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New York State Teamsters Conference Pension and Retirement Fund v. Staats Express

October 13, 2010


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



On November 25, 2009, plaintiffs, New York State Teamsters Conference Pension & Retirement Fund, ("Pension Fund"), by its Trustees, John Bulgaro, Gary Staring, Ronald G. Lucas, Daniel W. Schmidt, Michael S. Scalzo Sr., Tom J. Ventura, Bob Schaefer and Steven S. Mazza, filed this action alleging that defendant Staats Express, Inc., violated the Employment Retirement Income Security Act of 1974 ("ERISA"), as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C. § 1001 et seq. According to the complaint, the Pension Fund is an employee benefit fund which was created and exists pursuant to Agreements and Declarations of Trust entered into between participating employers and union locals affiliated with the International Brotherhood of Teamsters ("Teamsters"). It is a multi-employer plan ("Plan") as defined in 29 U.S.C. § 1002(37)(A). To participate in the Plan, local unions and employers must execute a collective bargaining agreement with the Teamsters and a participation agreement requiring the employer to participate with the Fund. The Pension Fund pays pension and retirement benefits to qualified participants in the Plan and receives contributions from employers pursuant to collective bargaining agreements between employers and Teamsters locals and participation agreements between employers and the Pension Fund.

According to the complaint, during all relevant time periods, defendant was party to a collective bargaining agreement which required it to make contributions to the Pension Fund on behalf of its employees. Defendant was also party to a participation agreement which required it to make contributions to the Pension Fund "on behalf of all eligible and appropriate employees." Plaintiffs allege that defendant "permanently ceased all covered operations under the Plan and/or permanently ceased to have an obligation to contribute to the Plan." As a result, plaintiffs determined that defendant "had completely withdrawn from the Plan . . . and assessed, the defendants a withdrawal liability in the sum of $600,809.34."

The Pension Fund notified defendants of the amount of the withdrawal liability in letters dated July 2, 2009 and July 15, 2009. In those letters, the Pension Fund advised defendants that they were required to make monthly payments of $7,912,74 for 101 months, and a final payment of $6,627.98. The complaint states that the first payment was due on September 2, 2009. In a letter dated September 10, 2009, the Pension Fund noted that defendants failed to make the scheduled interim withdrawal liability payment and informed defendants "that if said payment was not made within 60 days, the defendants would be in default and the withdrawal liability would be immediately due and owing." Plaintiffs allege in the complaint that defendants have failed to make the interim payments and have defaulted on the withdrawal liability. According to the complaint, defendants have not requested a review or demanded arbitration within the statutory time period under the MPPAA. As a result, plaintiffs seek "judgment against the defendants for $600,809,34 together with an award of interest thereon from the due date when the first scheduled payment was not timely made, an additional award of the greater of interest or liquidated damages, [and] reasonable attorney fees and costs". To date, defendants have not filed an answer or otherwise appeared in this action.

On February 3, 2010, plaintiffs obtained a Clerk's Entry of Default. Dkt. No. 7. On April 20, 2010, plaintiffs filed a motion requesting that the Court enter default judgment against defendants. In support of their application, plaintiffs filed an affidavit by Kenneth R. Stilwell, Executive Administrator for the Pension Fund. Stilwell avers that the Pension Fund "determined that the Defendant incurred an employer withdrawal liability in the amount of $600,809.34" and attached a copy of the withdrawal liability calculation to his affidavit. According to Stilwell, despite three letters notifying defendants of the amount of withdrawal liability, and the Pension Fund's provision of a schedule of interim payments, defendants failed to make any payment. Stilwell asserts that by letter dated September 10, 2009, the Pension Fund notified defendants that an action for collection would be commenced if the default was not cured in sixty days. According to Stilwell, defendant has not made payment, requested a review, or filed a demand for arbitration. Stilwell asserts that the Pension Fund adopted a Plan interest rate of eleven percent (11%), and utilizing this rate, the interest sum from September 10, 2009, the date defendant defaulted on its interim payment, through and including the return date on the motion for default judgment, June 2, 2010, is $47,982.44. Additionally, Stilwell states, under ERISA, the Pension Fund is entitled to another payment equal to the greater of interest or liquidated damages. According to the rules of the Pension Fund, liquidated damages are calculated at ten percent (10%) of the liability assessment, which in this case equals $60,080.93. Stilwell further avers that from June 2, 2010, the return date on the instant motion, until the date of entry of judgment, the Pension is entitled "to interest at 11% in the amount of $181.06 per diem." Stilwell states that the Pension Fund also seeks post-judgment interest as well as attorneys' fees and costs.


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.

Defendant has not answered or otherwise moved with respect to the complaint. Plaintiffs received a clerk's entry of default on February 3, 2010. On April 20, 2010, plaintiffs filed a motion for default judgment pursuant to Rule 55(b)(2). Plaintiffs have submitted an affidavit by their counsel showing that defendants are not infants or incompetent, and are not in the military service. Therefore, plaintiffs have fulfilled the procedural prerequisites for default judgment.

Liability and Damages

"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 and supporting documents are therefore presumed accurate.

"The MPPAA requires an employer that withdraws from a multiemployer pension plan to pay its proportionate share of the plan's unfunded vested employee benefits, the so-called withdrawal liability." Bowers v. Andrew Weir Shipping, Ltd., 27 F.3d 800, 803 (2d Cir. 1994) (citing 29 U.S.C. §§ 1381 (1988), 1391 (1988 & Supp. IV 1992)). The withdrawal liability represents "the employer's proportionate share of the plan's 'unfunded vested benefits,' calculated as the difference between the present value of vested benefits and the current value of the plan's assets." Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 725 (1984)). Under ERISA, to dispute the fact or amount of withdrawal liability, an employer must seek arbitration in a timely manner after receiving notice that it is subject to withdrawal liability. 29 U.S.C. § 1401(a)(1). "Failure to initiate the review and arbitration procedure constitutes a waiver of defense to the fact or the amount of the corporation's withdrawal liability." Retirement Fund of the Fur Mfg. Indus. v. Strassberg & Tama, Inc., 88 CIV. 6034, 1989 WL 87483 (S.D.N.Y. July 31, 1989). Additionally, plaintiffs are entitled to an award of interest, liquidated damages, and attorney's fees and costs. See 29 U.S.C. § 1451(b) ("In any action . . . to compel an employer to pay withdrawal liability, any failure of the employer to make any withdrawal liability payment within the time prescribed shall be treated in the same manner as a delinquent contribution"); see also 29 U.S.C. § 1132(g) ("in any action [involving delinquent contributions] . . . in which a judgment in favor of the plan is awarded, the court shall award the plan - . . . (B) interest . . . (C) an amount equal to the greater of (i) interest on the unpaid [withdrawal liability], or (ii) liquidated damages . . . , (D) reasonable attorney's fees and costs").

Plaintiffs have established that defendant Staats Express, Inc., as the business which signed the collective bargaining agreement, withdrew from the Plan. Thus, Staats Express is liable for its proportionate share of the Plan's unfunded vested employee benefits. According to the complaint, Staats Express did not seek arbitration or otherwise dispute the amount of withdrawal liability as calculated by plaintiffs. Thus, plaintiffs have established defendants' liability in this case.

According to the affidavit by Kenneth Stilwell, the withdrawal liability in this case is $600,809.34. Plaintiffs also seeks interest at the Plan interest rate of eleven percent (11%), which, according to Stilwell, amounts to $47,982.44. This is the amount of interest that accrued from September 10, 2009 through June 2, 2010. See 29 U.S.C. ยง 1399(c)(5) ("in the event of a default, a plan sponsor may require immediate payment of the outstanding amount of an employer's withdrawal liability, plus accrued interest on the total outstanding liability from the due date of the first payment which was not timely made.") Plaintiffs also seek an award ...

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