Trustees of the United Food and Commercial Workers Local 2013 Health and Welfare Fund v. Americare, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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TRUSTEES OF THE UNITED FOOD AND

COMMERCIAL WORKERS LOCAL 2013 HEALTH

AND WELFARE FUND, MEMORANDUM & ORDER

22-CV-62 (EK)(PK)

Plaintiff,

-against-

AMERICARE, INC.,

Defendant.

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ERIC KOMITEE, United States District Judge:

This is a dispute between an employee benefit fund and

an employer required to pay into that fund. The plan in

question is the United Food and Commercial Workers Local 2013

Health and Welfare Fund (“the Fund”). The Fund provides

healthcare benefits to employees of Americare, a company that

provides home healthcare assistance. Americare contributes to

the Fund pursuant to a collective bargaining agreement with

Local 2013 (“the Union”).

The Fund’s trustees originally sued Americare for

failing to contribute to the Fund as required by the collective

bargaining agreement, and for blocking a compliance audit to

which the trustees were allegedly entitled under that agreement.

Americare responded with counterclaims against the trustees, the

Union, and the Union’s president (Louis Mark Carotenuto). Those

counterclaims arose under the Labor Management Relations Act

(“LMRA”); the Employee Retirement Income Security Act (“ERISA”);

and New York common law.

Americare contends that it actually overpaid its

contributions to the Fund. This happened, according to

Americare, because the counterclaim-defendants permitted

Americare employees to waive their rights to healthcare benefits

and neglected to inform Americare of those waivers. (An

employee might waive if, among other things, his or her spouse

had access to a plan s/he preferred to what Americare made

available.) As a result, Americare alleges, the company paid

more than $600,000 in benefits that went unclaimed — money that

the Fund has not yet returned.

The counterclaim-defendants moved to dismiss those

counterclaims, and that motion is now before the Court. For the

reasons that follow, all counterclaims are dismissed except for

the one arising under Section 403 of ERISA.

Background

The following facts are drawn from the amended

counterclaim / third-party complaint and are presumed true for

purposes of this order. Ashcroft v. Iqbal, 556 U.S. 662, 678

(2009).

Americare is a home-care services agency based in

Brooklyn. Am. Counterclaim & Third-Party Compl. (“Am. Compl.”)

¶¶ 4-5. The Fund is an employee benefit fund organized pursuant

to collective bargaining agreements (“CBAs”) between Americare

and the Union. Id. ¶¶ 9-10, 17. The Fund covers health

benefits for Americare healthcare aides. Id. ¶¶ 19-20. One of

the reasons Americare contributes to the Fund is to satisfy

certain obligations under New York state law. Under New York’s

Home Care Worker Wage Parity Act, Americare must pay its home

health aides minimum wage plus $4.09 in “additional benefits.”

Id. ¶¶ 7-8. Americare provides some of those “additional

benefits” by contributing money to the plan. Id. ¶ 21.

During the pendency of two CBAs between Americare and

Local 2013,1 the three counterclaim-defendants (Carotenuto, the

Fund, and the Union) “permitted [healthcare aides] who did not

want to receive health coverage benefits . . . to waive their

entitlement to such health coverage benefits.” Id. ¶ 24. The

counterclaim-defendants implemented this waiver policy without

notifying or negotiating with Americare. Id. As a result,

Americare continued to contribute money to the Fund on behalf of

healthcare aides who did not want (or receive) benefits. Id.

¶ 28.

Americare first learned about the waiver policy in

early December 2020, when a Fund employee notified the company’s

1 These CBAs ran (1) from April 1, 2016 to March 31, 2019, and (2) from

May 1, 2019 to June 30, 2022. Am. Compl. ¶ 15.

human resources department. Id. ¶¶ 29-30. Twice that month,

Americare requested a list of employees who had participated in

the waiver program. Id. ¶¶ 32-34. The Fund did not provide the

list. Id. ¶ 35. Americare then filed an unfair labor practice

charge with the National Labor Relations Board (“NLRB”). Id.

¶ 36. The Fund eventually produced the requested list in early

May 2021. Id. ¶ 37.

On June 1, 2021, Americare sent the Fund a letter

requesting reimbursement of at least $600,000 in surplus

benefits. Id. ¶¶ 39-40. The counterclaim-defendants have since

“refused to resolve the waiver issue and overpayment issues.”

Id. ¶ 44.2

Legal Standard

A motion to dismiss a counterclaim is subject to the

same standard as a motion to dismiss an ordinary-course cause of

action. Zurich Am. Life Ins. Co. v. Nagel, 571 F. Supp. 3d 168,

175 (S.D.N.Y. 2021).3 “[T]he court’s task is to assess the legal

feasibility of the [pleadings].” Lynch v. City of New York, 952

2 At oral argument, the counterclaim-defendants suggested they were

retaining the alleged overpayments because they believed, based on an

independent audit, that Americare owed more than $1 million to the Fund.

Oral Arg. Tr. 45:9-21. So, they might net the $600,000 in overpayments

against Americare’s even greater obligations to the Fund. Id. The Court

need not, however, determine at this stage whether this is a legitimate basis

on which to retain the allegedly overpaid funds, and we take no account here

of the counterclaim-defendants’ assertion concerning the magnitude of any

underpayment.

3 Unless otherwise noted, when quoting judicial decisions this order

accepts all alterations and omits all citations, footnotes, and internal

quotation marks.

F.3d 67, 75 (2d Cir. 2020). In doing so, the Court “must take

the facts alleged in the [pleading] as true, drawing all

reasonable inferences in [the nonmovant’s] favor.” In re NYSE

Specialists Sec. Litig., 503 F.3d 89, 91 (2d Cir. 2007).

To survive a motion to dismiss, counterclaims must

contain sufficient factual matter, accepted as true, to “state a

claim to relief that is plausible on its face.” Iqbal, 556 U.S.

at 678. “Threadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not

suffice.” Id. The counterclaims are “deemed to include any

written instrument attached to [them] as an exhibit or any

statements or documents incorporated [therein] by reference.”

Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002).

Discussion

Americare brings counterclaims for (1) unfair labor

practices under the LMRA, (2) common-law fraud, and

(3) violation of Section 403 of ERISA. The Court addresses each

claim in turn.

A. The LMRA Claims

Under the LMRA, “refus[ing] to bargain collectively

with an employer” is an unfair labor practice. 29 U.S.C.

§ 158(b)(3). When a CBA is in effect, “the duty to bargain

collectively . . . mean[s] that no party to [the CBA] shall

terminate or modify” it without first notifying the counterparty

and engaging in a statutorily mandated dispute resolution

process. Id. § 158(d). Americare alleges that the

counterclaim-defendants, by implementing the waiver policy

without any notice, impermissibly sought to “unilaterally change

the terms and conditions” of the CBA. Am. Compl. ¶ 53; see also

id. ¶ 48.

1. The LMRA Claims Are Preempted

These claims are preempted. The NLRB has exclusive

jurisdiction over claims challenging unfair labor practices

under Section 158 of the LMRA. S.D. Bldg. Trades Council v.

Garmon, 359 U.S. 236, 244-45 (1959). And here, Americare

expressly styles its LMRA claims as unfair-labor-practice

claims. Am. Compl. 17-18. Thus, Garmon precludes this Court

from reviewing those claims in the first instance.

Perhaps recognizing that Garmon bars its LMRA claims,

Americare shifts gears in its opposition brief, arguing that it

is actually bringing a breach-of-contract claim under Section

301 of the LMRA. See Americare Br. in Opp’n to Mot. to Dismiss

10, ECF No. 27. To be sure, Section 301 permits federal courts

to hear — in the first instance — suits for “violation of

contracts between an employer and a labor organization.”

29 U.S.C. § 185(a). The fact remains, however, that Americare

simply has not brought a Section 301 claim. That statutory

provision appears nowhere in the amended counterclaim-complaint.4

And it is hornbook law that a party cannot amend its complaint

in its brief opposing a motion to dismiss. Wright v. Ernst &

Young LLP, 152 F.3d 169, 177-78 (2d Cir. 1998).

2. The LMRA Claims Fail Anyway

Even if the Court were to construe the counterclaim-

complaint as alleging a breach of contract under Section 301,

dismissal would still be appropriate.

To determine whether a party has stated a valid

Section 301 claim, we “look to traditional state contract law,

when it is not inconsistent with federal labor policy, to form

the context of the federal common law governing labor

agreements.” See Dist. Lodge 26, Int’l Ass’n of Machinists v.

United Techs. Corp., 610 F.3d 44, 51 (2d Cir. 2010). In New

York, a party must “identify what provisions of the contract

were breached” to state a breach-of-contract claim. Wolff v.

Rare Medium, Inc., 171 F. Supp. 2d 354, 358 (S.D.N.Y. 2001); see

also Gianelli v. RE/MAX of N.Y., Inc., 144 A.D.3d 861, 862 (2d

Dep’t 2016). Americare has not done so here. Indeed, the

4 Revealingly, Americare’s original counterclaim-complaint did bring a

Section 301 claim. So, Americare clearly consciously chose not to bring one

in its amended counterclaims. This further undermines any argument that the

Court should construe the amended counterclaim-complaint as bringing a

Section 301 claim. E.g., Guerrero v. Douglas, No. 22-CV-1217, 2023 WL

5020646, at *3 n.3 (E.D.N.Y. Aug. 7, 2023) (“[A] court is under no obligation

to construe a counseled plaintiff’s complaint as arguably raising claims it

chose not to include.”).

counterclaim-complaint identifies no particular provision of the

contract that the counterclaim-defendants breached.

Americare tried to remedy this deficiency at oral

argument. It asserted that the fund trustees breached Article

IX of the CBA by failing to notify Americare about the waiver

policy. Oral Arg. Tr. 21:17-22:3. Leaving aside the obvious

issue that a party cannot amend its complaint through statements

made at oral argument, see United Prob. Officers’ Ass’n v. City

of New York, No. 21-CV-218, 2022 WL 875864, at *8 n.9 (S.D.N.Y.

Mar. 24, 2022), there are three other problems here.

First, the CBA does not expressly impose such a notice

requirement on the Fund trustees. The provision on which

Americare relies — Article IX — concerns only Americare’s

obligations to contribute to the Fund. For example, Article

IX(1) requires Americare to “participate in the [Fund] for each

non-probationary employee who works twenty-five (25) hours per

rolling thirteen (13) weeks average.” See CBA 7, ECF No. 30.

The Article says nothing about the Fund trustees’ obligations to

Americare, let alone about a notice requirement specifically.

Second, the CBA does not impliedly impose a notice

obligation on the Fund trustees. “[T]here can be no breach of

the implied promise or covenant of good faith and fair dealing

where the contract expressly permits the actions being

challenged, and the defendant acts in accordance with the

express terms of the contract.” JN Contemp. Art LLC v. Phillips

Auctioneers LLC, 29 F.4th 118, 128 (2d Cir. 2022) (quoting 23

Williston on Contracts § 63:22 (4th ed. 2021)) (applying New

York law). Here, the CBA expressly contemplates that employees

may waive health coverage. See CBA 7. Specifically, Article

IX(2)(a) says that “[a]ny employee waiving coverage will not be

permitted to rejoin the plan for a period of six (6) months

after seeking reinstatement.” Id. (emphasis added). Thus,

Americare cannot plausibly allege that the Fund trustees

violated any implied covenants or promises in the CBA by failing

to notify Americare about the waiver policy.

Third, no default rule in New York contract law

required the trustees to notify Americare about the waiver

policy. Americare alleges that when it made Fund contributions

for employees who had waived coverage, it mistakenly over-

contributed to the Fund. Am. Compl. ¶¶ 31, 62. But “[t]he

obligation of a party to refund money voluntarily paid by

mistake can arise only after the notification of the mistake and

a demand of payment [by the counterparty].” Southwick v. First

Nat’l Bank of Memphis, 84 N.Y. 420, 430; see also Mfrs. &

Traders Tr. Co. v. World One Travel Ctr., Inc., 202 A.D.2d 974,

974 (4th Dep’t 1994) (citing Southwick’s holding on necessity of

demand for payment); cf. Banque Worms v. BankAm. Int’l, 570

N.E.2d 189, 196 (N.Y. 1991) (treating Southwick’s “discharge for

value” rule governing mistaken payments as good law). Americare

was of course free to be in touch with its employees about their

desire to waive any benefits, and thus could have provided such

notification. It does not, however, allege any such notice.

In sum, even if the Court were to construe the

counterclaim-complaint as bringing a Section 301 claim (which it

does not), that claim would fail on the merits. As a concluding

note, it is also unclear that Americare could even bring a

breach-of-contract claim against the Fund or its president,

neither of which appears to be a party to the underlying CBA.

However, because Americare’s Section 301 claim is defective in

several other ways, the Court need not resolve that issue.

B. The Fraud Claim

Americare alleges that the Fund’s failure to notify it

about the waiver program constituted fraud. Am. Compl. ¶¶ 57-

58. This claim also fails on preemption grounds.

The fraud claim turns on the counterclaim-defendants’

silence, so it is properly characterized as a fraud by omission

or concealment. See Merrill Lynch & Co. v. Allegheny Energy,

Inc., 500 F.3d 171, 181 (2d Cir. 2007); Kaufman v. Cohen, 307

A.D.2d 113, 119-20 (1st Dep’t 2003). In New York, a claim for

fraudulent concealment only lies if the “non-disclosing party

has a duty to disclose.” Remington Rand Corp. v. Amsterdam-

Rotterdam Bank, N.V., 68 F.3d 1478, 1483 (2d Cir. 1995)

(applying New York law). Americare alleges that this duty to

disclose flowed from Section 404 of ERISA, which outlines the

fiduciary obligations that plan trustees owe to plan

“participants and beneficiaries.” 29 U.S.C. § 1104(a)(1); see

also Am. Compl. ¶ 57.5

This allegation is fatal to the fraud claim. ERISA

preempts state-law fraud claims that have “as a critical factor

in establishing liability the existence of . . . duties similar

to those imposed by ERISA.” Diduck v. Kaszycki & Sons

Contractors, Inc., 974 F.2d 270, 288 (2d Cir. 1992). Here,

Americare does not just rely on a duty “similar” to one imposed

by ERISA — it relies on a duty actually imposed by ERISA. The

fraud claim is therefore preempted, and must be dismissed for

failure to state a claim. Briarpatch Ltd., L.P. v. Phoenix

Pictures, Inc., 373 F.3d 296, 309 (2d Cir. 2004).6

C. The ERISA Section 403 Claim

Finally, Americare brings a claim under Section 403 of

ERISA, which permits it to seek repayment of the allegedly

surplus benefits. That claim may proceed.

5 In addition to the preemption issue discussed below, Americare

provides no support for the proposition that it — as an employer — is a

“participant” or “beneficiary” to whom the Fund trustees owe a fiduciary duty

under Section 404(a)(1). Its claim would fail on that additional basis, too.

6 Given this holding, the Court need not consider whether the LMRA also

preempts the fraud claim.

1. Americare Plausibly Pleads a Section 403 Claim

When an employer makes a benefit contribution based on

a mistake of fact or law, ERISA permits the employer to recover

“such contribution or payment . . . within [six] months after

the plan administrator determines that the contribution was made

by such a mistake.” 29 U.S.C. § 1103(c)(2)(A). If the

administrator refuses to repay the benefits, the employer “is

entitled to repayment if it shows that [1] the refusal to repay

was arbitrary or capricious and [2] the equities favor

restitution.” Frank L. Ciminelli Constr. Co., Inc. v. Buffalo

Laborers Supp. Unemp. Fund, 976 F.2d 834, 835 (2d Cir. 1992).

In the ERISA context, a decision is arbitrary and capricious if

it was “made without reason [or] is unsupported by substantial

evidence.” Arnone v. Aetna Life Ins. Co., 860 F.3d 97, 105 (2d

Cir. 2017).

It is plausible that the counterclaim-defendants’

conduct was arbitrary and capricious. The complaint alleges

that the Fund (1) twice declined to provide a list of employees

who had waived healthcare coverage, Am. Compl. ¶¶ 32-35; (2)

only produced the list after Americare filed an NLRB complaint,

id. ¶¶ 36-37; and (3) “refused to resolve the waiver issue and

overpayment issues” even after Americare requested such

resolution. Id. ¶ 44. The complaint does not allege that the

counterclaim-defendants ever explained the basis for this

conduct. It is therefore plausible that they took these actions

“without reason.” See Arnone, 860 F.3d at 105. To be sure, the

counterclaim-defendants suggested at oral argument they retained

the money to cover a deficiency in Americare’s Fund

contributions. Oral Arg. Tr. 45:9-21. But that justification

does not appear in the counterclaim-complaint, and the Court

does not consider it here.

It is also eminently plausible that the equities favor

restitution. The Fund allegedly retained $600,000 in payments

to which it was not entitled, because its beneficiaries did not

intend to claim that money. Am. Compl. ¶ 40. A basic goal of

equity is “the return of that which rightfully belongs” to

another party. SEC v. Ahmed, 72 F.4th 379, 402 (2d Cir. 2023).

So, if the Fund wrongly retained Americare’s money even after

Americare requested it back, the equities could favor requiring

the Fund to disgorge that money.

2. The Section 403 Claim Is Timely

The counterclaim-defendants argue that even if

Americare has stated a claim under Section 403, that claim is

untimely. This argument is unavailing.

As noted above, an employer may recover an overpayment

“within [six] months after the plan administrator determines

that the contribution was made by such a mistake.” 29 U.S.C.

§ 1103(c)(2)(A). The complaint does not allege that any such

determination has yet been made. But according to the

counterclaim-defendants, the limitations period begins (1) when

the plan administrator determines that a contribution was a

mistake, or (2) when an employer learns about the alleged

mistake. Counterclaim Defs.’ Mem. in Supp. of Dismissal 22, ECF

No. 26. Because Americare filed its counterclaim complaint nine

months after June 2021 (when it first learned about the scope of

the alleged overpayment and demanded a refund, see Am. Compl.

¶¶ 39-40), counterclaim-defendants argue that the company missed

its six-month window.

The second triggering event urged by counterclaim-

defendants appears nowhere in the statutory text. The only

authority that the counterclaim-defendants summon for their two-

part timeliness standard is a forty-year-old unreported case

from the District of Hawaii, which itself cites no authority.

Counterclaim Defs.’ Mem. in Supp. of Dismissal 22 (citing Haw.

Carpenters’ Trust Funds v. Waiola Carpenter Shop, No. 83-CV-253,

1985 U.S. Dist. LEXIS 13893, at *3 (D. Haw. Nov. 14, 1985)).

This is not enough to overcome the plain text of the statute.

The Court therefore cannot conclude at this stage that the

Section 403 claim was untimely.

Conclusion

For the foregoing reasons, the counterclaim-

defendants’ motion to dismiss is granted except as to the ERISA

Section 403 claim. The remaining claims are dismissed without

prejudice for failure to state a claim.

SO ORDERED.

/s/ Eric Komitee

ERIC KOMITEE

United State

s District Judge

D ated: September 30, 2025

Brooklyn, New York