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The Annuity, Pension Welfare and Training Funds of the International Union of Operating Engineers v. Superior Site Work, Inc.

United States District Court, E.D. New York

February 16, 2016

THE ANNUITY, PENSION, WELFARE AND TRAINING FUNDS OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 14-14B, AFL-CIO by their trustees EDWIN L. CHRISTIAN, CHRIS CONFREY, JOHN CRONIN, DON DENARDO, KENNETH KLEMENS, JOHN F. O’HAIRE, DENISE M. RICHARDSON and ERNESTO TERSIGNI, Plaintiffs,
v.
SUPERIOR SITE WORK, INC., Defendant.

          MEMORANDUM & ORDER

          MARGO K. BRODIE, United States District Judge.

         Plaintiffs Edwin L. Christian, Chris Confrey, John Cronin, Don Denardo, Kenneth Klemens, John F. O’Haire, Denise M. Richardson and Ernesto Tersigni are trustees of the Annuity, Pension, Welfare and Training Funds of the International Union of Operating Engineers, Local 14-14B, AFL-CIO (collectively, the “Local 14 Trust Funds”) who commenced this action on February 4, 2015, against construction company Superior Site Work, Inc. under sections 502 and 515 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1132(a)(3) & 1145 (“ERISA”), and section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. § 185 (“LMRA”). (Compl. ¶¶ 1–2, Docket Entry No. 1.) Plaintiffs seek to recover fringe benefit contributions owed to employee trust funds and statutory damages for an alleged breach of a collective bargaining agreement. (Id.) Based on additional information received during discovery, Plaintiffs filed an Amended Complaint on May 26, 2015 requesting additional contributions. (Am. Compl., Docket Entry No. 12.)

         On April 5, 2016, Plaintiffs moved for summary judgment seeking a judgment in the amount of $177,636.80, consisting of a principal deficiency of $153,587.90, interest of $7760.15, and attorneys’ fees and costs of $15,793.75 and $495.00, respectively, plus additional interest and statutory damages in amounts to be determined. (Pls. Mot. for Summ. J. (“Pls. Mot.”), Docket Entry No. 25; Statement of Damages at 1, annexed to Pls. Mot. as Ex. 1.) Despite conferring with Plaintiffs on a briefing schedule and taking part in settlement negotiations as late as February of 2016, Defendant has not opposed Plaintiffs’ motion for summary judgment and appears to have stopped defending this action. (See Joint Mot. for Extension of Time, Docket Entry No. 24.) For the reasons discussed below, the Court grants Plaintiffs’ motion for summary judgment.[1]

         I. Background

         The Local 14 Trust Funds are multi-employer benefit plans and third-party beneficiaries to a collective bargaining agreement (“CBA”) between Defendant and Local 14-14B International Union of Operating Engineers (“Local 14”).[2] (Pls. Statement of Undisputed Facts Pursuant to Local R. 56.1 (“Pls. 56.1”) ¶¶ 3, 5, Docket Entry No. 26.) The CBA was Dated: September 13, 2006, has no expiration date and has not been voided by the parties. (Id. ¶ 5; CBA, annexed to Affidavit of James M. Steinberg in Supp. of Pls. Mot. (“Steinberg Aff.”) as Ex. A, Docket Entry No. 27.) The CBA provides the terms and conditions of employment for Defendant’s employees, who perform “heavy construction work” within the jurisdiction of Local 14. (Pls. 56.1 ¶ 7; CBA ¶¶ 1, 6.) By its terms, the CBA also incorporates certain other agreements that Local 14 negotiated with employers’ associations, including an agreement between Local 14 and the General Contractors Association of New York (the “GCA”) that defines the obligations of heavy construction employers. (Pls. 56.1 ¶ 9; 2010–2014 GCA Contract, annexed to Steinberg Aff. as Ex. B; 2014–2018 GCA Contract, annexed to Steinberg Aff. as Ex. C.) Because Defendant performs heavy construction work, it is bound by the terms of Local 14’s contracts with the GCA governing heavy construction employers’ obligations (the “GCA Contracts”). (Pls. 56.1 ¶ 10; 2010–2014 GCA Contract at 4; 2014–2018 GCA Contract at 5.) The GCA Contracts provide that employers like Defendant must make contributions to the Local 14 Trust Funds on behalf of their employees who perform work covered by the GCA Contracts. (CBA ¶ 5; 2010–2014 GCA Contract at 71–76; 2014–2018 GCA Contract at 108– 14.) In order to make contributions to the Local 14 Trust Funds, employers like Defendant are required to purchase and distribute “fringe benefit stamps”[3] to their employees from the Local 14 Trust Funds in proportion to the number of eligible hours their employees work. (Pls. 56.1 ¶ 12; CBA ¶ 5; Affidavit of Marlene Monterroso in Supp. of Pls. Mot. (“Monterroso Aff.”) ¶ 2, Docket Entry No. 29.) Defendant is also required to make its books and records available to the Local 14 Trust Funds for audit of those contributions. (CBA ¶ 4.)

         On or about November 18, 2014, Plaintiffs and their certified public accounting firm conducted an audit of Defendant’s books and records. (Affidavit of Lisa Madeiras in Supp. of Pls. Mot. (“Madeiras Aff.”) ¶ 3, Docket Entry No. 30.) The audit covered Defendant’s payroll records from July 1, 2011 through December 7, 2014. (Id.) The initial audit report identified a deficiency of $162,750.17 in the amount due and owing to Local 14 Trust Funds.[4] (Id. ¶ 4; Pls. 56.1 ¶ 21.) Based on the initial report, Plaintiffs filed the instant suit. (Madeiras Aff. ¶ 4; Pls. 56.1 ¶¶ 16, 17.) On February 13, 2015, one of Defendant’s employees contacted the auditor with two objections to the initial report. First, the employee objected to the deficiency calculated on behalf of employee Perry Notarnicola as understating the amount owed because Defendant had provided Notarnicola with “straight” stamps, reflecting regular hours worked, instead of the “double” stamps reflecting the overtime hours Notarnicola actually worked. (Madeiras Aff. ¶ 4; Email from Susan Caruso dated Feb. 13, 2015 (“Caruso Email”), annexed to Steinberg Aff. as Ex. J.) Second, Defendant’s employee objected to the deficiency calculated on behalf of employee Joaquim Batista, a member of the affiliated Local 138 in Long Island, which should not have been included because Batista had not operated heavy construction equipment during the audit period. (Id.)

         The Local 14 Trust Funds requested that Defendant produce a contribution history report from the Local 138 Trust Funds, Batista’s home funds, or other independent documentation to support Defendant’s position that Batista had not operated heavy construction equipment despite having received and redeemed stamps from Defendant during that period.[5] (Pls. 56.1 ¶ 33; Caruso Email; see Steinberg Aff. ¶ 4.) Defendant did not respond or provide any further information, and the audit report was revised to reflect only Notarnicola’s additional hours. (Pls. 56.1 ¶ 34; Madeiras Aff. ¶ 4; Revised Audit Report dated Apr. 16, 2015 (“Revised Report”), annexed to Steinberg Aff. as Ex. L.) The Revised Report identified a deficiency of $164,202.46, the amount included in the Amended Complaint. (Revised Report; see also Am. Compl. ¶ 26.)

         On June 2, 2015, Plaintiffs served their initial disclosures on Defendant. (Pls. Initial Disclosures, annexed to Steinberg Aff. as Ex. O.) At a conference held before Magistrate Judge Viktor Pohorelsky on June 17, 2015, Defendant was ordered to “provide initial disclosures within 7 days.” (Minute Entry dated June 17, 2015, Docket Entry No. 15.) Defendant never served its initial disclosures. (Steinberg Aff. ¶ 6.) Plaintiffs attempted, but were unable, to informally gather additional information from Defendant to support the alleged discrepancy regarding Batista’s hours. (Id. ¶ 7.) Accordingly, Plaintiffs served their first set of discovery requests on August 10, 2015. (Pls. Interrogs., annexed to Steinberg Aff. as Ex. Q; Pls. Req. for Prod., annexed to Steinberg Aff. as Ex. R.) The requests included a demand for further information to support Defendant’s objection to the audit results as to Batista’s hours. (Id.; Steinberg Aff. ¶ 7.) At a status conference held on September 9, 2015, Judge Pohorelsky ordered Defendant to respond to Plaintiffs’ discovery requests by September 30, 2015. (Order dated Sept. 9, 2015, Docket Entry No. 17.) Judge Pohorelsky advised Defendant that if it failed to respond by the deadline, Plaintiffs would be entitled to “move for such relief as they deem appropriate including the preclusion of evidence.” (Id.) Defendant did not respond to Plaintiffs’ discovery requests. (Pls. 56.1 ¶ 40; Ltr. from Pl. dated Oct. 5, 2015, annexed to Steinberg Aff. as Ex. T.)

         In support of their motion for summary judgment, Plaintiffs have submitted a final audit report identifying a deficiency of $161,348.05, which reflects specific amounts owed for ERISA and non-ERISA contributions. (Affidavit of Edwin L. Christian in Supp. of Pls. Mot. (“Christian Aff.”) ¶ 9, Docket Entry No. 28; Final Audit Report dated Dec. 9, 2015 (“Final Report”), annexed to Steinberg Aff. as Ex. V.) The Final Report reflects an amount that includes six-percent interest on the ERISA funds for welfare, pension, annuity and training;[6] and no interest on the non-ERISA funds for voluntary annuity (including political action contributions), dues assessment and legal defense.[7] (Final Report; see Madeiras Aff. ¶¶ 2, 10–13 (explaining minor differences between Revised Report and Final Report); Pls. 56.1 ¶¶ 30–32.) Defendant has not paid any part of the deficiency. (Pls. 56.1 ¶ 29; Monterroso Aff. ¶ 11.)

         II. Discussion

         a. Standard of review

         Summary judgment is proper only when, construing the evidence in the light most favorable to the non-movant, “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a); Davis v. Shah, 821 F.3d 231, 243 (2d Cir. 2016); see also Cortes v. MTA NYC Transit, 802 F.3d 226, 230 (2d Cir. 2015); Tolbert v. Smith, 790 F.3d 427, 434 (2d Cir. 2015); Zann Kwan v. Andalex Grp. LLC, 737 F.3d 834, 843 (2d Cir. 2013). The role of the court “is not to resolve disputed questions of fact but only to determine whether, as to any material issue, a genuine factual dispute exists.” Rogoz v. City of Hartford, 796 F.3d 236, 245 (2d Cir. 2015) (first quoting Kaytor v. Elec. Boat Corp., 609 F.3d 537, 545 (2d Cir. 2010); and then citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249–50 (1986)). A genuine issue of fact exists when there is sufficient “evidence on which the jury could reasonably find for the plaintiff.” Anderson, 477 U.S. at 252. The “mere existence of a scintilla of evidence” is not sufficient to defeat summary judgment. Id. The court’s function is to decide “whether, after resolving all ambiguities and drawing all inferences in favor of the non-moving party, a rational juror could find in favor of that party.” Pinto v. Allstate Ins. Co., 221 F.3d 394, 398 (2d Cir. 2000).

         Where, as here, a motion for summary judgment is unopposed, “the district court may not grant the motion without first examining the moving party’s submission to determine if it has met its burden of demonstrating that no material issue of fact remains for trial.” Amaker v. Foley, 274 F.3d 677, 681 (2d Cir. 2001). “Before summary judgment may be entered, the district court must ensure that each statement of material fact is supported by record evidence sufficient to satisfy the movant’s burden of production even if the statement is unopposed.” Jackson v. Fed. Exp., 766 F.3d 189, 194 (2d Cir. 2014) (citing Vt. Teddy Bear Co., Inc. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004)). “In doing so, the court may rely on other evidence in the record even if uncited.” Id. (citing Fed. R. Civ. P. 56(c)(3)).

         b. Liability under ERISA and the LMRA

         Section 515 of ERISA 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. § 1145. Similarly, the LMRA authorizes federal “[s]uits for violation of contracts between an employer and a labor organization representing employees.” Id. § 185(a); see also Brown v. C. Volante Corp., 194 F.3d 351, 354 (2d Cir. 1999) (explaining lawsuit for failure to abide by a collective bargaining agreement is governed by 29 U.S.C. § 185(a)).

         Here, the facts establish that Defendant failed to make required contributions pursuant to the CBA, violating ERISA. Local 14 and Defendant are parties to a CBA for the period covered by the auditor’s report. Pursuant to that CBA and the GCA Contracts, Defendant purchased stamps for work performed by its employees between July 1, 2011 and December 7, 2014. The auditor reviewed Defendant’s books and records and discovered that Defendant had failed to purchase the required number of stamps for all hours worked by employees covered under the CBA and GCA Contracts.[8] Plaintiffs, as plan fiduciaries, may bring a civil action to enforce the provisions of the CBA. See 29 U.S.C. § 1132(a)(3)(B)(ii) (empowering a fiduciary to enjoin any act or practice in violation of ERISA or to enforce any provisions of the employee plan); see also Finkel v. Ommega Commc’n Servs., Inc., 543 F.Supp.2d 156, 160 (E.D.N.Y. 2008) (applying same provision). Accordingly, the Court finds that Plaintiffs have met their burden of proving that Defendant violated section 515 of ERISA, as well as the terms of the CBA for which Plaintiffs may seek enforcement under the LMRA. Plaintiffs are therefore entitled to summary judgment.

         c. Damages

         Plaintiffs request that the Court accept their damages calculations and award damages as listed in their Statement of Damages. (Pls. Mem. 17.) Ordinarily, claims for damages must be established in an evidentiary proceeding at which a defendant is afforded an opportunity to contest the amount claimed. See Fustok v. Conticommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir. 1989). However, a court may make this determination based upon evidence presented at a hearing or upon a review of detailed affidavits and documentary evidence submitted by the plaintiffs. See Action S.A. v. March Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir. 1991); Fustok, 873 F.2d at 40. Here, Defendant has been on notice of the damages Plaintiffs sought since the filing of the Complaint, (Compl. ¶ 25), and it has not disputed Plaintiffs’ documentary evidence. The Court will therefore determine damages based on the documentary record before it.

         Section 502(g) of ERISA provides that upon finding a violation of section 515, “the court shall award the plan” the following:

(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the ...

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