Union benefit funds are taking on major insurers in New York federal court, alleging millions are owed on surety bonds after a contractor defaulted on public works projects.
The trustees of the Local 806 Structural Steel and Bridge Painters of Greater New York Employee Trust Funds, along with related union benefit funds, have filed a sweeping complaint in the United States District Court for the Southern District of New York. The lawsuit targets Commodore Maintenance Corp., several of its principals, and a slate of heavyweight insurance and surety providers: Markel Insurance Company, Berkshire Hathaway Specialty Insurance Company, Western Surety Company, CNA (Continental Casualty Company), and Euler Hermes North American Insurance Company (Allianz Trade).
At the heart of the dispute is the allegation that Commodore Maintenance Corp., a contractor engaged in union work, failed to meet its obligations under a collective bargaining agreement. The trustees claim Commodore did not submit required contribution reports or remit fringe benefit payments for the months of March, April, July, and August 2025. The alleged shortfall is substantial: $2,842,938.26 in unpaid contributions and dues, according to the complaint.
The trustees further allege that Commodore’s failure to pay was not an isolated event, but part of a broader pattern of non-compliance that left union benefit funds exposed. The complaint asserts that the company’s principals, Gerald Michael Boyle and Kin Lai Tam, exercised direct control over Commodore’s finances and the disbursement of plan assets. The trustees claim Boyle and Tam withheld contributions and used plan assets for their own benefit, actions that, if proven, would constitute violations of their fiduciary duties under the Employee Retirement Income Security Act (ERISA).
The case takes on added significance for the insurance industry because of the involvement of multiple surety and insurance providers. According to the complaint, Markel, Berkshire Hathaway, Western Surety, CNA, and Allianz Trade issued surety bonds to guarantee Commodore’s obligations on major public works projects, including the Culver Line and RFK Bridge projects. When Commodore allegedly defaulted, the Trustees demanded payment from the sureties. The complaint states that the sureties are liable for the proceeds of the bonds, including $2,132,741.19 for the Culver Line Project and $293,557.14 for the RFK Bridge Project, covering the period January 2025 through July 2025.
The trustees allege that the sureties have failed to honor their obligations under the bonds, leaving the union funds to absorb the losses. The complaint seeks to hold the insurers and sureties accountable for the unpaid contributions, as well as for liquidated damages, interest, audit costs, and attorneys’ fees. The trustees also seek restitution from Boyle and Tam, alleging that their actions caused direct harm to the funds and violated ERISA’s strict fiduciary standards.
The legal action is grounded in ERISA Sections 404 and 406, which require fiduciaries to act solely in the interest of plan participants and prohibit them from engaging in self-dealing or using plan assets for personal gain. The complaint does not quote specific insurance policy clauses, but the Trustees’ claims are based on the terms of the surety bonds and the statutory duties imposed by ERISA.
This case is a stark reminder to the insurance and surety industry of the risks associated with guaranteeing union contractor obligations, especially in the high-stakes world of public works. The outcome could have wide-ranging implications for how insurers and sureties assess risk, structure bonds, and respond to claims involving union benefit funds.
No court has ruled on the merits, and all parties are presumed innocent of any wrongdoing until proven guilty.
