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International Association of Heat and Frost Insulators v. Affiliated Environmental Services NJ, Inc.

United States District Court, S.D. New York

November 6, 2017

INTERNATIONAL ASSOCIATION OF HEAT AND FROST INSULATORS AND ALLIED WORKERS LOCAL UNION NO. 12A and TRUSTEES OF THE ASBESTOS WORKERS LOCAL 12A HEALTH AND ANNUITY FUNDS, Plaintiffs,
v.
AFFILIATED ENVIRONMENTAL SERVICES NJ, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          LAURA TAYLOR SWAIN, UNITED STATES DISTRICT JUDGE.

         Plaintiffs International Association of Heat and Frost Insulators (“IAHFI”), Allied Workers Local Union No. 12A (“Local Union No. 12A”), and Trustees of the Asbestos Workers Local 12A Health and Annuity Funds (the “Funds” and, collectively, “Plaintiffs”), bring this civil action pursuant to Sections 502 and 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. §§ 1132 and 1145; and Section 301 of the Labor Management Relations Act of 1947 (“LMRA”), as amended, 29 U.S.C. § 185, against Defendant Affiliated Environmental Service NJ, Inc. (“Defendant” or “AES”) for injunctive and other equitable relief, breach of contract, and violations of the relevant trust agreements, collective bargaining agreement, ERISA and/or the LMRA. Defendant has not appeared in the above-captioned action.

         The Court has jurisdiction of this action pursuant to 28 U.S.C. § 1331 and 29 U.S.C. § 185(a).

         Plaintiffs now move, pursuant to Federal Rule of Civil Procedure 55(b)(2), for a default judgment against Defendant. Specifically, Plaintiffs seek judgment against the Defendant for violations of Section 515 of ERISA and Section 301 of the LMRA, and an award totaling $172, 073.60, for:

. The period of January 1, 2013, through December 31, 2013: fringe benefit contributions in the amount of $40, 627.40; contractual union dues in the amount of $10, 035.00; prejudgment interest in the amount of $6, 622.35; contractual audit costs in the amount of $1, 477.00; and liquidated damages in the amount of $6, 622.35, as agreed to in the applicable Collective Bargaining Agreement/Trade Agreement (the “Agreement”);
. The period of December 29, 2013, through December 31, 2014: fringe benefit contributions in the amount of $66, 261.40; contractual union dues in the amount of $16, 986.00; prejudgment interest in the amount of $6, 777.93; contractual audit costs in the amount of $5, 218.00; and liquidated damages in the amount of $6, 777.93, as agreed to in the Agreement; and
. Attorneys' fees in the total amount of $4, 062.50 are sought pursuant to 29 U.S.C. § 1132(g). Plaintiffs also seek costs and disbursements of this action in the amount of $605.74.

         The Court has considered the parties' submissions carefully. For the following reasons, Plaintiffs motion, which is unopposed, is granted.

         Background[1]

         Plaintiffs IAHFI and Local Union No. 12A (collectively, the “Union”) are labor organizations under Section 301 of the Taft-Hartley Act, 29 U.S.C. § 185. (Compl. ¶ 5.) The Union represents and bargains on behalf of workers who perform hazardous waste removal work in New York City and Long Island. (See Devasia Aff. In Support of Motion for Default Judgment (“First Devasia Aff.”), Docket Entry No. 31, ¶¶ 7, 9; see also Pls. Br. in Support of Motion for Default Judgment (“Pls. Br.”), Docket Entry No. 33, at 1-2 (citations omitted).) Plaintiff Funds are “fiduciaries . . . of employee welfare benefit plans and employee pension benefit plans as defined in” the relevant sections of ERISA that are “established and maintained jointly by employers and by a labor organization representing employees in an industry affecting commerce, and . . . qualify as multi-employer plans within the meaning of” ERISA. (Compl. ¶ 6.) The Funds “provide various fringe benefits to eligible employees on whose behalf a defendant-employer contributes to the [Funds] pursuant to the [relevant] collective bargaining agreement . . . between the [Union] and the employer.” (Id. ¶ 7.) At all relevant times, Defendant AES “is and was, at all relevant times, engaged in an industry affecting commerce and is an ‘employer' within the meanings of” Sections 3(5) and 515 of ERISA and Section 301 of the Taft-Hartley Act. (Id. ¶ 9.)

         At all relevant times, Defendant was a signatory to a collective bargaining agreement with the Union, obligating Defendant “to employ members of [the Union] within the trade and geographical jurisdiction of the Union” and “to pay and/or submit the required monetary contributions and/or reports to the [Funds] and remit dues checkoffs deducted from the wages [of] paid employees who authorize said deductions in writing to the [Union] for all work performed by [D]efendant's employees within the trade and geographical jurisdictions of the [Union].” (See Pls. Br., at 2; Compl. ¶ 10.) Employees of the Defendant, “who are and/or were participants in the [Funds], performed work governed by the [Agreement] on behalf of [D]efendant for the period [of] January 1, 2013 to present[, ]” and, “[a]s a result, [D]efendant was obligated to make fringe benefit contributions to the [Funds] on behalf of these employees.” (Compl. ¶ 14.) Plaintiffs allege that Defendant failed to fully fulfill those obligations during the relevant periods.

         The relevant collective bargaining agreements and trust indentures “require . . . that an employer submit its books and records for inspection and audit to the [Funds'] Auditors, Accountants, or other representatives of the [Funds] in order to confirm that fringe benefit contributions and union dues owed to [Plaintiffs] are paid in full.” (Id. ¶¶ 13, 25; see also Exhibit D, First Devasia Aff., Article VIII, Section 12.) Plaintiffs allege that the Funds' designated auditor “attempted to conduct an audit of Defendant's books and records . . . to confirm that all fringe benefit contributions and union dues [had] been paid in full, ” for the period of January 1, 2013, through December 31, 2013. (See Pls. Br., at 3; see also Compl. ¶¶ 27, 51.) A partial audit of Defendant's books and records for this period revealed that Defendant was delinquent in the payment of $52, 666.40 in fringe benefit contributions and $12, 996.00 in union dues. (See Compl. ¶¶ 27-30, 51-52; Exhibit E, First Devasia Aff.) After the audit was presented to the Defendant on or about September 11, 2014, Defendant made two payments totaling $15, 000 towards the $65, 662.40 debt for 2013 period. (See First Devasia Aff. ¶¶ 12-13.) Plaintiffs further allege that a second audit “confirmed [D]efendant was delinquent in its payment of” $66, 261.40 in fringe benefit contributions and $16, 986.00 in union dues for the period of December 29, 2013, through December 31, 2014. (Id. ¶¶ 11, 15 (citing First Devasia Aff., Exhibit E).) This second audit was presented to Defendant on or about April 15, 2015, and Plaintiffs do not allege Defendant has made any payment towards these delinquent funds to date. (See id. ¶ 12.)

         The Agreement provides that, if an “[e]mployer is found to be delinquent in the payment of fringe benefit contributions . . . then the [e]mployer shall pay, in addition to the delinquent fringe benefit contributions, interest on the unpaid amounts from the date due until the date of payment at the rate prescribed under section 6621 of Title 26 of the United States Code, ” and in the event a litigation is brought “to recover the interest on delinquent fringe benefit contributions, ” and Fringe Benefit Funds prevail, “the [e]mployer shall be obligated to pay the reasonable costs and attorneys' fees incurred in bringing said action.” (Exhibit D, First Devasia Aff, Article VIII, Section 12(f).)

         On September 1, 2015, Plaintiffs initiated this action, seeking injunctive and other equitable relief for breach of contract and violations of the respective trust agreement, collective bargaining agreement, ERISA and/or the LMRA. (See Docket Entry Nos. 1, 6.) Specifically, Plaintiffs seek a default judgment against the Defendant for violations of Section 515 of ERISA and Section 301 of the LMRA, including an award totaling $172, 073.60, for:

. The period of January 1, 2013, through December 31, 2013: fringe benefit contributions in the amount of $40, 627.40; contractual union dues in the amount of $10, 035.00; prejudgment interest in the amount of $6, 622.35; contractual audit costs in the amount of $1, 477.00; and liquidated damages in the amount of $6, 622.35, as agreed to in the Agreement;
. The period of December 29, 2013, through December 31, 2014: fringe benefit contributions in the amount of $66, 261.40; contractual union dues in the amount of $16, 986.00; prejudgment interest in the amount of $6, 777.93; contractual audit costs in the amount of $5, 218.00; and liquidated damages in the amount of $6, 777.93, as agreed to in the Agreement; and
. Attorneys' fees in the total amount of $4, 062.50 pursuant to 29 U.S.C. ยง 1132(g). Plaintiffs also seek costs and disbursements of this action in ...

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