Greenblatt v. Delta Plumbing & Heating Corp.
Decision Date | 07 April 1994 |
Docket Number | No. 89 Civ. 7759 (RWS).,89 Civ. 7759 (RWS). |
Citation | 849 F. Supp. 247 |
Parties | William GREENBLATT and Peter N. Salzarulo, as Chairman and Co-Chairman, respectively and Trustees of the Joint Industry Board of the Plumbing Industry of the City of New York and Funds Administered by Joint Industry Board of the Plumbing Industry of the City of New York, Peter N. Salzarulo, in his capacity as President of Local Union No. 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO, Peter N. Salzarulo, Individually and Local Union No. 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO, Plaintiffs, v. DELTA PLUMBING & HEATING CORP. and New York Surety Company, Defendants. |
Court | U.S. District Court — Southern District of New York |
Kaming & Kaming, New York City, for plaintiffs (Joseph S. Kaming, Elizabeth C. Kaming, and Sean O'Donnell, of counsel).
Hollander & Associates, P.C., New York City, for defendant New York Sur. Co. (Michael R. Strauss, of counsel).
Plaintiffs William Greenblatt and Peter N. Salzarulo as Chairman and Co-Chairman, respectively, and Trustees of the Joint Industry Board of the Plumbing Industry of the City of New York and Funds Administered by Joint Industry Board of the Plumbing Industry of the City of New York ("the Board"), Peter N. Salzarulo, in his capacity as President of Local Union No. 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO, Peter N. Salzarulo, individually, and Local Union No. 2 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO (collectively, the "Plaintiffs"), have submitted a proposed judgment purportedly in conformance with this Court's opinion of September 29, 1993, reported at 834 F.Supp. 86 (S.D.N.Y. 1993) (the "September 29 Opinion"). Defendant New York Surety Company ("New York Surety") objects to certain portions of the Plaintiffs' proposed judgment, and has submitted a proposed counter-judgment.
The parties, facts, and prior proceedings in this matter were discussed at length in prior opinions of this Court, familiarity with which is assumed. See, e.g., Greenblatt v. Delta Plumbing & Heating Corp., 834 F.Supp. 86 (S.D.N.Y.1993); Greenblatt v. Delta Plumbing & Heating Corp., 818 F.Supp. 623 (S.D.N.Y.1993). They will be described below only to the extent necessary for the resolution of this motion.
The Plaintiffs, who include guardians of various Employee Retirement Income Security Act of 1974 (ERISA) funds, brought suit in this Court against Delta Plumbing and Heating Corporation ("Delta") on November 30, 1989, and added the New York Surety as a named defendant in May 1990. Delta sought protection from its creditors by filing a voluntary petition in bankruptcy in March 1991, automatically staying the action against it pursuant to 11 U.S.C. § 362, leaving New York Surety as the sole defendant.
New York Surety's motion to dismiss the complaint was denied on April 9, 1993. Greenblatt v. Delta Plumbing & Heating Corp., 818 F.Supp. 623 (S.D.N.Y.1993). In the April 9 Opinion, the Court determined that New York Surety was subject to the jurisdiction of the Court under ERISA, 29 U.S.C. § 1145 ("Section 1145").
The September 29, 1993 Opinion, issued after trial, concluded that "judgment will be entered awarding to the Board the sum of $50,636.86 plus costs." Greenblatt v. Delta Plumbing & Heating Corp., 834 F.Supp. 86, 93 (S.D.N.Y.1993). Argument on the present matter was heard on January 5, 1994, and was considered fully submitted as of that date.
The Plaintiff's proposal provides for judgment in the principal amount of $50,638.86 as and for past benefit contributions for the period through to June 30, 1990, interest at 18% according to the CBA from March 5, 1990, liquidated damages in the amount of $33,421.65, disbursements of this action in the amount of $807.00, attorneys' costs in the amount of $73,963.25, and accounting costs in the amount of $3,650.00, amounting in total to $195,902.41.
The CBA provides, among other things, as follows:
On January 29, 1990 a bond was executed and issued by New York Surety for the benefit of Delta as Principal and the Board as Obligee (the "Bond") on a form prepared by the Board in the penal sum of $80,000.00.
The Bond provides for:
(1) an amount equal to all required fringe benefits under the Collective Bargaining Agreement on all classifications of employees covered thereunder who are employed by the Principal; ... which amounts shall be due to the Obligee during the term of said Agreement, or written modification, renewal or extensions, or on such other dates or at such other times as may hereafter be agreed upon in writing between the Principal and the Obligee....
The Plaintiffs argue that they are entitled to interest at 18%, liquidated damages, and costs including attorneys' fees for a number of reasons. First, they argue that ¶ 20 of the CBA, which prescribes the consequences to an employer ensuing from a failure to pay fringe benefits, is applicable to New York Surety.
In addition, the Plaintiffs argue that they are entitled to these costs pursuant to ERISA, 29 U.S.C. § 1132(g)(2) ("Section 1132(g)"), which provides:
The Plaintiffs argue that, since the Court has previously found that New York Surety was an employer pursuant to 29 U.S.C. §§ 1002(5) and 1145 for purposes of jurisdiction, Greenblatt v. Delta Plumbing & Heating Corp., 818 F.Supp. 623, 625-29 (S.D.N.Y. 1993), New York Surety should also be subject to the punitive provisions of the Bond and of Section 1132(g)(2).
In the September 29 Opinion, the Court determined liability against New York Surety based on the face of the Bond. Citing Crisafulli Brothers, Inc. v. Clanton, 128 A.D.2d 963, 512 N.Y.S.2d 927, 928 (1987), the Court stated that:
It is an established rule of law that the language of guaranty must be given its ordinary meaning. It is equally accepted law that the liability of a guarantor cannot be extended in the application of a guarantee beyond the clear agreement of the parties.
Greenblatt, 834 F.Supp. at 92.
As further determined by the Court, "the Bond is unambiguous, covering: an amount equal to all required fringe benefits." Id. at 91. Under the Bond, New York Surety's liability is limited to the fringe benefits set forth in the bond, which does not cover each item of damage recoverable from Delta under the CBA. The bond does not express the clear intent of the parties that, in addition to the fringe benefits listed in the CBA, New York Surety should be liable for all penalties assessable against Delta for a failure to pay fringe benefits. See Davis Acoustical Corp. v. Hanover Ins. Co., 22 A.D.2d 843, 254 N.Y.S.2d 14, 16 (3d Dept.1964) ( ...
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