Morrissey v. Curran, 73 Civ. 204 (WCC).

• Decision Date: 19 December 1979
• Docket Number: No. 73 Civ. 204 (WCC).,73 Civ. 204 (WCC).
• Citation: 482 F. Supp. 31
• Parties: James M. MORRISSEY and Ralph Ibrahim, Individually and on behalf of the members of the National Maritime Union of America, Plaintiffs, v. Joseph CURRAN, as President of the National Maritime Union of America and Individually, Shannon Wall, as Secretary-Treasurer of the National Maritime Union of America and Individually, Mel Barisic, Rick S. Miller, James J. Martin, Peter Bocker, Leo Strassman, Robert Nesbitt, William Perry, Abraham E. Freedman, Martin Segal and Leon Karchmer, Individually, Defendants.
• Court: U.S. District Court — Southern District of New York

482 F. Supp. 31

James M. MORRISSEY and Ralph Ibrahim, Individually and on behalf of the members of the National Maritime Union of America, Plaintiffs, v. Joseph CURRAN, as President of the National Maritime Union of America and Individually, Shannon Wall, as Secretary-Treasurer of the National Maritime Union of America and Individually, Mel Barisic, Rick S. Miller, James J. Martin, Peter Bocker, Leo Strassman, Robert Nesbitt, William Perry, Abraham E. Freedman, Martin Segal and Leon Karchmer, Individually, Defendants.

No. 73 Civ. 204 (WCC).

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

July 27, 1979.

Opinion and Order December 19, 1979.

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Duer & Taylor, New York City, for plaintiffs; Arthur E. McInerney, New York City, of counsel.

Feder, Kazovitz & Weber, Hale, Russell, Gray, Seaman & Birkett, New York City, for defendant Curran; Francis J. Dooley, Orange, N. J., Thomas E. Engel, Selvyn Seidel, New York City, of counsel.

Evans, Koelzer, Marriott, Osborne & Kreizman, Red Bank, N. J., for defendants Wall, Barisic, Martin, Miller, Strassman, Nesbitt and Bocker; George J. Koelzer, Joel N. Kreizman, Red Bank, N. J., of counsel.

Waldman & Waldman, New York City, for defendants Wall, Barisic, Miller, Martin and Bocker; Seymour M. Waldman, New York City, of counsel.

Duane, Morris & Heckscher, Philadelphia, Pa., for intervenor, Edward Pogor; Thomas P. Preston, Philadelphia, Pa., of counsel.

OPINION

CONNER, District Judge:

This is an action under Section 501 of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 501, brought by two members of the National Maritime Union ("NMU" or "the Union") against past and present officers of the Union and trustees of its Officers' Pension Plan ("OPP") charging various breaches of fiduciary duties, principally in the payment to or for certain officers of unauthorized or excessive salaries, pensions, severance pay and other benefits.

Procedural Background

As a prerequisite to this action, 29 U.S.C. § 501(b), plaintiffs on August 2, 1971 wrote to the defendant officers of the NMU, requesting the filing of an action for an accounting of the NMU general fund and pension plan and to recover damages for the losses sustained as a result of breaches of fiduciary duty by the officers "in that they did suffer and permit expenditures of moneys from the NMU general fund which expenditures were not for the benefit of the organization and its members" and by the trustees "in that they did permit expenditures of moneys from the maritime Union Pension Plan, which expenditures were contrary to the terms of the Plan and not for the benefit of the participants of said Plan." The letter set forth a number of specific examples of the alleged breaches, adding that they were "merely illustrations and your actions should not be limited to recovery solely of these items" but of all losses "discovered or discoverable in the necessary accounting proceedings."

When, as expected, no action resulted, plaintiffs applied to this Court, pursuant to Section 501(b), for leave to bring suit. On January 9, 1973, Judge Robert L. Carter granted leave to commence a proceeding, inter alia,

"1. For an accounting of the general funds of the NMU;

* * * * * *

"3. For an accounting of the NMU Officers' Pension Fund;

"4. For damages, injunctive and other appropriate relief against the defendants with relation to the breaches of their fiduciary duties under Title 29 U.S.C. § 501 * * *."

The original Complaint charged thirteen specific violations of trust and, by a memorandum and order dated February 25, 1975, 76 CCH Labor Cases ¶ 10,695, the Court granted leave to file an Amended Complaint alleging six more.

The action went to trial on February 23, 1976. After two trial days, plaintiffs rested and defendants moved orally to dismiss the Complaint for failure to make out a prima facie case. In the ensuing discussion, plaintiffs' attorney indicated that he had been hampered in preparing for trial by the Union's delay in producing documents and that he had wished to take additional testimony but had been unable to obtain service of subpoenas on the witnesses. The Court, remarking that valuable rights of Union members should not be lost through inadequate trial preparation, adjourned the trial to afford plaintiffs' counsel a further opportunity to put their case in order. To accommodate defendants' counsel and witnesses, defendants were allowed to proceed with the beginning part of their case the following day.

The second and final installment of plaintiffs' main case was presented from April 19 through April 21, 1976. At its conclusion, defendants renewed their motion to dismiss. Because plaintiffs' case had been presented in a somewhat disorderly fashion, the Court asked plaintiffs to submit a written statement, supported by citations to the record, setting forth what they believed their proofs had shown, and defendants were asked to file written answering statements.

In their memorandum, plaintiffs asserted that the proofs established that defendants had breached their fiduciary responsibilities in eight respects. In an unreported Memorandum and Order entered May 19, 1977, the Court dismissed the Complaint as to three of the eight, leaving in the case the following five claims:

1. that defendant Joseph Curran, retired president of the NMU, was paid a salary that was unauthorized and excessive;

2. that the defendant officers had received unauthorized cash payments in lieu of vacations;

3. that NMU funds had been used to pay personal expenses of the defendant officers;

4. that the OPP (and its successor plan) were overfunded and that they provide excessive pensions; and 5. that NMU general funds had been transferred to the "Fighting Fund" and used to make political contributions.

The remainder of defendants' case was put on in two sessions, the first covering November 31 to December 3, 1977, and the second January 18 and 19, 1978.

From a study of this additional evidence, it appeared that the Court's dismissal of the plaintiffs' claim that "excessive" severance pay had been given to the retired officer defendants was too sweeping in its terms. That dismissal was expressly based upon the Court's determination that the NMU's scheme of giving severance pay in an amount equal to one month's pay for each year of employment had been authorized by the membership and that plaintiffs had failed to establish "that the membership authorization was obtained in any improper manner or that the authority conferred was somehow exceeded." Upon a review of the full record and briefs, it appeared that, at least in the case of Joseph Curran, and perhaps others as well, the authority conferred had apparently been exceeded by giving severance pay in amounts above the authorized rate.

Because the Court's unqualified dismissal of this claim at the close of plaintiffs' case might have caused defendants to fail to introduce in their case available evidence tending to show that the severance payments were within the authorized limit, the Court, to avoid prejudice to defendants, notified counsel at a conference on December 15, 1978, that it was modifying its previous Order to the extent of reinstating plaintiffs' claim of excessive severance payments, but would afford defendants the opportunity to introduce additional evidence in opposition to that claim. Defendants have not elected to avail themselves of that opportunity and therefore stand on the present record.

This Opinion incorporates the Court's findings of fact and conclusions of law pursuant to Rule 52(a), F.R.Civ.P.

THE PARTIES

The NMU is a labor organization as defined in 29 U.S.C. § 402.

Plaintiffs James M. Morrissey and Ralph Ibrahim are and have been since before 1950 members of the NMU. Morrissey has been a repeated unsuccessful candidate for the offices of President and Secretary-Treasurer, and a perennial and highly vocal dissident. In addition to speaking out at port meetings and conventions of the NMU, Morrissey has published a paper named "The Call," charging the incumbent administration with various improprieties, including many of the violations of trust alleged in this action, which is but one of a series of actions he has brought against Curran and other Union officers. See, e. g., Morrissey v. Curran, 483 F.2d 480 (2d Cir. 1973), cert. denied, 414 U.S. 1128, 94 S.Ct. 865, 38 L.Ed.2d 752 (1974); Morrissey v. Curran, 356 F.Supp. 312 (S.D.N.Y.1973); Morrissey v. Curran, 76 Civ. 738 (RJW), U.S.D.C., S.D. N.Y.

Defendant Joseph Curran was one of the founders of the NMU and its President from 1938 until his retirement on March 1, 1973. Defendant Shannon J. Wall has been President of the NMU from March 1, 1973 to date; he was Secretary-Treasurer from 1966 to 1973 and Vice President from 1961 to 1966. Defendant Mel Barisic was Secretary-Treasurer of the NMU from March 1, 1973 until his retirement on February 28, 1978, having been an employee of the Union for a total of 27 years.

Defendants Rick S. Miller, James J. Martin, Peter Bocker, Leo Strassman and Robert Nesbitt are and were at all relevant times Vice Presidents or National Representatives of the NMU. Defendants Strassman and Nesbitt were apparently not personally served and have not voluntarily appeared; accordingly, they will not be bound by the judgment herein.

Defendant William Perry was Assistant to the President of the NMU from 1958 until he was discharged on January 16, 1969.

Defendants Abraham E. Freedman, Martin E. Segal and Leon Karchmer were trustees of the OPP until it was supplanted by the Staff Pension Plan ("SPP") effective January 1, 1974. Defendant Amalgamated Bank, which was added by amendment, is trustee of the SPP.

The Court has jurisdiction of the action under 29 U.S.C. § 501. Morrissey v. Curran, supra, 483 F.2d 480.

HISTORICAL BACKGROUND

The NMU was founded in 1937 following a walkout of the crew of the...