United States District Court, E.D. New York
TRUSTEES OF THE PAVERS AND ROAD BUILDERS DISTRICT COUNCIL WELFARE, PENSION, ANNUITY AND APPRENTICESHIP, SKILL IMPROVEMENT AND SAFETY FUNDS AND THE HIGHWAY, ROAD AND STREET CONSTRUCTION LABORERS LOCAL UNION 1010, Plaintiffs,
TRI STATE CONSTRUCTION & MASONRY CORP., HUDSON INSURANCE COMPANY, AND AMERICAN FIRE AND CASUALTY COMPANY, Defendants.
REPORT & RECOMMENDATION
Honorable Raymond J. Dearie, Senior United States District
of the Pavers and Road Builders District Council Welfare,
Pension, Annuity and Apprenticeship, Skill Improvement and
Safety Funds (collectively the "Funds"), and the
Highway, Road, and Street Construction Laborers Local Union
10101 (the "Union") (collectively
"Plaintiffs"), commenced this action against
Defendant Tri State Construction & Masonry Corp.
("Tri State") on November 20, 2015. (Dkt. No. 1).
Plaintiffs brought this action pursuant to Sections 502(a)(3)
and 515 of the Employee Retirement Income Security Act of
1974 ("ERISA"), 29 U.S.C. §§ 1132 and
1145, as well as Section 301 of the Labor Management
Relations Act of 1947 ("LMRA"), 29 U.S.C. §
185. (Dkt. No. 1, Complaint ("Compl.") ¶ 1).
Plaintiffs filed an Amended Complaint against Tri State and
added claims against Hudson Insurance Company
("Hudson") and American Fire and Casualty Company
("American Fire") on February 18, 2016. (Dkt. No.
8, Amended Complaint, ("AC")). Plaintiffs have
since voluntarily dismissed their claims against Hudson and
American Fire. (Dkt. Nos. 35, 37). To date, Tri State has not
filed an appearance or participated in this action. (Dkt.
Nos. 7, 22).
September 27, 2016, Plaintiffs requested a certificate of
default against Tri State. (Dkt. No. 21). On September 28,
2016, the Clerk of the Court entered default. (Dkt. No. 22).
On September 30, 2016, Plaintiffs filed a motion for default
judgment. (Dkt. No. 23). Plaintiffs seek $47, 268.22 in
damages and $5, 787.21 in attorney's fees and costs from
Tri State. (Dkt. No. 29, ("Plaintiffs' Memo")
at 10). Your Honor has referred Plaintiffs motion to me for a
report and recommendation. (See Dkt. Entry dated
Oct. 27, 2016).
reasons stated below, I respectfully recommend that
Plaintiffs' motion for default judgment be granted. I
further recommend that the Court award: $2, 190.41 in
outstanding contributions from the April 2014 audit, interest
on the sum of $1, 801.55 to be calculated by the Clerk of the
Court at an annual rate of 10% from April 28, 2014 through
the date of final judgment, and punitive damages in the
amount of $438.08.1 also recommend that the Court award
Plaintiffs interest on previous late payments in the amount
of $2, 558.19 and $4, 667.21 in attorney's fees and
Funds are employee benefit plans within the meaning of 29
U.S.C. § 1002(3) and are "trustees of multiemployer
labor-management trust funds organized and operated in
accordance with section 302(c) of the LMRA, 29 U.S.C. §
186(c)." (AC ¶ 4). The Funds also act as collection
agents for the Union. (Id. ¶ 10). Tri State is
an employer that is a party to a collective bargaining
agreement ("CBA") with the Union. (Id.
¶¶ 6, 9; Dkt. No. 24-1). The CBA incorporates and
binds the parties to certain trust agreements as well as a
Collection Policy. (AC ¶¶ 14-16; see also
Dkt. Nos. 26-1, 26-2). Pursuant to the CBA, Tri State is
required to remit certain moneys, including dues check-offs,
to Plaintiffs for work performed on its behalf "within
the trade and geographical jurisdiction of the Union."
(AC ¶¶ 10, 11). The CBA establishes an annual
interest rate of 10% for overdue fringe benefits.
(Id. ¶ 12). The CBA also requires that Tri
State make its books and records available for inspection.
(Id. ¶ 19; see also Dkt. Nos. 24-1 at
28-29, 26-2 at 1).
April 2014, the Funds conducted an audit of Tri State's
books and records for the time period from March 1, 2011
through December 31, 2013, which revealed that Tri State
failed to make contributions in the amount of $16, 828.00
during that time. (AC ¶ 21; see also Dkt. No.
25, Declaration of Robert Castiglia, ("Castiglia
Decl.") ¶¶ 3, 5). Plaintiffs claim that $2,
190.41 of that amount remains outstanding. (AC ¶
As a consequence, Plaintiffs seek the outstanding
contributions along with interest owed based on an annual
rate of 10% and liquidated damages at 20% of the principal
amount of the delinquency. (Id. ¶ 21).
also claim that Tri State failed to remit contributions and
dues checkoffs pursuant to the CBA totaling $25, 612.26 for a
separate period from August 2014 through June 2015.
(Id. ¶ 25). The CBA also requires Tri State to
report to the Funds on a monthly basis the number of hours of
applicable work performed by each employee. (Id.
¶ 24). Plaintiffs allege that Tri State failed to do so
for the month of December 2014, and the period of July 2015
through December 2015. (Id. ¶ 25). Plaintiffs claim
that Tri State therefore also owes the Funds unpaid
contributions and dues check-offs in an unknown amount for
this period. (Id.).
seek: (1) unpaid contributions and dues check-offs totaling
$2, 190.41 along with interest and punitive damages; (2) $25,
612.26 in unpaid contributions and dues check-offs for August
2014 through June 2015 along with interest and punitive
damages; (3) an unknown amount of unpaid contributions and
dues check-offs for December 2014 and the period from July
through December of 2015; (4) interest on previous late
payments in the amount of $2, 558.19; and (5) the
attorney's fees, expenses and costs incurred in
prosecuting this suit. (Id. ¶¶ 23-49).
Federal Rules of Civil Procedure provide "a two-step
process for obtaining a default judgment." Priestley
v. Headminder, Inc. 647 F.3d 497, 504 (2d. Cir. 2011).
First, the clerk of the court must enter a party's
default upon being advised that the party has "failed to
plead or otherwise defend" against an action.
Fed.R.Civ.P. 55(a). Then, in cases where the relief sought is
not "a sum certain or a sum that can be made certain by
computation, " the party seeking relief "must apply
to the court for a default judgment." Fed.R.Civ.P.
55(b)(1), (b)(2); see also Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993).
State has failed to appear in this action, respond to the
Complaint, or otherwise challenge the default. (See
Dkt. No. 22). The clerk has therefore appropriately entered
default. Further, Plaintiffs have applied to this Court for
default judgment in accordance with Fed.R.Civ.P. 55(b). (Dkt.
No. 23). Accordingly, Plaintiffs have satisfied the two-step
process for obtaining a default judgment.
the clerk enters the default of a party, the Court accepts
all the well-pleaded allegations in the complaint as true.
Greyhound Exhibitgroup Inc. v. E.L.U.L. Realty
Corp., 973 F.2d 155, 158-59 (2d Cir. 1992). However, the
Court must decide whether those pleadings are sufficient to
establish liability as a matter of law. Finkel v.
Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009) (citing
Au Bon Pain Corp. v. Artect, Inc., 653 F.2d61,
515 of ERISA states:
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
29 U.S.C. § 1145 (2012). ERISA "does not require
employers to provide any particular benefits, but once an
employer does elect to provide benefits, ERISA regulates the
terms of administration . . . [and requires the employer to]
do so in accordance with the relevant multi-employer plan or
collective bargaining agreement." Finkel v. Metro
Elec. Control Systems Ltd., No. lO-cv-2012 (CBA) (JO),
2012 WL 4049803, at *4 (E.D.N.Y. 2012). Further, Section 301
of the LMRA authorizes this Court to enforce valid CBAs.
here requires Tri State to remit contributions and dues
check-offs to the Funds as well as submit to the Funds a
record of the number of hours worked by each employee. (AC
¶¶ 23, 24; see also Dkt. No. 24-1).
Plaintiffs adequately allege that: (1) they are owed any
unpaid contributions and dues check-offs along with interest
and punitive damages that remain outstanding from the April
2014 audit; (2) they are entitled to known unpaid
contributions and dues check-offs for August 2014 through
June 2015; (3) under the CBA, Tri State is liable for
whatever unknown amount of dues check-offs and other
contributions are owed from December 2014 and July 2015
through December 2015; (4) under New York law, Tri State is
liable for interest on late payments of dues check-offs and
contributions; and (5) Tri State is liable for the
attorney's fees, expenses, and costs that Plaintiffs have
incurred in prosecuting this suit. In defaulting, Tri State
admits its liability for violating the CBA, LMRA, and ERISA
with regards to the claims stated above. Greyhound,
973 F.2d at 158-59.
the Court accepts all well-pleaded allegations as to
liability, it must determine on its own the extent of
damages. Id. The burden rests with the plaintiff
"to establish its entitlement to recovery. Trustees
of Plumbers & Pipefitters Nat. Pension Fund v. Daniel
Weintraub & Assocs., Inc. No. 04-CV-2611 (FB) (CLP),
2007 WL 4125453, at *3 (E.D.N.Y. Nov. 16, 2007). In addition,
"Rule 55(b)(2) of the Federal Rules of Civil Procedure
provides that on the matter of damages 'the court may
conduct such hearings or order such references as it deems
necessary and proper.' The rule 'allows but does not