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ALSTON v. WALL STREET GARAGE PACKAGING CORP.

May 28, 2004.

FRED ALSTON, as a Trustee of THE LOCAL 272 LABOR-MANAGEMENT PENSION FUND; FRED ALSTON, as a Trustee of THE LOCAL 272 WELFARE FUND, Plaintiffs, -against- WALL STREET GARAGE PARKING CORP., 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. The suit was commenced by Fred Alston as a Trustee of both the Local 272 Labor-Management Pension Fund and the Local 272 Welfare Fund (collectively, the "Funds"). The plaintiff seeks damages stemming from the failure of Wall Street Garage Parking Corp. ("Wall Street") to pay contributions to the Funds as required under a collective bargaining agreement between Wall Street and the Garage Employees Union Local 272 ("Local 272").

Following entry of a default judgment, the case was referred to me for an inquest on damages, and a hearing was held on April 23, 2004. Despite being afforded notice of the hearing, Wall Street did not appear. The following findings are therefore based on the evidence presented at the hearing and on the information submitted by the plaintiff. Background

  Wall Street is a corporation that conducted business in New York City at all relevant times. (Complaint ("Compl."), ¶¶ 4-5). Wall Street entered into a collective bargaining agreement (the "Labor Contract") with Local 272 which, among other things, obligated Wall Street to pay fringe benefit contributions to the Funds based on work performed for Wall Street by members of Local 272. (Compl., ¶ 6). Notwithstanding the Labor Contract, Wall Street failed to pay fringe benefit contributions to the Funds for the period June 1, 2001 through December 31, 2002. (Compl., ¶¶ 8, 11, 13).

  The plaintiff filed the instant action on July 22, 2003. When the defendant failed to answer, the Honorable Robert L. Carter, 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. In addition, Wall Street 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 plaintiff's 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 Wall Street's liability under ERISA.

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

  Wall Street was required by the Labor Contract to pay fringe benefit contributions to the Funds. It failed to comply with this requirement for the period June 1, 2001 through December 31, 2002. Consequently, Wall Street is liable to the Funds under ERISA.

  C. Damages

  The Funds are entitled to recover unpaid contributions as damages under the Labor Contract and ERISA. 29 U.S.C. § 1132(g)(2)(A). The plaintiff has presented evidence that Wall Street owes an outstanding balance $1,107.20 in unpaid contributions to the Welfare Fund and $1,093.36 in unpaid contributions to the Pension Fund, for a total of $2,200.56. (Audit Report of Joseph M. Stern, C.P.A., dated May 23, 2003 ("Audit Report"), attached to Declaration of Jeffrey S. Dubin dated March 31, 2004 ("Dubin Decl.")). Pursuant to 29 U.S.C. § 1132 (g)(2)(B), the Funds are entitled to interest on this deficiency at the rate prescribed by the Labor Contract, 18 percent per year. (Labor Contract, Art. XXI, § 8 & Art. XXII, § 8). This comes to $205.86 for the period through May 23, 2003 (Audit Report) and another $396.00 through May 23, 2004. In addition, the Funds are entitled to an additional award equal to the amount of interest another $601.86 — as statutory damages. 29 U.S.C. § 1132(g)(2)(C)(i).

  In total, then, the plaintiff is entitled to an award of $3,404.28 for unpaid contributions, ...


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