Silverman v. Miranda

• Citation: 116 F.Supp.3d 289
• Decision Date: 22 July 2015
• Docket Number: No. 06 Civ. 13222(ER).,06 Civ. 13222(ER).
• Parties: Leon SILVERMAN, James Crowley, Janet Sachs, Herbert Pobiner, Louis Flacks, and Paul Berkman, as Trustees of the Union Mutual Medical Fund, and Union Mutual Medical Fund, Plaintiffs, v. George MIRANDA, Robert Bellach, Anthony Cerbone, Martin Sheer, and John Does 1–6 in their capacities as Trustees of Teamsters Local 210 Affiliated Health and Insurance Fund, and Crossroads Healthcare Management, LLC, Defendants.
• Court: U.S. District Court — Southern District of New York

116 F.Supp.3d 289

Leon SILVERMAN, James Crowley, Janet Sachs, Herbert Pobiner, Louis Flacks, and Paul Berkman, as Trustees of the Union Mutual Medical Fund, and Union Mutual Medical Fund, Plaintiffs,

v.George MIRANDA, Robert Bellach, Anthony Cerbone, Martin Sheer, and John Does 1–6 in their capacities as Trustees of Teamsters Local 210 Affiliated Health and Insurance Fund, and Crossroads Healthcare Management, LLC, Defendants.

No. 06 Civ. 13222(ER).

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

Signed July 22, 2015.

Robert J. Kipnees, John Albert Fialcowitz, Michael Andrew Kaplan, Lowenstein Sandler LLP, Roseland, NJ, for Plaintiffs.

Plaintiffs, Leon Silverman, James Crowley, Janet Sachs, Herbert Pobiner, Louis Flacks and Paul Berkman, as Trustees of the Union Mutual Medical Fund, and The Union Mutual Medical Fund, pro se.

Thomas Albert Thompson, Thomas A. Thompson, Law Offices, Yonkers, NY, Roland Richard Acevedo, Seiff Kretz & Abercrombie, New York, NY, for Defendants.

OPINION AND ORDER

RAMOS, District Judge.

This litigation concerns a long-fought dispute over the right to contributions made pursuant to Collective Bargaining Agreements ("CBAs"). In 2006, Trustees of the Union Mutual Medical Fund (the "UMMF") and the UMMF (collectively, "Plaintiffs") brought suit against individuals in their capacities as Trustees of the Teamster Local 210 Affiliated Health and Insurance Fund (the "Local 210 Fund"), the "Local 210 Fund", and Crossroads Healthcare Management, LLC ("Crossroads," collectively, "Defendants") alleging underpayment of employer contributions in violation of the CBAs. After significant motion practice and various rulings by the district court, on January 4, 2013, the Honorable Barbara S. Jones entered an order that, inter alia, awarded Plaintiffs $2,460,777.33, as well as pre-and post-judgment interest (the "Judgment").¹ On January 31, 2013, the Local 210 Fund filed a notice of appeal with the United States Court of Appeals for the Second Circuit, appealing the entry of the Judgment. Doc. 229. On August 1, 2014, the Second Circuit vacated the judgment in favor of Plaintiffs, finding Plaintiffs had failed to state claims under ERISA, and remanded to this Court to determine whether to exercise supplemental jurisdiction over counts one and two, construed by the Second Circuit as asserting state law breach of contract claims. Doc. 266.

Pending before this Court are cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, Defendants' motion for release of the escrowed funds, and Plaintiffs' motion for prejudgment attachment of the escrowed funds pursuant to Rule 64 of the Federal Rules of Civil Procedure.

For the reasons discussed below, Plaintiffs' Summary Judgment motion is DENIED, Defendants' Summary Judgment motion is GRANTED in part and DENIED in part, Plaintiffs' Motion for Prejudgment Attachment is DENIED, and Defendants' Motion for Release of the Escrowed Funds is GRANTED.

I. Background

a. Factual Background²

Plaintiff UMMF is a collective bargaining group health plan under ERISA that was established in 1978 to obtain and provide medical and insurance benefits to its participants and beneficiaries, who are primarily retired union members of two unions, the Allied Trades Council and the International Brotherhood of Teamsters Local Union 210 (the "Local 210 Union"), and their spouses.³ Defendant Local 210 Fund is an employee welfare benefit plan under ERISA and was established to provide health insurance to its members and their spouses, who are primarily current members of the Local 210 Union. The Local 210 Fund is funded by contributions from employers ("Contributing Employers") who, in addition to the unions, are parties to the CBAs. The CBAs direct Contributing Employers to contribute funds to the Local 210 Fund.⁴ Under the CBAs, the Local 210 Fund is directed to remit a portion of the contribution from the Contributing Employers to the UMMF

It is hereby agreed ... the Employer shall pay to the Allied Welfare Fund the sum of Fifty–Nine ($59.00) Dollars, each and every week for each employee who is employed within the bargaining unit....From and out of the contributions made to the Allied Welfare Fund as specified above, Eight Dollars per employee per week shall be unconditionally and irrevocably allocated and paid to the Union Mutual Medical Fund ... for the benefit of retired employees of the Employer and retired employees of all other employers similarly situated and their families.⁵

In 2000, the AWF trustees filed suit against Duane Reade in the Southern District of New York, claiming that Duane Reade, as a Contributing Employer, purportedly failed to make the required contributions under its CBA. In 2006, the AWF and Duane Reade settled their dispute for $825,000. The Duane Reade settlement was received by the AWF in satisfaction of Duane Reade's obligation under its CBA to pay contributions to the AWF. The Local 210 Fund denies that it received all of the Duane Reade settlement proceeds from the AWF. The Local 210 Fund does not contest that the UMMF received no monies from the Duane Reade settlement.

In January 2006, the Local 210 Fund began persuading Contributing Employers to amend their respective CBAs to reduce the amount of the contribution remitted to the UMMF. In March or April 2006, the CBAs were amended and the amount of the contribution per employer per week remitted to the UMMF was reduced from eight dollars to ten cents. The UMMF was not consulted and did not agree to the amendments. As a result of the amendments, the amount of contributions received by the UMMF from the AWF and/or the Local 210 Fund consistently decreased each month from approximately $1,220 in April 2006 to $449 in January 2007.

Plaintiffs filed its original Complaint against Defendants in November 2006. Doc. 1. Plaintiffs filed an Amended Complaint in June 2008 asserting six claims, three of which were against the Local 210 Fund seeking, inter alia, (1) an accounting of the funds received in the Duane Reade settlement and remittance of the portion claimed by the UMMF; (2) an accounting of all monies received by the AWF and the Local 210 Fund "for the period January 1, 2005, to the date of judgment" because payments to the UMMF "dropped precipitously since the end of March 2006;" and (3) an order directing the AWF and the Local 210 Fund to remit to the UMMF all employer contributions improperly withheld from the UMMF in violation of Section 515 of ERISA. Doc. 54 at ¶¶ 44–46, 48–50, 53.⁶

b. Relevant Prior Decisions

i. The 2009 District Court Decision

On November 16, 2009, the district court denied Defendant Local 210 Fund's motion to dismiss counts one and two of the Amended Complaint, but granted Defendants' motion to dismiss count three. Miranda I, 670 F.Supp.2d at 279.⁷ Regarding counts one and two, which the court construed as claims for relief under ERISA Section 502(a)(3)(B), the court made three relevant findings. First, the court found that "Plaintiffs ... sufficiently alleged that the relevant CBAs are enforceable against Defendants" because Defendants "accepted their obligations under the relevant CBAs to remit monies to Plaintiff UMMF in accordance with the terms of these agreements ... and that Defendants ... intended to be bound by these agreements." Id. Second, the court found that Plaintiffs adequately alleged that the UMMF met the three elements required to assert third party beneficiary status and that "[t]he UMMF is an intended third-party beneficiary under the CBAs[ ]"

First, the requirement of valid and binding contracts between other parties is satisfied since Plaintiffs allege that the Unions entered into valid CBAs with the various Contributing Employers. Second, Plaintiffs establish that the contract was intended for Plaintiffs' benefit. Third, the Plaintiffs establish that benefit to them under the CBAs is immediate rather than incidental, since Plaintiffs allege that the CBAs provide that ‘[f]rom and out of the contributions made to the Allied Welfare Fund as specified above, Eight Dollars per employee per week shall be unconditionally and irrevocably allocated and paid to [Plaintiff UMMF].’

Id. at 275 (internal citations omitted). Third, the court found that the relief requested by Plaintiffs, accounting and restitution, was permitted equitable relief under ERISA Section 502(a)(3)(B). Id. at 276.⁸

ii. The 2011 District Court Decision

On April 12, 2011, the district court granted Plaintiffs' motion for partial summary judgment on counts one and two and denied Defendants' motion for summary judgment in its entirety. Fishbein v. Miranda, 785 F.Supp.2d 375, 393 (S.D.N.Y.2011), vacated sub nom., Silverman v. Teamsters Local 210 Affiliated Health and Ins. Fund, 761 F.3d 277 (2d Cir.2014) ("Miranda II ").⁹ The court characterized Defendants' summary judgment motion as "largely rehash[ing] arguments the Court already considered and rejected" and reaffirmed the court's 2009 Order with three relevant findings. Id. at 384.

First, the court reaffirmed its earlier 2009 Order, finding "that Plaintiffs have standing to enforce the CBAs and seek an accounting of monies received pursuant to the Duane Reade settlement because UMMF is an expressly named third-party beneficiary in the CBAs, including the one with Duane Reade." Id. at 384. Second, the court "found Plaintiffs may enforce the CBAs against the Local 210 Fund because it accepted the CBAs and acted upon them." Id. at 385. Third, the court found that Plaintiffs' requested relief constitute "other" forms of "appropriate equitable relief" under ERISA § 502(a)(3)(B). Id. The court then held that "[i]n light of the Court's legal findings and the lack of any disputed issues of material fact regarding Plaintiffs' first two counts, Plaintiffs are entitled to summary judgment on both counts." Id. The court ordered the Local 210 Fund to provide "(1) an accounting of all proceeds received from the Duane Reade settlement and (2) an...