98 Civ. 5629 (HB)
1999 U.S. Dist. LEXIS 12662
CORE TERMS: membership, collective
bargaining, negotiate, by-laws, entailed, summary judgment, labor union,
memorandum, labor-management, multi-employer, touchstones, credible evidence,
contractor, face-to-face, negotiation, negotiated, messenger, joining, tenure,
score, abide, spell, join
COUNSEL: [*1] For
MASON
TENDERS DISTRICT COUNCIL WELFARE FUND, PENSION FUND, ANNUITY FUND,
TRAINING FUND, NEW YORK STATE LABORERS-EMPLOYERS COOPERATION AND EDUCATION TRUST
FUND, NEW YORK LABORERS' HEALTH AND SAFETY TRUST FUND, BUILDING CONTRACTORS
ASSOCIATION INDUSTRY ADVANCEMENT PROGRAM, JOHN J. VIRGA, ANTHONY SILVERI,
plaintiffs: Lawrence A. Kravitz, Gorlick, Kravitz & Listhaus, P.C., New
York, NY.
For MONARCH CONSTRUCTION CORP., defendant: Denis B.
Frind, Altieri, Kushner, Miuccio & Frind, New York, NY.
JUDGES: Hon. HAROLD BAER, JR., District Judge.
OPINIONBY: HAROLD BAER, JR.
OPINION: OPINION AND
ORDER
Hon. HAROLD BAER, JR., District Judge:
This is an action by multi-employer labor-management trust funds to
enforce certain rights granted to plaintiffs and obligations imposed upon
defendant Monarch Construction Corp. ("Monarch") pursuant to various collective
bargaining agreements in accordance with sections 302(c)(5) and (c)(6) of the
Labor-Management Relations Act, 1947. The defendant moved for summary judgment
and the plaintiffs cross-moved for summary judgment. I denied both motions in a
Memorandum and Order dated May 26, 1999. In that memorandum,
Mason
Tenders District Council Welfare Fund, et al., v. Monarch Construction
Corp., 1999 U.S. Dist. LEXIS 8011, No. 98 Civ. 5629 (HB), 1999 WL
349692 [*2] (S.D.N.Y. May 27, 1999), familiarity with which is
assumed, I noted that while both sides cited
Trustees
of the UIU Health and Welfare Fund and UIU Pension Trust v. New York Flame
Proofing Co., Inc., 828 F.2d 79 (2nd Cir. 1987), many of the
touchstones upon which that decision rested were omitted from those submissions.
A bench trial devoted to those concerns was ordered and held on July 29, 1999.
For the reasons set forth below, I now find that Monarch is bound by the
agreement it signed.
The plaintiffs' only witness was Paul O'Brien, the
Managing Director of the Building Contractors Association, Inc. ("BCA"), the
entity with which it is alleged the defendant Monarch contracted. He testified
that his tenure with the BCA began in 1971 and that he had been the Managing
Director since 1990. (Tr. at 4.) He detailed the procedures for gaining
membership in BCA and how the defendant Monarch and more particularly its
principal, Charles Saliba, had not only applied for membership but had come to
his offices to discuss precisely what membership in BCA entailed. BCA has 116 or
117 regular members. (Tr. at 6.) All of which are building contractors like the
defendant.
O'Brien [*3] went on to testify that Saliba met
with him in his offices in March 1997 and that they reviewed together what the
association does for its members, the functions and activities of the
association, and how its primary role was to negotiate and sign collective
bargaining agreements on behalf of its members and administer those agreements.
He further testified that he explained to Saliba that once a member was approved
by the Board of Directors and paid his dues, he was bound by the collective
bargaining agreements that the BCA negotiated. (Tr. at 10.) It is interesting to
note that Saliba denied any such face-to-face preliminary meeting, with O'Brien.
(Tr. at 53.) This is so despite Plaintiffs' Exhibit 5 which was a letter sent
both by fax and messenger from Saliba that thanked O'Brien for talking with him
and for his efforts to expedite Monarch's membership.
See Plaintiffs'
Exhibit 5.
Admittedly, the note does not spell out a face-to-face
meeting but it certainly suggests a discussion beyond anything Saliba recalls.
Not only did the note reflect a discussion which included the thought testified
to by O'Brien that membership in the BCA "...entailed [Monarch] being a party to
all [*4] the collective bargaining agreements that we sign on behalf
of our members" (Tr. at 13), but also that even if Monarch chose to drop out of
the association, it would remain bound to the provisions of the collective
bargaining agreements until their expiration date. (Tr. at 14.) In this case, as
I understand it, the BCA's collective bargaining agreements to which Monarch was
bound have all expired and the recovery sought is for unpaid contributions
during the period of membership.
To continue the chronology, Saliba
returned the application for membership, Plaintiffs' Exhibit 7, along with the
note, Plaintiffs' Exhibit 5, and the dues structure, Plaintiffs' Exhibit 6, by
messenger along with Monarch's $ 2000 dues check to O'Brien. (Tr. at 16-18.)
Monarch was approved for membership on June 26, 1997. (Tr. at 18.) According to
O'Brien, Saliba attended a membership meeting in September 1997 and his
attendance is supported by a form evidencing Monarch's intention to attend.
See Plaintiffs' Exhibit 10.
On another occasion in July 1998,
Saliba informed O'Brien that the
Mason Tenders District Council
sought an audit of his contributions to the various benefit funds and Exhibit 11
supports [*5] testimony to the effect that they discussed the
Mason Tenders District Council, and that Saliba asked O'Brien
what he should do in connection therewith.
See Plaintiffs' Exhibit 11.
It is undisputed that Monarch never made the requested contributions.
As
O'Brien testified, Saliba's position at the meeting in late March 1997 was to
the effect that he was joining the BCA so that he could qualify for school
construction authority business in New York. (Tr. at 12.) Saliba admits that he
did join the BCA but testified that he joined a lot of associations basically in
the hope of obtaining new business. This despite the fact that the testimony and
the exhibits including the application for membership which the defendant signed
spell out that membership will be governed by the by-laws and that members will
be bound by "...any and all agreements made by the association."
See
Membership Application, Plaintiffs' Exhibit 7.
Saliba testified that he
never expected to be bound to make contributions as a consequence of his
membership in BCA. In support of that testimony, he submitted a list of his
contracts,
see Defendant's Exhibit M, and the opinion that for him to
be bound by the [*6] agreements negotiated by BCA would be "economic
suicide." (Tr. at 59.) He admitted that he read the application and that his
belief was that the association was simply there "...to resolve disputes and any
other issues like that." (Tr. at 54.) This too differs from other testimony that
it was the social activities which prompted his membership. On that score, the
credible evidence is that any such activity paled beside the negotiation aspect
of BCA's work. Further, no where during this period of close to a year and a
half was there any indication that Saliba was joining BCA for its social
activities.
Indeed, it is interesting to note that Saliba paid another $
2000 for a second year of membership, and only after a year and a half did he
first complain to O'Brien about what his membership entailed. His testimony on
this score is interesting: "I said: Well, I got into something I did not
understand I got into, and so, you know: [He said:] Well, you could resign. I
says: Well, that's what I'll do." (Tr. at 65.) Unfortunately, from the testimony
and the demeanor of the two witnesses, my view is that Saliba understood exactly
what he was getting into but membership turned out to be more [*7]
expensive than he expected.
Following the conclusion of the trial, I
received letters which cited several cases, amongst the new authorities
presented, the defendant relies primarily on
Wenzel,
et al., v. Jeff Parking Corporation, 1995 U.S. Dist. LEXIS 5815, 93
Civ. 5071 (AJP) (S.D.N.Y. May 3, 1995).
Wenzel is a very different
case. There, the defendant employer signed a one-page agreement that merely
recognized a labor union as the exclusive bargaining representative for certain
categories of its employees. In that decision, the court stated that there was
no evidence in the record that the recognition agreement intended to stand for
anything beyond the designation of a union representative.
See id. at
*9. Further, the labor union thereafter never approached the defendant to
negotiate a collective bargaining agreement on its behalf, and no such agreement
was ever executed.
See id. at *3.
In stark contrast to
Wenzel, there is substantial evidence to support the conclusion that
the defendant intended to be bound by the collective bargaining agreements
entered into by the BCA. Monarch made an application for membership to the BCA
on March 20, 1997, which [*8] was subsequently approved and accepted
by the BCA. The Application for Membership contained the following language:
Applicant expressly agrees that, if approved and accepted for
membership, it will abide and be governed by and conform to the By-Laws of the
Association and any and all agreements made by the Association. .
.
See Membership Application, Plaintiffs'
Exhibit 7. Moreover, the By-Laws of the BCA specifically provided in pertinent
part as follows:
Each application shall contain an agreement to abide and be
governed by these By-Laws . . . and any labor agreements made by the
Association with those trades for which the Association acts as the individual
Member's designated bargaining agent.
See BCA
By-Laws, Article II, § 2, Plaintiffs' Exhibits 3 and 4. Accordingly, there is
ample evidence which corroborates that Monarch understood it would be bound by
any negotiation of collective bargaining agreements during the tenure of its
membership in the BCA.
Further, assessing the credibility of both
witnesses as I must, I find that O'Brien is the more credible. He worked as the
Managing Director of this multi-employer association for almost [*9]
a decade and was the Assistant Managing Director for a long time before that. In
addition, he is a trustee for several of the funds. He is hardly likely to
jeopardize what he has built to insure contributions from this defendant with
20-30 employees. Further, it is perfectly reasonable for him to have met with a
prospective member and explain to him where his $ 2000 in dues is going.
In sum, the touchstones relied on by Chief Judge Winter in
New York
Flame Proofing have now been analyzed and I am convinced that in his words
the ". . . principal, if not sole, raison d'etre was to negotiate on behalf of
its members collective agreements . . ."
New
York Flame Proofing, 828 F.2d at 81. Any other activities sponsored by
the BCA were minor at best and it is difficult for me to believe any contractor
would join the BCA and pay $ 2000 a year for those benefits.
Further,
the testimony as well as the documentary evidence such as the application for
membership make it abundantly clear that BCA is authorized to bargain on behalf
of its members and that its members are bound by the agreements it negotiates.
The plaintiffs have carried their burden by a preponderance of the
[*10] credible evidence. Accordingly, Monarch will be bound by the
agreement it signed.
A judgment and counter-judgment will be submitted
to the Court on or before September 1, 1999.
SO
ORDERED. New York, New York
August 17, 1999
Harold Baer, Jr.
U.S.D.J.