Opinion
99 Civ. 2274 (RWS)
January 4, 2002
MEMORANDUM OPINION
Defendant Richard Murphy ("Murphy") has moved for partial summary judgment pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, dismissing the plaintiffs' complaint as to the defendant, Murphy. Because there are disputed issues of material fact, the motion is denied.
Parties and Prior Proceedings
Plaintiffs Mason Tenders District Council Welfare Fund, Annuity Fund, Training Fund, New York State Laborers-Employers Cooperation and Education Trust Fund, New York Laborers' Health and Safety Trust Fund and Building Contractors Association Industry Advancement Program and John J. Virga in his fiduciary capacity as Director, (the "Funds") are jointly administered, multi-employer, labor-management trust funds established and maintained pursuant to various collective bargaining agreements in accordance with sections 302(c)(5) and (c)(6) of the Labor-Management RElations Act, 1974 ("Taft-Hartley Act") ( 29 U.S.C. § 186 (c)(5) and (c)(6)), and/or are employee benefit plans within the meaning of sections 3(1), 3(2) and 502(d)(1) of the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") ( 29 U.S.C. § 1002(1), (2), (3) and 1132(d)(1)), and/or are multi-employer plans within the meaning of sections sections 3(37) and 515 of ERISA. The Funds are authorized to maintain suit as independent legal entities under section 502(d)(1) of ERISA.
Mason Tenders District Council (the "Union") is a labor organization within the meaning of section 301 of the Taft-Hartley Act, representing employees in an industry affecting interstate commerce. The Union is the representative of its constituent locals, Numbers 78 and 79, each being a labor organization operating as a labor union.
Murco Contracting, Inc. ("Murco") was and is a for-profit domestic corporation doing business in the City and State of New York as an employer within the meaning of sections 3(5) and 515 of ERISA as well as section 301 of the Taft-Hartley Act. Murphy is the principal of Murco.
This suit was filed on March 26, 1999 to recover contributions to the Funds owed under a collective bargaining agreement with Murco, and Murphy as principal of Murco, asserting claims under sections 502 and 515 of ERISA for unpaid fringe benefit contributions plus statutory damages and interest, and attorney's fees and costs. After numerous extensions, the instant motion was filed to dismiss the claim as against Richard Murphy. The motion was taken on submission and marked fully submitted on December 19, 2001.
Facts
In or around October 1996, Murco began construction work at Sotheby's Auction house, 1334 York Avenue, New York, New York, pursuant to a subcontract with Anchor Construction, Inc. When Murco began the work, it was a non-union contractor.
Subsequently, Murphy signed the last page of a collective bargaining agreement (the "Agreement") with the Union. The Agreement was effective on and after June 1, 1996 to May 31, 1999. The Agreement provides, in relevant part,
The person signing on behalf of the Employer also agrees to be personally bound by and to assume all obligations of the Employer provided in this Agreement and he warrants and represents that he has authority to bind the Employer and principals or members thereof.
Murphy claims in his affidavit that when he originally refused to sign the agreement, the union representatives "stopped the job and prevented all of Murco's men from entering the building". Affidavit of Defendant Richard Murphy in support of Motion for Summary Judgment ("Murphy Aff."), ¶ 15. Murphy also claims that he was told that if he signed the Agreement he would get more work and not have future labor difficulties.
Murphy states that he then went to the Union's offices and met with Anthony Silveri ("Silveri"), the Business Manager of the Union, who promised to get Murco more work as an inducement to sign the agreement. As a result of potential work stoppages, both on the current job and future jobs, and foreseeable litigation by Sotheby's for failure to complete the work, Murphy states he had "no alternative but to sign anything put in front of me." Id., 20. Silveri, in contrast, states in his affidavit that at no time was Murphy forced to sign the Agreement. Murphy claims he was not permitted to read the Agreement or have an attorney review the Agreement. Silveri states that Murphy was not prevented from reading the Agreement and was not prevented from seeking legal advice prior to signing the Agreement.
Pursuant to the Agreement, the Funds conducted an audit of the books and records of Murco, establishing that Murco failed to pay fringe benefit contributions owed to the Funds. The audit also established that Murco failed to pay dues checkoffs to the Union and PAC contributions.
Summary Judgment Standard
Rule 56(c) of the Federal Rules of Civil Procedure provides that a motion for summary judgment may be granted when "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The Second Circuit has repeatedly noted that "as a general rule, all ambiguities and inferences to be drawn from the underlying facts should be resolved in favor of the party opposing the motion, and all doubts as to the existence of a genuine issue for trial should be resolved against the moving party." Brady v. Town of Colchester, 863 F.2d 205, 210 (2d Cir. 1988) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 330 n. 2 (1986) (Brennan, J., dissenting)); see Tomka v. Seiler Corp., 66 F.3d 1295, 1304 (2d Cir. 1995); Burrell v. City Univ., 894 F. Supp. 750, 757 (S.D.N.Y. 1995).
Materiality is defined by the governing substantive law. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248(1986). "[T]he mere existence of factual issues — where those issues are not material to the claims before the court — will not suffice to defeat a motion for summary judgment." Quarles v. General Motors Corp., 758 F.2d 839, 840 (2d Cir. 1985). When viewing the evidence in the light most favorable to the non-movant, only if there is no genuine issue of material fact is the entry of summary judgment appropriate. See Burrell, 894 F. Supp. at 758 (citing Binder v. Long Island Lighting Co., 933 F.2d 187, 191 (2d Cir. 1991)).
The Motion for Summary Judgment is Denied
Murphy argues that his execution of the Agreement came about as the result of economic duress and thus that the Agreement is voidable. United States Bank v. Weaver, 526 F. Supp. 29 (S.D.N.Y. 1981), sets out a helpful three point test whereby a contract is voidable when it is shown that the agreement was obtained:
(1) by means of a wrongful threat precluding the exercise of free will;
(2) under the press of financial circumstances;
(3) where circumstances permitted no other alternative.
Here, Murphy's factual allegations have been specifically disputed by Silveri, the business manager of the Union. Silveri states that Murphy was not forced to sign the Agreement and he had an opportunity to read it and present it to a lawyer. Thus the requirement that the agreement was obtained "by means of a wrongful threat precluding the exercise of free will" is directly in dispute. In this Circuit, "as a general rule, all ambiguities and inferences to be drawn from the underlying facts should be resolved in favor of the party opposing the motion, and all doubts as to the existence of a genuine issue for trial should be resolved against the moving party." Brady v. Town of Colchester, 863 F.2d 205, 210 (2d Cir. 1988) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 330 n. 2(1986) (Brennan, J., dissenting)). The facts surrounding the signing of the Agreement and whether the signature was procured under duress are in dispute and are material to the resolution of this claim.
Further, Murphy has not complied with the requirements of Rule 56.1 of the Local Civil Rules of the United States District Courts for the Southern and Eastern Districts of New York, which provides as follows:
(a) Upon any motion for summary judgment pursuant to Rule 56 . . ., there shall be annexed to the notice of motion a separate, short and concise statement of the material facts as to which the moving party contends there is no genuine issue to be tried. Failure to submit such a statement may constitute grounds for denial of a motion.
Murphy has failed to submit the statement required by Rule 56.1(a). In addition, plaintiffs noticed deposition of both defendant Murphy and defendant Murco. Neither of those depositions have been conducted and thus Murphy's version of the facts set forth in his affidavit was not subject to cross-examination. This provides further reason to resolve these factual issue in favor of the plaintiffs on this motion for summary judgment.
Undisputed facts that establish Murphy's proffered defense of duress are crucial at the summary judgment stage. Since the facts put forward by Murphy are only presented in the form of an affidavit, no depositions of Murphy or Murco were conducted, and the central factual allegations relating to duress are disputed by Silveri, the motion to dismiss is denied.
It is so ordered.