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D&K Construction Co., Inc v. Plumbers Local Union 24

May 25, 2011

D&K CONSTRUCTION CO., INC., PLAINTIFF,
v.
PLUMBERS LOCAL UNION 24, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Hochberg, District Judge:

NOT FOR PUBLICATION CLOSED

ORDER

I. INTRODUCTION

This matter comes before the Court upon cross-motions filed by plaintiff D&K Construction Co., Inc. ("D&K") and defendants, Plumbers Local Union 24 ("Union") and Plumbers Local 24 Benefit Funds ("Union Funds"), to confirm and vacate an arbitration award issued on February 26, 2010, and modified on August 9, 2010 (the "Award"). The Award addresses a dispute between D&K and defendants under a Project Labor Agreement ("Agreement") to which both D&K and the Union are parties. The dispute arose when a subcontractor used by D&K pursuant to the Agreement failed to make required contributions to the Union Funds. The Award held D&K jointly and severally liable with the subcontractor for the unpaid contributions, interest, liquidated damages, attorneys' fees and costs. D&K contends that the award should be vacated because there is no basis under the terms of the Agreement for D&K to be held liable for the unpaid contributions, interest, liquidated damages, attorneys' fees and costs.

II. BACKGROUND

The Agreement contains two provisions that are central to this action. First, the Agreement contains a detailed provision regarding contributions to the Union Funds. Under that provision:

A. The Contractors agree to pay contributions on behalf of all employees covered by this Agreement to the established employee benefit funds in the amounts designated in the appropriate Schedule A

B. The Contractor agrees to be bound by the written terms of the legally established Trust Agreements specifying the detailed basis on which payments are to be paid into and benefits paid out of, such Trust Funds but only with regard to work done on this Project . . ..

C. Should any contractor or sub-contractor become delinquent in the payment of contributions to the fringe benefit funds, then the subcontractor at the next higher tier, [sic] or upon notice of the delinquency claim from the Union or the Funds, agrees to withhold from the subcontractor such disputed amount from the next advance, or installment payment for work performed until the dispute has been resolved.

Agreement, Article 11, Section 2.

Second, the Agreement contains a general liability provision. That provision is contained in Article 2, which is titled "General Conditions," Section 5, which is titled "Liability." The general liability provision states that:

The liability of any Contractor and the liability of any Union under this Agreement shall be several and not joint. The PMF and any Contractor shall not be liable for any violations of this Agreement by any other Contractor.

On May 18, 2009, the Union Funds notified D&K that one of its subcontractors, A. Pflugh, Inc. ("Pflugh") had failed to make required contributions to the Union Funds. D&K responded to the Union Fund's notice by withholding payments due to Pflugh and making payments to the Union Funds. The Award indicates that D&K used the withheld funds to pay a total of $74,983.76 in contributions to the Union Funds for work performed for subcontractor Pflugh during payroll periods between April 26, 2009 and December 19, 2009. Certification of Ranit Shiff ("Shiff Certification"), Ex. F at 8. However, it also indicates that a $44,880.52 balance remained owing by subcontractor Pflugh for work performed by Union members on the relevant project. Id. at 3.

The Award concluded that Pflugh violated the Agreement by failing to make the required contributions and that Pflugh was liable to the Union Funds for $44,880.52, plus interest of $1,870.02, liquidated damages of $8,796.10,*fn1 attorneys' fees of $6,732.07 and the arbitrator's fee of $2,500.00. Id. at 9-10. The Award then concluded that "[n]otwithstanding payments made to Plumbers Local 24 Benefit Funds for the liability of A. Pflugh, Inc. to date, D&K Construction Co., Inc. remains jointly and severally liable for the delinquent contributions due Plumbers Local 24 Benefit Funds, pursuant to Article 11, Section 2 of the PLA and shall withhold from the next advance or installment payment due A. Pflugh . . . amounts due the Plumbers Local 24 Benefit Funds." Id. at 11. The Award does not cite ...


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