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Trustees of New York City District Council of Carpenters Pension Fund v. Pulco, Inc.

United States District Court, S.D. New York

November 22, 2017

TRUSTEES OF THE NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION FUND, WELFARE FUND, ANNUITY FUND, AND APPRENTICESHIP, JOURNEYMAN RETRAINING, EDUCATIONAL AND INDUSTRY FUND, TRUSTEES OF THE NEW YORK CITY CARPENTERS RELIEF AND CHARITY FUND, THE NEW YORK CITY AND VICINITY CARPENTERS LABOR-MANAGEMENT CORPORATION, and NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS, Plaintiffs,
v.
PULCO, INC., Defendant.

          OPINION & ORDER

          PAUL A. ENGELMAYER, DISTRICT JUDGE.

         On February 14, 2017, the Trustees of the New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educational and Industry Fund; the Trustees of the New York City Carpenters Relief and Charity Fund; the New York City and Vicinity Carpenters Labor-Management Corporation; and the New York City District Council of Carpenters (collectively, "petitioners") commenced this action to confirm an arbitral award ("the Award") issued against respondent Pulco, Inc., ("Pulco"). This action was filed under Section 502(a)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1132(a)(3); Section 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185; and Section 9 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 9. Petitioners also seek interest plus attorneys' fees and costs incurred during this proceeding, This decision confirms the Award and grants such other relief.

         I. Background[1]

         A. The Parties' Agreement and the Arbitral Award

         Since at least May 28, 2013, Pulco has been a member of the Building Contractors Association of New York ("BCA"). Dkt. 1 ("Petition"), Ex. B at 1, 16. As a member of the BCA, Pulco must comply with a collective bargaining agreement (the "Agreement") executed by various labor organizations and the BCA. Petition Ex. A (the "Agreement"). Under the Agreement, Pulco was required to contribute to certain fringe benefit funds ("the Funds") for every hour its covered employees worked. See Agreement at 46-47. In June 2015, the labor organizations and the BCA extended the CBA's terms in a Memorandum of Agreement. Petition Ex. C.

         To ensure compliance, the Agreement authorized the Funds to audit Pulco's books and records. Agreement at 46. If Pulco failed to comply with an audit request, a policy incorporated by reference in the Agreement authorized the Funds to estimate Pulco's delinquent contributions based on the company's past remittances. See Petition Ex. D ("Collection Policy") at 6-7; Agreement at 51. A dispute arose when Pulco refused to submit to an audit. Petition ¶ 17. Pursuant to a provision in the Funds' Collection Policy, the Funds estimated Pulco's delinquent remittances as $1, 278, 189.07. Petition ¶¶ 15, 17.

         Article XVI, Section 7 of the Agreement contains an arbitration clause stating that "either party may seek arbitration" to resolve "any dispute or disagreement." Agreement at 54-55. The clause provides that the arbitrator "shall have full and complete authority to decide any and all issues, " that the arbitrator's award "shall be final and binding, " and that the award "shall be wholly enforceable in any court of competent jurisdiction." Id. at 55.

         Under the Agreement, if court proceedings are later instituted to collect delinquent contributions to fringe benefit funds, the employer must pay the unpaid contributions plus "interest on the unpaid contributions determined at the prime rate of Citibank plus 2%, " plus the greater of either "the amount of the interest charges on the unpaid contributions as determined above" or "liquidated damages of 20% of the amount of the unpaid contribution, " as well as "reasonable attorney's fees and costs of the action." Id. at 53-54.

         Pursuant to the Agreement, petitioners submitted the dispute to arbitration. Petition ¶ 18. On September 22, 2016, arbitrator Roger Maher held a hearing. See Petition Ex. F ("Award") at 1-2. Despite having received notice of the arbitration, Pulco did not appear or request an adjournment. Id. at 2. The arbitrator accordingly found Pulco in defauh, and heard evidence submitted by petitioners. Id.

         On October 4, 2016, the arbitrator issued an Opinion and Default Award. See Award at 1. Based on the "substantial and credible evidence" petitioners had presented, the arbitrator found that Pulco was bound by the Agreement effective October 17, 2013, and had failed to permit petitioners' auditors to examine the corporate books and records for the period between October 17, 2013 and an unspecified "Date." Id. at 2. The arbitrator awarded a principal amount of $1, 278, 189.07-the auditors' estimated amount of delinquent contributions-plus interest at the rate of 5.5% to accrue from the date of the Award, liquidated damages, court costs, attorneys' fees, and arbitrator's fees, for a total of $1, 646, 491.75, excluding post-award interest. Id. at 3. To date, Pulco has not paid any portion of the Award. Petition ¶ 22.

         B. The Petition to Confirm the Award

         On February 14, 2017, petitioners filed the instant Petition to confirm the Award. Dkt. 1. Petitioners seek a judgment confirming the Award; a sum of $1, 646, 491.75; interest on the $1, 278, 189.07 in delinquent contributions; liquidated damages; and attorneys' fees and costs incurred in this action. Petition ¶¶ (1)-(4).

         On February 22, 2017, Pulco was served. Dkt. 7. On May 4, 2017, petitioners filed a letter asking the Court to treat the petition as a motion to confirm the Award and be deemed unopposed. Dkt. 8. On October 31, 2017, this Court granted the request to construe the petition as a motion to confirm the Award and directed Pulco to file a response. See Dkt. 9.

         On November 3, 2017, this Court issued an order seeking supplemental submissions clarifying the record on a discrete point. Dkt. 11. The Court noted that "the record before the Court does not disclose the period during which respondent failed to make fringe-benefit payments." Id. at 1, The Court also noted that the Award unhelpfully described the delinquency period as "10/17/2013 through Date." Id. Accordingly, the Court directed petitioners to file a supplemental brief and supporting evidence, "which [was] to set out and substantiate the time period and damage ...


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