The opinion of the court was delivered by: JAMES FRANCIS, Magistrate Judge
REPORT AND RECOMMENDATION
This is an action brought pursuant to Sections 502 and 515 of the
Employee Retirement Income Security Act of 1974 ("ERISA"), as amended,
29 U.S.C. § 1132 and 1145, and Section 301 of the Labor-Management
Relations Act of 1947 ("Taft-Hartley Act"), 29 U.S.C. § 185. The suit
was commenced by the Mason Tenders District Council Welfare Fund, Pension
Fund, Annuity Fund, Training Fund, New York State Laborers-Employers
Cooperation and Education Trust Fund, New York Laborers' Health and
Safety Trust Fund, Building Contractors Association Industry Advancement
Program, and John J. Virga in his capacity as Director (collectively, the
"Funds"), and by Anthony
Silveri as Business Manager of the Mason Tenders District Council
of Greater New York and Long Island (the "Union"). The plaintiffs seek
damages stemming from the failure of Deluccia Erectors & Scaffolding
Supply, Inc. ("Deluccia") to pay contributions to the plaintiffs and to
permit an audit of its books and records, as required under a collective
bargaining agreement between Deluccia and the Union. The plaintiffs also
seek to hold Deluccia's principal, Eugene Deluccia, individually liable.
Following entry of a default judgment, the case was referred to me for
an inquest on damages, and a hearing was held on October 23, 2003.
Despite being afforded notice of the hearing, the defendants did not
appear. The following findings are based on the evidence presented at the
hearing and on supplemental information submitted by the plaintiffs.
Deluccia is a corporation that conducted business in New York City at
all relevant times. (Amended Complaint ("Am. Compl."), ¶ 11).
Deluccia entered into a collective bargaining agreement (the "Labor
Contract") with the Union which, among other things, obligated Deluccia
to pay fringe benefit contributions to the Funds based on work performed
for Deluccia by Union members. (Am. Compl., ¶ 11). The Labor Contract
also required Deluccia to remit to the Union dues checkoffs and Political
Action Committee ("PAC") contributions that were based on the work
performed by Union members and were deducted from the wages of those
employees who authorized such deductions. (Am. Compl., ¶ 11). In
this program, the Labor Contract obligated Deluccia to make
available its books and records for periodic audits by the Funds. (Am.
Compl., ¶ 11). Eugene Deluccia was the Vice President of Deluccia and
executed the Labor Contract on the company's behalf. (Am. Compl., ¶
Notwithstanding the Labor Contract, the defendants failed to pay fringe
benefit contributions to the Funds, as well as dues checkoffs and PAC
contributions to the Union, for the period June 1, 2000 to August 31,
2000. (Am Compl., ¶¶ 14-15, 22, 45-46, 50, 54-55, 59). The defendants
also failed to permit the Funds to audit Deluccia's books for the period
May 13, 1999, to the present. (Am. Compl., ¶¶ 1, 17, 39, 47, 56).
The plaintiffs filed the instant action in 2001. When the defendants
failed to answer, the Honorable Whitman Knapp, U.S.D.J., entered a
default judgment and referred the case to me for an inquest on damages.
(Order dated July 10, 2003).
As this case arises under ERISA, the Court has jurisdiction pursuant to
29 U.S.C. § 1132 (e)(1) and (f), as well as federal question
jurisdiction under 28 U.S.C. § 1331. This Court also has jurisdiction
under Section 301 of the Taft-Hartley Act, 29 U.S.C. § 185, and under
28 U.S.C. § 1337, as this is a civil action arising under an act of
Congress regulating commerce. In addition, both defendants are subject to
personal jurisdiction in this Court since they were doing business in New
York at all relevant times.
See New York Civil Practice Law and Rules ("CPLR") §
All of the plaintiffs' factual allegations, except those relating to
damages, must be accepted as true where, as here, the defendants have
defaulted. See Transatlantic Marine Claims Agency, Inc. v. Ace
Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997); Cotton v.
Slone, 4 F.3d 176, 181 (2d Cir. 1993); Time Warner Cable of New
York City v. Barnes, 13 F. Supp.2d 543, 547 (S.D.N.Y. 1998). In
this case, the allegations of the Amended Complaint establish ERISA
violations and breach of contract with respect to Deluccia.
The Funds are employee benefit plans under ERISA,
29 U.S.C. § 1002(1), (2), (3) and 1132(d)(1) (Am. Compl., ¶¶ 4-8), while
Deluccia was an employer under the terms of that statute,
29 U.S.C. § 1002(5), 1145. (Am. Compl., ¶ 11). Accordingly, Deluccia's
obligations to the Funds under the Labor Contract are enforceable through
ERISA. 29 U.S.C. § 1132 (a)(3).
Deluccia was required by the Labor Contract to pay fringe benefit
contributions to the Funds, and dues checkoffs and PAC contributions to
the Union. It failed to comply with this requirement for the period June
1, 2000 to August 31, 2000. Deluccia was also required to permit an audit
of its books and records, and it failed to comply for the period May 13,
1999 to the present. Consequently, Deluccia is liable to the Funds under
ERISA and for breach of contract, and Deluccia is liable to the Union for
breach of contract.
With respect to Eugene Deluccia, there must be "clear and explicit
evidence of [an individual] defendant's intent to add personal liability
to the liability of the entity." Mason Tenders District Council
Welfare Fund v. Thomsen Construction Co., 301 F.3d 50, 53 (2d Cir.
2002) (internal quotation marks and citation omitted). The factors to be
considered in determining such intent include "the contract's length, the
location of the liability provision relative to the signature line, the
presence of the name of the signatory in the contract itself, `the nature
of the negotiations ...