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LABARBERA v. HUBBARD EQUIPMENT CORP.
January 15, 2003
GARY LABARBERA, LAWRENCE KUDLA, THOMAS GESUALDI, PAUL GATTUS, THEADORE KING, CHESTER BROMAN, FRANK FINKEL, AND JOSEPH FERRARA, AS TRUSTEES AND FIDUCIARIES OF THE LOCAL 282 WELFARE PENSION, ANNUITY, JOB TRAINING AND VACATION AND SICK LEAVE TRUST FUNDS, PLAINTIFFS,
HUBBARD EQUIPMENT CORP. AND J.E.T. RESOURCES, INC., DEFENDANTS.
The opinion of the court was delivered by: Arthur D. Spatt, United States District Judge
Presently before the Court is the plaintiffs' application for
attorneys' fees and costs.
On June 13, 2001, the plaintiffs, who are the trustees of the Local 282
benefit funds, commenced this action against Hubbard Equipment Corp. and
J.E.T. Resources, Inc. ("JET") (collectively, the "defendants") to compel
JET to post a surety bond or its equivalent pursuant to a collective
bargaining agreement ("agreement"). According to the plaintiffs, JET
previously posted bonds for the union, and in May of 2000, a bond expired
and was never renewed, in violation of the agreement.
On May 8, 2002, JET appeared before United States Magistrate Judge E.
Thomas Boyle and indicated that it would not be posting a bond because it
was no longer in business. On August 5, 2002, the parties appeared
before this Court for a bench trial. During the trial, the Court stated
that it would grant a judgment by default in favor of the plaintiffs by
directing JET to file a bond or its equivalent. Counsel for the
plaintiffs informed the Court that they were entitled to attorneys' fees
and costs under ERISA pursuant to 29 U.S.C. § 1132(g)(1), which
provides that "[i]n any action under this subchapter . . . by a
participant, beneficiary, or fiduciary, the court in its discretion may
allow a reasonable attorney's fee and costs of action to either party."
The Court reviewed Section 1132(g)(1) and expressed doubt that attorneys'
fees and costs could be recovered under this provision in this action.
The Court then directed counsel for the plaintiffs to submit an
application for attorneys' fees and costs and to provide authority
substantiating that such fees could be recovered in an action for a
surety bond. On August 13, 2002, the Court signed the judgment against
On August 16, 2002, the plaintiffs filed their application for
attorneys' fees and costs pursuant to 29 U.S.C. § 1132(g)(1). The
plaintiffs seek fees in the amount of $7,033.00 and costs in the amount of
$285.86. In support of their application, the plaintiffs rely on the
factors that district courts consider in exercising its discretion under
29 U.S.C. § 1132(g)(1): (1) the degree of the offending party's bad
faith or culpability; (2) the ability of the offending party to satisfy
an award of attorneys' fees; (3) whether an award of fees would deter
other persons from acting similarly under like circumstances; (4) the
relative merits of the parties' positions; and (5) whether the action
conferred a common benefit on a group of pension plan participants.
Chambless v. Masters, Mate and Pilots Pension Plan, 815 F.2d 869, 871 (2d
In response, JET disregards the plaintiffs' reliance on the five
factors and contends that 29 U.S.C. § 1132(g)(1) specifically applies
to attorneys fees involving a claim for benefit funds. JET argues that
because this case involves an action for a surety bond, the plaintiffs
are not entitled to attorneys' fees under Section 1132(g)(1). In reply
papers, the plaintiffs explain that 29 U.S.C. § 1132(g)(1) gives the
district court discretion in awarding attorneys' fees and costs to a
party in an action under ERISA. The plaintiffs argue that because this
action seeks to enforce a provision of the collective bargaining
agreement and trust agreement between Local 282, International
Brotherhood of Teamsters, and various employers, to which the funds are
third-party beneficiaries, attorneys' fees and costs are permitted under
29 U.S.C. § 1132(g)(1).
The plaintiffs provide not a single case substantiating their claim
that attorneys' fees and costs are permitted under Section 1132(g)(1) in
an action for a surety bond. The Court notes it could find no authority
in support of the plaintiffs' position. Instead, it appears that Section
1132(g) is intended to be remedial in nature. Greenblatt v. Delta
Plumbing & Heating Corp.,
849 F. Supp. 247, 251 (S.D.N.Y. 1994),
rev'd on different grounds, 68 F.3d 561 (2d Cir. 1995). Courts have
explained that section 1132(g) "`arose out of an acute concern over the
adverse impact of delinquencies on employee benefit plans and was
intended to discourage failure to make payments when due.'" Id. (quoting
Central States; Southeast & Southwest Areas Pension Fun v. Alco
Express Co., 522 F. Supp. 919, 930-31 (E.D.Mich. 1981)). As such, the
purpose of Section 1132(g) is not applicable to a surety bond because it
"does not involve the hiring of labor or the payment of benefits." Id.
Thus, Section 1132(g) does not support an award of attorneys' fees and
costs for an action for a surety bond. Accordingly, the plaintiffs'
application for attorneys' fees and costs is denied.
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