NJ BUILDING LABORERS CONSTRUCTION LABORERS DISTRICT COUNCIL, NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS and the TRUSTEES THEREOF v. NOVA CRETE INC.

CourtDistrict Court, D. New Jersey
DecidedOctober 15, 2020
Docket3:20-cv-05180
StatusUnknown

This text of NJ BUILDING LABORERS CONSTRUCTION LABORERS DISTRICT COUNCIL, NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS and the TRUSTEES THEREOF v. NOVA CRETE INC. (NJ BUILDING LABORERS CONSTRUCTION LABORERS DISTRICT COUNCIL, NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS and the TRUSTEES THEREOF v. NOVA CRETE INC.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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NJ BUILDING LABORERS CONSTRUCTION LABORERS DISTRICT COUNCIL, NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS and the TRUSTEES THEREOF v. NOVA CRETE INC., (D.N.J. 2020).

Opinion

NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS AND THE TRUSTEES THEREOF, Civ. No. 20-5180 Petitioners, OPINION v.

NOVA CRETE, INC.,

Respondent.

THOMPSON, U.S.D.J. INTRODUCTION This matter comes before the Court upon the Petition and Motion to Confirm Arbitration Award filed by Petitioners New Jersey Building Laborers Statewide Benefit Funds and the Trustees Thereof (collectively, the “Funds”) (ECF Nos. 1, 2), and the Cross-Motion to Dismiss the Petition filed by Respondent Nova Crete, Inc. (“Nova Crete”) (ECF No. 8). The Court has decided the Motion based on the written submissions of the parties and without oral argument, pursuant to Local Civil Rule 78.1(b). For the reasons stated herein, the Petition and Motion to Confirm Arbitration Award are denied, and the Cross-Motion to Dismiss the Petition is granted. BACKGROUND I. Relevant Documents This case arises out of a dispute regarding a company’s contribution obligations under a 1 collective bargaining agreement. Between 2005 and 2019, a union1 and Nova Crete executed four one-page “Short-Form Agreements” (collectively, “SFAs”). (Parsons Cert. Ex. A, ECF No. 10-2 (compiling SFAs dated May 3, 2005; September 7, 2007; October 24, 2016; and May 8, 2019).) The SFAs incorporate the Building, Site and General Construction Collective Bargaining

Agreement (“CBA”) between the union and Nova Crete. (Id.) The SFAs and CBA delegate disputes, including disputes regarding arbitrability and whether an agreement exists, to an arbitrator. The 2007 and 2019 SFAs state, “The permanent arbitrator appointed by the Trustees of the [F]unds shall decide all disputes arising under the Agreement including all matters of procedural and substantive arbitrability.” (Id.) The CBA states, “The Arbitrator shall have the authority to decide all disputes arising under this Agreement including all matters of procedural and substantive arbitrability and whether an Agreement exists between the parties.” (CBA Art. XXII, § 22.20(d), Parsons Cert. Ex. B.) The agreements also specify Nova Crete’s obligations. The CBA and a separate Trust Agreement require Nova Crete to pay contributions to the Funds for employees performing work

under the CBA. (Arb. Award ¶ 4, Petition Ex. D, ECF No. 1 (citing CBA Arts. X, XIV); Trust Agreement Art. V, Parsons Cert. Ex. C.) The 2016 and 2019 SFAs provide, “This Short Form Agreement is not a one job agreement.” (Parsons Cert. Ex. A.) In accordance with the CBA, an independent auditor conducted an audit to determine

1 The complete name of the union as set forth in the SFAs is the New Jersey Building Construction Laborers Local Unions and New Jersey Building Construction Laborers District Council affiliated with the Laborers’ International Union of North America. (Parsons Cert. Ex. A.) 2 whether Nova Crete had paid its required contributions. (Arb. Award ¶ 5.)2 The Funds concluded that Nova Crete violated the CBA by failing to pay over $700,000 in contributions between October 24, 2016 and September 30, 2018. (Id. ¶ 8.) II. Initiation of Arbitration and Nova Crete’s Fraud-in-the-Execution Claim

The Funds pursued collection of the contributions in arbitration. (Id. ¶ 12.) The initial hearing dates were scheduled in December 2019 and January 2020. (Id. ¶ 13.) At Nova Crete’s request, the January 2020 hearing date was adjourned to February 25, 2020, and then to March 11, 2020. (Id. ¶¶ 14–17.) On March 10, 2020, Nova Crete’s counsel notified the Funds that Nova Crete would not be participating in the arbitration. (Id. ¶ 18.) Nova Crete’s counsel explained that the CBA was “null and void because [Nova Crete] was fraudulently induced to execute the . . . agreement.” (Id.)3 According to Nova Crete, a union representative demanded that Nova Crete commit to using union workers on all of its projects. (Resp.’s Br. at 4, ECF No. 8-3 (citing Cardoso Cert. ¶ 3, ECF No. 8-4).) When Nova Crete’s president indicated that he would only agree to utilize

union workers on a single project, the union representative allegedly affirmed that any agreement between the union and Nova Crete would be a single-job agreement. (Id. at 5 (citing Cardoso Cert. ¶¶ 5–6).) When signing the SFAs, the union apparently never presented Nova Crete with the incorporated CBA. (See id. (citing Cardoso Cert. ¶ 8).) Moreover, in response to direct

2 The 2019 CBA and Trust Agreement authorize the Funds to review any documentation necessary to determine whether Nova Crete has satisfied its contribution obligations. (See CBA Art. XVI, § 16.50(c); Trust Agreements Art. V, § 5.) 3 Nova Crete “reserve[d] all its legal rights to challenge any issued award in any subsequent filed enforcement action.” (Arb. Award ¶ 18.) 3 questioning from Nova Crete, the union representative purportedly confirmed that the parties’ agreement applied only to Nova Crete’s current, ongoing project. (Id. at 5–6 (citing Cardoso Cert. ¶ 9).) Nova Crete alleges that the Funds “never sought reimbursement for payments for any other projects except the single project being worked on at the time it executed the agreement.”

(Id. at 6 (citing Cardoso Cert. ¶ 10).) Consequently, Nova Crete understood its agreement with the union to cover only the single project that the union representative confirmed it would. (Id. (citing Cardoso Cert. ¶ 8).) III. Arbitration Award Arbitration proceeded with the Funds’ counsel only on March 11, 2011. (Arb. Award ¶ 19.) Arbitrator J.J. Pierson, Esq. (the “Arbitrator”) concluded that Nova Crete’s conduct confirmed its intent to comply with the CBA. (Id. ¶ 22.)4 The Arbitrator reasoned that “the dates of the [SFAs] . . . coincide with the effective dates of the full Laborers Agreement.” (Id.) Moreover, the Arbitrator noted, Nova Crete hired union members through the Funds’ hiring hall procedures, paid wages to union workers performing covered work, and remitted contributions to

the Funds. (Id.) The Arbitrator further explained that the SFAs were explicitly not “one job agreement[s],” oral agreements could not alter Nova Crete’s contribution obligations, and the SFAs were valid and enforceable. (See id. ¶¶ 22–24.) The Arbitrator directed Nova Crete to pay a total amount of $1,300,112.57 to the Funds, including a principal amount of $749,840.13, $229,052.88 in interest, $149,968.03 in liquidated damages, $168,751.53 in attorneys’ fees, and the Arbitrator’s fee of $2,500.00. (Id. ¶ 25.)

4 The Arbitration Award has two paragraphs numbered paragraph 22. This citation refers to the first paragraph 22. 4 IV. Post-Arbitration Motions On April 28, 2020, the Funds filed a Petition and Motion to Confirm Arbitration Award in this Court. (ECF Nos. 1, 2.) On June 22, 2020, Nova Crete filed a Cross-Motion to Dismiss. (ECF No. 8.) The Funds filed an Opposition (ECF No. 10), and Nova Crete filed a Reply (ECF

No. 11). The Funds’ Petition and Motion to Confirm Arbitration Award and Nova Crete’s Cross- Motion to Dismiss are presently before the Court. LEGAL STANDARD Within one year after the entry of an arbitration award, “any party to the arbitration may apply to [a district court located in the district where the award was made] for an order confirming the award, and thereupon the court must grant such an order unless the award is vacated, modified, or corrected.” 9 U.S.C. § 9. An arbitration award is subject to vacatur on four exclusive grounds: (1) “where the award was procured by corruption, fraud, or undue means”; (2) “where there was evident partiality or corruption in the arbitrators”; (3) “where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in

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NJ BUILDING LABORERS CONSTRUCTION LABORERS DISTRICT COUNCIL, NEW JERSEY BUILDING LABORERS STATEWIDE BENEFIT FUNDS and the TRUSTEES THEREOF v. NOVA CRETE INC., Counsel Stack Legal Research, https://law.counselstack.com/opinion/nj-building-laborers-construction-laborers-district-council-new-jersey-njd-2020.