Motion for Summary Judgment and Defendants' response thereto, it is hereby ORDERED that Plaintiffs' Motion is GRANTED.
This a contract enforcement action involving a series of labor contracts and a separate series of surety agreements. The facts are not in dispute. See First Set of Joint Stipulated Facts. Plaintiffs are Sprinkler Fitters Local Unions 692 and 696 ("Local 692 and Local 696") and the Trustees of the National Automatic Sprinkler Industry Pension, Welfare, Educational and Supplemental Pension Funds ("NASI Funds"). Local 692 and Local 696 are labor organizations as defined under the Labor-Management Relations Act ("LMRA"). 29 U.S.C. § 152(5). The NASI Funds are employee benefit trust funds as defined under the Employee Retirement Income Security Act ("ERISA"). 29 U.S.C. § 1002(3). Defendants are First Indemnity of America, Inc. and Homestead Insurance Company.
On behalf of laborers engaged in the installation and maintenance of fire protection systems ("Laborers"), Local 692 and Local 696 entered into a series of collective bargaining agreements ("CBAs") with Adelphia Automatic Sprinkler Company, Inc. ("Adelphia"). These CBAs obligated Adelphia, in exchange for services performed, to make hourly payment of wages directly to the Laborers and fringe benefit contributions to the NASI Funds on the Laborer's behalf. Separately and on a per-project basis, Adelphia entered into a series of uniform surety bonds with the Defendants. Under these bonds the Defendants agreed to guarantee a certain class of Adelphia's labor and material payment obligations.
Adelphia failed to make wage payments and fringe benefit contributions as required by the operative CBA on several projects covered by one of the CBAs and by one of the Defendants' surety bond (the "Bonded Projects"). In response, Plaintiffs sought payment from Defendants pursuant to the terms of the applicable bonds.
Defendants denied the request for payment and Plaintiffs initiated this action.
The parties have stipulated that Adelphia breached the operative CBAs for the Bonded Projects in question and that the total amount of wages and benefits due is $ 75,000. See Joint Stipulation P 14.
II. Issues Presented
Defendants contest Plaintiffs claims on two legal grounds. First, they contend that this court lacks subject matter jurisdiction. Second, they assert that the Plaintiffs are not proper claimants under the terms of the bonds.
The parties are not diverse. Therefore, the issue is whether the Plaintiffs claims present a justiciable federal question. Plaintiffs assert jurisdiction under two comprehensive bodies of federal law, the LMRA and ERISA. See 29 U.S.C. § 185 and 29 U.S.C. § 1132. There is conflicting authority regarding the scope of federal jurisdiction under each statutory scheme.
By Order of September 29, 1993, the court denied Defendants' Motion to Dismiss Plaintiffs' Claims for Lack of Subject Matter Jurisdiction and held that jurisdiction was proper under the LMRA. The court also concluded that ERISA could not provide a basis for jurisdiction as the Defendants are not "employers" as defined by ERISA. A review of the parties' contentions regarding jurisdiction and the court's previous order is appropriate.
Jurisdiction Under Section 301 of the LMRA
Section 301(a) of the LMRA provides in relevant part:
Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce . . . or between any such labor organizations, may be brought in any district court . . . without respect to amount in controversy or without respect to diversity of citizenship.