Burke v. Hamilton

06-5249-cv Burke v. Hamilton 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2007 4 (Argued: April 16, 2008 Decided: June 4, 2008) 5 Docket No. 06-5249-cv (L), 06-5425-cv (XAP) 6 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 7 THOMAS BURKE, RICHARD DANITZ, ROBERT J. KULCZYK, JAMES M. KILGER, 8 BRUCE HOFFMAN, GEORGE FERRARO, JAMES BIDDLE SR., JOHN O’HARE JR., 9 as Trustees on Behalf of the Buffalo Carpenters Pension Fund, and 10 BUFFALO CARPENTERS PENSION FUND, [11] 12 Plaintiffs-Appellants-Cross-Appellees, [13] 14 - v. - [15] 16 HAMILTON EQUIPMENT INSTALLERS, INC., [17] 18 Defendant-Appellee-Cross-Appellant, [19] 20 PROFESSIONAL FURNISHINGS & EQUIPMENT, INC., HAMILTON INSTALLERS, 21 INC., and A. JAN STALKER ASSOCIATES, INC., [22] 23 Defendants-Appellees. [24] 25 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - [26] 27 B e f o r e: WINTER, SACK, Circuit Judges, and MURTHA, District 28 Judge.* 29 Appeal from a judgment after a bench trial in the United 30 States District Court for the Western District of New York 31 (Richard J. Arcara, Judge) finding Hamilton Equipment Installers * The Honorable J. Garvan Murtha, United States District Judge for the District of Vermont, sitting by designation. [1] 1 liable as an alter ego for the ERISA liability of Hamilton 2 Installers, but finding that Professional Furnishings & Equipment 3 was not liable for these debts either as an alter ego or under a 4 veil-piercing theory. For substantially the reasons stated by 5 the district court, we affirm. [6] 7 JONATHAN G. JOHNSEN, Creighton, Pearce, 8 Johnsen & Giroux, Buffalo, New York, for 9 Plaintiffs-Appellants-Cross-Appellees. [10] 11 PHILIP B. ABRAMOWITZ, Barth, Sullivan and 12 Baer LLP, Buffalo, New York (Jason H. Sterne, 13 Williamsville, New York, on the brief), for 14 Defendant-Appellee-Cross-Appellant and 15 Defendants-Appellees. [16] 17 PER CURIAM: 18 Thomas Burke et al. appeal from a judgment issued after a 19 bench trial by Judge Arcara. See Burke v. Hamilton Installers, 20 Inc., No. 02-CV-519, 2006 WL 3831380 (W.D.N.Y. Oct. 16, 2006). 21 We assume familiarity with the district court’s opinion. 22 Judge Arcara held that certain ERISA withdrawal liabilities 23 incurred by Hamilton Installers, Inc. (“Installers”) under the 24 terms of a collective bargaining agreement with the Carpenters 25 Pension Fund could be attributed to Hamilton Equipment 26 Installers, Inc. (“Equipment”). The district court found that 27 Equipment was an alter ego of Installers under a theory derived 28 from labor law. See Lihli Fashions, Inc., v. N.L.R.B., 80 F.3d 29 743, 748 (2d Cir. 1996). However, the court also found that 30 Professional Furnishings & Equipment (“Professional”) was not [2] 1 derivatively responsible for Installers’ ERISA liability because 2 Professional was not an alter ego of Equipment and because there 3 were no grounds to pierce the corporate veil between Professional 4 and Equipment. 5 Burke argues in his appeal that Professional is responsible 6 for Equipment’s ERISA liability under the veil-piercing theory 7 enunciated in Lowen v. Tower Asset Management, Inc., 829 F.2d 8 1209, 1220-21 (2d Cir. 1987). Under this theory, liability would 9 flow from Installers to Equipment to Professional. 10 Equipment cross-appeals, contending that it was neither an 11 alter ego nor a successor of Installers. 12 We affirm on both the appeal and the cross-appeal for 13 substantially the reasons stated by the district court. See 14 Burke, 2006 WL 3831380 . We specifically note that the veil- 15 piercing theory enunciated in Lowen does not render Professional 16 responsible for the ERISA liability originally incurred by 17 Installers and attributed to Equipment. See Lowen, 829 F.2d at 18 1220-21. Other than familial relationships among the principals 19 of the firms, Professional has no connection to Installers’ ERISA 20 liability or to the circumstances surrounding the founding of 21 Equipment. Installers’ ERISA debts were incurred and Equipment 22 was created - in part to avoid Installers’ obligations under the 23 collective bargaining agreement - long before Professional was 24 founded. To the extent that Installers and Equipment were [3] 1 deliberately undercapitalized, this also occurred well before 2 Professional existed. After Professional was created, it was in 3 competition for business with Equipment’s then-parent company. 4 Professional therefore had nothing to do with Installers’ 5 incurring ERISA liability or with Equipment’s creation as 6 Installers’ alter ego. Appellants also have not shown that 7 Professional derived any substantial benefit from the creation of 8 Equipment to avoid, inter alia, ERISA liability. Long after the 9 relevant events occurred, Professional did business with 10 Equipment and arguably exerted influence over it. This later 11 relationship provides no grounds, however, for rendering 12 Professional liable for Equipment’s derivative liability for 13 Installers’ debts. 14 For the foregoing reasons, the judgment of the district 15 court is AFFIRMED.