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Upstate New York Carpenters Pension Health v. Seaway of Governeur

September 27, 2006

UPSTATE NEW YORK CARPENTERS PENSION, HEALTH, AND ANNUITY FUNDS, BY EARL HALL AND GARY TOTH AS TRUSTEES; EMPIRE STATE CARPENTERS APPRENTICESHIP COMMITTEE, BY JOHN J. FUCHS AND JOSEPH OLIVERI, AS TRUSTEES; AND EMPIRE STATE (NAM/GHL) REGIONAL COUNCIL OF THE UNITED BROTHERHOOD OF CARPENTERS AND JOINERS OF AMERICA, REGION 3, CARPENTERS LOCAL NO. 747, BY GARY TOTH, AS SENIOR COUNCIL REPRESENTATIVE, PLAINTIFFS,
v.
SEAWAY OF GOVERNEUR, INC., AND WILLIAM REDDICK, INDIVIDUALLY, DEFENDANTS.



The opinion of the court was delivered by: Hon. Norman A. Mordue, Chief U.S. District Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiffs Upstate New York Carpenters Pension, Health, and Annuity Funds, by Earl Hall and Gary Toth as Trustees, Empire State Carpenters Apprenticeship Committee, by John J. Fuchs and Joseph Oliveri, as Trustees, and Empire State Regional Council of the United Brotherhood of Carpenters and Joiners of America, Region 3, Carpenters Local No. 747, by Gary Toth, as Senior Council Representative, bring this action alleging that defendant Meacham Electrical Contractors Inc., violated sections 404, 406, and 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. §§ 1104, 1106, and 1145 and 1145, and section 301(a) of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185(a), by failing to timely remit fringe benefit contributions and deductions to plaintiffs from June 2002 through December 2002. Plaintiffs move for default judgment pursuant to Rule 55(b) of the Federal Rules of Civil Procedure and seek to collect delinquent fringe benefit contributions, deductions, interest, liquidated damages, costs and disbursements, and attorneys' fees and costs.

II. FACTS

According to the complaint and plaintiffs' motion papers, defendant Seaway of Governeur, Inc., is party to a collective bargaining agreement with Empire State Regional Council of Carpenters, Local Union No. 747 ("Agreement"). The Agreement obligates defendants to remit fringe benefit contributions and deductions to plaintiffs for all hours worked by employees who are covered by the Agreement, i.e., performing bargaining unit work. Defendant William Reddick owned, controlled, and dominated the affairs of Seaway.

Pursuant to the Agreement, defendants are bound by the rules and regulations of the Funds' Board of Trustees and the terms and conditions of the Amended and Restated Agreements and Declarations of Trust of the Upstate New York Carpenters Pension, Health, and Annuity Funds, the Collections Policy of the Upstate New York Carpenters Pension, Health, and Annuity Funds, and the Agreement and Declaration of Trust of the Empire State Carpenters Apprenticeship Committee ("Agreements and Declaration of Trust" and "Collections Policy"). The Agreements and Declarations of Trust, the Collections Policy, and Sections 515 and 502(g)(2) of ERISA, 29 U.S.C. §§ 1132(g)(2) and 1145 obligate defendants, if delinquent in remitting contributions and deductions, to pay the delinquent amounts as well as interest, liquidated damages, and attorneys' fees and costs.

Based on defendants' failure to remit benefit contributions and deductions to plaintiffs from June 2002 through December 2002, defendants owe $13,106.14 in fringe benefit contributions and deductions, plus attorneys' fees and costs, as well as $5,508.20 in interest and $5,216.84 in liquidated damages. On September 21, 2005, plaintiffs commenced this action to collect the delinquent contributions and deductions as well as applicable interest, liquidated damages, costs and fees of collection, and attorneys' fees.

III. DISCUSSION

A. Standard -- Default Judgment Rule 55(b)

Under Rule 55(b) of the Federal Rules of Civil Procedure, default judgment shall be entered if a defendant has failed to plead or otherwise defend an action." Parise v. Riccelli Haulers, Inc., 672 F.Supp. 72, 74 (N.D.N.Y. 1987). Rule 55(b)(2) and Local Rule 55.2 set forth the procedural prerequisites plaintiffs must meet before their motion for default judgment may be granted. Plaintiffs must: (1) properly serve defendant with a summons and complaint (to which no response has been made); (2) obtain an entry of default; and (3) provide an affidavit setting forth the facts required by L.R. 55.2(a), including an affidavit showing that defendant is not an infant or incompetent, or in the military service. See Fed. R. Civ. P. 55(b)(2); N.Y.N.D.L.R. 55.1 and 55.2.

Plaintiffs filed the complaint on July 8, 2005, and served Seaway on August 15, 2005, and Reddick on August 18, 2005. On September 21, 2005, plaintiffs received a Clerk's Entry of Default. In connection with their motion for default judgment, plaintiffs have submitted an affidavit by their counsel stating that defendants are not infants or incompetent, and are not in the military service. Therefore, plaintiffs have fulfilled the procedural prerequisites for default judgment. Indeed, defendants have not appeared in this action or opposed the present motion. Accordingly, the Court turns to liability.

B. Liability

"A party's default is deemed to constitute a concession of all well-pleaded allegations of liability." Resolution Trust Corp. v. Forney, 1993 WL 61415, *1 (W.D.N.Y. June 28, 1993) (citing Greyhound Exhibitgroup v. E.L.U.L. Realty, 973 F.2d 155, 158 (2d Cir. 1992). The allegations in plaintiffs' complaint are therefore presumed accurate.

Pursuant to 29 U.S.C. § 1145, "[e]very employer who is obligated to make contributions to a multi-employer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with the law, make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145. Further, where the contract between the parties classifies unpaid contributions as trust assets, the controlling officer of the company is a fiduciary individually liable for a delinquency if he withholds contributions from the plans. NYSA-ILA Medical and Clinical Services Fund v. Catucci, 60 F.Supp.2d 194 (S.D.N.Y. 1999); LoPresti v. Terwilliger, 1216 F.3d 34, 40 (2d Cir. 1997) (finding that individual who commingled plan assets with general assets, and used plan assets to pay company creditors, rather than ...


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