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Carpenters Health & Welfare Fund of Philadelphia & Vicinity v. Silica Builders & Constr. Mgmt.

October 6, 2009

CARPENTERS HEALTH & WELFARE FUND OF PHILADELPHIA & VICINITY, ET AL.,
v.
SILICA BUILDERS & CONSTR. MGMT., LLC, D/B/A SILICA BUILDERS



The opinion of the court was delivered by: Anita B. Brody, J.

MEMORANDUM

I. INTRODUCTION

Plaintiffs in this case fall into three main categories:

1) "The Union": the Metropolitan Regional Council of Carpenters, Southeastern Pennsylvania, State of Delaware and Eastern Shore of Maryland, United Brotherhood of Carpenters and Joiners of America.

2) "The Trust Funds": the Carpenters Health and Welfare Fund of Philadelphia and Vicinity; the Carpenters Pension and Annuity Fund of Philadelphia and Vicinity; the Carpenters Savings Fund of Philadelphia and Vicinity; the Carpenters Joint Apprentice Committee;*fn1 and the National Apprenticeship and Health and Safety Fund (respectively, "Welfare Fund," "Pension Fund," "Savings Fund," "Apprentice Committee," and "NAHS"). Plaintiff Edward Coryell is a trustee and fiduciary of several of these Funds.

3) "The non-Trust Funds": the Carpenters Political Action Committee ("PAC"), and the Building Industry Association of Philadelphia, Pennsylvania ("BIA"), a multiemployer organization, as well as its officer, William Reddish, as holder of an Industry Advancement Program Fund ("IAP").*fn2 All plaintiffs are either a party to or a beneficiary of a collective bargaining agreement ("Labor Contract") between the Union and the BIA. Defendant Silica Builders and Construction Management LLC ("Silica") is a construction management company that hires contractors and subcontractors, including carpenters, to work on construction projects.

Plaintiffs jointly bring this action against Silica pursuant to § 502 and § 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132, 1145; § 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a); and their rights under the Labor Contract. Each Plaintiff seeks an audit of Silica's financial records (Count I), and to collect any delinquent contributions revealed by the audit, as well as liquidated damages, interest, and attorneys' fees and costs incurred by Plaintiffs and owed to them under the Labor Contract (Count II). The Trust Funds also seek damages owed to them under ERISA (Count III).

Silica moves to dismiss the Complaint, arguing that Plaintiffs' must first submit their claims to arbitration before a court may entertain them. Silica is incorrect because the Labor Contract contains an express provision that excludes delinquency disputes from mandatory submission to arbitration. Consequently, I deny Silica's motion to dismiss.

II. JURISDICTION AND LEGAL STANDARD

This Court has subject matter jurisdiction under 28 U.S.C. § 1331. In deciding a motion to dismiss under FED. R. CIV. P. 12(b)(6), a court must "accept all factual allegations as true [and] construe the complaint in the light most favorable to the plaintiff."*fn3 Pinker v. Roche Holdings Ltd., 292 F.3d 361, 374 n.7 (3d Cir. 2002). A motion to dismiss should be granted if the moving party has established that the plaintiff would not be entitled to relief under any reasonable reading of the complaint. Brown v. Card Serv. Ctr., 464 F.3d 450, 452 (3d Cir. 2006).

III. FACTUAL BACKGROUND

On December 19, 2006, Silica agreed to be bound by the provisions of the Labor Contract between the Union and the BIA. In doing so, Silica agreed to certain contributory and withholding obligations set forth within the Labor Contract.*fn4 Plaintiffs allege that Silica has failed to make contributions to the Funds as required by the Labor Contract. Plaintiffs further allege that they cannot know "the precise nature, extent and amount of [Silica's] delinquency [because] the books, records and information necessary to determine this liability are in the exclusive possession, custody and control or knowledge of [Silica]." (Compl. ¶16.) Plaintiffs also claim that Silica "has purposefully and intentionally denied the Funds and Union access to records needed by their auditors to determine the full extent of the delinquency." (Id. ¶17.)

IV. DISCUSSION

This dispute concerns whether Plaintiffs may pursue their rights to audit Silica's financial records and seek contributions under Article 19 ("Delinquency and Collection Procedure") of the Labor Contract in district court or must submit to arbitration. Silica contends that a straightforward reading of the Labor Contract compels the conclusion that Plaintiffs must first submit their grievances to arbitration. It argues that the Contract's general arbitration clause, Article 14, plainly governs "any dispute [that] arise[s] as to the interpretations, application or claimed violation of any provision of th[e] Agreement." Labor Contract, Art. 14, infra Part IV.B. Plaintiffs respond that each of them is exempt from arbitration because of an exception clause in Article 21, ...


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