Gesualdi v. S. Difazio & Sons Constr., Inc., Case No.: 16-cv-5209 (SJF)(ARL)

THOMAS GESUALDI, LOUIS BISIGNANO,ANTHONY D'AQUILA, MICHAEL O'TOOLE, MICHAEL BOURGAL,FRANK H. FINKEL, JOSEPH A. FERRARA, SR., MARC HERBST, DENISE RICHARDSON,and THOMAS CORBETT, as Trustees and Fiduciaries of the Local 282 Welfare Trust Fund,the Local 282 Pension Trust Fund, the Local 282 Annuity Trust Fund, the Local 282 Job TrainingTrust Fund, and the Local 282 Vacation and Sick Leave Trust Fund, Plaintiffs, v. S. DiFAZIO AND SONS CONSTRUCTION,INC. d/b/a DiFAZIO ENVIRONMENTAL SERVICES, DiFAZIO IND., LLCd/b/a DiFAZIO INDUSTRIES, DiFAZIO INDUSTRIES, INC., FAZTEC INDUSTRIES, INC.,and WEST SHORE TRUCKING, INC., jointly and severally, Defendants.

Case No.: 16-cv-5209 (SJF)(ARL)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

March 8, 2018

ORDER

FEUERSTEIN, Senior District Judge.

I. Introduction

Plaintiffs Thomas Gesualdi, Louis Bisignano, Anthony D'Aquila, Michael O'Toole, Michael Bourgal, Frank H. Finkel, Joseph A. Ferrara, Sr., Marc Herbst, Denise Richardson, and Thomas Corbett (collectively, "Plaintiffs"), are Trustees and Fiduciaries of the Local 282¹Welfare Trust Fund, the Local 282 Pension Trust Fund, the Local 282 Annuity Trust Fund, the Local 282 Job Training Trust Fund, and the Local 282 Vacation and Sick Leave Trust Fund, (collectively, the "Funds"), for the benefit of which they commenced this action seeking to collect delinquent employer contributions pursuant to the Employee Retirement Income Security Act ("ERISA"), 29 U.C.S. §§ 1132(a)(3) & 1145, and the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185 from defendants S. Di Fazio and Sons Construction, Inc. d/b/a DiFazio Environmental Services ("Environmental"), DiFazio Ind., LLC d/b/a DiFazio Industries ("LLC") and DiFazio Industries, Inc. ("Inc.") (LLC and Inc. collectively referred to as "Industries"), Faztec Industries, Inc. ("Faztec"), and West Shore Trucking, Inc. ("West Shore") (collectively, "Defendants"). After the Court denied as premature and without prejudice the Defendants' summary judgment motions (see ECF No. 47), the Defendants moved for judgment on the pleadings (see ECF No. 55 (Environmental, Industries, and Faztec)); ECF No. 61 (West Shore) (collectively, the "Rule 12(c) Motion²)), which motions were referred to Magistrate Judge Arlene R. Lindsay (see Electronic Referral Order dated Apr. 14, 2017 (re: ECF No. 55); see also Electronic Referral Order dated May 2, 2017 (re: ECF No. 61).)

Now before the Court is Magistrate Judge Lindsay's Report and Recommendation, dated December 12, 2017, recommending that Defendants' Rule 12 Motions be granted in part and denied in part. (See ECF No. 82; hereafter, "Report".) Specifically, the Magistrate Judge recommends:

(1) Plaintiffs' claims against Faztec for delinquent contributions accruing prior to June 1, 2011 should be dismissed as barred by the 2011 Release; and (2) Plaintiffs' claims for declarative and injunctive relief should be dismissed to the extent these claims essentially seek money damages.

(Report at 25.) On December 26, 2017, Defendants filed their objection to the Report. (See ECF No. 86; hereafter, the "Objection".³) On January 9, 2018, Plaintiffs filed an opposition to Defendants' Objection. (See ECF No. 94; hereafter, the "Opposition".) For the reasons that follow, the Court overrules Defendants' objections and adopts Magistrate Judge Lindsay's Report in its entirety.

II. Background

The "BACKGROUND" section of the Report addresses the facts and procedural history underlying this action, which are incorporated by reference⁴ (see Report at 2-4) and with the Court assuming the Parties' familiarity therewith. The Court provides a summary of the Defendants' arguments in support of their Rule 12(c) Motion for convenience of the reader.

Defendants argued that the Release in the 2011 Stipulation clearly barred the Plaintiffs from claiming any contributions prior to June 1, 2011. (See Environmental's Rule 12(c) Motion at 9-10.) The Release states in pertinent part:

[T]he Trustees and their successors and assigns, and, collectively,their past, present, and future trustees, fiduciaries, administrators, employees, agents, and representatives ("Releasors") discharge and release all claims, obligations, demands and judgments, causes of action and charges, of whatever kind or nature, whether known or unknown, which they now may have against: DiFazio [i.e., Environmental] and Faztec and each of their owners, officers, directors, employees, shareholders, affiliates, agents or any of their successors or assigns ("Releasees") for all periods prior to August 31, 2008. For periods up to the date of this Stipulation, Releasors specifically release Releasees from any claim, obligation, demand, judgment, cause of action or charge of whatever kind, whether known or unknown, which they now have that Faztec is an alter ego, single employer, controlled group member or is otherwise affiliated with DiFazio such that Faztec is responsible for any benefit fund contribution, delinquency, liability or obligated under any labor agreement between DiFazio and Teamsters Local 282 or any trust document attendant thereto; Releasees expressly acknowledge that Faztec is a separate corporation which shall not be deemed liable, in any of the aforementioned regards or otherwise, for the obligations of DiFazio.

(2011 Stipulation ¶3 (defined as the "Release")(all emphases added).) They also contend that any pre-2011 claims are barred under the doctrine of res judicata, asserting that the 2011 Stipulation precludes further litigation regarding the same time period. (See Rule 12(c) Motion at 10-11 (citing Hanley v. Aperitivo Rest., Corp., No. 97-cv-5768, 1998 WL 307376, at *5 (S.D.N.Y. June 11, 1998; further citation omitted).) They further argue that since Faztec "has already paid all required union and fund payments to [Local] 447 for the same work claimed by [Local] 282" (id. at 11), and Plaintiffs have not shown a duty under Local 282's collective bargaining agreement ("CBA") with Environmental that Faztec is doubly liable to the Funds for work performed by other union workers, all causes of action against Faztec should be dismissed. (See id. at 11-13.) Defendants further posit that: Plaintiffs fail to allege sufficient non-conclusory facts to support their theories of affiliate liability (see id. at 13-17); Plaintiffs' claims, other thanseeking an audit, are not ripe (see id. at 17-18); Plaintiffs lack standing to bring their claim under the Labor Management Relations Act (see id. at 18); Plaintiff's fraud claim is facially deficient, as the claim "does not contain the required allegation of intent" (id. at 19; see also id. at 19-20); and there is no basis for Plaintiffs' demands for declaratory judgment and injunctive relief (see id. at 20-21).

III. Applicable Standards

A. Report and Recommendation Standard of Review

Rule 72 of the Federal Rules of Civil Procedure permits a magistrate judge to conduct proceedings of dispositive pretrial matters without the consent of the parties. See Fed. R. Civ. P. 72(b). Any portion of a report and recommendation on dispositive matters to which a timely objection has been made is reviewed de novo. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). However, "when a party makes only conclusory or general objections, or simply reiterates the original arguments, the Court will review the report strictly for clear error." Frankel v. City of N.Y., Nos. 06-cv-5450, 07-cv-3436, 2009 WL 465645, at *2 (S.D.N.Y. Feb. 25, 2009); see also Butto v. Collecto, Inc., 290 F.R.D. 372, 379 (E.D.N.Y. 2013) ("In a case where a party makes only conclusory or general objections, or simply reiterates his original arguments, the Court reviews the Report and Recommendation only for clear error." (quotations and citation omitted)). The Court is not required to review the factual findings or legal conclusions of the magistrate judge as to which no proper objections are made. See Thomas v. Arn, 474 U.S. 140, 150, 106 S. Ct. 466, 88 L. Ed.2d 435 (1985). Whether or not proper objections have been filed, the district judge may, after review, accept, reject, or modify any of the magistrate judge's findings or recommendations. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b).

B. Motion for Judgment on the Pleadings Standard

"In deciding a Rule 12(c) motion, we 'employ[] the same . . standard applicable to dismissals pursuant to [Federal Rule of civil Procedure] 12(b)(6).'" L-7 Designs, Inc. v. Old Navy, LLC, 647 F.3d 419, 429 (2d Cir. 2011)(quoting Johnson v. Rowley, 569 F.3d 40, 43 (2d Cir. 2009;quotation marks and citation omitted). The standard of review on a Rule 12(b)(6) motion is that a plaintiff plead sufficient facts "to state a claim for relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 127 S. Ct. 1955, 1974 (2007). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S. Ct. 1937 (2009). The plausibility standard requires "more than a sheer possibility that a defendant has acted unlawfully." Id.

"A pleading that offers 'labels and conclusions' or 'a formulaic recitation of the elements of a cause of action will not do.'" Iqbal, 556 U.S. at 678, 129 S. Ct. 1937 (quoting Twombly, 550 U.S. at 555, 127 S. Ct. 1955). "Nor does a complaint suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Id. (quoting Twombly, 550 U.S. at 557, 127 S. Ct. 1955). "Factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true (even if doubtful in fact)." Twombly, 550 U.S. 544, 127 S. Ct. at 1959.

In deciding a motion pursuant to Rule 12(b)(6), the Court must liberally construe the claims, accept all factual allegations in the complaint as true, and draw all reasonable inferences in...