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Hynes v. Clarke

January 28, 1997

LESLIE A. HYNES, JOHN F. DALY, THOMAS J. KING, PHILIP A. CENTINEO, ROY OLSEN, MICHAEL E. HEGARTY, WILLIAM T. MULLEN, JOHN P. NEIDHARDT, JAMES J. KEARNY, JAMES E. WADE, WILLIAM A. KOLFENBACH, TRUSTEES OF THE DISTRICT COUNCIL IRONWORKERS PENSION, WELFARE, ANNUITY, VACATION, TRAINING PROGRAM TRUST AND INDUSTRY ADVANCEMENT FUNDS OF NORTHERN NEW JERSEY, PLAINTIFFS-RESPONDENTS,
v.
GEORGE R. CLARKE, DANIEL N. HERRES, JR., WILLIAM J. LARUSSO, JOHN D. STEINMETZ, WALTER F. STEINMETZ AND GREGORY P. TEMPLIN, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Essex County.

Approved for Publication January 28, 1997.

Before Judges Shebell, Baime and P.g. Levy. The opinion of the court was delivered by Shebell, P.j.a.d.

The opinion of the court was delivered by: Shebell

The opinion of the court was delivered by

SHEBELL, P.J.A.D.

Rise Steel, Inc. ("Rise Steel") instituted suit in the Chancery Division, Middlesex County, on June 6, 1995, to vacate an arbitration award issued against it on May 21, 1995. It named as defendants the District Council of Ironworkers Welfare, Pension, Vacation, Annuity, Training Program, and Industry Advancement Funds ("Funds"), the arbitrator, the Funds' attorney, all the employees of Rise Steel, including the six defendants in the present action, George R. Clarke, Daniel N. Herres, Jr., William J. LaRusso, John D. Steinmetz, Walter F. Steinmetz and Gregory P. Templin. *fn1

On June 23, 1995, while the Middlesex County action was pending, the Funds requested arbitration against the six employees of Rise Steel, seeking to hold them each personally liable for a portion of the monies owed by Rise Steel on a theory of conspiracy between Rise Steel and defendants to divert monies that otherwise would have gone to the Funds. On December 9, 1995, the arbitrator entered an award against defendants holding them liable for the following amounts: George R. Clarke owed $6,290.36; Daniel N. Herres, Jr. $10,013.00; William J. LaRusso $5,010.29; John D. Steinmetz $11,442.29; Walter F. Steinmetz $1,924.11; and Gregory P. Templin $5,152.07. These awards totaled $39,832.12. The total award against Rise Steel in the initial arbitration proceeding was $157,936.12.

On March 21, 1996, the present appellants filed an answer and cross-claim in the litigation in Middlesex County brought by Rise Steel. Appellants sought to vacate the arbitration award noting among other things that they were never Union members and that the arbitrator lacked jurisdiction. The Funds, on March 15, 1996, had instituted this action by way of a Verified Complaint and Order to Show Cause in the Law Division, Essex County, seeking to confirm their arbitration award against the six appellants. The Case Information Statement, which accompanied the Verified Complaint, and the certification required by R. 4:5-1(b), failed to mention the pending action in Middlesex County.

Appellants moved to dismiss the Essex County suit or, alternatively, to transfer the matter to Middlesex County and to consolidate it with the case pending there, relying upon R. 4:30A and R. 4:29-1. They also moved, pursuant to R. 1:10-3, for an award of counsel fees for the failure of the Funds' counsel to comply with R. 4:5-1(b), or in the event the complaint was not dismissed or the case transferred, they requested an opportunity to defend on the merits based on the lack of jurisdiction of the arbitrator. The Judge rendered a written opinion on April 19, 1996. He denied appellants' motion, refused leave to defend on the merits, and entered final judgment against appellants. This appeal followed and we reverse.

Plaintiffs in this action are the trustees of funds established under collective bargaining contracts to provide fringe benefits to ironworkers. The collective bargaining agreements were entered into by five ironworker local unions that bargain under the trade name of The District Council of Ironworkers of Northern New Jersey ("District Council"). Although employed by Rise Steel as ironworkers, defendants are not and have never been members of any of the five local unions. *fn2 Rise Steel was a party to one such Collective Bargaining Agreement ("Agreement") with the District Council. Under Article XII of the Agreement, the employer, in addition to paying the wages of the Agreement, was also required to pay to the Funds a specified amount of money for each hour worked by a covered ironworker in the employ of a particular employer. The Agreement set forth a method of contribution that required the employer to buy a stamp from the Funds which was equivalent to the amount of money required under the Agreement for each hour of employment covered by the fringe benefit Funds, and to submit reports to the Trustees of the Funds.

Section 12.4, subsection A of the Agreement, in pertinent part, declared:

(6) that the Trustees of either or all of the aforenamed Trusts or Funds may maintain an action in their name as an entity, or in their names as Trustees of their respective Trust, in any Court and in any jurisdiction, or before an arbitrator as hereafter provided to claim, recover and collect any amount or amounts due from any Employer for contributions or sums due to their respective Trust or Fund....

(7) The Trustees of any Fund or an alleged delinquent Employer may request arbitration of any alleged delinquencies or breach of agreement regarding Fund contributions and arbitration must be heard within thirty (30) days after such request. The Trustees may join an individual ironworker as a party to any such arbitration proceeding relating to an alleged delinquency or a breach of agreement regarding Fund contributions in which such ironworkers may be involved. Each ironworker subject to this Agreement does hereby, through ...


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