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Trustees of New York City District Council of Carpenters Pension v. Access Solutions Group, LLC

United States District Court, S.D. New York

November 13, 2017


          OPINION & ORDER


         Plaintiffs, employer and employee trustees of benefit funds (the “Funds”) for individuals covered by the New York City District Council of Carpenters (the “Union”), move for a default judgment against Access Solutions Group, LLC (“Access”). For the reasons that follow, the Funds' motion is granted.


         This is an ERISA action seeking contribution payments that Access's alleged predecessor, Sukhmany Construction, Inc. (“Sukhmany”), failed to pay pursuant to a collective bargaining agreement (“CBA”) with the Union. When an audit revealed Sukhmany's delinquent contributions, the Funds commenced an arbitration against Sukhmany. (Complaint (“Compl.”), ECF No. 1, at ¶ 11-12.) The Funds subsequently obtained an arbitration award, which was confirmed and entered as a judgment against Sukhmany in the amount of $215, 992.33 (the “Sukhmany Judgment”). (Compl. ¶¶ 12-15.)

         Thereafter, the Funds sought to enforce the Sukhmany Judgment. During that process, they discovered that Access was Sukhmany's alter-ego or successor. Both companies are owned and operated by Sandeep Boparai and Sunny Singh and share a common telephone number. (Compl. ¶¶ 16-17, 19-22.) Both entities also served a common business purpose-to perform scaffolding, sidewalk shed, hoist, and elevator work covered by the CBA's jurisdiction. (Compl. ¶¶ 17-18, 23, 29.)

         On the heels of this discovery, in June 2017, the Funds initiated this action to recover the amounts owed under the Sukhmany Judgment, compel Access to submit its books and records for an audit, and to recover any additional contribution balances due during and as a result of such audit. (Compl. ¶¶ 30-41.) On June 23, 2017, the Funds effected service of their complaint on Access. (ECF No. 7.) On September 8, 2017, the Funds appeared before this Court for an initial pretrial and pre-motion conference regarding their request to file a motion for default judgment. At that conference, this Court established a briefing schedule on the Funds' motion for default judgment, and provided Access-which failed to appear-an opportunity to file an opposition. (ECF No. 12.) On September 11, 2017, the Funds obtained a certificate of default from the Clerk of Court. (ECF No. 13.) On October 6, 2017, the Funds filed their motion for default judgment. Access did not file any opposition and has not appeared in this action.


         I. Standard

         Federal Rule of Civil Procedure 55 establishes a two-step process to enter default judgments. First, the Clerk of Court must enter the absent party's default. (See ECF No. 13.) Second, the non-defaulting party must move for a default judgment. A default is an admission of all well-pleaded allegations in the complaint, except those regarding damages. Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). “A default also effectively constitutes an admission that the damages were proximately caused by the defaulting party's conduct: that is, the acts pleaded in a complaint violated the laws upon which a claim is based and caused injuries as alleged.” Trs. of Empire State Carpenters Annuity, Apprenticeship, Labor-Mgmt. Co-op., Pension and Welfare Funds, 2015 WL 1221500, at *3 (E.D.N.Y. Mar. 9, 2015).

         II. Joint and Several Liability-Alter Ego Relationship

         The Funds seek a finding that Access is the alter ego or successor to Sukhmany so they can enforce the Sukhmany Judgment against Access. Of course, if Access is found to be an alter ego or successor to Sukhmany, such a finding will also allow the Fund to audit Access's books and records and determine whether additional contributions should be remitted.

         Joint and several liability may exist under two different theories. Under the single employer doctrine, a CBA binding one employer may be enforced against a non-signatory employer if (1) the two employers constitute a “single employer” and (2) the employees of the companies constitute a single appropriate bargaining unit. See Brown v. Sandimo Materials, 250 F.3d 120, 128 n.2 (2d Cir. 2001). “Separate companies are considered a single employer if they are part of a single integrated enterprise.” Lihli Fashions Corp. v. NLRB, 80 F.3d 743, 747 (2d Cir. 1996).

         The second theory, the alter ego doctrine, “while having the same binding effect on a non-signatory as the single employer/single unit doctrine, is conceptually distinct.” Truck Drivers Local Union No. 807 v. Reg'l Import & Export Trucking Co., 944 F.2d 1037, 1046 (2d Cir. 1991). “The purpose of the alter ego doctrine in the ERISA context is to prevent an employer from evading its obligations under the labor laws through a sham transaction or technical change in operations.” Ret. Plan of UNITE HERE Nat'l Ret. Fund v. Kombassan Holding A.S., 629 F.3d 282, 288 (2d Cir. 2010) (internal quotation marks and citations omitted). “To protect employee benefits, courts observe a general federal policy of piercing the corporate veil when necessary.” Kombassan Holding, 629 F.3d at 288. The Funds advance this theory in support of their argument that Access is an alter ego or successor to Sukhmany.

         Courts should consider a number of factors in assessing whether alter ego status exists: “whether the two enterprises have substantially identical management, business purpose, operation, equipment, customers, supervision, and ownership.” Goodman Piping Prods, Inc. v. NLRB, 741 F.2d 10, 11 (2d Cir. 1984). Additionally, “[a]lthough the alter ego doctrine is primarily applied in situations involving successor companies, where the successor is merely a disguised continuance of the old employer, it also applies to situations where ...

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