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Trs. of the Plumbers Local Union No. 1 Welfare Fund v. N.Y. Pipeline Mechanical Contractors

March 23, 2010

TRS. OF THE PLUMBERS LOCAL UNION NO. 1 WELFARE FUND, ADDTL. SECURITY BENEFIT FUND, VACATION & HOLIDAY FUND, TRADE EDUC. FUND, AND 401(K) SAVINGS PLAN, TRS. OF THE PLUMBERS AND PIPEFITTERS NAT'L PENSION FUND, AND TRS. OF THE INT'L TRAINING FUND, PLAINTIFFS,
v.
N.Y. PIPELINE MECHANICAL CONTRACTORS, LLC AND LIBERTY MUTUAL INSURANCE CO. DEFENDANTS.



The opinion of the court was delivered by: Azrack, United States Magistrate Judge

REPORT AND RECOMMENDATION

On March 31, 2009, the Trustees of the Plumbers Local Union No. 1 Welfare Fund, Additional Security Benefit Fund, Vacation & Holiday Fund, Trade Education Fund, and 401(K) Savings Plan, the Trustees of the Plumbers and Pipefitters National Pension Fund, and the Trustees of the International Training Fund ("plaintiffs") commenced this action against N.Y. Pipeline Mechanical Contractors, LLC ("defendant" or "N.Y. Pipeline") and Liberty Mutual Insurance Co. ("Liberty Mutual") pursuant to sections 502(a)(3) and 515 of the Employee Retirement Income Security Act, 29 U.S.C §§ 1132(a)(3) and 1145 ("ERISA"), and section 301 of the Labor Management Relations Act, 29 U.S.C. § 185 ("LMRA"), to recover unpaid contributions, interest, liquidated damages, attorneys' fees, and costs. (Amend. Compl. ¶ 1.)

On November 6, 2009, plaintiffs made a motion for default judgment against N.Y. Pipeline and the Clerk of the Court noted the default. (Dkt. Nos. 8, 9.) By order dated December 11, 2009, the Honorable John Gleeson referred the motion to me for a Report and Recommendation ("R&R"). For the reasons set forth below, I recommend that the Court enter judgment in favor of plaintiffs against N.Y. Pipeline for $186.965.40.

I. FACTUAL BACKGROUND

Three plaintiffs bring this action on behalf of Local No. 1 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the "Union"). (Amend. Compl. ¶ 5, 11.) First, the Trustees of the Plumbers Local Union No. 1 Welfare Fund, Additional Security Benefit Fund, Vacation & Holiday Fund, Trade Education Fund, and 401(K) Savings Plan (the "Local 1 Funds") manage multiemployer benefit plans on behalf of Union members from a principal place of business at 158-29 Cross Bay Boulevard, Howard Beach, New York 11414. (Id. ¶ 4.) Second, the Trustees of the Plumbers and Pipefitters National Pension Fund (the "NPF") manage a multiemployer pension benefit plan on behalf of Union members from a principal place of business at 103 Oronoco Street, Alexandria, Virginia 22314. (Id. ¶ 6.) Third, the Trustees of the International Training Fund (the "ITF") manage a multi-employer welfare benefit plan on behalf of Union members from a principal place of business at 103 Oronoco Street, Alexandria, Virginia 22314. (Id. ¶ 7.) These plans are organized and operated pursuant to a collective bargaining agreement ("CBA") in accordance with ERISA and the LMRA. (collectively "ERISA plans") (Id. ¶¶ 4, 6--7.)

N.Y. Pipeline employs Union members within the five boroughs of the City of New York from a principal place of business at 2323 Haviland Avenue, 1st Floor, Bronx, New York 10462. (Id. ¶ 8, 10, 13.) N.Y. Pipeline is a party to the CBA. (Id. ¶ 12; Decl. of Charles Virginia, Esq. ("Virginia Decl.") ¶ 4; Pl. Ex. A at 49.) The CBA requires N.Y. Pipeline to remit contributions to the ERISA plans based on rates stated in the CBA. (Amend. Compl. ¶ 13; Virginia Decl. ¶ 4; Pl. Ex. A ¶¶ 13--23.) The CBA provides that any employer who fails to remit the required contributions to the Local 1 Funds is liable for the unpaid contributions, interest at a rate of ten percent per annum (or nine percent per annum on amounts owed to the Union), liquidated damages at twenty percent of the eligible principal amount due, attorneys' fees, audit fees, and other collection costs. (Amend. Compl. ¶ 21; Pl. Ex. A ¶ 27.) The CBA provides that any employer who fails to remit the required contributions to the NPF and the ITF is liable for the unpaid contributions, interest at a rate of twelve percent per annum, liquidated damages at ten percent of the principal amount due, attorneys' fees, audit fees, and other collection costs. (Amend. Compl. ¶ 29.) The CBA also requires employers to obtain a bond from a surety company approved by the New York State Insurance Department to guarantee payment of contributions. (Id. ¶ 18.) N.Y. Pipeline secured a benefits bond from Liberty Mutual for $25,000. (Id. ¶ 36.)

Plaintiffs audited the financial books and records of N.Y. Pipeline and learned that N.Y. Pipeline failed to remit contributions to the Local 1 Funds from March through June 2007. (Virginia Decl. ¶ 30; Pl. Ex. D.) Remittance reports prepared and submitted by N.Y. Pipeline show that N.Y. Pipeline also failed to remit contributions to the Local 1 Funds, the NPF, and the ITF from January through February 2009. (Virginia Decl. ¶ 17, 21; Pl. Ex. B.) Plaintiffs allege that N.Y. Pipeline failed to remit contributions to the ERISA plans or submit remittance reports for March 2009. (Supplemental Decl. of Charles Virginia, Esq. ("Virginia Supp. Decl.") ¶¶ 59-- 66.) Plaintiffs also allege that N.Y. Pipeline failed to remit contributions to the NPF and the ITF for October 2008 and to the 401(k) Savings Plan and Additional Secured Benefit Fund from November 2008 through March 2009. (Id. ¶¶ 48, 69--72.)

On March 31, 2009, plaintiffs filed this action. (Dkt. No. 1.) On April 2, 2009, plaintiffs served N.Y. Pipeline. (Dkt. No. 2.) On April 3, 2009, plaintiffs served Liberty Mutual. (Dkt. No. 3.) On May 5, 2009, plaintiffs amended the complaint. (Dkt. No. 4.) On June 3, 2009, plaintiffs served both N.Y. Pipeline and Liberty Mutual. (Dkt. Nos. 5, 6.) On June 23, 2009, the time to answer expired. (Dkt. Entry June 12, 2009.) On August 7, 2009, plaintiffs dismissed Liberty Mutual from the action in exchange for payment of the bond. (Dkt. No. 7.) On November 6, 2009, plaintiffs made a motion for default judgment against N.Y. Pipeline and the Clerk of the Court noted the default. (Dkt. Nos. 8, 9.) Plaintiffs seek from N.Y. Pipeline $232,257.07 in unpaid contributions, interest, liquidated damages, attorneys' fees, and costs.*fn1

(Virginia Supp. Decl. ¶ 79.)

II. DISCUSSION

A. Liability

"A court accepts as true all well-pleaded allegations against a defaulting defendant for purposes of determining liability." Finkel v. Romanowicz, 577 F.3d 79, 82 n.6 (2d Cir. 2009).Yet, the "plaintiff[] must . . . establish that on the law it is entitled to the relief it requests, given the facts as established by the default." Trs. of the Plumbers Local Union No. 1 Welfare Fund v. Generation II Plumbing & Heating, Inc., No. 07--CV--5150, 2009 U.S. Dist. LEXIS 91607, at *3 (E.D.N.Y. Sept. 9, 2009).

N.Y. Pipeline defaulted. I accept as true N.Y. Pipeline's liability for violating ERISA, 29 U.S.C. § 1145.*fn2 Section 1145 provides:

Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 U.S.C. ยง 1145. N.Y. Pipeline employs Union members as defined by ERISA. Plaintiffs act as the administrator of multiemployer plans, including the Local 1 Funds, the NPF, and the ITF, as defined by ERISA. N.Y. Pipeline agreed to the terms of the CBA that require employers to remit weekly contributions to these plans. N.Y. Pipeline failed to remit contributions from March through June 2007 and January ...


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