Trs. of the Int'l Union of Operating Eng'rs Local 30 Benefit Funds v. Nyack Hosp.

TRUSTEES OF THE INTERNATIONAL UNIONOF OPERATING ENGINEERS LOCAL 30 BENEFIT FUNDS, Plaintiffs, v. NYACK HOSPITAL, Defendant.

No. 16-CV-6638 (KMK)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

February 13, 2018

OPINION & ORDER

Appearances

Lauren M. Kugielska, Esq.

Barnes, Iaccarino & Shepherd LLP

Elmsford, NY

Attorney for Plaintiffs

John H. Pope, Esq.

Epstein Becker & Green, P.C.

New York, NY

Attorney for Defendant

KENNETH M. KARAS, District Judge:

The Trustees of the International Union of Operating Engineers, Local 30 Benefit Funds ("Plaintiffs"), bring this Action to compel an audit of the financial records of Nyack Hospital ("Defendant"), an employer that made contributions to the Plaintiffs' Funds. (See Compl. (Dkt. 1).) Plaintiffs have moved for summary judgment to compel this audit, while Defendant has refused to submit to the requested audit and has cross-moved for summary judgment, claiming that it is contractually obligated to make contributions to the Plaintiff Fund, but is not obligated to submit to an audit by contract, and ERISA does not require an audit under these circumstances. (See Def.'s Mem. in Supp. of Mot. for Summ. J. and in Opp'n to Pls.' Mot. for Summ. J. ("Def.'s Mem.") 8-12 (Dkt. No. 31).) Moreover, Defendant claims that Plaintiffs' claim is barred as both untimely and by the doctrine of res judicata. (See id. at 4-8.) For the reasons below, Plaintiffs' Motion is denied and Defendant's Cross-Motion is granted.

I. Background

A. Factual History

The following facts are taken from the documents submitted and the Parties' respective statements of material facts pursuant to Local Civil Rule 56.1.¹ The facts as described below are not in dispute, except to the extent indicated.

Plaintiffs are the fiduciaries of jointly administered, multi-employer, labor management trust funds (the "Funds"). (See Pls.' Local Rule 56.1 Statement ("Pls.' 56.1") ¶ 1 (Dkt. No 26).) The Funds are established and maintained jointly by the International Union of Operating Engineers, Local 30 (the "Union") and various other employers and are formed in accordance with § 3(21)(A) and Section 502(a)(3) of the Employee Retirement Income Security Act, commonly known as "ERISA," 29 U.S.C. §§ 1002(21)(A) and 1132(a)(3), and § 302(c)(5)(1) of the Taft-Hartley Act, 29 U.S.C. § 186(c)(5). (Id.) The Union and Defendant are parties to a series of collective bargaining agreements, but the Funds are not a party to any of the collectivebargaining agreements executed between the Union and Defendant. (See Def.'s Statement of Material Facts Not in Dispute ("Def.'s 56.1") ¶¶ 1-2 (Dkt. No. 33).) Separately, Plaintiffs have a Declaration of Trust ("Trust Agreement") and Collection Policy that define the operation of the Funds. (See Pls.' 56.1 ¶ 5.) Defendant is not a signatory to the Trust Agreement or Collection Policy, (see Def.'s 56.1 ¶¶ 5-6), though the Parties dispute whether, pursuant to the collective bargaining agreements, Defendant must comply with the terms of the Trust Agreement and Collection Policy, and furthermore, whether Defendant must allow an annual audit of its books and records, (see Pls.' 56.1 ¶ 5; Def.'s 56.1 Resp. and Obj's to Pls.' Rule 56.1 Statement of Material Facts ("Def.'s 56.1 Resp.") ¶ 5 (Dkt. No. 29)).²

As is relevant here, the Trust Agreement, to which Defendant is not a party, provides that the Trustees are empowered "to do all acts . . . which the Trustees deem necessary to accomplish the general objective of maintaining the plan solely in the interest of the participants and beneficiaries," and that this duty entails "[p]rocur[ing] an audit of the books of the Trust Fund" and grants the power to "audit . . . the payroll and/or other records of any [e]mployer . . . to the extent necessary to determine whether the proper [c]ontributions required to be made to the Trust Fund have been made." (Decl. of Michael Spillane ("Spillane Decl.") Ex. A. ("Trust Agreement") §§ 4.01, 4.02(g) and 4.03(o) (Dkt. No. 22).) The collective bargaining agreements, to which Plaintiffs are not a party, set forth various obligations with respect to Defendant's obligations to the Funds. (See Def.'s 56.1 ¶ 3.) As part of the most recent collective bargainingagreement, Defendant is required to contribute 23.5%, multiplied by the gross payroll of the employees for the preceding month to the Funds, (see Spillane Decl. Ex. C ("2011 CBA") § 24.02), and Defendant is required to remit to Plaintiffs the benefit contributions and reports in a timely fashion, (see Pls.' 56.1 ¶ 6). The most recent collective bargaining agreement also provides that:

The [F]unds shall be held and administered under the terms and provisions of the existing Trust Agreements and any amendments thereto and the Employee Retirement Income Security Act. An independent audit of each Plan shall be made annually and a statement of results shall be furnished to the Hospital upon request.

(2011 CBA § 24.05.)

The core of the Parties' dispute is whether the collective bargaining agreements and/or the Trust Agreement require Defendant to allow Plaintiffs to conduct an audit of Defendant's books and records. (See Pls.' 56.1 ¶ 7; Def.'s 56.1 Resp. ¶ 7.) Although the Parties dispute whether an audit is required under the relevant documents, it is undisputed that Defendant has refused Plaintiffs' request to permit access to Defendants' books and records for the purpose of conducting an audit. (See Pls.' 56.1 ¶ 8; Def.'s 56.1 Resp. ¶ 8.) Specifically, in 2010, Plaintiffs sought to audit Defendant's books for the period of January 16, 2003 through January 15, 2007. (See Def.'s 56.1 ¶ 8.) Defendant refused to permit the requested audit, and Plaintiffs thereafter received an arbitration award that purported to entitle Plaintiffs to the requested audit. (See id.) Plaintiffs filed suit in this Court to confirm the arbitration award, and Defendant cross-moved to have the award vacated and the Complaint dismissed. (See id. ¶ 9.) On September 27, 2013, the Court denied Plaintiffs' Motion To Confirm the Arbitration Award and granted Defendant's Cross-Motion To Vacate and Dismiss the Complaint. (See id. ¶ 10.) See also Trustees I, 975 F. Supp. 2d at 376. No appeal was taken. (See Def.'s 56.1 ¶ 10.)

Three years after Trustees I, Plaintiffs filed suit in this Court to compel an audit of Defendant's books and records. (See id. ¶ 11.; see also Compl.) The instant Complaint does not specify for which period an audit is requested. (See generally Compl.) Plaintiffs' 56.1 statement and moving papers are similarly devoid of any mention of the specific audit period at issue here. (See generally Pls.' 56.1; Pls.' Mem. in Supp. of Mot. for Summ. J. ("Pls.' Mem.") (Dkt. No. 24); Spillane Decl.; Aff. of Lauren M. Kugielska, Esq., in Supp. of Pls.' Mot. for Summ. J. ("Kugielska Aff.") (Dkt. No. 23).)³ By contrast, Defendant asserts that the relief sought by Plaintiffs "is an audit of the Hospital's books for the period January 16, 2003 through January 15, 2007." (Def.'s 56.1 ¶ 12.) According to Defendant, this representation was made clear at a conference held before Judge Briccetti on December 19, 2016, where Plaintiffs' counsel "stated that this Action is directed at compelling an audit for the period of January 16, 2003 through January 15, 2007."⁴ (Decl. of John H. Pope, Esq., in Supp. of Def.'s Mot. for Summ J. ¶ 4 (Dkt.No. 32).) Plaintiffs have not withdrawn this representation at any point prior to the filing of their Opposition brief, nor did Plaintiffs' Opposition brief cite to any record evidence that would contradict Defendant's assertion. (See Pls.' Opp'n 4.) See also S.D.N.Y. Civ. R. 56.1(d) ("Each statement by the movant or opponent pursuant to Rule 56.1(a) and (b), including each statement controverting any statement of material fact, must be followed by citation to evidence which would be admissible, set forth as required by Fed. R. Civ. P. 56(c)."). As previously discussed, because Plaintiffs have not opposed Defendant's 56.1 statement, as is required under this Court's local rules, nor have they specifically controverted this statement in any of their moving or opposition papers with record evidence, they have conceded the fact that the requested audit at issue here is for the period January 16, 2003 through January 15, 2007.

B. Procedural History

Plaintiffs filed their Complaint on August 23, 2016, (see Compl.), and Defendant filed an Answer on October 11, 2036, (see Answer (Dkt. No. 7)). The case was initially assigned to Judge Briccetti, and the Parties held an initial pretrial conference before Judge Briccetti on December 19, 2016. (See Dkt. (entry for Dec. 19, 2016).) At this conference, Defendant requested that this case be deemed related to Trustees I, and Judge Briccetti thereafter issued an Order requiring Defendant to submit a letter in support of this request, (see Order (Dkt. No. 12)), which Defendant did, (see Pope Letter), Plaintiffs did not oppose Defendant's position.

The case was accepted by the Court as related on January 5, 2017, (see Dkt. (entry for Jan. 5, 2017)), and the Court set a briefing schedule on the instant Motions, (see Mot. Scheduling Order (Dkt. No. 16)). Plaintiffs filed their Motion for Summary Judgment and accompanyingpapers on March 20, 2017. (See Dkt. Nos. 20-24, 26.) Defendant filed its consolidated opposition and Cross-Motion for Summary Judgment papers on April 28, 2017. (See Dkt. Nos. 29-33.) Plaintiffs filed their consolidated Reply and opposition papers in response to Defendant's Motion on May 24, 2017, (see Dkt. Nos. 36-37), and Defendant filed its Reply to Plaintiffs' opposition on June 9, 2017, (see Dkt. No. 38).

II. Discussion

A. Standard of Review

Summary judgment is appropriate where 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); see also Psihoyos v. John Wiley & Sons, Inc., 748 F.3d 120, 123-24 (2d Cir. 2014) (same). "In...