Hudson County Carpenters Local v. V.S.R. Const.

• Decision Date: 29 December 2000
• Docket Number: No. C.A. 99-6032(DRD).,C.A. 99-6032(DRD).
• Citation: 127 F.Supp.2d 565
• Court: U.S. District Court — District of New Jersey
• Parties: HUDSON COUNTY CARPENTERS LOCAL UNION NO. 6, Carpenters Local Union No. 6 Benefit Funds, and Zazzali, Fagelli & Nowak, P.A., Plaintiffs, v. V.S.R. CONSTRUCTION CORP., V.S.R. Construction, V.S.R. Construction Specialties, V.S.R. Construction Specialties, Inc., V.S.R. Construction, Inc., Melcon Construction Corp., Vista Drywall, Vincent Mauro, and Randi Mauro, Defendants.

127 F.Supp.2d 565 HUDSON COUNTY CARPENTERS LOCAL UNION NO. 6, Carpenters Local Union No. 6 Benefit Funds, and Zazzali, Fagelli & Nowak, P.A., Plaintiffs,
v.
V.S.R. CONSTRUCTION CORP., V.S.R. Construction, V.S.R. Construction Specialties, V.S.R. Construction Specialties, Inc., V.S.R. Construction, Inc., Melcon Construction Corp., Vista Drywall, Vincent Mauro, and Randi Mauro, Defendants. No. C.A. 99-6032(DRD). United States District Court, D. New Jersey. December 29, 2000.

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Aileen M. O'Driscoll, Zazzali, Fagella & Nowak, Newark, NJ, for Plaintiffs.

Mark I. Chinitz, Stein Riso Mantel Haspel & Jacobs, L.L.P. Chatham, NJ, for Movant Defendants, V.S.R. Construction Specialties, Inc., Vista Drywall Corp., Vincent Mauro, and Randi Mauro.

OPINION

DEBEVOISE, Senior District Judge.

Plaintiffs in this action are a labor union, its pension and welfare trust funds, and the law firm that represents them. Alleging alter ego, single employer, successorship, common control, and veil piercing theories of liability, plaintiffs filed this action to recover judgments owed to them by defendants V.S.R. Construction Corp. and Melcon Construction Corp. ("the judgment defendants"). The judgments were incurred as a result of the judgment defendants' failure to make contributions to the trust funds as required by the terms of collective bargaining agreements entered into by the parties. Defendants V.S.R. Construction Specialties, Vista Drywall Corp., Vincent Mauro, and Randi Mauro ("the non-judgment defendants") move to dismiss the complaint for lack of subject matter jurisdiction, lack of personal jurisdiction, and failure to state a claim upon which relief may be granted. For the reasons set forth herein, the non-judgment defendants' motion will be granted as to defendants Vincent Mauro and Randi Mauro, and denied as to the corporate defendants.

STATEMENT OF FACTS

Plaintiff Hudson County Carpenters Local Union No. 6 ("the Union") is an unincorporated labor organization. Plaintiffs Carpenters Union Local No. 6 Benefit Funds ("the Funds") are unincorporated, multiemployer pension and welfare trust funds subject to the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq. Plaintiff Zazzali, Fagella & Nowak ("the Firm") is a law firm that represents the Union and the Funds.

Under the collective bargaining agreements¹ and two individuated "short form agreements" that incorporate the collective bargaining agreements (collectively, the "CBA"), the judgment defendants agreed to make fringe benefit contributions to the Funds on behalf of employees covered by the CBA. The judgment defendants failed to fulfill their obligations under the CBA, which precipitated the three arbitration awards entered against them. Plaintiffs sought to confirm the arbitration awards in three civil actions filed in this Court, and obtained three judgments against the judgment defendants as follows:

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                 Civil Action No. Judgment Defendant Date of Judgment Amount of Judgment
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                 97-1137 V.S.R. Constr. May 20, 1997 $67,051.11
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                 98-4485 Melcon Constr. Nov. 2, 1998 $ 8,596.48
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                 99-0620 V.S.R. Constr. Mar. 20, 1999 $50,109.06
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To date, none of these judgments has been satisfied by the judgment defendants.

None of the non-judgment defendants was a party to the CBA, and none of them is named in the judgments entered in favor of the plaintiffs. In their First Amended Complaint, however, plaintiffs allege that V.S.R. Construction, V.S.R. Construction Specialties, V.S.R. Construction Specialties, Inc., V.S.R. Construction, Inc., and Vista Drywall Corp. are alter ego or successor companies to, or joint and single employers with, the judgment defendants. First Amended Complaint at ¶ 22. Plaintiffs further allege that the individual defendants, Vincent and Randi Mauro, are principals of the corporate entities and have failed to follow corporate formalities with the intent of evading the obligation to make contributions to the Funds and to avoid satisfaction of the judgments. First Amended Complaint at ¶ 23. Applying these theories, plaintiffs seek to establish liability against the defendants for the unsatisfied judgments.

DISCUSSION Subject Matter Jurisdiction

Plaintiffs assert two possible bases for subject matter jurisdiction. First, they argue that jurisdiction may be invoked pursuant to Section 515 of the Employee Retirement Income Security Act ("ERISA"), which states:

Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 U.S.C. § 1145. Second, they claim jurisdiction under Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. Section 301 provides federal district courts with jurisdiction to hear "[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce. . . ." 29 U.S.C. § 185(a). As already noted, plaintiffs and the judgment defendants are parties to the CBA within the meaning of ERISA § 515 and LMRA § 301. It is well-established that the failure to make contributions to a union trust fund as required by a collective bargaining agreement constitutes a violation of ERISA § 515 and a violation of LMRA § 301. Mass. State Carpenters Pension Fund v. Atlantic Diving Co., 635 F.Supp. 9, 10-11 (D.Mass.1984); Composition Roofers Union Local No. 30 Welfare Trust Fund v. Jackel Servs. Corp., 1998 WL 32608 (E.D.Pa.); Trustees of Nat'l Elevator Indus. Pension, Health Benefit & Educ. Funds v. Nordic Indus., 1997 WL 83742 (E.D.Pa.).

The non-judgment defendants, who view this case merely as an action to enforce the judgments against them, contend this court lacks subject matter jurisdiction under the Supreme Court's decision in Peacock v. Thomas, 516 U.S. 349, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996). In Peacock, Thomas brought an ERISA action against his corporate employer and an individual officer and shareholder of the corporation, Peacock, for benefits due to him under his employer's pension benefits plan. 516 U.S. at 351, 116 S.Ct. 862. The district court held Peacock was not a fiduciary, and judgment was entered against the corporation only. Ibid. Thomas was unable to collect, however, because Peacock had siphoned off corporate assets to prevent satisfaction of the judgment. Id. at 352, 116 S.Ct. 862. Thomas then filed a second suit against Peacock, asserting a cause of action for piercing the corporate veil "under ERISA and applicable federal law." Ibid. The district court awarded judgment in favor of Thomas and the Court of Appeals for the Fourth Circuit affirmed. Ibid.

The Supreme Court reversed, finding a lack of subject matter jurisdiction under either ERISA or the federal courts' ancillary

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jurisdiction. 516 U.S. at 352-59, 116 S.Ct. 862. As to the first point, the Court observed that "[p]iercing the corporate veil is not itself an independent ERISA cause of action," and that Thomas' failure to allege an underlying ERISA violation left the court without jurisdiction to hear his suit. Id. at 354, 116 S.Ct. 862. As to the second point, the Court rejected Thomas's argument that the second suit fell within the district court's ancillary jurisdiction to enforce its earlier judgment, stating that "[t]he court must have jurisdiction over a case or controversy before it may assert jurisdiction over ancillary claims." Id. at 355, 116 S.Ct. 862. "[C]laims alleged to be factually interdependent with and, hence, ancillary to claims brought in an earlier federal lawsuit will not support federal jurisdiction over a subsequent lawsuit." Ibid. (emphasis added). In conclusion, the Court stated that "[w]e have never authorized the exercise of ancillary jurisdiction in a subsequent lawsuit to impose an obligation to pay an existing federal judgment on a person not already liable for that judgment." Id. at 357, 116 S.Ct. 862.

The impact of Pe...