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Mandarini v. Accurate Engineered Concrete, Inc.

United States District Court, D. Massachusetts

December 31, 2019

Louis A. MANDARINI III et al., Plaintiffs,
v.
ACCURATE ENGINEERED CONCRETE, INC. and Frank J. Franzone, Inc., Defendants.

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          Anne R. Sills, Nathan P. Goldstein, Sasha N. Gillin, Segal Roitman LLP, Boston, MA, for Plaintiffs.

          Amato J. Bocchino, Bocchino Law, Beverly, MA, for Defendants.

         MEMORANDUM AND ORDER ON MOTIONS FOR SUMMARY JUDGMENT

         SOROKIN, J.

         Pending before the Court are the parties' cross-motions for summary judgment. Doc. No. 66; Doc. No. 89.[1] The parties' various motions to strike and to quash (Doc. Nos. 94, 95, 108, 116) are resolved in a separate Order also issuing today. The motions are fully briefed, and the Court held oral argument on December 6, 2019.

         I. BACKGROUND

         Plaintiff Louis Mandarini III ("Mandarin") is the Executive Director of the Massachusetts Laborers' Health and Welfare Fund, the Massachusetts Laborers' Pension Fund, and the Massachusetts Laborers' Annuity Fund. Plaintiff James Merloni ("Merloni") is the Administrator of the New England Laborers Training Trust Fund. Plaintiff Joseph Bonfiglio ("Bonfiglio") is a Trustee of the Massachusetts Laborers' Legal Services Fund. Plaintiffs bring this action on behalf of and for the benefit of their employee benefit plans (collectively, "the Funds") under section 515 of the Employment Retirement Income Security Act of 1974 (ERISA) seeking to recover contributions Defendants Accurate Engineered Concrete, Inc. ("Accurate") and Frank J. Franzone, Inc., d/b/a Engineered Concrete Inc. ("Engineered") allegedly owe them.

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          The Funds are "employee benefit plans" within the meaning of Section 3 of ERISA, see 29 U.S.C. § 1002, and are third-party beneficiaries of collective bargaining agreements (CBAs) between Defendant Accurate and the Massachusetts & Northern New England Laborer's District Council (the union).[2] The Funds provide participants and beneficiaries with various benefits, including retirement pensions, health insurance, dental and prescription drug benefits, accident and disability benefits, training, and legal services. These benefits are funded through contributions signatory employers—employers who have signed on to one or more CBAs—make to the Funds. Workers then receive credit towards various benefits based on hours worked. To qualify for such benefits, workers must work a certain number of creditable hours per year.

         Section 515 of ERISA provides that "[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145. The collectively bargained agreements at issue in this action require employers to make contributions, at rates specified by the agreements, to each of the Funds for each hour their employees worked for them.

         Defendant Engineered was incorporated in 1973; Defendant Accurate was incorporated in 1991. Both Defendants were at all relevant times owned by Mr. Frank Franzone.[3] Defendant Engineered is not a signatory to any CBA. Accurate entered into the following three CBAs with the union in 1992: (1) by and between the Associated General Contractors Association of Massachusetts, Inc. and the Building Trades Employers' Association of Boston and Eastern Massachusetts, Inc. ("the Eastern Massachusetts Building and Site Construction CBA"); (2) by and between the General Contractors' Association of Pittsfield, Massachusetts, Inc.; and (3) by and between the Construction Industries Association of Western Massachusetts, Inc. (together, "the CBAs at issue").[4] The three CBAs at issue required Accurate to remit monthly contributions to the Funds in proportion to the hours its employees worked each month.

         Between 2011 and 2018, Defendant Accurate remitted to the Funds contributions for hours worked by its union-member employees on union jobs. Defendants did not report, and remitted no contributions for, any hours their employees, whether union

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members or not, worked for Defendant Engineered (the non-signatory) during that time.

         Plaintiffs have moved for summary judgment on liability and damages that both Defendants are liable for violating the CBAs at issue and section 515 of ERISA for failure to remit contributions for work performed by Engineered, due to them from January 1, 2011 through the end of August 2018, when both Defendants ceased operations. The central question is whether Plaintiffs can apply the CBAs at issue to Engineered, a conceded non-signatory to those agreements. Defendants oppose and cross-move for summary judgment on liability.

         II. LEGAL STANDARD

         Summary judgment is appropriate when "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). Once a party has properly supported its motion for summary judgment, the burden shifts to the nonmoving party, who "may not rest on mere allegations or denials of his pleading, but must set forth specific facts showing there is a genuine issue for trial." Barbour v. Dynamics Research Corp., 63 F.3d 32, 37 (1st Cir. 1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). A court may enter summary judgment "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

         On a motion for summary judgment, courts are "obliged to view the record in the light most favorable to the nonmoving party, and to draw all reasonable inferences in the nonmoving party's favor." LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). At the same time, courts may not credit "conclusory allegations, improbable inferences, and unsupported speculation." Prescott v. Higgins, 538 F.3d 32, 39 (1st Cir. 2008). When cross-motions for summary judgment are presented, courts "must consider each motion separately" and draw all inferences against each moving party in turn. Reich v. John Alden Life Ins. Co., 126 F.3d 1, 6 (1st Cir. 1997).

         III. DISCUSSION

         The Court first addresses two preliminary objections Defendants advance in opposition to Plaintiffs' motion for summary judgment and in support of their own motion that challenge Plaintiffs' authority to bring this lawsuit. Neither objection has merit.

         A. Standing

         Defendants contend Plaintiffs lack standing to bring this action. They argue that Plaintiff Mandarini is not a fiduciary and thus is not authorized to file suit on behalf of any of the Funds for which he is Executive Director. Doc. No. 90 at 2-4. This argument borders on the frivolous. "ERISA ... defines `fiduciary' not in terms of formal trusteeship, but in functional terms of control and authority over the plan." Mertens v. Hewitt Assocs., 508 U.S. 248, 262, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993) (citing 29 U.S.C. § 1002(21)(A)). "The key determinant of whether a person qualifies as a functional fiduciary is whether that person exercises discretionary authority in respect to, or meaningful control over, an ERISA plan, its administration, or its assets." Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 18 (1st Cir. 1998). Here, the undisputed evidence establishes that Mandarini is the Executive Director of each of the three Funds on whose behalf he sues, Doc. No.

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69 (Mandarini Aff.) ¶ 1, and that the Trustees delegated authority to the Executive Director and their authorized representatives to collect contributions, perform audits, and bring lawsuits and enforcement actions to recover delinquent contributions, Doc. No. 69-1 (Eastern Massachusetts Building and Site Construction CBA, June 1, 2012 — May 31, 2016) Art. XIX; Doc. No. 69-2 (Eastern Massachusetts Building and Site Construction CBA, June 1, 2016 — May 31, 2020) Art. XIX; Doc. No. 90-6 (Mandarini Dep. Tr.) at 6 (13:19-16:17). In his capacity as Executive Director, Mandarini is charged with seeking unpaid employer pension contributions to the Funds, and he has been authorized to do so by the Trustees. Id. Defendants concede that a fiduciary would rightfully have standing in this action, Doc. No. 90 at 3, but they offer no evidence suggesting Mandarini is not a fiduciary or is without authority from the Trustees to bring suit on behalf of the Funds.

         Defendants make much of the fact that the minutes of Trustee meetings allegedly fail to specifically authorize Mandarini to bring this lawsuit. Doc. No. 114 at 3. To the extent that Defendants contend that Mandarini lacks standing because there seems to be a lack of express authorization on the part of the Funds' Trustees authorizing Mandarini to bring actions on their behalf, the Court notes that Mandarini's authority to pursue unpaid employer contributions derives from the Trust Agreement, which states in relevant part that "Trustees or their authorized representatives" can audit employer contributions and that "[s]uch examinations may be implemented by the Trustees' authorized representatives in connection with the proper administration of the Funds." Doc. No. 69-1 at 37 (Art. XIX); Doc. No. 69-2 (same). Moreover, Mandarini testified under oath that the Trustees do not separately authorize every individual lawsuit, but instead generally authorize him to bring lawsuits and collect delinquent contributions. Doc. No. 90-6 (Mandarini Dep. Tr.) at 6 (13:19-16:17). Nothing more is required. In any event, Defendants offer no contrary evidence. Mandarini plainly has standing to bring this action.

         Defendants also contend that Plaintiffs Merloni and Bonfiglio lack standing because they have provided no evidence that Mandarini can bring suit on their behalf. Doc. No. 90 at 1-2. Like Defendants' argument respecting Mandarini, this argument has no merit. Plaintiffs submit evidence, which Defendants neither dispute or contradict, that the five Funds work together, collect contributions in the form of a single check that is later distributed among them pro rata as appropriate, and authorize Mandarini to act on their collective behalf. The collection activity of all five Funds involved in this case is centralized in the Massachusetts Laborers' Benefits Fund Office, of which Mandarini is the head. The centralization of the collection activity is authorized by the Trust Agreements of the Funds, including the Training and Legal Services Funds. Plaintiffs explain and establish these points clearly in their papers.[5] See Doc. No. 105 at 19-22; Doc. No. 90-6 (Mandarini Dep. Tr.) at 8-9 (23:9-27:2). Merloni and Bonfiglio, like Mandarini, have standing to bring this action.

         In any event, Defendants have waived their argument that Plaintiffs lack standing. Defendants correctly note that they asserted standing as an affirmative

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defense in their Answers to the Complaint. Doc. No. 90 at 4 n.2; see also Doc. No. 7 at 4 (Affirmative Defense 2) and Doc. No. 8 at 4 (same). However, instead of responding substantively to an interrogatory seeking "all factual bases for your denial of allegations in the Complaint and our Affirmative Defenses asserted in this matter," Defendants objected to the interrogatory as overbroad, vague, unduly burdensome and not a single interrogatory. Doc. No. 106-8 at 10 (Resp. to Interrogatory No. 19). A defendant may not assert an affirmative defense, unreasonably refuse to answer discovery, and then, as here, seek summary judgment on that defense. In these circumstances, Defendants have waived their argument that Plaintiffs lack standing.[6] Fed.R.Civ.P. 37(c).

         For these reasons, Defendants' motion for summary judgment that the Plaintiffs lack standing to bring this action is DENIED and the Court determines that Plaintiffs have standing to proceed.

         B. Collective Bargaining Agreements

         Next, Defendants argue that "Plaintiffs' claims should be dismissed because there is no evidence that Accurate agreed to the CBAs at issue." Doc. No. 90 at 4. Like Defendants' standing argument, this argument also borders on the frivolous. The undisputed evidence establishes that on February 24, 1992, Raymond Griskiewicz of Accurate, signed the original Acceptance of Agreement(s) and Declarations of Trust document ("Acceptance Agreement") binding Accurate to the collective bargaining agreements at issue in this action. Doc. No. 69-8 (Acceptance Agreement). The next day, on February 25, 1992, Griskiewicz signed the union on-boarding questionnaire on behalf of Accurate. Doc. No. 105-4. The Acceptance Agreement bound Accurate to the CBAs at issue in this action and to their successive iterations unless Accurate terminated them in writing. Doc. No. 69-8 ¶ 1. There is no evidence Accurate ever terminated any CBA. Accurate neither contends otherwise nor submits any contrary evidence. These facts alone more than suffice to establish that Accurate is bound by the CBAs at issue. But there is more: Mr. Franzone testified that Accurate signed the 1992 Acceptance Agreement, that "Accurate is strictly for union", and that Accurate is "definitely a union company." Doc. No. 106-2 (Franzone Dep. Tr.) at 12 (38:19-21); id. at 7 (18:12); id. at 9 (27:12-13). None of these additional facts is disputed.

         Nonetheless, Defendants note that "[t]he 1992 acceptance agreement listed six CBAs and expressly instructed Accurate to circle and initial which CBAs it agreed to bind itself to. There are no circles or initials and instead only checkmarks near three of the CBAs."[7]Doc. No. 90 at 4; see also Doc. No. 69-8 (the Acceptance Agreement). Defendants argue that because the CBAs at issue here were identified by check marks and not ...


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