Opinion
99 Civ. 3294 (HB)
December 13, 2002
OPINION ORDER
Mason Tenders District Council Welfare Fund ("union"), Pension 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 (collectively, "Funds") and plaintiff Anthony Silveri (collectively, "plaintiffs") seek judgment in their favor and against Seaboard Surety Company ("Seaboard") and Robert Rubino (collectively, "defendants") for unpaid fringe benefit contributions due as a result of work performed by plaintiff employees of non-party I.T.R.I. Masonry Corp. ("I.T.R.I.") as a subcontractor to non-party Trataros Construction, Inc. ("Trataros"), on a job known as General Construction at Williamsburg Houses, Brooklyn, New York, during the period from June 25, 1995 through February 27, 1996 (the "project"). By memorandum and order dated January 25, 2001 on plaintiffs' motion and Seaboard's cross motion for summary judgment, I found Seaboard liable to plaintiffs under the terms of the first collective bargaining agreement ("first agreement") for the project that was entered into between the union and I.T.R.I. and scheduled a trial to determine the amount due under a surety bond ("bond") between Seaboard and Trataros. See Mason Tenders Dist. Council Welfare Fund v. Silveri, 2001 WL 64738, at * 1 (S.D.N.Y. Jan. 25, 2001). Specifically, I agreed with plaintiffs that the claims brought under the first agreement that were limited to the amount noticed in the Mechanic's Lien ("lien"), which was served on Trataros and Seaboard on May 21, 1996, constituted sufficient notice under New York Finance Law § 137 ("§ 137") on the ground that the project had not been completed for two years — the statute of limitations provided under the bond — when when Trataros and Seaboard were notified. See id. at *3-6 However, I dismissed all of plaintiffs' claims against defendant Seaboard under the second collective bargaining agreement ("second agreement") that was entered into between the union and non-party RDF Construction Corporation ("RDF") on the ground that plaintiffs failed to give timely notice under New York Finance Law § 137. See id. at *2-3. A bench trial on the remaining claims took place on July 28-29, 2002, the parties submitted posthearing memoranda that became sub judice on September 3, 2002. Defendants have advanced the following three arguments in their post-trial memoranda: (1) this Court lacks subject-matter jurisdiction over the claims raised against Seaboard; (2) plaintiffs failed to provide proper notice to Seaboard under § 137; and (3) plaintiffs failed to present sufficient evidence at trial to support the claim that Seaboard is liable to plaintiffs for a specific amount of unpaid fringe benefit contributions. I disagree. For the reasons detailed more fully below, plaintiff may have judgment against defendants in the amount of $92,975.82 in fringe benefit contributions, plus interest from May 21, 1996, at the rate of 5.6% per annum, compounded annually, as set forth under 28 U.S.C. § 1961.
That statute provides, in relevant part, that
[e]very person who has furnished labor or material, to the contractor or to a subcontractor of the contractor, in the prosecution of the work provided for in the contract and who has not been paid in full therefor before the expiration of a period of ninety days after the day on which the last of the labor was performed or material was furnished by him for which the claim is made, shall have the right to sue on such payment bond in his own name for the amount, or the balance thereof, unpaid at the time of commencement of the action; provided, however, that a person having a direct contractual relationship with a subcontractor of the contractor furnishing the payment bond but no contractual relationship express or implied with such contractor shall not have a right of action upon the bond unless he shall have given written notice to such contractor within one hundred twenty days from the date on which the last of the labor was performed or the last of the material was furnished, for which his claim is made, stating with substantial accuracy the amount claimed and the name of the party to whom the material was furnished or for whom the labor was performed. (S.N.Y. Finance Law § 137(3)).
That statute provides, in relevant part, that
a) [i]nterest shall be allowed on any money judgment in a civil case recovered in a district court. Execution therefor may be levied by the marshal, in any case where, by the law of the State in which such court is held, execution may be levied for interest on judgments recovered in the courts of the State. Such interest shall be calculated from the date of the entry of the judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as published by the Board of Governors of the Federal Reserve System, for the calendar week preceding the date of the judgment. The Director of the Administrative Office of the United States Courts shall distribute notice of that rate and any changes in it to all Federal judges. 28 U.S.C. § 1961.
BACKGROUND
I provided a detailed factual summary, based primarily on a stipulation of facts agreed to by the parties for the purposes of their motion and cross-motion for summary judgment, in Mason Tenders Dist. Council Welfare Fund v. Silveri, 2001 WL 64738, at * 1 (S.D.N.Y. Jan. 25, 2001), and familiarity with that opinion and order is assumed.ANALYSIS
1. Lack of Subject Matter Jurisdiction
Defendants argue that this Court lacks subject matter jurisdiction over this action under the Davis-Bacon Act ("Act"), 40 U.S.C. § 276, which provides for the payment of prevailing wages and benefits to laborers performing work on federal construction projects; that law is applicable only to contracts with city and state agencies for federally funded construction projects. Specifically, the Act applies to "every contract in excess of $2,000 to which the United States or the District of Columbia is a party, for construction, alteration, and/or repair, including painting and decorating of public buildings or public works . . . ." Defendants maintain that the Act, contrary to plaintiffs' view, does not confer a private right of action upon employees alleging non-payment of Davis-Bacon wages and supplements. Plaintiffs counter that the claims against Seaboard were not brought under the Act but rather under the surety bond on which the funds are third-party beneficiaries; consequently, plaintiffs' claims were brought pursuant to this Court's supplemental jurisdiction under 28 U.S.C. § 1367. Plaintiffs point out that, pursuant to the bond, Seaboard agreed to indemnify plaintiffs as a result of non-party I.T.R.I's failure to make fringe benefit payments to the plaintiffs funds pursuant to the first agreement between the union and I.T.R.I. As third-party beneficiaries of that agreement, plaintiffs contend that they are entitled to collect unpaid benefits under that contract. It should be noted that plaintiffs never brought a Davis-Bacon Act claim in the first instance, and that defendants raised the subject matter jurisdiction defense for the first time at trial.
That statute provides, in relevant part, that
in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. 28 U.S.C. § 1367.
In this case, original jurisdiction is conferred under ERISA, 29 U.S.C. § 1132(a)(3), 1145 and the Labor-Management Relations Act of 1947, 29 U.S.C. § 185 ("Taft-Hartley Act").
I agree with plaintiffs that Seaboard's Davis-Bacon argument fails. The bond on its face provides that Seaboard, as surety for the non-party principal here, Trataros, is liable for lawful claims for:
(a) [w]ages and compensation for labor performed and services rendered by all persons engaged in the prosecution of the Work under said Contract, and by any amendment or extension thereof or addition thereto, whether such persons be agents, servants or employees of the Principal or of any such Subcontractor, including all persons so engaged who [perform] the work of laborers or mechanics at or in the vicinity of the site of the Project regardless of any contractual relationship between the Principal or such Subcontractors, or his or their successors or assigns, on the one hand and such laborers or mechanics on the other . . . . (Vollbrecht Aff. Ex. D).
I agree with plaintiffs that, pursuant to this bond, Seaboard agreed to indemnify plaintiffs as a result of the failure of non-party I.T.R.I. — as non-party subcontractor for the nonparty general contractor, Trataros — to make fringe benefit payments to the Funds pursuant to the agreement between I.T.R.I. and the union. The point of contention here appears, at least in part, to be a linguistic one, namely, whether fringe benefit contributions constitute "wages and compensation" for which Seaboard is contractually bound to make payment. Article VI of the first collective bargaining agreement between the union and I.T.R.I. makes clear that fringe benefits are included in the ambit of wages/compensation. (See Vollbrecht Aff. Ex. B). Because the claims against Seaboard are contract claims that arise under a surety bond wherein the Funds are a clear third-party beneficiary, and since this Court has original subject matter jurisdiction pursuant to both ERISA and the Taft-Hartley Act, this Court has subject matter jurisdiction over plaintiffs' contract claims pursuant to its supplemental jurisdiction under 28 U.S.C. § 1367.
2. Plaintiffs' Claims Under the Agreement Are Untimely
Defendants next contend that plaintiffs' notice was untimely under New York Finance Law § 137. In my January 25, 2001 opinion and order, I found that plaintiffs' lien, which was served on May 21, 1996, constituted sufficient notice pursuant to § 137. Specifically, I found that the surety bond sued upon contained a longer statute of limitations — namely, two years — than that which is provided under § 137, see Mason Tenders, 2001 WL 64738, at *5-6 and that the statute of limitations had not run when plaintiffs gave notice.
However, defendants again only now maintain that new evidence was brought to light at trial proving that the lien did not constitute sufficient notice under § 137. Specifically, defendants point to the cross-examination of plaintiffs' witness, Dominick Giammona, who testified that each of the funds constitute a separate entity and each have separate bank accounts. (Tr. 38-39). Defendants contend that, under New York law, lienors who are separate entities must be named individually when filing and serving a lien, and that here the lien was served on behalf of an entity referred to generally as the "Mason Tenders District Council Trust Funds." In other words, none of the plaintiffs were named individually on the face of the lien and none have offered evidence that they provided notice to Seaboard in any manner other than the lien. It was not until August 20, 1999, when plaintiffs filed the instant action, that they provided Seaboard with notice with respect to each individual fund — in other words, beyond the two-year statute of limitations.
I find this argument unconvincing, representing Seaboard's last-ditch effort to avoid paying the plaintiff funds under the terms of the bond. As plaintiffs point out, Seaboard attempted to make the argument on its cross-motion for summary judgment that the "[t]he funds sought by the plaintiffs will be applied to by [sic] various union trust funds and union beneficiaries whether or not they worked on the project" (Defs.' Memorandum at 23) — put another way, defendants already challenged plaintiffs' claims on the basis that the funds were separate entities, some of which allegedly covered beneficiaries who did not perform any work on the project. However, as noted supra, I already resolved the notice issue with respect to the lien in my January 25, 2001 opinion and order. Because I already resolved this issue in plaintiffs' favor in that opinion and order, and because it appears that defendants were cognizant of the fact that the Funds constituted separate entities when defendants briefed their cross-motion for summary judgment, defendants' argument with respect to the timeliness of plaintiffs' lien must fail. Parenthetically, the Federal Rules provide for motions to reconsider and provide a time to file such a motion. However, the Rules do not provide a means for trying the same issue twice when the party aggrieved does not cotton to the outcome.
3. Plaintiffs' Failure to Prove Damages With Respect to the Project at Issue
Finally, defendants maintain that "it would be inherently wrong for this Court to award Plaintiffs damages in this action" on the ground that the payroll audits (Pls.' Exs. 36-18) that plaintiffs submitted as proof of work performed on the project do not state on their face which of the payments reflected in these audits were for work performed on the project itself. In other words, in defendants' estimation, plaintiffs are without legal recourse with respect to damages because they are unable to differentiate between the project and other projects that are unrelated to the instant action, and thus unable to prove any damages sustained specifically from this action. Plaintiffs counter that their claim for $92,975.82 in fringe benefits — 8,974.5 hours of work performed on the project — is not based on the payroll audits but rather solely on the weekly shop steward reports, which demonstrate actual hours of work performed on the project. (Pls.' Exs. 1-35). Plaintiffs point out that the reports were allowed into evidence at the hearing over defendants' objection, and thus that the reports were properly before the Court.
I agree with plaintiffs that the weekly shop steward reports provide clear evidence of the actual number of hours worked on the project. For instance, the reports provide a weekly list of the number of hours each employee spent on the Williamsburg Housing project specifically from the week ending June 27, 1995 to the week ending February 27, 1996. The total for those hours comes to 8,974.5. While defendants are correct that the audit reports do not differentiate with respect to which work was performed on which project, the fact is that plaintiffs have relied on the shop steward reports — not the audit reports — in making their determination with respect to the total number of fringe benefit hours spent on the project. The audit reports do provide a payment schedule and show on October 23, 1995 (Pls.'s Ex. 35) a rate of $l0.36 per fringe benefit hour for the period from January 1, 1995 through September 26, 1995; the same rate for the period from September 1995 through December 31, 1995 (Pls.'s Ex. 36); and the same rate once again for the period from January 1, 1996 through March 26, 1996. (Pls.'s Ex. 37). As noted supra, plaintiffs worked on the project from June 25, 1995 through February 27, 1996. Plaintiffs have simply multiplied the numbers of hours worked as indicated on the weekly shop steward forms (8,974.5) by the applicable rate as indicated on the audit form to produce a figure of $92,975.82 owed by Seaboard.
CONCLUSION
For the foregoing reasons, judgment may be entered against defendant Seaboard in the amount of $92,975.82 plus interest from May 21, 1996, at the rate of 5.6% per annum, compounded annually, and the clerk of the court is instructed to remove this case and any outstanding motions from my docket.