A federal judge has ordered Middletown plumbing companies to pay $2.3 million to a trade union’s fringe benefits funds.
The union sued Mid-Orange Mechanical Corp. and Mid-Orange Plumbing and Heating Inc. in 2017, claiming that they had failed to pay required benefits.
Mid-Orange Mechanical ceased operations in 2013 and transferred assets to Mid-Orange Plumbing and Heating “to evade the contractual obligations Mid-Orange had with the union,” according to the complaint.
“It was a sham transaction or a technical change in operations motivated by its attempt to avoid the payment of contributions to the funds.”
The union — Local 373 United Association of Journeyman and Apprentices of the Plumbing and Pipefitting Industry — amended the complaint in 2020 to add Mid-Orange Fire Protection Corp. and 1191 Dolsontown Road LLC.
The union asked the court for summary judgment after settlement negotiations broke down. The businesses should all share in covering the unpaid benefits, it argued, because they operated under common control.
They were owned and operated by William and Marie Hadden. They did the same kind of work and shared the same offices. They used the same equipment and employed many of the same workers and worked for many of the same customers.
U.S. District Judge Nelson S. Román granted summary judgment on May 16, except for 1191 Dolsontown Road LLC, a real estate holding company that was formed after the union benefits should have been paid.
The awards include sums owed for withdrawing from an underfunded pension plan, as well as interest that has accrued over the years.
Judge Román decreed damages totaling $723,698 against Mid-Orange Mechanical Corp., $1,186,941 against Mid-Orange Fire Protection Corp., and $2,257,225 against Mid-Orange Plumbing and Heating Inc.
The damages include duplicate charges, and the decree holds each company responsible for all damages.
