Hardy v. Kaszycki & Sons Contractors, Inc.

• Decision Date: 19 October 1994
• Docket Number: No. 83 Civ. 6346 (KTD).,83 Civ. 6346 (KTD).
• Citation: 870 F. Supp. 489
• Parties: Joseph HARDY and Harvey L. Sherrod, individually and as a participant in the Local 95 Insurance Trust Fund and the Local 95 Pension Fund, and on behalf of all other persons who are, will be, or have at any time since January 1, 1980 been participants or beneficiaries in the Funds, similarly situated, Plaintiff, v. KASZYCKI & SONS CONTRACTORS, INC.; William Kaszycki; John Senyshyn; Trump-Equitable Fifth Avenue Company; Donald J. Trump; Donald J. Trump d/b/a the Trump Organization; and the Equitable Life Assurance Society of the United States, Defendant.
• Court: U.S. District Court — Southern District of New York

870 F. Supp. 489

Joseph HARDY and Harvey L. Sherrod, individually and as a participant in the Local 95 Insurance Trust Fund and the Local 95 Pension Fund, and on behalf of all other persons who are, will be, or have at any time since January 1, 1980 been participants or beneficiaries in the Funds, similarly situated, Plaintiff, v. KASZYCKI & SONS CONTRACTORS, INC.; William Kaszycki; John Senyshyn; Trump-Equitable Fifth Avenue Company; Donald J. Trump; Donald J. Trump d/b/a the Trump Organization; and the Equitable Life Assurance Society of the United States, Defendant.

No. 83 Civ. 6346 (KTD).

United States District Court, S.D. New York.

October 19, 1994.

Jay Goldberg, P.C., New York City (Judd Burstein, Karen A. Murphy, of counsel), for Trump defendants.

Wendy E. Sloan, New York City (Steel, Bellman, Ritz and Clark, P.C., Miriam F. Clark, Lewis M. Steel, of counsel), for plaintiffs.

MEMORANDUM & ORDER

KEVIN THOMAS DUFFY, District Judge:

This case, hoary with age, has recently been transferred to my docket. In the files, I discovered cross-motions for summary judgment and for leave to amend the answer. In addition, defendants' move to strike plaintiff's jury demand. The summary judgment motions are in all respects denied as is the motion to amend the answer and to strike the jury demand. Questions of fact abound prohibiting the granting of summary judgment. See generally Fed.R.Civ.P. 56. The motion to amend the answer in this eleven year old case, if granted, would just start another round of fruitless discovery. There must be an end to all litigation; even Jarndyce v. Jarndyce ground down to a conclusion.

FACTS¹

Sometime in late 1979 or early 1980, Trump-Equitable hired defendant William Kaszycki and his company, Kaszycki & Sons Contractors, Inc. (collectively the "Kaszycki Defendants"), to demolish the Bonwit Teller building in Manhattan. Diduck, 774 F.Supp. at 805. The building was demolished to make way for Trump Tower. Id. Kaszycki had never performed a total demolition before undertaking the Bonwit Teller job, id., and apparently formed the Kaszycki Corporation for this sole purpose. (Transcript of Trial (hereinafter "Tr.") at 594). Thereafter, the Kaszycki Corporation did not do any other total demolition jobs. (Tr. at 594).

Pursuant to an agreement that was signed on January 29, 1980, the Kaszycki Corporation was responsible for the labor, equipment and supplies required to demolish the building. Diduck, 774 F.Supp. at 805. The agreement also provided that the Kaszycki Corporation was responsible for the hiring, firing and supervision of its employees engaged in the demolition job. (Trump Defendants 3(g) Statement, ¶ 2). The Kaszycki Corporation was to be paid $775,000 for this work. Diduck, 774 F.Supp. at 805.

The Kaszycki Corporation employed Polish workers who were paid "off-the-books". Id. No records were kept, no taxes were withheld and the pay was not in accordance with the wage laws. Id. at 805-06. Based on these practices, Kaszycki was later found to have violated certain sections of the Fair Labor Standards Act. See Donovan v. Kaszycki, 599 F.Supp. 860, 864 (S.D.N.Y.1984). Donald Trump visited both the Bonwit Teller job and an adjoining job where he noted that the Polish workers were good workers. Diduck, 774 F.Supp. at 805.

In or around March of 1980, members of Local 95 started working on the site. Id. at 806. Although the Polish workers were told that they would be discharged, some continued to work until June, 1980. Id. At some point, the Kaszycki Corporation and Local 95 entered into a collective bargaining agreement ("CBA") that covered the period from July 1, 1978 to June 30, 1981. Id. at 809. The CBA required the Kaszycki Corporation to make payments to the Local 95 Insurance Fund at a rate of eight percent of the "total wages paid to workers covered" by the agreement. Id. at 810 (quoting from the CBA ¶ 33). In addition, the CBA required contributions to the Local 95 Pension Fund at a rate of ten percent of the total wages paid to workers. Id. The Polish workers were doing work covered by the CBA, and thus contributions for that work were due to the Funds. Diduck, 974 F.2d at 274. Thomas Macari, the vice president of Trump-Equitable, was not told about the CBA until after it was signed. Diduck, 774 F.Supp. at 810.

In March, 1980, John Senyshyn² was the president of Local 95, and consequently was a trustee of both Funds. Diduck, 974 F.2d at 274. Senyshyn and John Osijuk were shop stewards at the demolition site. Id. This position required them to prepare and file with Local 95 weekly reports listing all workers, hours worked and wages. Id. Local 95 would then compare these reports with the payroll reports submitted by the Kaszycki Corporation to insure that the proper contributions to the Funds were being made. Id. In the instant case, neither the Kaszycki Corporation's nor the shop stewards' reports indicated the presence of Polish workers at the demolition site. Id. Thus, contributions to the Funds for their work were not made. Id.

Macari was Trump-Equitable's manager responsible for the demolition of the building. Diduck, 774 F.Supp. at 808. On May 9, 1980, Macari took over control of the finances for the demolition job from Kaszycki. Id. at 809. A special bank account was opened for the Kaszycki Corporation that required Macari's signature for all checks and withdrawals. Id. The bank signature card falsely identified Macari as a vice president of Kaszycki Corporation. Id. This special account was established to insure that payments would be made to the union members, the Funds, taxes, insurance and sick payments. Id. After May 9, no Trump-Equitable payments for the demolition job were made directly to the Kaszycki Defendants; rather, these payments were only made into this special account. Id.

"After May 9, Macari saw to it that bills were paid, that the workers were paid, that work was done, and personally signed for deliveries. He actively participated in paying the union workers. Trump-Equitable paid the union workers' payroll and suppliers of materials for the demolition job from this special account. In addition Trump-Equitable paid bills for the demolition job directly, apart from the special account." Id. (citations omitted). Kaszycki testified at trial that Macari "was running the show. He was in charge of the — he was representing Mr. Trump." (Tr. at 654). Kaszycki also testified in a deposition that about midway through the demolition project "I lost control of paying. Trump Organization, they pay to everybody. They gave me no money and they were making the payroll." Diduck v. Kaszycki & Sons Contractors, Inc., 874 F.2d 912, 915 (2d Cir.1989).

When these payments were made, "Trump-Equitable sent the Funds receipts stating that it was making the payments `On behalf of Kaszycki & Sons Contractors, Inc.' The Funds treated the checks as payments from the Kaszycki Corporation — not from Trump-Equitable — in its records. Macari informed the Kaszycki Corporation about these payments and advised the company that Trump-Equitable would hold it responsible for them." Diduck, 874 F.2d at 915. No action was ever taken by Trump-Equitable against the Kaszycki Corporation, apparently because it was insolvent. In late June, 1980, Macari determined that the Polish workers were no longer needed, and they were let go. Diduck, 774 F.Supp. at 809.

PRIOR PROCEEDINGS

This action was commenced in August, 1983. The complaint alleged various causes of action. Plaintiffs have been granted a default judgment against the Kaszycki Defendants. In 1984, in an unrelated action stemming from the same events that gave rise to this case, the Honorable John E. Sprizzo of this Court found that the Kaszycki Defendants had violated various provisions of the Fair Labor Standards Act. See Donovan v. Kaszycki & Sons Contractors, Inc., 599 F.Supp. 860 (S.D.N.Y.1984). Judge Sprizzo awarded the Polish workers a total of $254,523.59 in unpaid wages and overtime compensation, and the same amount as liquidated damages. Id. at 872. In 1988, Judge Stewart granted the Trump Defendants motion for summary judgment on what is now Plaintiffs' first cause of action. The Second Circuit reversed this decision in 1989. Diduck, 874 F.2d at 912.

The following year, Judge Stewart again granted the Trump Defendants' motion for summary judgment on the first cause of action, holding that the Plaintiffs' failure to comply with Rule 23.1 of the Federal Rules of Civil Procedure was not excused. Diduck, 774 F.Supp. at 802. Judge Stewart also permitted the Plaintiffs to amend their complaint by adding the Trump Defendants to what is now their second cause of action. Id. at 807. Following the sixteen day non-jury trial, Judge Stewart found that defendant Senyshyn had breached his fiduciary duties, and that the Trump Defendants had participated in this breach and were therefore jointly and severally liable. Diduck v. Kaszycki & Sons Contractors, Inc., 774 F.Supp. 802 (S.D.N.Y.1991). Judge Stewart ruled that $325,415.84 in contributions to the Funds should have been made on behalf of the Polish workers. Id. at 814. Judge Stewart also specifically held that the Trump Defendants' liability was based on their participation in the fiduciary breach.

On appeal, the Second Circuit affirmed in part and reversed in part. As to the first cause of action, the Court held that the demand requirement of Rule 23.1 was excused because such a demand would have been futile. Diduck, 974 F.2d at 287. As a result, the first cause of action is currently before this Court. As to the second cause of action, the Court affirmed Judge Stewart's decision except as to the finding of damages. Id. at 279. The Court held that Senyshyn could not be liable for fund contributions owed for work done by the Polish workers before Local 95 arrived on the job. Id. at 277. In addition, the Court remanded to determine the causal connection between the breach of...