Gambino v. Rotman Elec. Co.

• Decision Date: 16 March 2012
• Docket Number: CIVIL ACTION NO. 09-10118-NMG
• Parties: RICHARD P. GAMBINO, as Administrator, Electrical Workers' Health and Welfare Fund, Local 103, I.B.E.W., Electrical Workers' Pension Fund, Local 103, I.B.E.W., Electrical Workers' Supplementary Health and Welfare Fund, Local 103, I.B.E.W., Electrical Workers' Deferred Income Fund, Local 103, I.B.E.W., Electrical Workers' Joint Apprentice and Training Fund, Local 103, I.B.E.W., Electrical Workers' Educational and Cultural Fund, LAWRENCE J. BRADLEY, as Executive Secretary-Treasurer, National Electrical Benefit Fund, Plaintiffs, v. ROTMAN ELECTRICAL CO., INC., MICHAEL ROTMAN, Individually, and NANCY ROTMAN, Individually, Defendants, G. GREENE CONSTRUCTION CO., INC., HARVARD COOPERATIVE SOCIETY, RICHTER & RATNER CONTRACTING CORP. and FRANK BEAN, Reach and Apply Defendants, and CITIZENS BANK, MORGAN STANLEY SMITH BARNEY, CITISMITHBARNEY, Trustee Process Defendants.
• Court: U.S. District Court — District of Massachusetts

RICHARD P. GAMBINO, as Administrator, Electrical Workers' Health and Welfare Fund, Local 103,I.B.E.W., Electrical Workers' Pension Fund, Local 103, I.B.E.W., Electrical Workers' Supplementary Health and Welfare Fund, Local 103, I.B.E.W.,Electrical Workers' Deferred Income Fund, Local 103, I.B.E.W., Electrical Workers' Joint Apprenticeand Training Fund, Local 103, I.B.E.W., Electrical Workers' Educational and Cultural Fund, LAWRENCE J. BRADLEY,as Executive Secretary-Treasurer, National Electrical Benefit Fund, Plaintiffs,

v.ROTMAN ELECTRICAL CO., INC., MICHAEL ROTMAN, Individually,and NANCY ROTMAN, Individually, Defendants,G. GREENE CONSTRUCTION CO., INC., HARVARD COOPERATIVE SOCIETY, RICHTER & RATNER CONTRACTING CORP.and FRANK BEAN, Reach and ApplyDefendants, and CITIZENS BANK,MORGAN STANLEY SMITH BARNEY, CITISMITHBARNEY, TrusteeProcess Defendants.

CIVIL ACTION NO. 09-10118-NMG

UNITED STATES DISTRICT COURT DISTRICT OF MASSACHUSETTS

Dated: March 16, 2012

REPORT AND RECOMMENDATION RE:

PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT(DOCKET ENTRY # 99);

DEFENDANTS MICHAEL AND NANCY ROTMAN'S CROSS-MOTION FOR

SUMMARY JUDGMENT (DOCKET ENTRY # 105); DEFENDANT ROTMAN

ELECTRICAL COMPANY, INC.'S CROSS-MOTION FOR

PARTIAL SUMMARY JUDGMENT

(DOCKET ENTRY # 108)

BOWLER, U.S.M.J.

Pending before this court are the following motions: (1) a motion for summary judgment(Docket Entry # 99) filed byplaintiff Richard P. Gambino("Gambino" or "the Administrator") in his capacity as Administrator for the Electrical Workers' Health and Welfare Fund, Local 103, I.B.E.W, and a number of other funds ("the Funds");¹(2) a cross motion for summary judgment(Docket Entry # 105) filed by defendants Michael and Nancy Rotman("the Rotmans"); and (3) a cross motion for partial summary judgment filed by defendantRotman Electrical Co., Inc.("Rotman Electrical")(Docket Entry # 108).After conducting a hearing, this court took the motions (Docket Entry ## 99, 105 & 108) under advisement.

PROCEDURAL BACKGROUND

The crux of the present contract dispute arises out of the parties' interpretation of a March 11, 2008 security agreement ("the security agreement") signed by the Rotmans and Rotman Electrical as applied to a March 7, 2008 promissory note ("the note") also signed by the Rotmans and Rotman Electrical.Among the Funds' complaints are Rotman Electrical's failure to pay unpaid contributions, interest, liquidated damages, attorneys' fees and costs pursuant to the 1988 Local 103, I.B.E.W. unioncontract ("the collective bargaining agreement" or "the agreement")² and the Employee Retirement Income Security Act("ERISA"), 29 U.S.C. § 1132(a)(3)("section 1132(a)(3)") and 29 U.S.C. § 1145("section 1145"), as well as the Rotmans' failure to pay unpaid contributions, interest and attorneys' fees and costs purportedly owed under the security agreement and the promissory note.

On January 26, 2009, Gambino, as Administrator of the Funds, and plaintiffLawrence J. Bradley, as Executive Secretary-Treasurer of the National Electrical Benefit Fund, (collectively "plaintiffs") filed the original complaint against Rotman Electrical and the Rotmans.(Docket Entry # 1).On April 23, 2010, plaintiffs filed a motion for a preliminary injunction.(Docket Entry # 79).After a hearing on the motion, the court allowed the injunction and ordered Rotman Electrical and the Rotmans ("defendants") to deliver $146,493.00 to an escrow agent.(Docket Entry ## 79 & 92).The Rotmans acknowledge that the amount equals the money the Rotmans withdrew from two investment accounts pledged to secure payment of the note.(Docket Entry # 76).Thereafter, the court appointed an escrow agent and $146,493.33 was placed in escrow with the escrow agent.(Docket Entry # 98).

Subsequently, on June 15, 2010, plaintiffs filed a verified amended complaint.(Docket Entry # 93).The verified amended complaint sets out the following counts: (1) a violation of section 1145 in connection with unpaid contributions, interest and damages against Rotman Electrical (Count One); (2) a violation of the collective bargaining agreement with respect to contributions, interest and damages against Rotman Electrical (Count Two);³ and (3) violations of the security agreement and the promissory note against the Rotmans (Count Three).

On July 14, 2011, the Funds filed the summary judgment motion requesting entry of a judgment for $583,201.81 in unpaid contributions, interest, liquidated damages, attorneys' fees and costs.(Docket Entry # 99).The Funds further requested that the Rotmans be held liable for $99,661.52 of Rotman Electrical's debts satisfied, if necessary, by taking collateral pledged under the security agreement.(Docket Entry # 99).

On August 12, 2011, the Rotmans filed the cross motion for summary judgment asserting that their personal liabilities were satisfied by payment in full.(Docket Entry # 105).On the same day, Rotman Electrical filed the partial cross motion for summary judgment asserting that it owed the Funds a lesser amount.(Docket Entry # 108).

STANDARD OF REVIEW

Summary judgment is designed "'to pierce the boilerplate of the pleadings and assay the parties' proof in order to determine whether trial is actually required.'"Davila v. Corporacion De Puerto Rico Para La Difusion Publica, 498 F.3d 9, 12(1st Cir.2007) .It is appropriate when the summary judgment record shows "there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law."Rule 56(c), Fed. R. Civ. P."A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party."American Steel Erectors, Inc. v. Local Union No. 7, International Association of Bridge, Structural, Ornamental & Reinforcing Iron Workers, 536 F.3d 68, 75(1st Cir.2008) ."A fact is material if it carries with it the potential to affect the outcome of the suit under the applicable law."Id.

Facts are viewed in favor of the non-movant.Noonan v. Staples, Inc., 556 F.3d 20, 23(1st Cir.2009).When "the nonmovant has the [underlying] burden of proof and the evidenceon one or more of the critical issues in the case is not significantly probative, summary judgment may be granted."Davila, 498 F.3d at 12(internal quotation marks, citation and ellipses omitted);accordClifford v. Barnhart, 449 F.3d 276, 280(1st Cir.2006)(if moving party makes preliminary showing, nonmoving party must "produce specific facts, in suitable evidentiary form, to establish the presence of a trialworthy issue" with respect to each element on which he"would bear the burden of proof at trial")(internal quotation marks and citations omitted).

Plaintiffs submit a LR. 56.1 statement of undisputed facts to support their summary judgment motion.Uncontroverted statements of fact in the LR. 56.1 statement comprise part of the summary judgment record.SeeCochran v. Quest Software, Inc., 328 F.3d 1, 12(1st Cir.2003)(the plaintiff's failure to contest date in LR. 56.1 statement of material facts caused date to be admitted on summary judgment);Stonkus v. City of Brockton School Department, 322 F.3d 97, 102(1st Cir.2003)(citing LR. 56.1 and deeming admitted undisputed material facts that the plaintiff failed to controvert).Local Rule 56.1 also requires oppositions to summary judgment motions to contain a statement of the material facts "with page references to affidavits, depositions and other documentation."

Defendants' LR. 56.1 statement in response to plaintiffs'LR. 56.1 statement as well as defendants' LR. 56.1 statements in support of their summary judgment motions do not contain any references to the record.For example, defendants stated reliance on an affidavit followed by a list of allegedly uncontested facts without citations to the record (Docket Entry # 108) does not comply with LR.56.1.Accordingly, although this court will consider defendants' affidavits and other supporting documentation in support of their summary judgment motions and in opposition to plaintiffs' summary judgment motion, this court will not consider defendants' LR. 56.1 statements.⁴

The factual background includes facts from the verified amended complaint.See generallySheinkopf v. Stone, 927 F.2d 1259, 1262-63(1st Cir.1991)(facts within verified complaint considered equivalent to summary judgment affidavit).Each summary judgment motion is reviewed separately and factual disputes are resolved in favor of the nonmoving party.SeeSaenger Organization, Inc. v. Nationwide Insurance Licensing Associates, 119 F.3d 55, 56(1st Cir.1997).

FACTUAL BACKGROUND

Prior to going out of business in January 2009, RotmanElectrical was a Massachusetts corporation engaged in the business of electrical contracting.(Docket Entry # 93).The Rotmans are husband and wife and were principals of Rotman Electrical throughout the relevant time period.(Docket Entry ## 93 & 101-3).

A.Collective Bargaining Agreement

On May 2, 1988, Rotman Electrical signed a letter of assent to join the Electrical Workers Union, Local 103 of the International Brotherhood of Electrical Workers ("I.B.E.W.") of Greater Boston ("the union") and to allow the union to act as a collective bargaining representative.(Docket Entry # 93-1).Because of the letter of assent and the extensions, Rotman Electrical became bound to the terms and conditions of the collective bargaining agreement including the collective bargaining agreement in effect from September 1, 2006 through August 31, 2011.(Docket Entry ## 93, 93-1 & 93-2).Under the collective bargaining agreement, Rotman Electrical was required to make contributions to the Funds for each hour its union employees worked.⁵(Docket Entry # 93).Contribution amountswere calculated pursuant to the agreement and were due to the Funds no later than the fifteenth of each month.(Docket Entry ## 93 & 93-2).

The agreement also established a method to collect delinquent contribution payments....