National Elec. Benefit Fund v. Heary Bros.
| Decision Date | 28 July 1995 |
| Docket Number | No. 91-CV-717A.,91-CV-717A. |
| Citation | 931 F. Supp. 169 |
| Parties | NATIONAL ELECTRICAL BENEFIT FUND, et al., Plaintiffs, v. HEARY BROTHERS LIGHTNING PROTECTION COMPANY, INC., et al., Defendants/Third-Party Plaintiffs, v. LOCAL 41, INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, et al., Third-Party Defendants. |
| Court | U.S. District Court — Western District of New York |
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David H. Potts-Dupre, Counts & Kanne, Chartered, Washington, D.C., for Plaintiff NEBF.
Craig L. Miller, Diebold & Farmelo, P.C., Buffalo, NY, for Plaintiffs Local 41 IBEW Health, Pension and Annuity Funds.
Linda H. Joseph, Jaeckle, Fleischmann & Mugel, Buffalo, NY, for Defendants/Third-Party Plaintiffs Heary Bros., Kenneth P. Heary and Edwin W. Heary.
Jules L. Smith, Blitman & King, Rochester, NY, for Third-Party Defendant Local 41 IBEW.
Terrence M. Connors, Connors & Vilardo, Buffalo, NY, for Third-Party Defendants Charles H. Pillard and Gene N. Adams.
Richard J. Barnes, Morris, Cantor & Barnes, Buffalo, NY, for Third-Party Defendants John Pavlovic and Michael Franey.
Joseph D. Bermingham, Bermingham, Cook & Mahoney, Buffalo, NY, for Third-Party Defendant Daniel E. Erker.
Richard M. Resnick, Sherman, Dunn, Cohen, Leifer & Yellig, P.C., Washington, D.C., for Third-Party Defendant IBEW.
Michael Babat, Buffalo, NY, for NECA.
DECISION AND ORDER
Plaintiffs, the National Electrical Benefit Fund ("NEBF") and the Health, Pension, and Annuity Funds of Local 41 International Brotherhood of Electrical Workers ("Local 41 Funds") brought this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., seeking monetary and injunctive relief to redress violations of § 515 of ERISA, 29 U.S.C. § 1145. In their answer, Heary Brothers Lightning Protection Company, Inc., Kenneth P. Heary and Edwin W. Heary (collectively "defendants/third-party plaintiffs") asserted various affirmative defenses and counterclaims. Defendants/third-party plaintiffs filed an Amended Third-Party Complaint asserting, inter alia, violations of the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961, et seq.
This case was referred to Magistrate Judge Carol E. Heckman on June 21, 1993, pursuant to 28 U.S.C. § 636(b)(1). On March 29, 1994, Magistrate Judge Heckman filed a Report and Recommendation recommending:
(1) granting plaintiff NEBF's motion for partial summary judgment1 on the issue of liability and entering judgment in favor of all plaintiffs on the liability portion of their ERISA delinquency claim;
(2) granting NEBF's motion to sever the third-party action;
(3) granting in their entirety third-party defendants International Brotherhood of Electrical Workers' ("IBEW") and National Electrical Contractor's Association's ("NECA") motions to dismiss the Amended Third-Party Complaint and dismissing those parties from the case;2
(4) granting third-party defendant Local 41 of the International Brotherhood of Electrical Workers' ("Local 41") motion to dismiss the Amended Third-Party Complaint to the extent that Counts Seven, Eight and Nine allege Local 41 to be a RICO enterprise and denying Local 41's motion to dismiss in all other respects;
(5) granting third-party defendants Charles H. Pillard, Gene Adams, John Pavlovic, Michael Franey, Daniel E. Erker and David A. Roll's (collectively "remaining third-party defendants") motions to dismiss to the extent that they request dismissal of Counts One, Two, Three, Thirteen, Fourteen and Fifteen of the Amended Third-Party Complaint;
(6) denying the remaining third-party defendants' motions to dismiss the Amended Third-Party Complaint with respect to Counts Four, Five, Six, Seven, Eight, Nine, Ten, Eleven and Twelve.
Magistrate Judge Heckman also ordered that: (a) defendants/third-party plaintiffs' motion for leave to amend the Third-Party Complaint be granted; and (b) NECA's motion for sanctions be denied.
Defendants/third-party plaintiffs and third-party defendants filed objections to the Report and Recommendation. In addition, third-party defendants Charles H. Pillard and Gene Adams appeal the order granting defendants/third-party plaintiffs' request for leave to amend.3 The Court heard argument on November 1, 1994.
Pursuant to 28 U.S.C. § 636(b)(1)(C), this Court must make a de novo determination of those portions of the Report and Recommendation to which objections have been made. Upon a de novo review of the Report and Recommendation and of the record, and after reviewing the submissions and hearing argument, the Court adopts the proposed findings of the Report and Recommendation. Accordingly, for the reasons therein:
(1) NEBF's motion for partial summary judgment is GRANTED and judgment is entered in favor of all plaintiffs with respect to their claims of liability under § 515 of ERISA. As a consequence of granting judgment in favor of all plaintiffs, the counter-claims and affirmative defenses asserted by defendants/third-party plaintiffs in the Second Amended Answer are necessarily DISMISSED;
(2) NEBF's motion to sever the third-party action is GRANTED;
(3) third-party defendants IBEW and NECA's motions to dismiss the Amended Third-Party Complaint are GRANTED in their entirety and are DISMISSED;
(4) third-party defendant Local 41's motion to dismiss the Amended Third-Party Complaint is GRANTED to the extent that Counts Seven, Eight and Nine allege Local 41 to be a RICO enterprise. Local 41's motion to dismiss is DENIED in all other respects;
(5) the remaining third-party defendants' motions to dismiss are GRANTED with respect to Counts One, Two, Three, Thirteen, Fourteen and Fifteen of the Amended Third-Party Complaint;
(6) the remaining third-party defendants' motions to dismiss the Amended Third-Party Complaint are DENIED with respect to Counts Four, Five, Six, Seven, Eight, Nine, Ten, Eleven and Twelve.
Pursuant to 28 U.S.C. § 636(b)(1)(A), the district court "may reconsider any pretrial matter under this subparagraph (A), where it has been shown that the magistrate's order is clearly erroneous or contrary to law."
Having carefully reviewed Magistrate Judge Heckman's order granting defendants/third-party plaintiffs' request for leave to amend, and the submissions, and after hearing argument from counsel, the Court finds that the order is neither clearly erroneous or contrary to law.
Accordingly, the Court affirms Magistrate Judge Heckman's order granting defendants/third-party plaintiffs' request for leave to amend.
IT IS ORDERED that this matter is referred back to Magistrate Judge Heckman for determination of the amount of damages due plaintiffs' on their claims arising under § 515 of ERISA and for further proceedings consistent with this Decision.4
IT IS SO ORDERED.
ORDER AND REPORT AND RECOMMENDATION
This matter was referred to the undersigned by the Hon. Richard J. Arcara, to hear and report, in accordance with 28 U.S.C. § 636(b). The following constitutes the undersigned's proposed findings and recommendations for the disposition of the several motions pending.
This action, brought under § 515 of the Employee Retirement Income Security Act ("ERISA"), was filed on November 1, 1991, by fiduciaries of the National Electrical Benefit Fund ("NEBF") and the health, pension and annuity funds of Local 41 of the International Brotherhood of Electrical Workers ("IBEW" or the "International"). Named as defendants are Heary Bros. Lightning Protection Co. and its corporate officers, Kenneth P. Heary and Edwin W. Heary (collectively, the "Hearys"). On January 16, 1992, an amended complaint was filed before defendants answered or otherwise appeared in the action (Item 2). The amended complaint, which did not substantially change the allegations in the original complaint, sets forth five claims for monetary and injunctive relief based on defendants' alleged failure to contribute to the plaintiff funds, as required by ERISA and the terms of various collective bargaining agreements or letters of assent entered into between IBEW and defendants.
NEBF alleges that the Hearys first entered a collective bargaining relationship with IBEW in 1964 when Heary Bros. executed a "Letter of Assent-B," effective from May 1, 1964 through April 30, 1966. A "Letter of Assent" is a typical short-form agreement by which an employer agrees to be bound by a collective bargaining agreement already negotiated, or about to be negotiated, between a local union and the employer's collective bargaining representative. A "Letter of Assent-B" binds the employer to an existing agreement and is of limited duration. A "Letter of Assent-A" establishes an ongoing relationship between the employer and the collective bargaining representative and binds the employer to the agreement from year to year until the relationship is terminated by the employer .
Under the 1964 Letter of Assent-B, Heary Bros. expressly agreed to be bound by the Inside Wiremen's Agreement then in effect. Heary Bros. subsequently executed additional Letters of Assent-B effective from May 1, 1969 through April 30, 1972, and from May 1, 1972 through April 30, 1973. Heary Bros. also executed a series of Letters of Assent-A, the last of which became effective on July 16, 1979 . Finally, Heary Bros. entered a Specialty Agreement with IBEW effective April 1, 1979 (Item 2, ¶¶ 16-17; Reilly Aff., Ex. B).
NEBF's ERISA claim is based on the results of an audit conducted in 1990 which concluded that for the period of 1985 through mid-1990, Heary Bros. failed to report fully the wages earned and hours worked by its employees, resulting in underpayments of principal contributions for that period in the amounts of $64,260.88 to NEBF (Item 2, ¶ 39),...
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A. Terzi Production v. Theatrical Protect. Union, 97 Civ. 3615(SS).
...dismiss RICO claim despite causes of action asserting violations of federal labor laws); National Electrical Benefit Fund v. Heary Bros. Lightning Protection Co., Inc., 931 F.Supp. 169 (W.D.N.Y.1995) (allowing RICO claim against union and its officials predicated on Hobbs Act and LMRA viola......
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Moses v. Martin, 04 Civ. 1533(SAS).
...as persons, conducted the RICO activity, that corporation is insulated from liability."); National Elec. Benefit Fund v. Heary Bros. Lightning Prot. Co., Inc., 931 F.Supp. 169, 187 (W.D.N.Y.1995) (observing "general rule ... that a plaintiff may not use [section] 1962(c) to impose vicarious......
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Remy v. Lubbock Nat'l Bank, 5:17-CV-460-FL
...375 (D.Conn.1997) (non-fiduciaries cannot be sued under ERISA for contribution or indemnity); Nat'l Elec. Benefit Fund v. Heary Bros., 931 F.Supp. 169, 191-93 (W.D.N.Y.1995) (same); Glaziers & Glassworkers Union Local 252 Annuity Fund v. Newbridge Sec. Inc., 823 F.Supp. 1191, 1194-95 (E.D.P......
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Petrilli v. Gow, Civil No. 3:95CV1657(PCD).
...v. Varrasso, 111 F.R.D. 62 (D.Mass.1986); McLaughlin v. Biasucci, 688 F.Supp. 965 (S.D.N.Y.1988); National Electrical Benefit Fund v. Heary Bros., 931 F.Supp. 169, 191-93 (W.D.N.Y.1995). Other courts have held that there can be a right of contribution or indemnification by a breaching fiduc......