Local Union No. 38, Sheet Metal v. A & M Heating

• Decision Date: 21 April 2004
• Docket Number: No. 03 CIV. 4149(WCC).,03 CIV. 4149(WCC).
• Citation: 314 F.Supp.2d 332
• Parties: LOCAL UNION NO. 38, SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, AFL-CIO, Plaintiff, v. A & M HEATING, AIR CONDITIONING, VENTILATION & SHEET METAL, INC., Defendant.
• Court: U.S. District Court — Southern District of New York

314 F.Supp.2d 332

LOCAL UNION NO. 38, SHEET METAL WORKERS' INTERNATIONAL ASSOCIATION, AFL-CIO, Plaintiff, v. A & M HEATING, AIR CONDITIONING, VENTILATION & SHEET METAL, INC., Defendant.

No. 03 CIV. 4149(WCC).

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

April 21, 2004.

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Law Offices of Jeffrey S. Dubin, Attorneys for Plaintiff, Huntington, Jeffrey S. Dubin, Esq., Of Counsel.

Joseph P. Carey, P.C., Attorneys for Defendant, Fishkill, Joseph P. Carey, Esq., Of Counsel.

OPINION AND ORDER

WILLIAM C. CONNER, Senior District Judge:

Plaintiff Local Union Number 38, Sheet Metal Workers' International Association, AFL-CIO (the "Union") brings this action against defendant A & M Heating, Air Conditioning, Ventilation & Sheet Metal, Inc. ("A & M Heating"). The Union alleges inter alia that A & M Heating is the alter ego of Hudson Heating, Inc. ("Hudson Heating" or the "company") and is therefore liable for breach of Hudson Heating's Collective Bargaining Agreement (the "CBA"). (Complt.¶ 11.) The Union moves to compel arbitration and stay this action pursuant to an arbitration clause that appears in Hudson Heating's CBA. In its Supplemental Memorandum of Law filed with the Court in response to a request for further briefing, A & M Heating contended that this action must be dismissed pursuant to FED. R. CIV. PROC. 12(b)(1) for lack of subject matter jurisdiction because A & M Heating is not the alter ego of Hudson Heating. In its Supplemental Reply Memorandum of Law, the Union responded, albeit incompletely and unpersuasively, to A & M Heating's jurisdictional objection.¹ For the reasons stated herein, plaintiff's motion is denied, its Complaint is dismissed in its entirety with prejudice and judgment is entered in favor of defendant.

BACKGROUND

Unless otherwise noted, the following facts are undisputed. Alex Mancone became a member of the Union in November 1983 when he secured his first union job in the sheet metal trade. (Alex Mancone Decl. ¶ 4.) During his years of employment in the industry, Alex Mancone observed other Union members participate in family businesses in the following manner: someone in the family other than the Union member formed a company, entered into a collective bargaining agreement with the Union and hired the Union member. If that business experienced a slow period, the Union member could obtain employment with other employers through the Union's hiring hall. (Id. ¶ 5.) Sometime prior to January 1996, Alex Mancone began to get only sporadic work referrals from the Union's hiring hall. As a result, Alex and his wife, Lois Mancone, encountered financial difficulties. Although Lois Mancone wanted to obtain employment she did not have particularly marketable work experience because she had devoted her time to raising the couple's two children who were in high school at the time. (Lois Mancone Decl. ¶ 5.) The Mancones decided that the best solution to their dilemma was to have Lois Mancone form a sheet metal business and devote her time to running it while her husband worked for the company or for other employers that were affiliated with the Union. (Id. ¶¶ 6-7.)

Hudson Heating was incorporated under the laws of New York on January 25, 1996. (Alex Mancone Decl., Ex. 2.) Lois Mancone owned 100% of the shares of Hudson Heating and was listed with the Department of State as the corporation's agent for service of process. (Id.) Lois Mancone entered into a lease for a shop located at 577 North Main Street in Brewster, New York, and Hudson Heating operated out of the premises. (Lois Mancone Decl. ¶ 8.) She also negotiated with the Union and executed on behalf of Hudson Heating a CBA that became effective July 31, 1998 and expired April 30, 2002. (Id. ¶ 9.) Lois Mancone was the only party authorized to sign checks and approve expenditures for the company. (Alex Mancone Decl. ¶ 24.)² In his role as the company's working foreman, Alex had no control over Hudson Heating's labor relations and did not participate in any negotiations with the Union; Lois Mancone controlled this area of the business. (Id. ¶ 9; Lois Mancone Decl. ¶ 9.) Similarly, Lois Mancone claims that she generally called the Union to request employees for Hudson Heating. (Id. ¶¶ 9, 13; Alex Mancone Decl. ¶ 9.) Union president Gino Columbo claims that "Lois Mancone never called Local 38 to request workers. Alex Mancone was always the person that requested workers." (Columbo Aff. ¶ 9.) Lois Mancone states that if Columbo is truly under the impression that she never requested workers it is because she always called the Union's business agent Steven Bender to do so. (Lois Mancone Decl. ¶ 13.) Although the Union had the opportunity to address this point in its reply, it did not dispute Lois's statement. The evidence also demonstrates that Lois Mancone hired a worker that was allowed to join the Union after thirty days of employment with Hudson Heating. (Alex Mancone Decl. ¶ 18.)

Lois Mancone attended all contract negotiations relating to Hudson Heating's jobs, attended job meetings and collected all accounts receivable. (Lois Mancone Decl. ¶¶ 10-11.) When Alex was not present at a particular job, Lois visited the job site to ensure that the helpers had arrived to work and were performing their duties in a satisfactory manner. (Id.) She also delivered materials to job sites from time to time. (Id.) Columbo contends that "Lois Mancone was never present on any of Hudson's job sites." (Columbo Aff. ¶ 10.) However, the Union president could not possibly have such information without constant monitoring of Hudson Heating's job sites. Therefore, we decline to give Columbo's statement any weight. See Prudential Sec. Inc. v. Arain, 930 F.Supp. 151, 155 (S.D.N.Y.1996) (declining to credit an affidavit on a motion to compel arbitration where the declarant had no competent basis for testifying as to the inner workings of the petitioner's company).³

The Union contends, and defendant does not deny, that Hudson Heating utilized in its operations the same vans — a blue Ford and a blue Chevrolet — that A & M Heating now employs. (Columbo Aff. ¶ 15.) However, there is no indication as to the ownership of these vehicles or whether they were the only vehicles that were used by the two companies. Columbo also claims that Hudson Heating utilized certain shop equipment leased from Tempaire, Inc. (Columbo Aff. ¶ 20.) Lois Mancone indicates that the metal forming equipment in question was not leased but was acquired by Alex Mancone personally in 1996 and later used by him while working for Hudson Heating. (Lois Mancone Decl. ¶ 18.)

Sometime in 1998, near one of Hudson Heating's job sites, Alex Mancone and Union business agent Steven Quanto had a heated verbal exchange in which Quanto referred to Alex Mancone as a "piece of shit." (Alex Mancone Decl. ¶ 11.) Subsequent to this altercation, Alex Mancone alleges that the Union deliberately failed to credit benefit payments from Hudson Heating and then ordered a Union member to leave the company's job site, for the stated reason that Hudson Heating was in default. Alex Mancone reported the Union to the Federal Bureau of Investigation ("FBI"), complaining that this conduct amounted to racketeering. (Id. ¶ 14.) After this, defendant contends, and the Union offers no evidence to the contrary, that the Union ruined Hudson Heating by continually refusing to refer workers to it. Because Hudson Heating was bound by the CBA, it could not hire non-union laborers and without workers Hudson Heating could not take on any new jobs. (Id. ¶ 19.) Defendant also claims, and again the Union has offered no evidence to the contrary, that in late 1999 when Alex Mancone contacted Columbo to request work with other Union employers, Columbo informed him that he would see to it that Alex Mancone never again worked for a Union employer. (Id. ¶ 20.) Accordingly, Alex resigned from the Union. (Id. ¶ 21, Exs. 5, 6.)

In the Union's Reply Memorandum of Law, counsel for the Union declines to address directly the allegations of wrongdoing made by Alex Mancone in his sworn declaration opposing the Union's motion. (Pl. Reply Mem. Supp. Mot. Compel at 1.) Counsel states that the Union does not need to refute this evidence because the statements are untrue and irrelevant and asks the Court to take judicial notice of the alleged fact that no Union official was ever indicted for the behavior Alex Mancone reported. (Id.) Counsel next states, "We invite the Employer to make these allegations in an unprotected public forum." (Id.) Apparently, counsel is under the impression that he can remedy his failure to provide any evidence to refute Alex Mancone's sworn statement merely by implying that they are slanderous. He cannot. See Trap Rock Indus., Inc. v. Local 825, Int'l Union of Operating Eng'rs, AFL-CIO, 982 F.2d 884, 891 (3d Cir.1992) (holding that statements in a brief are insufficient to rebut affidavits offered to oppose a motion to compel arbitration). Furthermore, even if it is true that no Union official has been indicted for the Union's alleged wrongdoing in this case, it does not tend to rebut the evidence offered by A & M Heating that Alex Mancone was essentially blacklisted from Union employment because there is no evidence that Alex Mancone ever reported that action to the FBI.

The Union brought an arbitration proceeding against Hudson Heating alleging that Hudson Heating owed benefits under the CBA and obtained a judgment for $30,496.39 plus $8,262.50 in attorney's fees on July 17, 2000. (Def. Letter Br. 2/23/04, Ex. 1.) On August 11, 2000, Hudson Heating filed a voluntary Chapter 7 bankruptcy petition. (Lois Mancone Decl., Ex. 2.) To date, the Union's judgment appears unsatisfied. (Def. Letter Br. 2/23/04.) Hudson Heating also incurred other substantial debts that were not discharged in the bankruptcy proceeding. (Id.)

On September 7, 2000, Alex Mancone formed A & M Heating for the...