Demopoulos v. F&B Fuel Oil Co. Inc.

Background

The plaintiffs were trustees and fiduciaries of the Local 553 Pension Fund, a jointly administered, multi-employer pension fund. They sued under the Employee Retirement Income Security Act and the Multiemployer Pension Plan Amendments Act to recover withdrawal liability, interest, liquidated damages, attorneys’ fees, and costs.

F&B Fuel Oil Co. Inc. had entered collective bargaining agreements requiring contributions to the Fund. It submitted reports, paid contributions, and participated in Fund audits until approximately April 2016. F&B was dissolved on November 12, 2019. Ferdinand Ficaro and his son, Christopher Ficaro, were involved in operating F&B. In approximately 2014 or 2015, they created F&F, which did business as Paradise Fuels. The companies used the same trucks, employees, office space, phone and fax numbers, and business name, and transferred money between themselves and to the Ficaros.

The Fund assessed F&B’s withdrawal liability at $255,248 and notified F&B on November 16, 2017. F&B did not seek reconsideration, challenge the withdrawal date or amount, or demand arbitration. The Fund later determined that a different withdrawal date would have produced a higher assessment, but it sought only the original, lower amount of $255,248.

Summary Judgment Standard

The Fund moved for summary judgment on its claims for breach of a collective bargaining agreement and breach of ERISA obligations. Summary judgment is appropriate when the evidence shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment as a matter of law. Although the defendants did not oppose the motion, the court still had to review the Fund’s evidence and determine whether the Fund met its burden. The court concluded that it had.

Withdrawal Liability

The court held that F&B was an employer covered by the pension laws because it was bound by collective bargaining agreements requiring contributions to the Fund. It also held that F&B had received notice of the withdrawal-liability assessment and failed to pursue the reconsideration and arbitration procedures required by law.

Because F&B did not timely challenge the assessment through arbitration, the court held that F&B was liable for the withdrawal liability, together with interest, liquidated damages, attorneys’ fees, and costs. The court awarded the lower amount sought by the Fund—$255,248—even though the Fund later determined that the correct withdrawal date would have produced a higher liability.

Interest, Liquidated Damages, Fees, and Costs

The court awarded $230,108.64 in prejudgment interest, calculated under the Trust Agreement at 18 percent annually from December 1, 2017 through December 2, 2022. It awarded the same amount as liquidated damages because that amount exceeded 20 percent of the unpaid withdrawal liability.

The court found reasonable the Fund’s request for $120,345 in attorneys’ fees, based on 213 hours of work at a blended hourly rate of $565. The court awarded $400 in legal costs, which was the only cost it found adequately supported at that time. It ruled that overnight-mail and online legal-research charges were not reimbursable and that other requested costs were not sufficiently substantiated. The court allowed the plaintiffs to file an amended motion for additional costs by December 16, 2022, consistent with the applicable rules.

Liability of F&F and Ferdinand Ficaro

The court held that F&F and F&B were a single employer because they shared ownership, management, operations, labor, equipment, business name, facilities, employees, and funds. It also held that F&F was F&B’s successor because the businesses had substantial continuity and F&F and its principals had notice of the Fund’s claims.

The court further held that F&F was liable as F&B’s alter ego. The evidence showed common management, business purpose, operations, equipment, customers, supervision, and ownership. The court also held Ferdinand Ficaro liable as an alter ego because he exercised complete control over the companies, failed to observe corporate formalities, transferred funds among the companies, paid personal expenses with corporate funds, and removed funds after the companies knew about the withdrawal liability. The court found that these actions left the entities unable to pay the Fund.

Ruling

Judge Wang granted the plaintiffs’ motion for summary judgment. The court ordered payment of $255,248 in unpaid withdrawal liability, $230,108.64 in prejudgment interest, $230,108.64 in liquidated damages, $120,345 in attorneys’ fees, $400 in legal costs, and post-judgment interest at the rate provided by federal law. The Clerk was directed to enter judgment and close the case.