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Mingoia v. American Lath & Plaster Co.

November 15, 2005


The opinion of the court was delivered by: James C. Francis IV United States Magistrate Judge


The plaintiffs in this case are the trustees of the Operative Plasterers' and Cement Masons' International Association, Local 530 employee benefit funds ("Local 530" or "Funds"). The defendants are American Lath & Plaster Company, Incorporated ("American Lath") and its President, Douglas Schwartz. The plaintiffs previously obtained a stipulation and consent order against the defendants, and they now seek to hold the defendants in contempt of court for failure to abide by the terms of that order. The plaintiffs also seek an award of attorneys' fees and costs associated with this motion. For the reasons set forth below, the plaintiffs' motion is granted.


On January 7, 2005, pursuant to a settlement agreement between the parties, I issued a stipulation and consent order ("Order") that required the defendants to pay $38,021.08 to Local 530 for delinquent employee benefit fund contributions and union dues. (Order at 3). Including interest, the total amount due was $40,397.40. (Order at 3). Because the defendants represented that they were unable to pay the full amount, the Order provided that defendants would make a $12,000.00 payment on November 17, 2004 and pay the remaining $28,397.40 in four monthly installments.*fn1

(Order at 3). The defendants also agreed to submit to an audit for the period of July 23, 2003 to December 15, 2004 and pay all amounts due thereunder to the plaintiffs within sixty days of receipt of a copy of the audit. (Order at 4). Finally, the defendants were required to submit monthly remittance reports and pay their current monthly employee benefit fund payments to Local 530. (Order at 4).

The Order held American Lath and Mr. Schwartz jointly and severally liable (Order at 3), and defined default as a failure to make payments or the dishonoring of a check tendered by the defendants. (Order at 5). In the event of default, the Order provided that the plaintiffs could take any action to collect the outstanding delinquencies, including all measures to enforce the judgment. (Order at 5). Additionally, pursuant to 29 U.S.C. § 1132, the plaintiffs would be entitled to $10,000.00 in attorneys' fees and liquidated damages. (Order at 5).

The defendants submitted $8,673.70 to the plaintiffs on December 15, 2004 as the first scheduled payment under the Order. (Williams Decl., Exh. C; Pl. Statement at 6). Though the defendants' bank initially dishonored the check, it was re-deposited and accepted by the plaintiffs in early January.

(Williams Decl., Exh. C). The plaintiffs allege, and the defendants do not dispute, that no further payments were made on schedule.*fn2 (Williams Decl., ¶ 3; Declaration of Marc A. Pergament dated June 15, 2005 ("Pergament Decl."), ¶ 12). Nor did the defendants submit payment of $8,766.01 due under the December 2004 audit. (Williams Decl., ¶ 5; Transcript of Hearing dated July 25, 2005 ("H.") at 52). The defendants submitted a second payment of $3,028.12 in May 2005 (Pl. Statement at 6) and a third payment of $16,286.00 in June 2005 (H. at 12; Pl. Statement at 6).

The plaintiffs also allege, and the defendants again do not dispute, that the defendants made no contributions to the Fund from January 2005 to April 2005. (Williams Decl., ¶ 6; Pergament Decl., ¶¶ 16, 17). The defendants also did not submit remittance reports for the period between February 15, 2005 to April 26, 2005 until after the filing of this motion. (Reply Declaration of Raquel A. Williams dated June 22, 2005 ("Williams Reply Decl."), ¶ 13). No payments were sent with the reports.*fn3 (Williams Reply Decl., ¶ 13).

During his July 25, 2005 testimony, Mr. Schwartz testified that American Lath owed approximately $50,000.00 to the Internal Revenue Service (H. 26) and had not received payments from completed jobs. (H. 27-28, 30). From January 30, 2005 to June 30, 2005, the company did not take jobs for eight or ten weeks (H. 19), and Mr. Schwartz did not personally take a payroll check for twelve weeks. (H. 18). However, Mr. Schwartz testified that during the same period, American Lath had worked approximately six jobs (H. 20) and was making payments to both the Internal Revenue Service (H. 26) and Local 79.*fn4 (H. 29). American Lath also received $83,600.00 in April and May 2005, but used the money to pay business operating expenses. (H. 16-18). Regarding his personal finances, Mr. Schwartz stated in his affidavit that he also is "indebted to the taxing authorities." (Schwartz Aff., ¶ 14). During his testimony, however, he stated that he is a shareholder in five corporations in Florida, each of which is a holding company for specific property. (H. 21). Mr. Schwartz estimates his monthly compensation from these properties to be $11,500.00. (H. 22-25).

The plaintiffs sent several letters to the defendants, requesting that they bring the installment payments up to date. (Williams Decl., Exh. C). The plaintiffs' final letter, dated April 25, 2005, informed the defendants that full payment of $50,883.18*fn5 was to be remitted to the Funds' office by April 29, 2005. (Williams Decl. Exh. C). The defendants did not make this payment, and the plaintiffs then filed this motion.


A. Contempt

A determination of contempt must be predicated on three findings: (1) that the order allegedly violated is clear and unambiguous; (2) that the proof of noncompliance is clear and convincing; and (3) that "the contemnor has not diligently attempted to comply in a reasonable manner." Paramedics Electromedicina Comercial, Ltda. v. GE Medical Systems Information Technologies, Inc., 369 F.3d 645, 655 (2d Cir. 2004) (quoting King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995)). To be clear and unambiguous, the order must be "specific and definite enough to apprise those within its scope of the conduct that is being proscribed." Mingoia v. Crescent Wall Systems, ...

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