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Laundry, Dry Cleaning Workers and Allied Industries Health Fund v. Stainless Partners

October 31, 2007

IN THE MATTER OF ARBITRATION OF DISPUTES BETWEEN LAUNDRY, DRY CLEANING WORKERS AND ALLIED INDUSTRIES HEALTH FUND, UNITE (CPS)(JO) HERE! AND LAUNDRY, DRY CLEANING WORKERS AND ALLIED INDUSTRIES RETIREMENT FUND, UNITED HERE! PETITIONERS,
v.
STAINLESS PARTNERS, INC. D/B/A WORLD CLEANERS, RESPONDENT.
IN THE MATTER OF ARBITRATION OF DISPUTES BETWEEN LAUNDRY, DRY CLEANING WORKERS AND ALLIED INDUSTRIES HEALTH FUND, UNITE (CPS)(RML) HERE! AND LAUNDRY, DRY CLEANING WORKERS AND ALLIED INDUSTRIES RETIREMENT FUND, UNITED HERE! PETITIONERS,
v.
JUNG SUNG LAUNDRY CORP., RESPONDENT.



The opinion of the court was delivered by: Sifton, Senior Judge

MEMORANDUM OPINION AND ORDER

On August 21, 2007, petitioners Laundry, Dry Cleaning Workers and Allied Industries Health Fund, UNITE HERE! and Laundry, Dry Cleaning Workers and Allied Industries Retirement Fund, UNITE HERE! ("Petitioners" or "Funds") filed petitions (the "Petitions") against, separately, respondents Stainless Partners, Inc. d/b/a/ World Cleaners (07-CV-3542) and Jung Sun Laundry Corporation (07-CV-3545) ("Respondents"), seeking confirmation of arbitration awards made against each Respondent on July 31, 2007 ("Arbitration Awards"). On October 23, 2007, Petitioners moved for default judgment on the Petitions against each Respondent. Now before this court are the Petitions and Petitioners' motions for default judgment. For the reasons set forth below, the Arbitration Awards are confirmed and the motions for default judgment are denied.

Background

Petitioners are employee benefit plans within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1002(3).*fn1 The Funds were established pursuant to an Agreement and Declaration of Trust and by a Collective Bargaining Agreement entered into between Laundry, Dry Cleaning and Allied Workers Joint Board, UNITE HERE ("Union"), and employers engaged in the cleaning and dyeing industry. The Funds were created to provide benefits to eligible employees of contributing employers.

Both Respondents are parties to a Collective Bargaining Agreement and Supplemental Agreement ("CBA") with the Union. The CBA requires each Respondent to contribute to the Funds, based upon stated percentages of its gross payroll and to submit to the Funds premiums on behalf of eligible spouses of employees covered by the CBA.

The Funds allege that Respondent Stainless Partners, Inc. owes contributions to the Funds for the period from June 30, 2007, through July 27, 2007, in the amount of $4,591.58. The Funds allege that Respondent Jung Sun Laundry Corporation owes contributions to the Funds for the period from June 30, 2007 through July 27, 2007, in the amount of $30,239.79. The Funds also allege that Respondent Jung Sun Laundry Corporation owes premiums owed on behalf of eligible spouses of covered employees for the period from March 31, 2006 through June 30, 2007, in the amount of $3,250.00. Pursuant to the CBA, these disputes were referred to arbitration. Prior to arbitration, Petitioners served on Respondents subpoenas directing them to produce their payroll records. Neither Respondent did so.

Separate arbitration hearings were held concerning the disputes with each Respondent on July 31, 2007. Respondents did not appear. At these hearings, Petitioners presented the following evidence:

a. The provisions of the CBA obligating Respondents to make employee benefit contributions to Petitioners, obligating Respondents to produce books and records, and obligating the parties to arbitrate disputes, including disputes over delinquent employee benefit fund contributions;

b. The notices of the arbitration hearings, which were served on Respondents on July 11, 2007;*fn2

c. The subpoenas served on Respondents on July 11, 2007, requesting Respondents to produce all books and records necessary to compute the exact sum owing to Petitioners by Respondents;

d. Summaries of the delinquent contributions sought in the arbitration, which stated the payroll for the period of delinquency, the contribution rate and the calculation of the delinquent contributions due, interest, liquidated damages, Auditor's fees and costs and legal fees thereon.

Having heard this evidence, and after consideration, the arbitrator made the following awards, directing:

1) Respondent Stainless Partners, Inc. to pay the delinquent contributions in the amount of $4,951.58, plus, based on the Funds' Plan Rules and ERISA Section 502(g)(2)*fn3 , interest in the sum of $42.09, liquidated damages in the sum of $990.32, Auditor's fees and costs in the sum of $32.00 and legal fees in the sum of $100.00, for a total award of $6,115.99.

2) Respondent Jung Sun Laundry Corporation to pay the delinquent contributions in the amount of $30,239.79, plus, based on the Funds' Plan Rules and ERISA Section 502(g)(2), interest thereon in the sum of $257.04, liquidated damages in the sum of $6,047.96, premiums owed to the Funds in the amount of $3,250.00 plus interest in the sum of $364.99, Auditor's fees ...


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