Colussi v. Sandimo Materials

• Decision Date: 01 August 2000
• Docket Number: Docket No. 00-7219,DEFENDANTS-APPELLEES,PLAINTIFFS-APPELLANTS
• Citation: 250 F.3d 120
• Parties: (2nd Cir. 2001) JOHNNIE BROWN, ALDO COLUSSI, ANIELLO MADONNA, VINCENT SCAVETTA, THEODORE KING, CHESTER BROMAN, JOSEPH J. FERRARA, AND FRANK FINKEL, AS TRUSTEES AND FIDUCIARIES OF THE LOCAL 282 WELFARE, PENSION, ANNUITY AND JOB TRAINING TRUST FUNDS,, v. SANDIMO MATERIALS, RUAL TRUCKING CO., ALMAR SUPPLIES, INC., AND ALFREDO LAMANNA TRUCKING, INC.,
• Court: U.S. Court of Appeals — Second Circuit

Page 120

250 F.3d 120 (2nd Cir. 2001)

JOHNNIE BROWN, ALDO COLUSSI, ANIELLO MADONNA, VINCENT SCAVETTA, THEODORE KING, CHESTER BROMAN, JOSEPH J. FERRARA, AND FRANK FINKEL, AS TRUSTEES AND FIDUCIARIES OF THE LOCAL 282 WELFARE, PENSION, ANNUITY AND JOB TRAINING TRUST FUNDS, PLAINTIFFS-APPELLANTS, v. SANDIMO MATERIALS, RUAL TRUCKING CO., ALMAR SUPPLIES, INC., AND ALFREDO LAMANNA TRUCKING, INC., DEFENDANTS-APPELLEES

Docket No. 00-7219

August Term, 2000

UNITED STATES COURT OF APPEALS For the Second Circuit

Argued December 13, 2000

May 14, 2001

Appellants appeal from a judgment entered on March 21, 2000, in accordance with Findings of Fact and Conclusions of Law entered on January 31, 2000 (Leonard Wexler, Judge), ordering plaintiffs to pay $7,536,021.59 plus interest to a union pension fund to compensate for unpaid contributions, arguing that the district court: (1) erred in striking their demand for a jury trial; (2) erred in finding that although one of the defendants had not signed certain collective bargaining agreements, it was bound to their terms by its conduct; (3) erroneously found that defendants constituted a single employer and that their employees comprised an appropriate single bargaining unit, making defendants jointly and severally liable under the collective bargaining agreements; (4) erred in finding that defendants were jointly and severally liable under the collective bargaining agreements due to their status as alter egos of one another; and (5) erred in its calculation of the amount due to plaintiffs.

Judgment vacated and case remanded for jury trial.

[Copyrighted Material Omitted]

Luigi P. DeMaio, Crocco & DeMaio P.C., Mount Kisco, NY, for Appellants.

Eugene S. Friedman, Friedman & Levine, New York, NY (William K. Wolf and William Anspach on the brief), for Appellees.

Before: Cardamone, Parker, Katzmann, Circuit Judges.

Katzmann, Circuit Judge

Defendants, a group of family-owned companies, appeal from a judgment entered on March 21, 2000, in accordance with Findings of Fact and Conclusions of Law entered on January 31, 2000 (Leonard Wexler, Judge), ordering plaintiffs to pay $7,536,021.59 plus interest to the Trustees and Fiduciaries of the Local 282 Welfare, Pension, Annuity and Job Training Trust Funds (the "Trustees") to compensate for unpaid contributions. Because we find that defendants were entitled to a jury trial, we vacate the judgment and remand the case to the District Court.

I. Background

In 1994, pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(a)(3); 1132(d)(1); 1132 (e); 1132(f); 1132(g)(2), and section 301 of the Labor Management Relations Act ("LMRA"), the Trustees brought suit against the defendant companies for unpaid contributions to the Local 282 Welfare, Pension, Annuity and Job Training Trust Funds (the "Funds"). Although only one of the companies, Sandimo Materials, Inc. ("Sandimo"), was a signatory to collective bargaining agreements requiring such contributions, the district court found the defendant companies jointly and severally liable for the unpaid contributions. The companies were held liable for unpaid contributions under agreements signed by Sandimo, as well as for payments under two agreements never signed by any of the defendants, but found by the court to have been adopted by Sandimo.

The defendant companies are all owned and operated by Alfredo Lamanna and his family. In 1972, Alfredo Lamanna formed Alfredo Lamanna Trucking, Inc. ("ALT"), which began as a trucking company, but in 1973 ceased all of its trucking operations to sell sand, gravel, and other building materials. Alfredo Lamanna, the President of ALT, owns fifty percent of ALT, and his sons, Sabatino Lamanna and Emilio Lamanna, who are both officers, each own twenty-five percent. In 1973, Alfredo Lamanna and his brother-in-law, Rudolfo Branchinelli, formed defendant Rual Trucking Co., Inc. ("Rual") to haul the types of building materials sold by ALT. Again, Alfredo Lamanna, who served as an officer of Rual, owned fifty percent of the company, and his sons each owned twenty-five percent. Rual ceased its operations in 1993. In 1979, Sabatino Lamanna and Emilio Lamanna, with the help of their father, formed Sandimo, a "unionized" trucking company engaged in the hauling of building materials. The brothers are officers of Sandimo, and each owns fifty percent of its stock. Finally, in 1989, Alfredo Lamanna helped his daughter, Rossana Lamanna Bartone form Almar Supplies, Inc. ("Almar"), which until 1993 operated a nursery and sold related materials. In 1993, the same year Rual was dissolved, Almar stopped selling gardening materials and became instead a trucking business, hauling the same kinds of building materials hauled by Rual and Sandimo. Rossana is an officer of Almar, and its sole shareholder.

Sandimo signed a series of collective bargaining agreements ("CBAs") with Local 282, a labor union representing truck drivers. As stated by the district court, the relevant contracts for the purposes of this case are: "(1) the New York City Ready-Mix Concrete, Sand, Gravel and Bulk Cement 1984-1987 Contract, covering the period from July 1, 1984 to June 30, 1987 (the `1984-1987 Ready-Mix Agreement'); (2) the New York City Ready-Mix Concrete, Sand, Gravel and Bulk Cement Agreement 1987-1990 Contract, covering the period from July 1, 1987 to June 30, 1990 (the `1987-1990 Ready-Mix Agreement'); and (3) the New York City Heavy Construction and Excavating Industry, Memorandum of Agreement, covering the period from July 1, 1993 to June 30, 1996, but which was signed by Sandimo and became effective March 1, 1994 (the `1993-1996 Excavating Agreement')." The district court found that these agreements, in conjunction with an Agreement and Declaration of Trust entered into by Local 282 and signatory employers, "required Sandimo to make contributions to the Funds in specified amounts for each hour of work in employment covered by the agreements." The 1990-1993 Ready Mix Agreement and the 1993-1996 Excavating Agreement prohibit Sandimo from running a "double-breasted operation" - that is, creating side-by-side union and non-union entities - within the New York region.

As indicated above, Sandimo was not a signatory to any Local 282 CBA between July 1, 1990 (when the 1987-1990 Ready-Mix Agreement expired) and February 28, 1994 (after which it signed the 1993-1996 Excavating Agreement). The district court found that there were at least two applicable CBAs Sandimo could have signed during this period: "(1) the New York City Ready-Mix Concrete, Sand, Gravel and Bulk Cement 1990-1993 Contract, covering the period from July 1, 1990 to June 30, 1993 (the `1990-1993 Ready-Mix Agreement'); and (2) the New York City Ready-Mix Sand, Gravel and Bulk Cement Industry, Memorandum of Agreement, covering the period from July 1, 1993 to June 30, 1996 (the `1993-1996 Ready-Mix Agreement')."

Although it did not sign the 1990-1993 and 1993-1996 Ready-Mix Agreements, the district court determined that Sandimo complied with the terms of these two agreements in numerous respects. In particular, the court found that after the expiration of the 1987-1990 Ready-Mix Agreement, Sandimo (1) "continued to work with only union drivers who were members of Local 282"; (2) "continued to perform the same work out of the same location with the same trucks"; (3) paid wages in accordance with the 1990-1993 and 1993-1996 Ready-Mix CBAs; (4) "continued to remit hourly building fund dues and hourly union dues checkoff on a monthly basis," increasing the amount remitted when changes were made to the CBAs; (5) "continued to recognize a Local 282 shop steward and continued to recognize seniority rights"; (6) submitted to audits by the Fund Trustees and paid any delinquent amounts indicated by those audits; and (7) made certain contributions to the health and welfare funds, resulting in benefits being paid out by the funds to Sandimo workers. In addition, in a letter to Local 282 dated March 2, 1994, Emilio Lamanna, on behalf of Sandimo, stated, "Please be advised . . . I will no longer make any payments against the New York City Ready-Mix contract. I respectfully request that all of my payments be applied to the New York City Excavation Contract." The district court declared that this statement evinced a prior intent to comply with the then- extant Ready-Mix Agreements.

The district court found considerable overlap in the management and operation of the Lamanna family businesses. Regarding the management of these businesses, the court stated that "Alfredo is the president of ALT and was an officer of Rual. Sabatino and Emilio are both officers of ALT and Sandimo. Sabatino and Emilio signed Rual and Sandimo checks, and had check signing authority for ALT." The court also noted the integrated operations of the defendant companies. First, it found that Sandimo, Rual, and ALT all operated out of the same truckyard in Maspeth, New York, and that Almar operated from a Rosedale, New York, property owned by Alfredo, Sabatino and Emilio Lamanna. Sandimo and Rual shared an office, telephone number (which was answered "Lamanna" and not "Sandimo" or "Rual"), and office equipment, and employed the same clerical staff.

The court next found that Sandimo did not own its trucks, but rather used trucks that were owned by ALT and Rual and maintained and insured by ALT. While these trucks were ostensibly leased on a daily basis, there were no written agreements memorializing the lease arrangement, and although there were transfers of funds among ALT, Rual, and Sandimo, no documentation indicated that such transfers were made in connection with the leases. In 1993, when Rual dissolved, Alfredo Lamanna gave Sabatino Lamanna the fleet of Rual trucks, which were used to transform Almar from a nursery business into a trucking company. The court found that while Rossana Lamanna Bartone is an officer of Almar, Emilio and ...