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TRUSTEES OF LOCAL 210 HLT. & INS. FUND v. CHEMICRAFT CORP.

October 12, 2004.

TRUSTEES OF THE LOCAL 210 HEALTH & INSURANCE FUND, LOCAL 210 PENSION FUND, LOCAL 210 SCHOLARSHIP FUND AND LOCAL 210 LEGAL SERVICE FUND, Plaintiffs,
v.
CHEMICRAFT CORPORATION, CHEMICRAFT INTERNATIONAL, LEEDALL PRODUCTS, INC. AND MELLON CORPORATION, Defendants.



The opinion of the court was delivered by: KEVIN FOX, Magistrate Judge

REPORT AND RECOMMENDATION

TO THE HONORABLE RICHARD M. BERMAN, UNITED STATES DISTRICT JUDGE

I. INTRODUCTION

  In this action, Trustees of the Local 210 Health and Insurance Fund, Local 210 Pension Fund, Local 210 Scholarship Fund and Local 210 Legal Service Fund (collectively "the Funds" or "plaintiffs") allege that Chemicraft Corporation, Chemicraft International, Leedall Products, Inc. and Mellon Corporation (collectively "defendants") failed to make monetary contributions to the Funds as required by a collective bargaining agreement and the Employment Retirement Insurance Security Act ("ERISA"), 29 U.S.C. § 1001, et seq.

  Upon defendants' failure to file an answer or otherwise respond to the Complaint, United States District Judge Richard M. Berman ordered that a default judgment be entered against the defendants. Judge Berman then referred the matter to the undersigned to conduct an inquest and to report and recommend the amount of damages, if any, to be awarded plaintiffs against defendants.

  The Court directed plaintiffs to serve and file proposed findings of fact and conclusions of law, and an inquest memorandum setting forth their proof of damages, costs of this action, and their attorney's fees. Defendants were directed by the Court to serve and file opposing memoranda, affidavits and exhibits, as well as any alternative findings of fact and conclusions of law they deemed appropriate. Defendants failed to do so.

  Plaintiffs' submissions aver that they are entitled to $13,932 in unpaid fringe benefit contributions, $2,786.40 in interest and $1,184.22 in liquidated damages from defendant Chemicraft Corporation; $109,693 in unpaid fringe benefit contributions, $9,323.88 in interest and $21,938.60 in liquidated damages from defendant Chemicraft International; $30,893 in unpaid fringe benefit contributions, $2,625.88 in interest and $6,178.60 in liquidated damages from defendant Leedall Products, Inc.; and $15,993 in unpaid fringe benefit contributions, $1,359.38 in interest and $3,198.60 in liquidated damages from defendant Mellon Corporation. In addition, plaintiffs seek $5,678.75 in attorney's fees and $423 in costs.

  For the reasons set forth below, I recommend that the Funds be awarded $170,511 in unpaid fringe benefit contributions; interest on this sum in an amount to be computed by the Clerk of the Court applying the rates and standards set forth in this report; statutory penalties in an amount equal to the award of interest made herein; and $6,101.75 in costs and attorney's fees.

  II. BACKGROUND AND FACTS

  Based on submissions by the plaintiffs, the Complaint filed in the instant action — the allegations of which, perforce of defendants' default, must be accepted as true, except those relating to damages, see Cotton v. Slone, 4 F.3d 176, 181 (2d Cir. 1993); Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1993) — and the Court's review of the entire court filed maintained in this action, the following findings of fact are made:

  The Funds are jointly-administered, multiemployer, labor-management trust Funds.*fn1 The Funds have their business offices at 345 West 44th Street, New York, New York. Defendants are for-profit domestic corporations, organized and existing under the laws of New York. Id. Defendants maintain their offices at 351 West 35th Street, New York, New York.*fn2

  The purpose of the Funds is to provide medical and other benefits and retirement income to eligible employees on whose behalf employers contribute to the Funds. Contributions to the Funds are made pursuant to collective bargaining agreements between the Service, Production, Merchandising, Wholesale, Distribution, Clerical and Health Related Services, Airline, Airport and Aerospace Employees Union, Local 210 International Brotherhood of Teamsters, AFL-CIO, CLC ("Local 210") and employers in those industries.

  Defendants entered into a collective bargaining agreement ("the Agreement") with Local 210 through which, among other things, defendants became obligated to pay the required monetary contributions to the Funds for all work performed by each employee who was a member of Local 210. The Agreement, a copy of which has been provided by the plaintiffs in support of their application, covers the period January 1, 2000, through December 31, 2004.

  Pursuant to the terms of the Agreement, as a result of work performed by employees of the defendants during, inter alia, the period July 2000 through and including December 2001, benefit contributions became due and owing to the Funds. Plaintiffs' assessment of the amount of the benefit contributions owed for that period is based on reports and records maintained at the office of Kevin O. McCulloch ("McCulloch"), a director of the Funds and the Assistant to the Secretary Treasurer for Local 210. According to McCulloch, who has submitted an affidavit in support of the plaintiffs' damages claim, the subject reports and records reflect information provided to the Funds by the defendants concerning the number of persons who were employed by each defendant during the time period relevant to this action. Attached to the affidavit is a chart which indicates, for each defendant except Mellon Corporation, the amount of unpaid contributions on a month-by-month basis beginning in July 2000 and concluding in December 2001. Defendants failed to make the required contributions for the relevant period; as a result, the Funds were damaged.

  Under the terms of the Agreement, defendants' failure to pay timely the required contributions to the Funds obligated them to pay interest on the outstanding amount of the contributions. However, the Agreement does not fix a rate of interest to be applied in calculating the amount of interest due. Additionally, although defendants' failure to make the requisite contribution payments also triggered a liquidated damages provision of the Agreement that requires defendants to pay the Funds ...


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