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MASON TENDERS DIST. COUNCIL WELF. v. CIRO RANDAZZO BUILDERS

May 24, 2004.

MASON TENDERS DISTRICT COUNCIL WELFARE FUND, PENSION FUND, ANNUTIY FUND, TRAINING PROGRAM FUND, NEW YORK STATE LABORERS — EMPLOYERS CORPORATION AND EDUCATION TRUST FUND, NEW YORK LABORERS' HEALTH AND SAFETY TRUST FUND and BUILDING CONTRACTORS ASSOCIATION INDUSTRY ADVANCEMENT PROGRAM, and JOHN J. VIRGA, in his fiduciary capacity as Director, and ANTHONY SILVERI, as Business Manager of the MASON TENDERS DISTRICT COUNCIL OF GREATER NEW YORK, Plaintiffs, -against- CIRO RANDAZZO BUILDERS, INC. and CIRO RANDAZZO, Defendants


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 Program 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 (the "Union"). The plaintiffs seek damages stemming from the failure of Giro Randazzo Builders ("Randazzo Builders") to pay contributions to the plaintiffs and to permit an audit of its books and records, as required under a collective bargaining agreement between Randazzo Builders and the Union.*fn1

Following entry of a default judgment, the case was referred to me for an inquest on damages, and a hearing was held on February 10, 2004. Despite being afforded notice of the hearing, Randazzo Builders did not appear. The following findings are therefore based on the evidence presented at the hearing and on the information submitted by the plaintiffs.

 Background

  Randazzo Builders is a corporation that conducted business in New York City at all relevant times. (Complaint ("Compl."), ¶ 11). Randazzo Builders entered into a collective bargaining agreement (the "Labor Contract") with the Union which, among other things, obligated Randazzo Builders to pay fringe benefit contributions to the Funds based on work performed for Randazzo Builders by Union members. (Compl., ¶ 11). The Labor Contract also required Randazzo Builders 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. (Compl., ¶ 11). In furtherance of this program, the Labor Contract obligated Randazzo Builders to make available its books and records for periodic audits by the Funds. (Compl., ¶ 11).

  Notwithstanding the Labor Contract, Randazzo Builders failed to pay fringe benefit contributions to the Funds, as well as dues checkoffs and PAC contributions to the Union, for the period April 1, 2001 through the present. (Compl., ¶¶ 23-26, 46-49, 55-58). Randazzo Builders also failed to permit the Funds to audit its books for the same period. (Compl., ¶¶ 14-16).

  The plaintiffs filed the instant action on April 23, 2003. When the defendants failed to answer, the Honorable Richard M. Berman, U.S.D.J., entered a default judgment and referred the case to me for an inquest on damages.

 Discussion

  A. Jurisdiction

  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, Randazzo Builders is subject to personal jurisdiction in this Court since it was doing business in New York at all relevant times. See New York Civil Practice Law and Rules ("CPLR") § 301.

  B. Liability

  All of the plaintiffs' factual allegations, except those relating to damages, must be accepted as true where, as here, the defendant has 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 Complaint establish ERISA violations and breach of contract with respect to Randazzo Builders.

  The Funds are employee benefit plans under ERISA, 29 U.S.C. § 1002(1), (2), (3) and 1132(d)(1) (Compl., ¶¶ 4-7), while Randazzo Builders was an employer under the terms of that statute, 29 U.S.C. § 1002(5), 1145. (Compl., ¶ 11). Accordingly, Randazzo Builders' obligations to the Funds under the Labor Contract are enforceable through ERISA. 29 U.S.C. § 1132 (a)(3).

  Randazzo Builders 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 April 1, 2001 through the present. Randazzo Builders also failed to meet its obligation to permit an audit of its books and records for the same period. Consequently, Randazzo Builders is ...


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