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Cook v. New Jersey Building Laborers Statewide Benefit Funds

August 1, 2007

RE: COOK
v.
NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS, ET AL.,



The opinion of the court was delivered by: William J. Martini, U.S.D.J.

LETTER OPINION

Dear Counsel:

This matter initially came before the Court pursuant to a June 25, 2007 application by Plaintiff Clyde Cook for an order enjoining Defendant New Jersey Building Laborers Statewide Benefit Funds (the "Funds") from proceeding with an arbitration, scheduled for June 28, 2007, seeking allegedly delinquent fund contributions. On June 26, 2007, this Court entered a temporary restraining order enjoining the arbitration until further order of the Court. Defendant Funds subsequently cross-moved for an order compelling arbitration and staying the proceedings. Both motions have been fully briefed.

After hearing oral argument from Plaintiff and Defendant Funds on July 23, 2007, the Court issued a ruling from the bench denying Plaintiff's motion for a temporary injunction and granting the Funds' motion to compel arbitration. The Court writes now to memorialize and expand upon its ruling from the bench.

Although the parties have raised other issues in their filings to date, the only issue immediately before the Court is whether Grover-Cook Construction agreed to submit to arbitration any disputes arising out of its agreement regarding the hiring of union laborers. Therefore, the Court will not attempt to provide an exhaustive summary of the background in this case, but will limit its discussion to the facts and arguments relevant to this determination.

BACKGROUND AND RELEVANT FACTS

According to Plaintiff, in early 2004, Plaintiff entered into a partnership with Defendant Raymond Grover for the purpose of working together on a particular construction project for Sussex County Community College. (Compl. ¶¶ 21-22; Cook Aff. ¶¶ 9-10, June 25, 2007.) The partnership did business as Grover-Cook Construction. (Compl. ¶ 23; Cook Aff. ¶ 11.) On January 20, 2004, Grover signed a Short Form Agreement, on behalf of Grover-Cook Construction, regarding the hiring of union laborers. (Compl. ¶¶ 34-42, Ex. I; Giblin Cert. Ex. 1, June 29, 2007.) The Short Form Agreement incorporates a Collective Bargaining Agreement ("CBA"), indicating that "the undersigned employer [Grover-Cook Construction] and the Unions hereby agree to be bound by the terms and conditions as set forth in the 2002-07 Building, Site and General Construction Agreement, which Agreement is incorporated herein as if set forth in full." (Giblin Cert. Ex. 1, June 29, 2007.) The CBA obligates employers bound by its terms to make certain contributions to the New Jersey Building Laborers' Pension, Welfare and Annuity Funds. (Giblin Cert. Ex. A, Article XIV §§ 14.00, 14.10 & 14.20, July 20, 2007.) Additionally, the CBA contains provisions requiring arbitration in the event of a dispute that cannot be resolved by alternative means. (See Giblin Cert. Ex. A, Article XXI § 21.20, July 20, 2007.) The CBA also incorporates a Trust Agreement, which provides for arbitration to collect delinquent contributions, and pursuant to which J.J. Pierson, Esq. was appointed as the Funds' permanent arbitrator. (Giblin Cert. Ex. A, Article XIV §§ 14.00, 14.10 & 14.20, July 20, 2007; Giblin Cert. Ex. 4, June 29, 2007.)

Defendant Funds argues that Grover-Cook Construction is delinquent in its fund contributions in the amount of $286,752.39, and that the matter must proceed to arbitration pursuant to the agreement between the parties. (Def.'s Opp. 4-5.) Plaintiff alleges that Mr. Grover never informed Plaintiff of the nature of the agreement with the Unions, and that Mr. Grover was not authorized to enter into such an agreement on behalf of the partnership. (Compl. ¶¶ 124-25.) Plaintiff further alleges that until June 18, 2007 - when Kelli Grover, the bookkeeper/office manager of Grover-Cook Construction and the wife of Mr. Grover, handed Plaintiff a box of documents just before the couple left town - Plaintiff was completely unaware that Grover-Cook Construction was allegedly delinquent in its fund contributions, or that an arbitration hearing was scheduled to take place in ten days. (Cook Aff. ¶¶ 18, 91-93.) When the Funds and the arbitrator refused to consent to an adjournment of the arbitration, notwithstanding Plaintiff's representation that it would be impossible for Plaintiff and his newly-retained counsel to prepare for the arbitration on such short notice (see Horowitz Cert. ¶¶ 6-10, June 24, 2007), Plaintiff came before this Court requesting an emergency order staying the arbitration.

This Court initially granted a temporary restraining order preventing the arbitration from going forward on June 28. For the reasons discussed below, however, the Court now finds that temporary restraints are no longer appropriate; that Plaintiff has not met the standard for a preliminary injunction further staying the arbitration; and that an order should be entered compelling arbitration.

DISCUSSION

The preliminary injunction standard is a familiar one. "A party seeking a preliminary injunction must show: (1) a likelihood of success on the merits; (2) that it will suffer irreparable harm if the injunction is denied; (3) that granting preliminary relief will not result in even greater harm to the nonmoving party; and (4) that the public interest favors such relief." Child Evangelism Fellowship of New Jersey, Inc. v. Stafford Twp. Sch. Dist., 386 F.3d 514, 524 (3d Cir. 2004) (quoting KOS Pharms., Inc. v. Andrx Corp., 369 F.3d 700, 708 (3d Cir. 2004)).

I. Likelihood of Success on the Merits

The Court's threshold inquiry focuses on the likelihood of Plaintiff's success on the merits of his arguments that Grover-Cook Construction is not subject to a legally binding arbitration clause regarding the instant dispute with Defendant Funds.

Pursuant to the Federal Arbitration Act (the "FAA"), "[a] written provision in . . . a contract . . . to settle by arbitration a controversy thereafter arising out of such contract . . . or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. ยง 2. The FAA establishes a strong federal policy in favor of compelling arbitration over litigation, upon the court's being satisfied that the ...


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