United States District Court, D. New Jersey
NEW JERSEY BUILDING LABORERS' STATEWIDE PENSION FUND AND TRUSTEES THEREOF, Plaintiff,
RICHARD A. PULASKI CONSTRUCTION, R. PULASKI & SONS CONSTRUCTION, INC., PULASKI BROTHERS CONSTRUCTION, INC, and RA. PULASKI CONSTRUCTION COMPANY, L.L.C. Defendants.
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
Jersey Business Laborers' Statewide Pension Fund and the
Trustees thereof (Pension Fund) brought this action to
recover withdrawal liability due to it from Pulaski
Construction (the Signator), asserting claims "against a
construction family on the basis of successor liability .
.." (Defendants' Trial Brief at 2 (ECF No. 79)).
This action is governed by the Employee Retirement Income
Security Act of 1974 ("ERISA") 29 U.S.C. §
1001, et seq., specifically § 4301 of ERISA, 29
U.S.C. § 1451. (Stipulated Facts ¶1).
of the Court
case, the Court has three roles. First, as trier of fact, the
Court's duty is to decide the facts from the evidence
that was heard and seen in court during the hearing. The
second duty is to apply the law to the facts. The third duty
is to clearly explain the facts and the legal principles
underpinning the Court's decision.
any jury, the Court performs these duties fairly and
impartially. The Court will not allow sympathy, prejudice,
fear, or public opinion to influence its decision. The Court
will not be influenced by any person's race, color,
religion, national ancestry or gender. Here, both parties
stand on equal footing. Since the Court's decision is
based upon evidence seen and heard in the courtroom, the
Court followed the same guidelines as a jury would in
determining the evidence and what weight should be given to
Court did not let rumors, suspicions, or anything else that
it may have seen or heard outside of the court influence its
decision in any way. In order to assess the evidence, the
Court used common sense, and considered it in light of
everyday experience with people and events; and as such, the
Court gave the evidence whatever weight it believed it
deserved. See Model Jury Charge 1.5.
evidence in this case primarily consisted of the testimony of
two witnesses: Richard Pulaski and Gary Ramsey. Both
witnesses were honest and forthright.
presented three theories of withdrawal liability: alter ego
liability; successor in interest liability; and control group
liability. Although these theories overlap, there are some
differences and each is discussed separately in the
"Conclusions of Law" section below.
burden of proof for establishing any of the three theories
"rests with the party attempting to negate the existence
of a separate entity." Trs. of the Natl Elevator
Indus. Pension, Health Benefit & Educ. Funds v.
Lutyk, 332 F.3d 188, 197 (3d Cir. 2003). Alter ego
liability must be established by clear and convincing
evidence, id. at 192, and is "notoriously
difficult for plaintiffs to meet." Pearson v.
Component Tech. Corp., 247 F.3d 471, 485 (3d Cir. 2001).
Pension Fund was and still is a trust fund established and
maintained pursuant to § 302(c)(5) of the Labor
Management Relations Act, ("LMRA"), 29 U.S.C.
§ 186(c)(5), and an employee benefit plan within the
meaning of § 3 of ERISA, 29 U.S.C. § 1301(a)(3).
The Pension Fund qualifies to commence this action under
§§ 502(d)(1) and 4301(a)(1) of ERISA, 29 U.S.C.
§§ 1132(d)(1), 1451(a)(1). (Stipulated Facts
¶2). The Trustees of the Pension Fund are fiduciaries
and, as such, are entitled to bring and maintain this action
under § 4301(a)(1) of ERISA, 29 U.S.C. §
1451(a)(1). (Stipulated Facts ¶3).
Construction (hereinafter, the "Signator") was
subject to a Collective Bargaining Agreement
("CBA") with the New Jersey Construction Building
Laborers District Council ("Union") for work
performed within the Union's jurisdiction. (Stipulated
Facts ¶8) (Plaintiffs Exh. 5). Named Defendants are not
the Signator, but are alleged to be the "alter ego"
of the Signator, since they are family members who operated
the Signator. Under the terms of the CBA, the Signator was
obligated to hire members of the Union, and to pay wages and
benefits. (Stipulated Facts ¶9). Said payments and
benefits were paid until April 2012; Signator defaulted on
payment thereafter. At that time, the amount due to the
Pension Fund was $87, 152.00.
Pension Fund brought an action for the amount owed against
the Signator, and a default judgment in the amount of $137,
017.12 was awarded. This included principle, legal fees,
costs, interest, and liquidated damages. (Stipulated Fact
¶24). Since the Signator was defunct, the Pension Fund
brought this suit against Pulaski Brothers Construction Co.,
Inc. (Brothers), R. Pulaski & Sons Construction, Inc.
(Sons) and Richard A. Pulaski Construction based on successor
Pulaski has three sons, Richard, Ronald, and Rob. Patricia is
82 years of age. Her sons have worked in the construction
business for a number of years. Richard testified he first
began work in construction in 1976 and he has remained in the
construction business ever since. (Tr. 106:20-23). In 1984,
Ronald Pulaski formed the Signator, in which he was the owner
and Richard was the manager, supervisor and contract
negotiator. (Tr. 7:7-13; Stipulated Facts ¶¶34-35).
Patricia was never involved in any capacity with the
Signator. (Tr. 112:1-4). The Signator primarily worked on
heavy construction projects, which involved the hiring of
union labor. (Tr. 43:22-25). It entered contracts to
construct hospitals, hotels, arenas and schools, as well as
large private sector projects. Examples of such construction
projects include: (a) contract between Signator and Middlesex
County dated January 18, 1990 (Defendants' Exh. 6); (b)
contract between Sordoni Shansha and Signator dated October
20, 2000 for construction of Robert Wood Johnson Foundation
(Defendants' Exh. 7); and (c) contract between Signator
and Hill Construction, for construction of a library
(Defendants' Exh. 8). Each of these heavy construction
projects involved a CBA and the Pension Fund. At the height
of its success, the Signator employed hundreds of union
members, including those union laborers subject to the
Pension Fund. (Tr. 97:16-17; 101:5-18). The Signator was
affiliated with another Pulaski company, R&R Pulaski,
LLC, which owned real estate including an office building and
yard located at 2115 Hamilton Avenue, Hamilton, New Jersey.
event, after about 15 years of heavy construction operations,
the Signator's success ebbed, and losses mounted in or
about 1999-2000. (Tr. 88:15-17). At the time, the Signator
was constructing the Sovereign Bank Arena in Trenton, New
Jersey. The contract price negotiated was far less than the
actual cost of construction (Tr. 32:3-20).
about 2008, the Signator's affiliate, R&R Pulaski,
LLC, borrowed $1.6 million to pay off vendors and other
creditors. (Tr. 89:13-22; Defendants' Exh. 13). R&R
Pulaski mortgaged the real estate and the office building at
2115 Hamilton Avenue, as well as other real estate located on
Youngs Road. As security for the loan, R&R Pulaski
pledged all of the heavy equipment and real property it
owned. (Tr. 91:15-21).
2012, Signator's business financially crumbled. Richard
Pulaski testified at deposition that the Signator ceased
operations when it ran out of work. (Stipulated Fact
¶41). At some point, the mortgagee, LRL, LLC, evicted
the Signator's affiliate from the Youngs Road
warehouse/shop and seized all the equipment owned by the
Signator. The lender also levied upon the heavy construction
equipment and other assets, all of which were sold at an
auction by LRL, LLC. (Tr. 92:6-18). Later that year, First
Choice Bank, an affiliate of LRL, LLC, foreclosed on the 2115
Hamilton Avenue property, and was subject to a sheriffs sale.
(Tr. 91:21-92:8). In 2012, the Signator's bank accounts
were also levied upon and closed due to negative balances.
(Stipulated Fact ¶42). In addition, some of the leased
equipment and vehicles were repossessed by the leasing
company. (Stipulated Fact ¶60).
First Choice Bank, as the foreclosure purchaser, approached
the Pulaskis and offered to permit them to remain in the
office building at 2115 Hamilton Avenue, rent-free and
utility-free, for a short period of time. The Pulaskis agreed
and remained on the premises and now lease the property from
First Choice Bank. (Tr. 93:1-8).
time, Richard Pulaski and his brother, Ronald, each
personally filed for Bankruptcy under Chapter 11, which was
later converted to Chapter 7. The Signator and its affiliates
were listed in both petitions. Thereafter, the Bankruptcy
Court discharged them of all debts that they were personally
liable for. (Tr. 94:1-25). Richard acknowledged that the
Signator could have filed a Chapter 7 bankruptcy, but it did
not do so since the Signator's lawyers advised that since
it had no assets, there was no reason for it to file for
bankruptcy. (Tr. 95:19-23).
than a year after the bankruptcy proceedings, in December
2013, Ronald Pulaski created a new construction company that
would not undertake projects involving union
laborers. His mother, Patricia, agreed to finance the start
up of the company. The new company was named Pulaski Brothers
Construction Co., Inc. (hereinafter "Brothers") and
was incorporated in January 2014. (Tr. 37:4-11; T. 38:3-10).
Evidently, the mother allowed Brothers to use her credit line
to purchase materials for the business.
inception, Brothers was solely owned by Patricia. Her sons,
Richard, Ronald and Robert were employees. (Tr. 8:8-10).
Richard handled contract negotiations (Tr. 6:15-25), Ronald
supervised the field work (Tr. 7:5-13), and Robert, who is
disabled, worked occasionally as laborer and carpenter. (Tr.
7:17-25). Brothers retained the previous bookkeeper of
Signator, Eileen,  and an administrative assistant, Kayla
Dowd. (Tr. 10:7-17). As of July 2016, it had two additional
workers on the payroll, for a total of about seven employees.
(Defendants' Exh. 14; Tr. 61:18-25; 62:1-15).
to the testimony, Brothers consistently confined its work to
residential and light commercial construction. Presently,
Brothers is working on the Straube Center in Pennington, New
Jersey, performing drywalling, spackling and installing
ceilings (Tr. 12:8-14). Only two people are working on that
job, Ronald and an independent subcontractor named Curt, who
installs metal studs and sheetrock, and spackles ceiling
tiles. (Tr. 12:15-13:1-2). Brothers has not undertaken any
projects where heavy construction equipment, such as a crane,
is utilized. Instead, its work focuses primarily on jobs
where hand-held tools are used. (Tr. 98:19-99:9). Brothers
still uses the same phone number as Signator and operates
from the its former location; however, it now leases the
property. (Tr. 92:21-25; 93:1-23).
the trial, Richard Pulaski noted the difference between heavy