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Hotel Employees & Restaurant v. Stadium Hotel Restaurant Group

March 26, 2012

HOTEL EMPLOYEES & RESTAURANT
HEALTH & WELFARE FUND, ET AL.
v.
STADIUM HOTEL RESTAURANT GROUP, INC. T/A BENNY THE BUM RESTAURANT
v.
BRET LEVY



The opinion of the court was delivered by: O'neill, J.

MEMORANDUM

I have before me defendant/third-party plaintiff Stadium Hotel Restaurant Group's motion for summary judgment against third-party defendant Bret Levy and Levy's response. For the reasons that follow I will deny Stadium's motion.

BACKGROUND

This litigation began when three funds of the Hotel Employees and Restaurant Employees Local No. 274 union filed suit against Stadium to recover unpaid contributions. The funds allege that Stadium operates a restaurant called Benny the Bum in a Holiday Inn hotel in Philadelphia. Dkt. No. 3 at ¶¶ 8 & 9. When Stadium leased the restaurant space, it became bound to a pre-existing collective bargaining agreement between Holiday Inn and Local 274. Id. at ¶ 9. Under the agreement, Stadium was required to make certain contributions to the funds. Id. ¶ 10. The funds allege that Stadium owes nearly $100,000 for unpaid contributions dating from January 2007 to February 2010. Id. at ¶¶ 18 & 20. The funds attach to their Amended Complaint their auditor's letter to Benny the Bum stating that for the period of January 1, 2007 to December 31, 2008, the restaurant owes the funds approximately $55,000 for unpaid contributions. See Dkt. No. 3-3.

Stadium filed an Answer denying that it owes the funds any unpaid contributions. See Dkt. No. 8. Additionally, Stadium filed a Third-Party Complaint against Levy alleging that it entered into a joint venture with Levy to operate the hotel restaurant. Dkt. No. 12 at ¶ 5. According to Stadium, its contract with Levy "was never reduced to a single written document," id. at ¶ 6, but it made Levy solely responsible for managing the restaurant's payroll. Id. at ¶ 7. Levy had the authority to issue payroll checks drawing upon Stadium's bank account. Id. at ¶ 8. Levy knew that Stadium was obliged under the collective bargaining agreement to make contributions to the funds and failed to ensure that the payments were made. Id. at ¶¶ 12 & 13. He gave Stadium "inaccurate accountings of the restaurant staff." Id. at ¶ 11. Stadium ended its joint venture with Levy in August 2009, but Levy continued to hold himself out as the restaurant's manager and he withheld from Stadium the restaurant's financial records. Id. at ¶ 14.

Stadium asserts against Levy claims for breach of fiduciary duty, indemnification and contribution. Id. at ¶¶ 16-24. With respect to the claim for breach of fiduciary duty, Stadium alleges that it "has been exposed to potential legal liability, and incurred substantial damages, including legal fees." Id. at ¶ 19. Stadium seeks judgment against Levy "for all sums that may be adjudged against Stadium in favor of plaintiff Local 274, plus costs and attorney fees." Stadium does not assert a claim for breach of contract.

Levy admits in his Answer that he entered into a joint venture with Stadium but denies that he was solely responsible for managing the restaurant's payroll. Dkt. No. 14 at ¶¶ 5 & 7.

Additionally, Levy denies that he knew of Stadium's obligations under the collective bargaining agreement or that he was responsible for ensuring payment to the plaintiff funds. Id. ¶¶ 12 & 13.

After discovery, Stadium moved for summary judgment on all its claims against Levy. See Dkt. No. 24. Stadium asserts that "Levy failed to ensure that the Restaurant complied with" its obligation to pay contributions to the funds, Dkt. No. 24-1 at 6, but Stadium does not provide any evidence of non-payment. In addition, Stadium does not provide evidence establishing that Levy was responsible for making payments to the plaintiff funds. At his deposition, Levy described himself as the restaurant's "manager" and he admitted that he "helped oversee the restaurant," that he signed contracts and checks on behalf of the restaurant and that he was "like an owner with an interest in running the restaurant." Dkt. No. 24-2 at 10-12. But he never admitted responsibility for paying union contributions and he denied ever having seen the collective bargaining agreement. Id. at 13.

In opposing Stadium's motion, Levy does not deny that he owed Stadium a fiduciary duty. Levy asserts, however, that Stadium had control over the restaurant's bookkeeping. Dkt. No. 27 at 6. Additionally, he argues that he made the benefit payments owed. See Dkt. No. 27 at 8-12. Levy principally relies on two documents to support his position. One is a lease agreement for the restaurant space between landlord Trent Motel Associates, L.P. and tenants Stadium Hotel Restaurant Group, Benny the Bum and Stadium Hospitality Group. Ex. A to Dkt. No. 27. Levy signed the lease on behalf of Benny the Bum. Id. at 36. The lease includes a provision recognizing that existing restaurant workers are entitled to benefits pursuant to a "union contract." Id. at 42. The provision grants "Tenant"*fn1 the option of paying these benefits directly to the employees or paying Trent $2,083.33 a month, in which case Trent becomes responsible for paying the employees. Id. "Tenant," however, is responsible for benefits payments for any new employees. Id.

The second document on which Levy relies is a collection of budget sheets, each of which is entitled "Restaurant/Banquet Reconciliation for the Leased Out Operation." See Ex. B to Dkt. No. 27. Each budget sheet includes a section entitled "Bills Generated to Leasee." Id. For most months between July 2006 to May 2008, this section includes line items entitled "Union Benefits" or "Monthly Union Benefits" that show bills of $2,0833.33. Id. Levy argues that these budget sheets show that he made all the payments he was obligated to make.

These budget sheets, however, show only that a "leasee," presumably Benny the Bum, was regularly billed for benefits for union employees. The budget sheets do not show that Levy or anyone else actually made the payments sought. Accordingly, on January 30, 2012, I ordered Levy to file an affidavit or other evidence, such as cancelled checks, showing that he paid the amounts for which he was billed. See Dkt. No. 29. I gave Levy until February 13, 2012 to file his evidence. Id. To this date, Levy has not responded to my Order. Accordingly, the record contains no evidence that Levy made any payments.

STANDARD OF REVIEW

The party moving for summary judgment bears the burden of demonstrating that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). If the movant sustains its burden, the non-movant must set forth facts demonstrating the existence of a genuine dispute. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A dispute as to a material fact is genuine if "the evidence is such that a reasonable jury ...


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