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v. Molinaro Corp.

United States District Court, W.D. Pennsylvania

February 16, 2017

LABORERS' COMBINED FUNDS OF WESTERN PENNSYLVANIA, as agent for Philip Ameris, and Paul
v.
Scabilloni, trustees ad litem, Laborers' District Council of Western Pennsylvania Welfare and Pension Funds, The Construction Industry Advancement Program of Western Pennsylvania Fund, and the Laborers' District Council of Western Pennsylvania and its affiliated local unions, Plaintiff,
v.
MOLINARO CORPORATION and ANTHONY LEONE, Defendants. BOARD OF TRUSTEES OF THE BRICKLAYERS OF WESTERN PENNSYLVANIA COMBINED FUNDS, INC ., Plaintiff,
v.
MOLINARO CORPORATION and ANTHONY LEONE, Defendants.

          MEMORANDUM OPINION

          DAVID STEWART CERCONE UNITED STATES DISTRICT JUDGE.

         I. Introduction

         Plaintiffs, Laborers' Combined Funds of Western Pennsylvania (“Laborer Funds”) and Board of Trustees of the Bricklayers of Western Pennsylvania Combined Funds, Inc. (“Bricklayer Funds”) (collectively “Funds” or “Plaintiffs”), instituted these related actions against Defendants, Molinaro Corporation (“Molinaro”) and Anthony Leone (“Leone”) (collectively “Defendants”), to recover fringe benefits and wage deductions Defendants allegedly were required to contribute to the Funds for the period from February 2015 through June 30, 2015, under certain signed collective bargaining agreements and incorporated Trust Agreements. The Funds each filed a motion for summary judgment, Defendants have responded, and the motions are now ripe for review.

         II. STATEMENT OF THE CASE[1]

         The Funds are multi-employer employee benefit plans within the meaning of the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002 et seq.Pl. CSMF ¶ 1. During the time period relevant to this action, Molinaro was engaged in the business of operating a construction company in or about Western Pennsylvania. Pl. CSMF ¶ 2. At all relevant times, Anthony Leone was the sole shareholder, sole director, President, Secretary and Treasurer of Molinaro. Pl. CSMF ¶ 3 (citing Deposition of Anthony Leone (“Leone Dep.”) (Ex. 14) at 12).[2]

         At all times material, Molinaro was bound by collective bargaining agreements (“CBAs”) with the Laborer and Bricklayer Unions (“Unions”) that required Molinaro to submit certain amounts for fringe benefits and wage deductions to the Funds on behalf of Molinaro's laborers and bricklayers. Pl. CMSF ¶ 4 (citing Pecora Affidavit (Ex. 2) ¶ 3; Ex. 10A at 43-48, 60-61; Ringer Affidavit (Ex. 4) ¶ 3; Ex. 11A at 11-13, 42; Leone Dep. at 13-14). The CBAs provided for the assessment of interest, late charges/liquidated damages, and attorneys' fees for each month that Molinaro failed to submit timely payment to the Funds. Pl. CMSF ¶ 5 (citing Ex. 10A at 43-44, 50; Ex. 10B; Ex. 11A at 11-13; Ex. 11B).

         From January 2015 through May 2015, Molinaro employed laborers and bricklayers on various construction sites who performed work covered by such CBAs, and Molinaro and Leone failed to pay fringe benefit contributions and wage deductions on behalf of Molinaro's laborer and bricklayer employees for such work. Pl. CMSF ¶ 6 (citing Botsford Affidavit (Ex. 1) ¶¶2-5; DiCresce Affidavit (Ex. 3) ¶¶ 2-5). The Funds performed audits of the payroll books and records of Molinaro and provided audit reports to Molinaro. Pl. CMSF ¶ 8.

         The Funds cite portions of Leone's deposition as corporate designee of Molinaro, in which Leone admits that, from August 2014 to the present, he: was the sole director, shareholder, and officer of Molinaro; signed Molinaro's CBAs with the Laborer and Bricklayer Unions as President; had the sole authority to decide what Molinaro bills were to be paid and not paid; had authority to sign Molinaro checks; oversaw the collection of all Molinaro's accounts receivables; knew or should have known of the amounts owed by Molinaro to the Funds since Molinaro filed reports without payment to the Funds listing the amounts owed and was sent by the Fund auditors' reports of the amounts of the audit deficiencies to the Funds; received weekly paychecks from Molinaro from August 2014 through the cessation of business of Molinaro in the summer of 2015; and personally guaranteed Molinaro's credit line with Molinaro's bank and made payments on the line after August 2014. Pl. CMSF ¶ 9 (citing Leone Dep. at 8-9, 11, 14, 29-32).

         Count I of the Funds' Complaints is an ERISA collection action against Molinaro for the alleged delinquency amounts. Counts II and III seek recovery from Defendant Leone on the grounds that he is personally liable for the amounts in question for breach of his ERISA fiduciary duties (Count II) and for state law conversion of the funds (Count III). The Funds contend that, as a result of Defendants' failure to pay, Defendants are liable to the Funds for principal, interest, late charges/liquidated damages, attorneys' fees, and costs in an amount in excess of $110, 000. Pl. CMSF ¶¶ 7, 10 and Exs. 12, 13 (itemizing alleged damages).

         III. Legal Standard for Summary Judgment

         Summary judgment may only be granted where the moving party shows that there is no genuine dispute as to any material fact, and that a judgment as a matter of law is warranted. Fed.R.Civ.P. 56(a). Pursuant to Federal Rule of Civil Procedure 56, the court must enter summary judgment against a party who fails to make a showing sufficient to establish an element essential to his or her case, and on which he or she will bear the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). In evaluating the evidence, the court must interpret the facts in the light most favorable to the nonmoving party, drawing all reasonable inferences in his or her favor. Watson v. Abington Twp., 478 F.3d 144, 147 (3d Cir. 2007). The burden is initially on the moving party to demonstrate that the evidence contained in the record does not create a genuine issue of material fact. Conoshenti v. Pub. Serv. Elec. & Gas Co., 364 F.3d 135, 140 (3d Cir. 2004). A dispute is “genuine” if the evidence is such that a reasonable trier of fact could render a finding in favor of the nonmoving party. McGreevy v. Stroup, 413 F.3d 359, 363 (3d Cir. 2005). Where the nonmoving party will bear the burden of proof at trial, the moving party may meet its burden by showing that the admissible evidence contained in the record would be insufficient to carry the nonmoving party's burden of proof. Celotex Corp., 477 U.S. at 322. Once the moving party satisfies its burden, the burden shifts to the nonmoving party, who must go beyond his or her pleadings and designate specific facts by the use of affidavits, depositions, admissions or answers to interrogatories showing that there is a genuine issue of material fact for trial. Id. at 324. The nonmoving party cannot defeat a well-supported motion for summary judgment by simply reasserting unsupported factual allegations contained in his or her pleadings. Williams v. Borough of West Chester, 891 F.2d 458, 460 (3d Cir. 1989).

         For the reasons set forth below, the Funds are entitled to summary judgment as to liability on the claims set forth in the Complaint.

         IV. Discussion

         A. Count I - ERISA ...


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