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Engineers Joint Welfare, Pension, Supplemental Unemployment Benefit and Training Funds v. BDR Inc.

September 29, 2006

ENGINEERS JOINT WELFARE, PENSION, SUPPLEMENTAL UNEMPLOYMENT BENEFIT AND TRAINING FUNDS, BY DANIEL P. HARRIGAN, AS ADMINISTRATOR; OPERATING ENGINEERS LOCAL 17 TRAINING FUND, BY FREDERICK EYE, AS ADMINISTRATIVE MANAGER; CENTRAL PENSION FUND OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS AND PARTICIPATING EMPLOYERS, BY MICHAEL R. FANNING, AS CHIEF EXECUTIVE OFFICER; AND INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 17, BY MARK N. KIRSCH, AS BUSINESS MANAGER, PLAINTIFFS,
v.
BDR INC. AND RAYMOND ZYLINSKI, INDIVIDUALLY AND AS AN OFFICER OF BDR INC., DEFENDANTS.



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

MEMORANDUM DECISION AND ORDER

I. INTRODUCTION

Plaintiffs Engineers Joint Welfare, Pension, Supplemental Unemployment Benefit and Training Funds, Operating Engineers Local 17 Training Fund, Central Pension Fund of the International Union of Operating Engineers and Participating Employers, and International Union of Operating Engineers, Local Union No. 17, by their fiduciaries, bring this action alleging that defendants BDR Inc., and Raymond Zylinski violated the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and the Labor-Management Relations Act of 1947, as amended, 29 U.S.C. § 185 (a) et seq., by failing to timely remit fringe benefit contributions and deductions. Plaintiffs move for default judgment against defendants pursuant to Rules 55 and 54(b) of the Federal Rules of Civil Procedure, and seek delinquent fringe benefit contributions, wage deductions, interest, liquidated damages, audit fees, and attorneys' fees and costs.Plaintiffs also seek an order compelling defendants to submit employment, payroll and related records to plaintiffs for the purposes of an audit.

II. FACTS

The Court has taken the following facts from plaintiffs' pleadings and submissions.*fn1

Defendant BDR Inc., is a party to collective bargaining agreements with International Union of Operating Engineers, Local Union No. 17 ("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 Raymond Zylinski owned, controlled, and dominated the affairs of BDR Inc.

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 Agreements and Declarations of Trust of the Engineers Joint Welfare, Pension, Supplemental Unemployment Benefit and Training Funds, Central Pension Fund of Operating Engineers, and the Collections Policy of the Engineers Joint Benefit Funds ("Agreements and Declarations 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 October 2004 to August 2005, defendants owe $10,668.08 in fringe benefit contributions and deductions, $3,237.57 in interest, $3,921.22 in liquidated damages, and $2,431.66 in attorneys' fees and costs, including paralegal fees. Thus, plaintiffs seek judgment on their first, second, fourth, and fifth causes of action. Plaintiffs also seek an order directing defendants to produce their books and records to plaintiffs for an audit, pay the cost and expense of such audit, and pay all attorneys' fees and paralegal fees and costs incurred in obtaining an audit.

Additionally, plaintiffs request that the Court retain jurisdiction over their third and sixth causes of action for purposes of entering judgment for any contributions and deductions plaintiffs determine from the audit to be due and owing, as well as applicable interest, liquidated damages, and costs and expenses of collection.

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.

Rule 54(b) provides, in pertinent part, that "[w]hen more than one claim for relief is presented in an action...or when multiple parties are involved, the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties...upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment." See Advanced Magnetics v. Bayfront Partners, Inc., 106 F.3d 11, 16 (2d Cir. 1997). There is "no just reason for delay" "where a plaintiff might be prejudiced by a delay in recovering a monetary award." Id. (citing Curtiss-Wright Corp. v. General Electric Co., 446 U.S. 1, 11-12 (1980).

As referenced above, plaintiffs filed and served a summons and complaint. Defendants have not answered the complaint. Plaintiffs timely served defendants written notice of the application for judgment pursuant to Fed. R. Civ. P. 55(b)(2). Defendants never answered or otherwise moved with respect to the complaint. Plaintiffs received a clerk's entry of default on December 29, 2005. On January 27, 2006, plaintiffs filed a motion for default judgment and submitted the required affidavits pursuant to Rule 55(b)(2). Pursuant to Rule 54(b), plaintiffs have shown that there is "no just reason for delay," since the corpus and income of plaintiffs' funds have been ...


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