally) and ¶ 16. As the
principal payments regarding the laborers’ work have been paid and are no longer outstanding,
the Laborers Fund now only seeks to hold Velotta liable under ERISA for payment of the
remaining unpaid liquidated damages, interest, and attorneys’ fees. See ECF No. 42-1 (Affidavit
of Botsford, Administrator Laborers Fund).
The filings relative to summary judgment in these related matters are virtually identical and are filed at the same
docket numbers. Thus, the Court’s reference to a particular docket number pertains to both cases.
The only differences between the two cases are the names of the plaintiff administrators, the names of the funds,
and the amounts due and owing.
Plaintiffs also brings a state law claim for conversion at Count II seeking recovery for
amounts they claim were withheld from workers’ wages for union dues and legislative funds
(“political action committee” or “PAC” contributions) but not remitted to the Funds. See ECF
No. 3, ¶¶ 19-25.
Both of these matters were stayed until February 26, 2015 at the request of Plaintiffs.
ECF Nos. 28, 29. On April 8, 2016, counsel for Velotta filed a motion to withdraw as counsel in
both cases, which the Court granted. ECF No. 34, 35. Velotta has since been proceeding pro
Motions for Summary Judgment
On January 9, 2017, Plaintiffs each filed a Motion for Summary Judgment against
Velotta with Brief in Support, ECF Nos. 39, 40,4 arguing that they are entitled to summary
judgment on the ERISA claim against Velotta for breach of fiduciary duty based on the
contention that Velotta was a fiduciary under ERISA either by virtue of his position at CRS, or
alternatively, under a theory that Velotta Company and CRS constituted a “single employer” and
Velotta would be liable with respect to Fund assets representing the work performed by laborers
and contractors for CRS by virtue of his position at Velotta Company. Plaintiffs’ Motions do not
mention Count II, although that count is briefly addressed in the supporting briefs. Plaintiffs
filed Concise Statements of Material Facts in support of their Motions, ECF No. 41, with
separate Appendices. ECF No. 42. On January 30, 2017, Velotta filed Responses in Opposition,
ECF No. 44, disputing certain of the Material Facts asserted by Plaintiffs, namely: 1) that Velotta
is a personally liable “fiduciary” under ERISA during the relevant time period for which the
On July 5, 2016, the Carpenters Fund and Lucci jointly filed a consent judgment in C.A. No. 13-1287, which the
Court entered by order July 6, 2016. ECF Nos. 37, 38. Similarly, on July 11, 2016, the Laborers Fund and Lucci
jointly filed a consent judgment in C.A. No. 13-1288, which the Court entered by order July 12, 2016. ECF Nos. 37,
Funds seek payment, as Velotta contends he was not an officer or employee of CRS during the
relevant time period and thus did not then have authority or control over CRS payments to the
Funds; and 2) that Velotta Company is a “single employer” with CRS, as Velotta maintains the
two were maintained as separate legal entities. In opposition, Velotta relies on the record as
contained within Plaintiffs’ Appendices. On February 13, 2017, Plaintiffs filed replies in support
of their motions for summary judgment, ECF No. 45, arguing that because the pro se defendant
failed to file a separate response to each of their Concise Statement of Material Fact as required
by the rules, the stated facts should be deemed admitted. Velotta responded with motions to
strike the replies as untimely, ECF No. 47, which the Court denied. ECF No. 52. Plaintiffs’
motions for summary judgment are now ripe for resolution.
STANDARD ON SUMMARY JUDGMENT
In deciding a summary judgment motion under Federal Rule of Civil Procedure 56, a
court must view the facts in the light most favorable to the nonmoving party and must draw all
reasonable inferences, and resolve all doubts in favor of the nonmoving party. Matreale v. New
Jersey Dep’t of Military & Veterans Affairs, 487 F.3d 150, 152 (3d Cir. 2007); Woodside v. Sch.
Dist. of Phila. Bd. of Educ., 248 F.3d 129, 130 (3d Cir. 2001). Rule 56 specifically provides
that: “[t]he court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). Thus, summary judgment is warranted where, “after adequate time for
discovery and upon motion . . . a party . . . fails to make a showing sufficient to establish the
existence of an element essential to that party's case, and on which that party will bear the burden
of proof at trial.” Marten v. Godwin, 499 F.3d 290, 295 (3d Cir. 2007) (quoting Celotex Corp. v.
Catrett, 477 U.S. 317, 322-23 (1986)).
A disputed fact is “material” if proof of its existence or nonexistence would affect the
outcome of the case under applicable substantive law. Anderson v. Liberty Lobby, 477 U.S.
242, 248 (1986); Gray v. York Newspapers, Inc., 957 F.2d 1070, 1078 (3d Cir. 1992). An issue
of material fact is “genuine” if the evidence is such that a reasonable jury could return a verdict
for the nonmoving party. Anderson, 477 U.S. at 257; Brenner v. Local 514, United Brotherhood
of Carpenters and Joiners of America, 927 F.2d 1283, 1287-88 (3d Cir. 1991). When
determining whether there is a genuine issue of material fact, the court must view the facts and
all reasonable inferences in favor of the nonmoving party. EEOC v. Allstate Ins., 778 F.3d 444,
448 (3d Cir. 2015).
Ordinarily, the movant bears the initial burden of demonstrating that there is an absence
of evidence to support the non-moving party=s case. Celotex Corp. v. Catrett, 477 U.S. at 322.
See Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 140 (3d Cir. 2004). “W]hen the
moving party has carried its burden under Rule 56(c), its opponent must do more than simply
show that there is some metaphysical doubt as to the material facts . . . . Where the record taken
as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no
genuine issue for trial.” Scott v. Harris, 550 U.S. 372, 380 (2007) (quoting Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)). If the nonmoving party bears
the burden of proof at trial and fails to make a sufficient showing on any essential element of its
case, the moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323.
Where, as here, however, the moving parties -- Plaintiffs -- bear the burden of proof on
each element of their claims, succeeding on their motions for “affirmative” summary judgment
can prove a more difficult but not insurmountable task because Athe standard is more stringent.@
Nat’l State Bank v. Fed. Reserve Bank, 979 F.2d 1579, 1582 (3d Cir. 1992). The moving
[b]ear the burden of proof on [their ERISA and conversion claims]. “After all,
the burden of proof includes the obligation to persuade the factfinder that one's
propositions of fact are indeed true. Thus, if there is a chance that a reasonable
factfinder would not accept a moving party's necessary propositions of fact, pretrial judgment cannot be granted. Specious objections will not, of course, defeat a
motion for summary judgment, but real questions about credibility, gaps in the
evidence, and doubts as to the sufficiency of the movant's proof, will.”
Wallace v. Nat’l Indem. of Mid-Am., No. 14-1253, 2016 WL 6948781, at *3 n.2 (W.D. Pa. July
8, 2016) (quoting El v. Se. Pa. Transp. Auth. (SEPTA), 479 F.3d 232, 238 (3d Cir. 2007)).
Plaintiffs must convince the Court that they have met this exacting standard on every essential
element of their claims. As the United States Court of Appeals for the Third Circuit further
explained in Nat’l State Bank, Awhere the movant bears the burden of proof at trial and the
motion does not establish the absence of a genuine factual issue, the district court should deny
summary judgment even if no opposing evidentiary matter is presented.@ 979 F.2d at 1582
(emphasis added) (citing Resolution Tr. Corp. v. Gill, 960 F.2d 336, 340 (3d Cir. 1992)).
FACTS RELATIVE TO MOTIONS FOR SUMMARY JUDGMENT5
Response to Plaintiffs’ Concise Statement of Facts
At the outset, the Court must address the application of the Local Rules of this Court and
Plaintiffs’ argument that the Concise Statement of Material Facts, ECF No. 41, to which Velotta
did not separately respond, is deemed admitted in all respects. ECF No. 45.
Local Civil Rule 56, sets forth the requirements for filings in summary judgment
motions. Local Civil Rule 56.B.1 requires the movant to file a separate concise statement of
material facts citing “to a particular pleading, deposition, answer to interrogatory, admission on
The facts are taken from the undisputed evidence of record, including Plaintiffs’ Concise Statements of Material
Facts as supported by the record, evidence not properly disputed on the record, and the disputed evidence of record
viewed in the light most favorable to Velotta, the nonmoving party. See Anderson, 477 U.S. at 255.
file or other part of the record supporting the party’s statement, acceptance, or denial of the
material fact.” LCvR 56.B.1. In response, the opposing party is required to provide a separately
filed concise statement admitting or denying the facts in the moving party’s concise statement,
LCvR 56.C.1.a, setting forth the basis for a denial of the moving party’s concise statement with
reference to the record, LCvR 56.C.1.b, and providing any additional material facts that are
necessary for the court’s ruling on the motion. LCvR 56.C.1.c. Finally, Local Civil Rule 56.E
provides that facts asserted as undisputed by either party “will for the purpose of deciding the
motion for summary judgment be deemed admitted unless specifically denied or otherwise
controverted by a separate concise statement of the opposing party.” LCvR 56.E.
Although Velotta, proceeding pro se, did not provide a separate responsive Concise
Statement of Facts as required by Local Rule 56.C.1, he did specifically indicate certain facts he
vehemently disputes with citations to evidence in the record in his responsive briefs.
Considering the admonition of the United States Court of Appeals for the Third Circuit in
Nat’l Bank regarding the standard on movants’ motions, the Court will consider as contested the
specifically challenged facts by Velotta where they are adequately supported by the record. The
remaining statement of facts proffered by Plaintiffs, to the extent they are adequately supported
by the record as required by Local Civil Rule 56.B.1 and are in accordance with the standards
applicable to motions under Federal Rule of Civil Procedure 56, will be deemed admitted for
purpose of the summary judgment motions in accordance with Local Civil Rule 56.E.
The Carpenters Fund and the Laborers Fund are multiemployer fringe benefit funds that
provide medical and retirement benefits to carpenters, laborers and their families. ECF No. 41 ¶
1.6 CRS was bound by the CBAs and their incorporated Trust Agreements entered into with the
Carpenters Union and the Laborers Union. ECF No. 41 ¶ 11. See ECF No. 42-6 (Laborers CBA
from 2008 to 2010); ECF No. 42-7 (Laborers CBA from 2010 to 2013); ECF No. 42-12
(Carpenters CBA from 2008 to 2010); ECF No. 42-13 (Carpenters CBA from 2011 to 2013).
The CBAs require the timely payment of fringe benefit contributions and wage deductions to the
Funds on a monthly basis with associated interest, liquidated damages and attorneys’ fee due for
failure to timely make required payments. ECF No. 41 ¶ 11. At some point, though the precise
dates are never provided by Plaintiffs, Velotta Company also was a signatory to the CBAs with
the Carpenters Union and the Laborers Union. ECF No. 42-22 at 55-56. Velotta Company
appears to have made its payments to the Fund as required by the CBAs, ECF No. 42-22 at 5556, and is not a defendant in this action.
CRS failed to make certain principal contributions it owed to the Carpenters Fund for
work performed from September 2012 to June 2013, ECF No. 3, ¶ 15, regarding which the
Carpenters Fund seeks payment through Civil Action No. 13-1287. According to the Carpenters
Fund, the amount due and owing by CRS through December 31, 2016, including liquidated
damages, attorney’s fees, and interest for Count I totals $85,151.08. ECF No. 42-14.7 Regarding
Count II for conversion, the amount due and owing to the Carpenters Funds through December
31, 2016 for principal and interest totals $4,209.95. ECF No. 42-14.
The Court cites to Plaintiffs’ Concise Statements of Material Facts as “ECF No. 41 ¶ _.”
The Affidavit of James Malloy (“Mr. Malloy”), Auditor for the Carpenters Fund, incorporates a statement that
purports to be “a breakdown of the amounts owed” to the Funds for work performed for CRS, but which provides
only a breakdown of the total amounts as between Count I and Count II. ECF No. 42-3, 42-14. The Court also
notes that the “breakdowns” provided by the Administrators of the Funds purport to state the amounts that Velotta
owes the Funds for the work performed for CRS. However, none of the labor contracts were between Velotta and
either of the Funds, and the indication as to the amounts Velotta owes the Funds appears to be based solely on the
legal argument offered that Velotta is an ERISA fiduciary regarding unpaid amounts owed by CRS.
As to the Laborers Fund, it is alleged in the Amended Complaint in Civil Action No. 131288 that CRS did not make payment for certain principal contributions it owed to the Laborers
Fund for work performed from June 2012 through June 2013. ECF No. 3, ¶ 16. According to
the Affidavit of Dawn Botsford, Administrator of the Laborers Fund, all of these principal
payments were eventually made to the Laborers Fund, but amounts remain outstanding for
interest, liquidated damages, and attorneys’ fees. ECF No. 42-1, ¶ 2 (“Botsford Affidavit”). The
remaining amount due and owing to the Laborers Funds by CRS through December 31, 2016,
totals $218,809.41 under Count I pursuant to ERISA for interest, liquidated damages, and
attorney’s fees, ECF No. 42-8, and totals $13,386.19 for interest under Count II for conversion.
ECF No. 42-8.8
Concrete Restoration Services (“CRS”)
CRS is an Ohio Limited Liability Company that was started and originally owned by its
two members, Lucci and his brother. ECF No. 42-22 at 18, 33. Subsequently, Velotta Company
became part owner of CRS through a purchase of CRS equipment. ECF No. 42-22 at 34.
According to the amended and restated operating agreement of CRS (“CRS Operating
Agreement”) dated January 1, 2006, signed by Lucci for himself and signed by Velotta on behalf
of Velotta Company, Lucci and Velotta Company were then the two Members of CRS with
Velotta Company owning 68 % of CRS and Lucci owning 32 %. ECF No. 42-22 at 28-29; ECF
No. 42-18 at 2-3, 12, 15, 23-24. The CRS Operating Agreement also provided that if the
members holding the majority of interest determined that additional funds were required to pay
CRS operating costs, then the members shall contribute additional funds in proportion to their
The Affidavit of Dawn A. Botsford of the Laborers Fund, as with Mr. Malloy’s affidavit, incorporates a statement
that purports to be “a breakdown of the amounts owed” to the Laborers Fund for work performed for CRS, but
which provides only a breakdown between amounts claimed to be owed under Count I and Count II. The affidavit
further indicates that the total provided represents amounts due beginning in August 2009 through December 2013,
but does not breakdown any of the amounts as to time periods for which they are due.
interest. ECF No. 42-18 at 3. If a member is unable or unwilling to make a proportionate
contribution, the contributing member could make the non-contributing member’s proportionate
contribution resulting in a loan from the contributing member. ECF No. 42-18 at 3 (emphasis
At one point, Velotta was an officer of CRS, serving as its Vice President. ECF No. 4222 at 16-17. In his capacity as an officer of CRS, Velotta, amongst other things, assisted in
estimating jobs, and was an additional signatory on CRS’ checking account, ECF No. 42-22 at
19; ECF No. 42-24 at 6. Velotta, however, did not have any role in determining amounts of
salary, wages, or fringe benefits of CRS employees, ECF No. 42-22 at 41, and did not sign any
of the CRS employee paychecks which were all were signed with Lucci’s signature using a
signature stamp. ECF No. 42-24 at 5. Other details regarding Velotta’s work for CRS are either
not provided by Plaintiffs through record evidence or are disputed by Velotta’s testimony.
Lucci, who admittedly worked for CRS and whose signature was on all of CRS issued
paychecks, received a CRS paycheck through December 2013, during the relevant time period.
ECF No. 42-24 at 5.
The parties dispute the precise time period during which Velotta served as an officer of
CRS and whether Velotta served as its Vice President or its President.9 Velotta testified at his
deposition that “at one time” he was a Vice President at CRS, ECF No. 42-22 at 16-17; that he
was never the President, ECF No. 42-22 at 21; that he had check writing authority for CRS “a
long time ago” and that Lucci had the check writing authority for CRS, ECF No. 42-22 at 19;
that he resigned from CRS and quit the company having signed a resignation letter dated May 1,
Interestingly, the original Complaints in both actions listed Velotta as President and Lucci as Vice President of
CRS, but in the Amended Complaints filed in 2013, Plaintiffs allege that Velotta was Vice President and Lucci was
President of CRS during the relevant time period. Compare C.A. No. 12-1287 ECF No. 1, ¶ 8 with ECF No. 3, ¶ 8;
C.A. No. 12-1288 ECF No. 1, ¶ 9 with ECF No. 3, ¶ 9.
2008, and that, at the very least by October of 2010, he was no longer employed and had nothing
to do with CRS, ECF No. 42-22 at 13, 16, 21, 25; and that he had not worked for CRS for at least
“six, seven years” as of the date of his January 2017 deposition. ECF No. 42-22 at 25, 16.10
Velotta explained that it was his signature on the May 1, 2008 resignation letter, but offered that
given that the events occurred nearly a decade prior to his deposition he could not specifically
recall handing the resignation letter to Lucci or telling Lucci of his resignation, but assumed that
he had done so. ECF No. 42-22 at 22. His testimony supports that, at the very least sometime
between May 1, 2008 and October of 2010, he ceased working for CRS and serving as its Vice
President. ECF No. 42-22 at 21-22. Regarding his reasons for resigning from CRS, Velotta was
able to recall that:
[a]t that time, Velotta Company had some work in Pennsylvania and it needed
100 percent of my attention because things were going sour on some jobs, and I
didn’t like the way—I didn’t like dealing with John Lucci and how he performed
his work, and so I decided just to quit and get away from it.
ECF No. 42-22 at 43. After Velotta quit working for CRS, Velotta never took any personal
action to take his name off of the signature card held at the bank for the CRS account.11 ECF
No. 42-22 at 31.
Plaintiffs contest that Velotta resigned as an officer of CRS because: Velotta could not recall specifically
informing Lucci of his resignation and delivering the resignation letter to Lucci; Lucci testified that Velotta did not
resign; and Jody Meager, a Velotta Company employee, had filled out a form listing Velotta as an officer of CRS
back in 2009. Thus, according to Plaintiff, Velotta’s resignation was not effective and therefore he remained an
officer of CRS during the relevant time period. Plaintiffs cite no legal authority and provide no analysis for the
benefit of the Court regarding what specifically would be required to constitute an “effective resignation” such that a
factfinder would be compelled to find Plaintiff remained an officer of CRS throughout the relevant time period.
Moreover, in this Court’s view, Velotta’s testimony that he resigned as officer and that he no longer worked for CRS
as of sometime between the 2008 resignation letter and at least by October of 2010, is sufficient to create an issue of
fact regarding whether Velotta was an officer of CRS during the required time.
Plaintiffs also assert as “fact” that because Velotta had check writing authority for CRS and did not remove
himself from such authority after he supposedly quit, that he retained check writing authority during the relevant
period and is a liable fiduciary as a result. Velotta admits that he had check writing authority for CRS at some point
and that he did not act to take his name off of the signature card, ECF No. 44 at 4, but disputes that he was an
employee or officer of CRS during the relevant period or that he ever signed CRS checks during the relevant time
period. Indeed, Velotta points out that, after he resigned from CRS and no longer worked there, he would not have
Velotta Company is an Ohio Corporation. ECF No. 42-21, ¶ 2. Robert Velotta,
Defendant Velotta’s uncle, was President of Velotta Company up until February of 2016. ECF
No. 42-22 at 7, 8. As of 2012, Velotta, his father Michael Velotta, Carolann Velotta, and her
father Robert Velotta were each 25% owners of the Velotta Company. ECF No. 41 ¶ 6; ECF No.
42-22 at 7, 30. Defendant Velotta served as Velotta Company’s Vice President of Operations.
ECF No. 41 ¶ 5. Carolann Velotta served as Velotta Company’s Vice President of Finance, ECF
No. 42-22 at 27, was responsible for signing the checks of Velotta Company and for maintaining
its finances and financial records. ECF No. 42-22 at 36-37. She did not report to Defendant
Velotta and he was not responsible for finances at Velotta Company. ECF No. 42-22 at 26, 35,
Jody Meager (“Meager”), was an employee of Velotta Company, ECF No. 42-22 at 3839, who at one point filled out and signed an “employer survey” form provided by the auditor of
the Laborers dated July 21, 2009, in which she listed herself as CRS’ controller, see ECF No. 4211 (indicating CRS as the correct name of “your company”), and listed that Velotta was
President of CRS and Lucci was Vice President of CRS. Velotta, however, testified that he was
never the President of CRS. ECF No. 42-22 at 21. Although Lucci indicated that Velotta was
President of CRS and that he (Lucci) was the Vice President, Lucci admitted that at some point
any legal authority to sign CRS checks and notes the absence of any evidence in the record to show that he signed
any CRS checks during the relevant time period and that the last check he signed was dated January 11, 2008. ECF
No. 44 at 4. Also consistent with Velotta’s testimony that he quit working for CRS, Plaintiffs have proffered no
evidence of a CRS check written to Velotta for any work he performed for CRS during the relevant period. Rather,
Plaintiffs rely solely on testimony of Lucci that Velotta was paid with a CRS check for work prior to that time
When asked at his deposition if he had “signature authority with Velotta Company,” Velotta responded “yes.”
ECF No. 42-22 at 20. There are various documents, such as certain notes, where Velotta signed on behalf of Velotta
Company, but the questioning regarding his “signature authority” did not specify whether it was as to contracts,
notes, bonds, or Velotta check writing authority, and Velotta was clear that he had nothing to do with Velotta
Company finances. Nowhere do Plaintiffs directly assert that Velotta had check signing authority at Velotta
Company, and such would be disputed on this summary judgment record.
Velotta switched to the position of Vice President of CRS but did not specify when. ECF No.
42-24 at 3.
It also appears that a signature stamp with Lucci’s signature on it existed for use on CRS
checks, which Meager, who had listed herself as controller of CRS, kept in her desk drawer in
her office located at the Velotta Company. ECF No. 42-24 at 4. Velotta was unaware of the
existence of this signature stamp and that Meager kept it. ECF No. 42-22 at 38, 39.13
Relationship Between CRS and Velotta Company
CRS and Velotta Company were both involved in the construction business, performed
projects in Western Pennsylvania, and were “signed to” collective bargaining agreements with
the Carpenters’ Union and Laborers Union. ECF No. 41 ¶ 3; ECF No. 42-2, ¶¶ 2-3; ECF No. 424, ¶¶ 2, 3; ECF No. 42-22 at 9, 55; ECF No. 3, 16, ¶ 5. Both maintained a principle place of
business at the same address, but in two separate offices. ECF No. 41 ¶ 4. In conducting Velotta
Company business, the owners and principals of the Velotta Company, including Velotta, Robert
Velotta and Carolann Velotta, would have in-house Velotta Company meetings from which
Lucci, who was not an officer of Velotta Company, was excluded. ECF No. 42-22 at 9; ECF No.
42-24 at 3. Defendant Velotta would then only provide limited information from Velotta
Company’s corporate meetings to Lucci, who was an officer of CRS. ECF No. 42-24 at 3.
The Funds contend that Velotta knew of the signature stamp because it was used on Velotta’s employee
paychecks from CRS. The Funds, however, have not provided copies of any stamp signed paycheck, much less a
copy of such a paycheck for the time period for which payments to the Funds are sought. The Funds also appears to
insinuate that because the signature stamp was located in Meager’s desk drawer inside the Velotta Company’s office
that Velotta or someone at Velotta Company must have used it after Lucci claims he was laid off from CRS. Yet,
Velotta denied knowing of the stamp and that it was stored in Meager’s desk drawer. ECF No. 42-22 at 40. There
is not even a scintilla of evidence in this record that Velotta used the stamp on any CRS checks, and Meager
apparently had custody and control of it by virtue of it being stored in her desk drawer. The Funds’ assertions on
summary judgment on this and other matters require inappropriate speculation and inference drawn in their favor.
Other than Velotta, none of the other members of the Velotta family were officers of CRS. ECF
Velotta signed certain notes for the Laborers and Carpenters Funds guaranteeing the
payment by Velotta Company of CRS’ debts to the Laborers and Carpenters Funds and
specifically indicating that he did not sign the notes personally but in the capacity as Vice
President of the Velotta Company. ECF No. 42-22 at 46. According to Velotta, Velotta
Company was signatory to these notes because Velotta Company was a Member and part owner
of CRS and had to sign certain indemnity agreements and bid bonds required for CRS to be hired
onto construction projects. ECF No. 42-22 at 44, 47-48. One such project was a job CRS was to
perform on a Squirrel Hill Tunnel project for which the contractor required a bond. ECF No. 4222 at 47-48. A similar judgment note also was signed on behalf of the Velotta Company with the
Carpenters Fund guaranteeing payment of other amounts owed by CRS. ECF No. 42-22 at 48.
At some point, Carolann Velotta mentioned to Velotta that the Velotta Company had to
give some money to CRS for payment of CRS’ bills that CRS was unable to pay. ECF No. 4222 at 48. Lucci testified that he approached Velotta approximately 8 to 10 times for Velotta
Company to pay certain of CRS’ bills in order to keep the construction jobs that CRS was
working on operating and, without providing further details, that somehow thereafter the bills
were paid. ECF No. 42-24 at 6. Velotta, however, flatly denied at his deposition that he ever
intervened on behalf of CRS to have Carolann Velotta pay any of CRS’ bills on behalf of Velotta
Company. ECF No. 42-22 at 50. Lucci did not specify over what time period the 8 to 10
requests and payments were made or what possible percentage of overall payments owed by
CRS they represented. In 2014, some Velotta Company checks signed by Carolann Velotta were
issued by Velotta Company to the Funds to make payment for CRS’ liability to the Funds. ECF
No. 42-22 at 55-56. Velotta referred in his deposition to payments being made by Velotta
Company for some of CRS’ bills as loans from the Velotta Company and as necessary due to the
bid bonds and judgment notes signed by Velotta Company. ECF No. 42-22 at 47-48, 54.
Velotta never made calls to general contractors or owners on behalf of CRS to collect receivables
due and owing to CRS and, after he resigned as Vice President of CRS, he was not involved in
any bidding or estimating for CRS. ECF No. 42-22 at 50.
Velotta did not know when Lucci, who was a 32% owner of CRS, ceased working for
CRS. Velotta also was unaware, because he no longer worked for CRS at the time, if Lucci
eventually had been terminated from CRS, presuming that, as an owner, Lucci would have had to
have terminated himself. ECF No. 42-22 at 31-32.14
CBA and Trust Agreement Provisions with Respect to Fund Assets
The Trust Agreements incorporated into the CBAs specifically address the status of
amounts due and owing by an employer to the Funds. For example, the Trust Agreement and
Pension Plan of the Laborers Fund states that:
No Employer obligated to pay contributions shall have any right, title or interest
to any sum payable by such Employer to the Fund, but not yet paid into the Fund.
Title to all monies paid into and/or due and owing the Fund Shall be vested in the
Fund and/or its Trustees.
ECF No. 42-9 at 4 (Laborers Fund Trust Agreement § 14); ECF No. 42-10 at 4 (Laborers Fund
Trust Agreement and Pension Plan § 14) (same); ECF No. 42-15 at 2 (Carpenters Fund
Agreement and Declaration of Trust at Appendix A, § 1) (same); ECF No. 42-16 at 2 (Carpenters
Fund Agreement and Declaration of Trust Article XII, § 2) (same); ECF No. 42-17 at 2
(Carpenters Fund Annuity and Savings Fund Appendix A, § 1) (same).
In an effort to show control or involvement by Velotta as an officer of CRS during the relevant time period, the
Funds contend that Velotta fired Lucci from CRS in December of 2013. Velotta specified in his deposition,
however, that he was unaware if Lucci was terminated from CRS because he himself no longer worked there at the
time, thereby creating an issue of fact to be resolved at trial.
As further provided in the Trust Agreements, “[n]o Employer shall be responsible for the
contributions or obligations of any other Employer, except as required by a collective bargaining
agreement or other agreement or as provided for under applicable law.” ECF No. 42-9 at 4
(Laborers Fund Trust Agreement § 13); ECF No. 42-10 at 4 (Laborers Fund Trust Agreement
and Pension Plan § 13) (same); ECF No. 42-15 at 2 (Carpenters Fund Agreement and
Declaration of Trust § 14) (same); ECF No. 42-16 at 2 (Carpenters Fund Agreement and
Declaration of Trust Article XII, § 2) (same); ECF No. 42-17 at 2 (Carpenters Fund Annuity and
Savings Fund Appendix A, § 1) (same).
Based on review of the above-noted facts, there remain genuine issues of fact for
resolution by the factfinder at trial. Many of Plaintiffs’ assertions require the Court to
inappropriately draw various inferences not in favor of Velotta but instead in favor of Plaintiffs - the moving parties. Their position also requires the Court to “fill in” gaps in their evidence
regarding the relevant time periods -- which is crucial for Plaintiffs to succeed on their claims.
The Court, however, declines to do so and thus summary judgment is properly denied.
A. Claim for Breach of Fiduciary Duty under ERISA (Count I)
Count I is an ERISA collection claim. As observed by the United States Court of
Appeals for the Third Circuit in Nat'l Sec. Sys., Inc. v. Iola, 700 F.3d 65 (3d Cir. 2012):
Congress enacted ERISA to ensure the proper administration of pension
and welfare plans, both during the years of the employee's active service and in
his or her retirement years. Crafted to bring order and accountability to a system
of employee benefit plans plagued by mismanagement, ERISA is principally
concerned with protecting the financial security of plan participants and
beneficiaries. To this end, the statute sets forth detailed disclosure and reporting
obligations for plans and imposes various participation, vesting, and funding
Relevant here, ERISA also prescribes standards of conduct for plan
fiduciaries, derived in large part from the common law of trusts. Section 404
requires fiduciaries to discharge their duties “solely in the interest of the
participants and beneficiaries ... with the care, skill, prudence, and diligence under
the circumstances then prevailing that a prudent man acting in a like capacity”
would use. 29 U.S.C. § 1104(a)(1) . . . .
ERISA also aims to provide a uniform regulatory regime over employee
benefit plans in order to ease administrative burdens and reduce employers' costs.
. . . Congress . . . enumerate[d] a set of integrated civil enforcement remedies
designed to redress violations of the statute or the terms of a plan.
Id. at 81–82 (internal quotations and citations omitted). See 29 U.S.C. § 1104(a)(1)(A)(i) (such a
fiduciary is required to “discharge his duties with respect to a plan solely in the interests of the
participants and beneficiaries . . . for the exclusive purpose of . . . providing benefits to
participants and their beneficiaries.”).
Here, the Carpenters Fund seeks to hold Velotta personally liable as a fiduciary under
ERISA with respect to the obligations of CRS to make payments to the Fund for work performed
by Carpenters from 2012 through 2013. The Laborers Fund seeks to hold Velotta personally
liable on the same basis for untimely payments with regard to laborers during the period
spanning from August 2009 to December 2013.15
ERISA provides for the personal liability of a fiduciary. As stated in Section 1109: “any
person who is a fiduciary with respect to a plan who breaches any of the responsibilities,
obligations, or duties imposed upon fiduciaries [by ERISA] shall be personally liable to make
good to such plan any losses to the plan resulting from each such breach . . . .” 29 U.S.C. §
1109(a). As urged by Velotta, ERISA also clarifies that “[n]o fiduciary shall be liable with
respect to a breach of fiduciary duty under this subchapter if such breach was committed before
he became a fiduciary or after he ceased to be a fiduciary.” 29 U.S.C. § 1109(b).
The Laborers Fund’s Amended Complaint in C.A. No. 13-1288 referenced the time period of 2012 to 2013 but
indicated that it was seeking additional amounts that may be revealed after audit. ECF No. 3, ¶¶ 15, 16. The
amounts indicated in the summary filed with the Laborers Fund’s Motion for Summary Judgment included amounts
due identified as beginning from August 2009, but providing no other specificity. ECF No. 42-8.
To establish breach of a fiduciary duty in failing to remit fringe benefit contributions,
Plaintiffs must demonstrate that Velotta was an ERISA fiduciary. Under ERISA:
A person is a fiduciary with respect to a plan to the extent he exercises any
discretionary authority or discretionary control respecting management of such
plan or exercises any authority or control respecting management or disposition
of its assets.
29 U.S.C. § 1002(21)(A) (emphasis added). Thus, in order to show that Velotta is personally
liable under ERISA for the unpaid contributions sought by the Funds those contributions must
have been plan assets, 29 U.S.C. § 1002(21)(A), Laborers Combined Funds of W. Pa. v. Cioppa,
346 F. Supp. 2d 765, 770 (W.D. Pa. 2004), and Velotta must have exercised control or authority
over the management or disposition of those plan assets, PMTA-ILA Containerization Fund v.
Rose, No. 94-5635, 1995 WL 461269, at *4 (E.D. Pa. Aug. 2, 1995); Cioppa, 346 F. Supp. 2d at
770, at the relevant time. 29 U.S.C. § 1109(b).
Velotta does not appear to dispute that the amounts due and owing by CRS to the Funds
for the fringe benefit payments, including interest, liquidated damages, and attorneys’ fees, are
ERISA plan assets. Nor can he.
The Court must strictly consider the language of the Trust Agreements to determine if the
unpaid contributions constitute ERISA “plan assets.” Roofers Local 30 Combined Welfare Fund
v. Lentz McGrane, Inc., No. 03-4187, 2005 WL 425582, at *3 (E.D. Pa. Feb. 21, 2005) (citing
Galgay v. Gangloff, 677 F. Supp. 295, 301 (M.D. Pa. 1987), aff’d, 932 F.2d 959 (3d Cir. 1991)).
Where the operative agreement contains language to the effect that that any payments “due and
owing” or “accrued” to a fund are vested in that fund, then those payments due and owing
constitute “plan assets” within the meaning of ERISA. Laborers’ Combined Funds of W. Pa. v.
Molinaro Corp., Nos. 15-1455 & 15-1466, 2017 WL 635361, at *3 (W.D. Pa. Feb. 16, 2017);
Cioppa, 346 F. Supp. 2d at 768, 771; Galgay, 677 F. Supp. at 301-302; Laborers’ Combined
Funds of W. Pa. v. Parkins, Nos. 01-79 & 01-80, 2002 WL 31435287, at *3 (W.D. Pa. Jun. 5,
2002); Rose, 1995 WL 461269, at *4; Connors v. Paybra Mining Co., 807 F. Supp. 1242, 1244
(S.D.W. Va. 1992).
In this case, albeit with minor variations, the Trust Agreements provide that:
No Employer obligated to pay contributions shall have any right, title or interest
to any sum payable by such Employer to the Fund, but not yet paid into the Fund.
Title to all monies paid into and/or due and owing the Fund Shall be vested in the
Fund and/or its Trustees.
See ECF No. 42-9 at 4 (Laborers Fund Trust Agreement § 14). This provision not only refers to
monies “due and owing” but the language is strikingly similar to the operative trust language in
Molinaro, Cioppa, Galgay, Parkins, Rose, and Connors, wherein it was found that the fringe
benefit payments due and owing to the funds involved therein constituted ERISA “plan assets”
based on the language in the applicable trusts and agreements. See Molinaro, 2017 WL 635361,
at *4 (“No Employer obligated to pay Contributions shall have any right, title, or interest to any
sum payable by such Employer to the Fund, but not yet paid into the Fund. Title to all monies
paid into and/or due and owing the Fund shall be vested in the Fund and/or its Trustees.” and
“No contributing employer shall have any right, title or interest to any sum payable by such
Employer to the Fund, but not yet paid into the Fund. Title to all monies paid into and/or due
and owing such Fund shall be vested in the Trustees of such Fund.”); Cioppa, 346 F. Supp. 2d at
768, 771 (“Title to all monies paid into and/or due and owing the Fund shall be vested in the
Fund and/or its Trustees.”); Galgay, 677 F. Supp. at 301 (“Title to all the monies paid into and/or
due and owing said fund shall be vested in and remain exclusively in the trustees of the fund.”);
Parkins, 2002 WL 31435287, at *3 (“Title to all monies paid into and/or due and owing such
Fund shall be vested in the Trustees of such Fund.”); Rose, 1995 WL 461269, at *4 (“Title to all
of the money . . . paid into, acquired by, or accrued to the fund shall be vested in and remain
exclusively in the board of trustees of the fund.”); and Connors, 807 F. Supp. at 1244 (“Title to
all the monies paid into and/or due and owing to the Trusts specified in this Article shall be
vested in and remain exclusively in the Trustees of those Trusts.”).
Thus, like in Molinaro, Cioppa, Galgay, Parkins, Rose, and Connors, the language used
in the Carpenters and Laborers CBAs and Trust Agreements indicate that once CRA’s obligation
to contribute to the Carpenters Fund and Laborers Fund arose, the contributions owed were not
simply receivables of the Funds if unpaid but instead became ERISA plan assets at the time these
amounts became due. Molinaro, 2017 WL 635361, at *4; Galgay, 677 F. Supp. at 302 (“If the
employer was delinquent in making such contributions, the unpaid monies were considered plan
assets, and not merely receivables.”). Title to the fringe benefit contributions owed by CRS
vested to the Funds when those fringe benefit contributions and the associated interest, liquidated
damages, and attorneys’ fees became due and owing, and they were plan assets within the
meaning of ERISA.
Authority and control regarding ERISA plan assets
Having found that the unpaid contributions at issue are “plan assets,” the question of
whether Velotta was a “fiduciary” within the meaning of ERISA, 29 U.S.C. § 1002(21)(A), turns
on whether he had authority and control over the management or disposition of the due and
owing fringe benefit contributions.
A corporate officer may be held personally liable for breach of ERISA fiduciary duties
where he has any authority and control over ERISA plan assets and fails to ensure payment of
plan assets due and owing to the relevant funds. See Srien v. Frankford Trust Co., 323 F.3d 214,
220-21 (3d Cir. 2003) (personal liability as ERISA fiduciary where individual has any authority
or control over the management or disposition of plan assets); Connors, 807 F. Supp. at 1247-48.
Notably, under the portion of 29 U.S.C. § 1002(21)(A), only the authority or control over the
management or disposition of plan assets, check writing authority will suffice under ERISA to
create fiduciary status. “‘Any’ control over disposition of plan money makes the person who has
the control a fiduciary,” IT Corp. v. Gen. Am. Life Ins. Co., 107 F.3d 1415, 1421 (9th Cir. 1997),
because “[t]he statute treats control over the cash differently from control over administration.”
Bd. of Trustees of Bricklayers & Allied Craftsmen Local 6 of N.J. Welfare Fund v. Wettlin
Assocs., Inc., 237 F.3d 270, 274 (3d Cir. 2001) (quoting IT Corp., 107 F.3d at 1421)).
Here, in opposing the instant Motions for Summary Judgment, Velotta asserts that there
is an issue of material fact as to whether he had the requisite authority or control over the plan
assets at issue during the relevant time period, thereby precluding the entry of summary
judgment in favor of Plaintiffs.16 ECF No. 44 at 8. Indeed, Velotta testified unequivocally that,
although he was Vice President of CRS at one time, he resigned from CRS, was no longer
employed by CRS, and performed no work for CRS after October of 2010 at the latest and
perhaps as early as 2008 when he signed his resignation letter. That Lucci testified that Velotta
did not in fact resign and that Meager (decidedly not Velotta) filled out an employer survey
provided by the Laborers’ auditor and listing Velotta as “President” of CRS and John Lucci as
“Vice President,” may be evidence, if ultimately admissible, in support of a finding that Velotta
was President of CRS on July 21, 2009 and beyond. However, it does not establish as a matter
of law that Velotta was an officer of CRS with authority or control over plan assets during the
relevant time period, much less for the entire relevant time period. An issue of fact therefore
remains as to what time period and what position as officer of CRS, if any, Velotta held during
the relevant time.
He also asserts that he is entitled to be dismissed from this action, ECF 44 at 9, but filed no motion of his own.
Plaintiffs also make much of the fact that Velotta had check writing authority for CRS at
one point and did not remove his signature authority from bank records after he supposedly quit,
arguing that, as a result, Velotta retained check writing authority during the relevant period and
is rendered liable as an ERISA fiduciary with authority and control regarding disposition of plan
assets that were owed but not remitted to the Funds. Velotta admits that he, at some point in
time, had check writing authority for CRS and that he did not act to take his name off of the
signature card. He disputes, however, that he was an employee or officer of CRS during the
relevant period or that he ever signed CRS checks during the relevant time period. Moreover,
Velotta makes the point that, after he resigned from CRS and no longer worked there, he would
have had no legal authority to sign CRS checks even if a check with his signature would “clear”
at the bank. ECF No. 44 at 4. He also points to the absence of any evidence of CRS checks in
the record that he supposedly signed during the relevant time period, or quite frankly at all,
further supporting his testimony that he no longer had the authority to sign CRS checks during
the relevant time period. ECF No. 44 at 4. Indeed, it was Lucci, who remained employed by
CRS through at least December 2013, whose signature was affixed to all CRS paychecks and not
that of Velotta. In addition, there is no proffered evidence of a CRS check written to Velotta and
signed by anyone for any work he performed for CRS during the relevant period which is also
consistent with Velotta’ s testimony that he quit working for CRS. Furthermore, Plaintiffs offer
no evidence to support their assertion that Velotta actually remained a signatory on CRS’ bank
account, much less that he was a lawful signatory on the account during the relevant time period
The Funds also point to the use of Lucci’s signature stamp as evidencing that Velotta was
a fiduciary. ECF No. 41 at 3, 7. Lucci testified that his signature stamp had been used on a
check and official documents after he no longer worked for CRS. Plaintiffs insinuate that the
Velotta Company is responsible for the use of the signature stamp and that someone at Velotta
Company must have used it because it was stored in Meager’s desk at Velotta Company. 17 Even
if evidence, as opposed to speculation, established that someone at Velotta Company used
Lucci’s signature stamp, the use without Lucci’s permission and after he no longer worked at
CRS does not tend to show that the individual who used the stamp “on behalf of Velotta
Company” had lawful control over the disposition of CRS’ funds. More importantly, it does not
show that Velotta ever used it or had the right to use it. Indeed, Lucci himself testified that his
signature stamp was used improperly on CRS checks without his authority after he was “laid
off.”18 ECF No. 42-24 at 4-5.
Nor does Velotta’s position as Vice President of Operations at the Velotta Company
suffice to establish him as an ERISA fiduciary with respect to the relevant plan assets. Carolann
Velotta was the Velotta Company Vice President of Finance, she did not report to Velotta and
thus he did not have authority over her. Moreover, she was the one who signed Velotta
Company checks and was responsible for Velotta Company finances. Nevertheless, the Funds
contend that because Lucci spoke to Velotta in an effort to have CRS bills paid by Velotta
Company (at an unspecified time) and that the bills were subsequently paid by Velotta Company,
then Velotta “must have” had the authority to instruct Velotta Company to pay the CRS bills.
ECF No. 41 at 7. This portended factual assertion is improperly based on speculation and
inference in favor of the Funds. It also is a far cry from showing as a matter of law that Velotta
was a fiduciary with respect to the plan assets related to the work performed by laborers and
That Lucci’s signature stamp was used after he claims he no longer worked at CRS is consistent with what Velotta
testified to regarding his lack of action to ensure he no longer remained as a listed signatory at the bank after he quit
working for CRS.
It therefore appears that Lucci’s signature remained on file at the bank and that he, just like Velotta, did not take
action to remove his own signature as an authorized signature on the bank account despite maintaining he was no
longer employed by CRS. Again, the fact that the bank would consider the signature authorized would not give
either Lucci or Velotta lawful control and authority over CRS accounts when they no longer worked for CRS.
carpenters for CRS. Indeed, as Velotta aptly explained, Carolann Velotta would have had some
of the CRS bills paid with Velotta Company assets because Velotta Company had signed a bond
and even judgment note, and Velotta Company was a Member of CRS having an interest in
making certain payments on CRS obligations and considering those payments a loan. This
position is consistent with the CRS Operating Agreement, which references loans from a
member under those circumstances. Again, the facts on summary judgment do not establish as a
matter of law that Velotta was an ERISA fiduciary during the relevant time period as to the plan
assets for work performed for CRS.
Finally, the Funds simply assume, but never explain or attempt to show with citation to
legal authority, how Velotta’s 25% ownership of the Velotta Company or his position of Vice
President of Operations of the Velotta Company automatically renders him an ERISA fiduciary
regarding the plan assets related to the work performed for CRS or just how this entitles them to
summary judgment where they bear the burden of proof. That Velotta was an officer of CRS
during the relevant time period remains in dispute and the contention that he had any authority
and control over the plan assets by virtue of his signature being on file with the bank regarding
the CRS account or by virtue of his position as Vice President of Operations for Velotta
Company is a tenuous assertion at best and adequately disputed on this summary judgment
record. Plaintiffs therefore have failed to point to evidence from which a reasonable factfinder
could find that Velotta had the requisite authority and control over plan assets during the relevant
time period and summary judgment as to Count I is properly denied.
Alternative single employer theory for Velotta’s ERISA fiduciary
Plaintiffs nevertheless contend that even if they are not entitled to summary judgment
regarding Velotta’s position as an officer at CRS with check signing authority, they are still
entitled to summary judgment based on a theory that Velotta Company and CRS were a single
employer and that Velotta, as an officer of Velotta Company, is somehow liable under ERISA to
the Funds for payments due and owing by CRS. ECF No. 40 at 8. In so arguing, Plaintiffs rely
solely on Stardyne, Inc. v. N.L.R.B, 41 F.3d 141 (3d Cir. 1994), and N.L.R.B v. Browning-Ferris
Indus. of Pa., Inc., 691 F.2d 1117 (3d Cir. 1982) in support of their theory. The problem with
Plaintiffs’ position is four-fold: 1) they fail to show how single employer theory applies in the
context of ERISA; 2) single employer status is a question for the factfinder when considering the
four relevant factors under all of the circumstances; 3) they offer a cursory analysis of the
required factors viewed improperly in the light most favorable to themselves as the moving
parties and ignore other salient and unfavorable facts counseling against single employer status;
and 4) they fail to show as a matter of law how Velotta’s position at Velotta Company rendered
him an ERISA fiduciary as to the plan assets regarding work performed by carpenters and
laborers for CRS.
Stardyne explains that the National Labor Relations Board (“NLRB”) developed the alter
ego and single employer theories in the face of vexing reorganizations utilized to evade National
Labor Relations Act (“NLRA”) obligations. Stardyne, 41 F.3d at 146.
The single employer doctrine generally applies to situations where two entities
concurrently perform the same function and one entity recognizes the union and
the other does not. In making a single employer determination, the Board uses
four criteria: interrelation of operations, common management, centralized control
of labor relations, and common ownership. The alter ego doctrine, by contrast, . . .
usually comes into play when a new legal entity has replaced the predecessor (or
at least the unionized portion of the predecessor).
Id. at 152 (internal citations omitted). Under this doctrine, the fact-finder determines whether the
two employers are in truth one enterprise, and if so, neither can avoid CBA obligations imposed
by the NLRA. N.L.R.B. v. Al Bryant, 711 F.2d 543 (3d Cir. 1983); N.L.R.B. v. Browning-Ferris
Indus., 691 F.2d 1117 (3d Cir. 1982); Bygott v. Leaseway Transp. Corp., 622 F. Supp. 774, 780
(E.D. Pa. 1985).
Notably, the Funds do not cite to an ERISA case applying this single employer and/or
alter ego theory to create ERISA fiduciary liability of an officer of one company with respect to
the plan assets involving the work performed for the other. Instead, they rely on two cases
involving the appeal of decisions and orders of the NLRB, which is charged by Congress under
the National Labor Relations Act (“NLRA”) with the responsibility of interpreting and enforcing
the Act and is empowered to make certain factual determinations in the labor disputes that come
before it. In the cases relied upon by the Funds, the NLRB was called upon to make the factual
determination as to whether the two employers involved should be treated as a single employer
(Stardyne) or a joint employer (Browning-Ferris). See Browning-Ferris, 691 F.2d at 1122
(affirming the factual finding that the two employers were “joint employers” and articulating
four factors to consider in determining whether two employers are a “single employer.”). Thus,
it is clear from these cases that the ultimate determination of whether the two nominally separate
entities are one integrated enterprise -- a single employer -- is an issue of fact based on all of the
circumstances. Browning-Ferris, 691 F.2d at 1122; Stardyne, 41 F.3d at 151.
Stardyne and Browning-Ferris stand for the proposition that if two companies are in
reality an integrated enterprise then both companies would be bound by the same CBA. The
cases do not address ERISA liability of an officer of one of those entities as a fiduciary with
respect to work performed for the other. Importantly, the Funds do not argue that because these
two companies should be considered a single employer, the Velotta Company is somehow liable
under the CBAs. Rather, the Funds argue that because CRS and the Velotta Company should be
considered a single employer, then the Vice President of Operations for Velotta Company --
Velotta, who is a 25% owner of the Velotta Company -- should be considered an ERISA
fiduciary with respect to plan assets of the Funds regarding work performed by laborers and
carpenters for CRS. Velotta’s ERISA fiduciary liability, however, does not necessarily follow
from any single employer status of CRS and Velotta Company and they offer no authority or
analysis to support their position. Moreover, as Vice President of Operations at Velotta
Company, Velotta was not responsible for Velotta Company financial matters -- that was the
responsibility of Carolann Velotta, Velotta Company’s Vice President of Finance.
Additionally, although not discussed by Plaintiffs, the Velotta Company itself was
already a signatory to the CBAs with the carpenters and laborers unions and the Velotta
Company paid the amounts it owed for the work of carpenters and laborers performed for the
Velotta Company. Velotta Company therefore did not seek to avoid its obligations under the
NLRA through use of two separate but really integrated entities. Thus, the justification for
applying the single employer theory is not present here and Stardyne and Browning-Ferris upon
which the Funds rely do not appear to be applicable.
Even if the Court were to find that the single employer theory applied to this ERISA
matter, however, the Funds would still have to point to evidence showing that CRS and Velotta
Company were a single employer during the relevant time period and that Velotta was a
fiduciary with authority or control over the ERISA plan assets at the time.
The Funds do not seriously engage in an analysis of the single employer factors or
consider the facts in the light most favorable to Velotta as required; instead they ignore salient
and unfavorable evidence. Arguing that there is no genuine issue of material fact as to whether
Velotta Company and CRS were a single employer, the Funds point to the following undisputed
facts: both entities were involved in the construction business in Western Pennsylvania and
signed CBAs with the Carpenters and Laborers unions; both maintained their principal places of
business at the same address; both used the same tax preparer, insurance companies, and banking
institution; both shared the same billing and accounting software; both were listed by Meager as
“related companies;” Velotta was an officer for both at one point; and Velotta also owned 25%
of the Velotta Company. Two companies being “related” in some fashion, though a necessary
proposition for single employer status, does not render the four factor “single employer” test
satisfied.19 Indeed, based on the record before the Court, it is unable to find that the four factors
have been met and thus cannot say that Velotta Company and CRS were a single employer as a
matter of law.
interrelations of operations
First, considering the interrelation of operations, the record shows that although the
entities appear to have shared an address, field of industry, some common vendors, and some
interrelated software programs, they each had their own computers, separate offices and
separately maintained bank accounts. Moreover, when the owners of Velotta Company were
discussing Velotta Company business they excluded Lucci as he was not an owner, officer, or
employee of Velotta Company, thus maintaining separation between Velotta Company and CRS.
Based on this record, which appears to be the extent of the evidence related to the operations of
the two companies, the Court is unable to conclude that the companies were so interrelated that
in reality they were one employer.
Plaintiffs attempt to show the two companies were interrelated based on Lucci’s testimony that Velotta directed
Lucci and CRS regarding work of CRS on the Squirrel Hill Tunnel project for the contractor. ECF No. 42-24 at 4.
Lucci testified that Velotta instructed CRS to stop working until a work order was issued, yet Velotta testified that
he was not involved in the job and only had some meetings with the contractor as a representative of Velotta
Company because Velotta Company had signed a bid bond for CRS to enable them to perform work on the project.
ECF 42-22 at 45. The competing testimony presents another classic dispute of fact which precludes the Court from
entering summary judgment in Plaintiffs’ favor.
With respect to common management, the principals of Velotta Company who managed
it actively excluded Lucci who was President of CRS from Velotta Company business meetings
as Lucci was neither an employee nor officer of Velotta Company, evidencing separation of the
two entities. Although Lucci and Velotta at one time appear to be the two who directly managed
CRS when Velotta was Vice President, Velotta had resigned prior to the relevant time period and
no longer worked for or managed CRS. Velotta Company also operated with a Vice President of
Operations and a separate Vice President of Finance, Carolann Velotta, who was responsible for
signing checks with respect to the Velotta Company’s bank account, whereas Lucci and Velotta,
when he worked for CRS, had the check signing authority for CRS’ bank account and Lucci’s
signature was affixed to all payroll checks. The Velotta Company Vice President of Finance was
not an officer or manager of CRS. Velotta Company and CRS only had one officer in common,
Velotta, but his position differed at Velotta Company where he was Vice President of
Operations. The Velotta Company had multiple other officers. In sum, the management of both
entities did not have so much in common that they appear to be a single entity.
centralized control of labor relations
There also is no evidence of a centralized control of labor relations. As stated, Velotta
Company was an independent signatory to the CBAs and Velotta Company paid its obligations
regarding the work performed for it by laborers and carpenters. Velotta testified that he “never
dealt with any of the unions with CRS, Laborers or Carpenters or anybody else [CRS] used.”
ECF No. 42-22 at 45. These facts, which the Funds fail to address, evidence that CRS and
Velotta Company maintained separation in labor relations and not centralized control.
Finally, as to common ownership, although at some point Velotta Company owned 68%
of CRS and Lucci owned 32% of CRS, CRS was started by and previously owned by Lucci and
his brother. Velotta Company, on the other hand was owned by Velotta, Carolann Velotta, and
their fathers in equal shares of 25%. In sum, on this record, the establishment of Velotta
Company and CRS as a single employer fails.
In addition, the Funds still would have to show that Velotta was a fiduciary with respect
to the plan assets related to the work performed by CRS to hold him personally liable. As
indicated supra, there is a factual issue as to whether Velotta was such a fiduciary at the relevant
time by virtue of his position and work at CRS because he had resigned.
B. Conversion Claim (Count II)
The Funds only seek recovery for amounts withheld from workers’ wages for union dues
and PAC contributions under a state law theory of conversion because “wage deductions for
union dues and political action contributions do not relate to an employee benefit plan within the
meaning of ERISA, and thus are not recoverable . . . under ERISA.” Molinaro, 2017 WL
635361, at *5 n.5 (citing Cioppa 346 F. Supp. 2d at 773-74; Carpenters Combined Funds ex rel.
Klein v. Klingman, No. 2:10-63, 2011 WL 92083, at *7 (W.D. Pa. Jan. 11, 2011)).
Under Pennsylvania law,
Conversion is the deprivation of another's right of property in, or use or
possession of, a chattel, without the owner's consent and without lawful
justification. In Pennsylvania, under the “participation” theory, a corporate
officer who takes part in the commission of a tort by the corporation is personally
liable for that tort.
Cioppa, 346 F. Supp. 2d at 773 (internal citations omitted). Courts have applied these
conversion and participation theories against an employer’s officers in support of recovery of
required withholdings made by an employer for union dues and PAC contributions but never
paid over by the employer to the appropriate Funds. See Cioppa, 346 F. Supp. 2d at 773;
Parkins, 2002 WL 31435287, at *5; Klingman, 2011 WL 92083, at *7; Molinaro, 2017 WL
635361, at *5.
In their Motions for Summary Judgment, Plaintiffs do not specifically mention the
conversion claim under Count II of the Amended Complaint, ECF No. 39, but they do indicate
that they seek summary judgment on the claim in their supporting briefs where they make
various bald assertions regarding Velotta’s liability for conversion. Argument and bald
assertions, however, are not evidence. The sum and substance of their argument for summary
judgment on conversion is that Velotta is liable for conversion because: 1) certain deductions
were made from the CRS earned wages of laborer and carpenter employees for union dues and
PAC contributions to be paid to the Fund were withheld by CRS, but were never submitted to the
Fund; 2) the withheld amounts were property of Plaintiffs and not of CRS or Velotta; 3) Velotta
was an officer of CRS; and 4) Velotta had discretionary control over money held by CRS and
had the authority and responsibility to remit to the Funds on behalf of those carpenters and
laborers any monies withheld by CRS to be paid to the Funds. ECF No. 40 at 5-6.
Velotta does not appear to dispute that CRS made withholdings from wages of carpenters
and laborers performing work for CRS that were to be paid to the Funds but were not remitted as
required. As indicated supra, the question of whether Velotta was an officer of CRS during the
relevant time period remains in dispute. Similarly, whether Velotta had authority and control
over CRS assets by virtue of his position as Vice President of Operations for Velotta Company is
not established on this record so as to render him liable for conversion.
Plaintiffs’ reliance on Cioppa and Parkins is misplaced. The Court in Cioppa determined
that that the individual who admittedly was the sole shareholder, director and officer of the
corporation that withheld wages for union dues and PAC contributions from that corporation’s
laborers but did not pay the withholdings to the Funds as required, was liable for conversion as a
matter of law. Cioppa, 346 F. Supp. 2d at 773-774. See also Molinaro, 2017 WL 635361, at *56. In Parkins, the summary judgment record established that the individual sued was President
of the corporation and also was personally responsible for directing the payment of all corporate
expenses, but failed to turn over the withholdings. Parkins, 2002 WL 31435287, at *5.
Here, the record on summary judgment differs significantly. Velotta was not admittedly
or otherwise the sole shareholder, officer or director of CRS or Velotta Company. Velotta
disputes that he was an officer or employee of CRS at the relevant time, and furthermore Velotta
testified that in his position for Velotta Company he was not responsible for any financial
matters. Relevant and material issues of fact therefore remain related to this Count as well.
Based on the foregoing, summary judgment in favor of the Funds and against Velotta on the
claim for conversion is inappropriate and will be denied.
Through what they offer as “facts” on summary judgment, Plaintiffs paint a picture of
this case with a rather broad brush, making improper inferences and construing the facts and
inferences in their own favor as the movants on summary judgment. Critical to their cases
against Velotta is the remaining factual issue of when Velotta was an officer of CRS with check
signing authority. Also, critical to their “alternative theory” of liability is that CRS and Velotta
Company were a single employer during the relevant time period, which cannot be resolved on
this record and its applicability remains doubtful. Finally, Plaintiffs must show that Velotta had
the requisite authority or control over plan assets and required remittance to the Funds, which
they have failed to do. Therefore, Plaintiffs are not entitled to summary judgment. Accordingly,
the following Order is entered:
AND NOW, this 13th day of September, 2017, upon consideration of Plaintiff Carpenters
Combined Funds, Inc.’s Motion for Summary Judgment, Plaintiff’s Brief in Support, Defendant
Thomas Velotta’s Brief in Opposition and Plaintiff’s Reply Brief, IT IS HEREBY ORDERED
that the Motion for Summary Judgment docketed at Civil Action No. 13-1287, ECF No. 39, is
FURTHER, upon consideration of Plaintiff Laborers’ Combined Funds of Western
Pennsylvania’s Motion for Summary Judgment, Plaintiff’s Brief in Support, Defendant Thomas
Velotta’s Brief in Opposition and Plaintiff’s Reply Brief, IT IS HEREBY ORDERED that the
Motion for Summary Judgment docketed at Civil Action No. 13-1287, ECF No. 39, is DENIED.
BY THE COURT:
/s/ Maureen P. Kelly
MAUREEN P. KELLY
CHIEF UNITED STATES MAGISTRATE JUDGE
All Counsel of Record Via CM-ECF
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