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Cummings v. West Harlem Community Organization, Inc.

United States District Court, E.D. New York

June 6, 2018

CYNTHIA CUMMINGS, CAROLYN COX, CHERYL WATKINS, GINA RUSCH, ANDRE LAKE, CYNTHIA MCCRIGHT, and KIMBERLY BERRY, as Trustees of DISTRICT COUNCIL 1707, LOCAL 95 HEAD START EMPLOYEES WELFARE FUND, Plaintiffs,
v.
WEST HARLEM COMMUNITY ORGANIZATION, INC., Defendant.

          REPORT & RECOMMENDATION

          Steven M. Gold United States Magistrate Judge.

         INTRODUCTION

         Plaintiffs Cynthia Cuminings, Carolyn Cox, Cheryl Watkins, Gina Rusch, Andre Lake, Cynthia McCright, and Kimberiy Berry, as Trustees of District Council 1707, Local 95 Head Start Employees Welfare Fund (collectively, the "Fund"), bring this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 141 et seg. Upon plaintiffs' application and in light of defendant's failure to appear or otherwise defend this action, the Clerk of the Court entered the default of defendant on September 11, 2017. Docket Entry 10. Plaintiffs moved for entry of default judgment against defendant on September 22, 2017. Docket Entry 11. United States District Judge Raymond J. Dearie then referred plaintiffs' motion to me for Report and Recommendation. Order dated September 26, 2017. In response to this Court's order, plaintiffs submitted additional information in support of their motion on March 22, 2018. Docket Entry 17.

         Plaintiffs seek monies allegedly owed by defendant West Harlem Community Organization, Inc. ("West Harlem Community") to the Fund pursuant to ERISA and the terms of a Collective Bargaining Agreement ("CBA"), as well as under a Trust Agreement entered into by District Council 1707, Local 95 ("Union") and Head Start Sponsoring Board of the City of New York ("HSSBC"). The CBA, submitted as Exhibit B to the Affidavit of James W. Versocki in Support of Default Judgment ("Versocki Aff."), Docket Entry 11-3, is between the Union and the HSSBC. CBA; Affidavit of Randy Paul in Support of Default Judgment ("Paul Aff.") ¶ 6, Docket Entry 17. Pursuant to a recognition clause within the CBA, HSSBC is the bargaining representative for employers covered by the agreement. CBA Art. I. Defendant has been an employer as defined under the CBA and Trust Agreement and has contributed to the Fund for its represented employees since at least 1994. CBA Art. I, § 1; Versocki Aff. Ex. C, Trust Agreement, Art. 3.3, Docket Entry 11-4; Paul Aff. ¶ 11.

         The Fund was established under the Trust Agreement to collect and receive required benefit contributions and to provide health care benefits to eligible employees under the terms of the CBA. Complaint ("Compl.") ¶ 6, Docket Entry 1; Versocki Aff. Ex. C, Trust Agreement, Art. 2.2. Defendant West Harlem Community has made, and continues to make, payments to the Fund to provide health care coverage to its employees and has never disputed its obligation to make such contributions to the Fund under the terms of the CBA. Paul Aff. ¶ 19. Plaintiffs contend, however, that defendant failed to make certain required payments to the Fund, and they seek unpaid fringe benefit contributions for various months ranging between July 2015 and December 2016, interest on those contributions, liquidated damages, litigation expenses, and attorneys' fees. Versocki Aff. at 5, Docket Entry 11-1; Versocki Aff. Ex. D, Fund's Statement of Liability. Docket Entry 11-5.

         Having reviewed plaintiffs' submissions and for the reasons that follow, I respectfully recommend that the Fund be awarded S37, 997.87 in unpaid contributions, $8, 330.04 in interest on the unpaid contributions plus per diem interest to be calculated at a daily interest rate of $10.22 for the period from September 23, 2017 until final judgment is entered, $7, 599.57 in liquidated damages, and $2, 642.50 in attorneys' fees and costs.

         Discussion

         A. Legal Standards

         Rule 55 of the Federal Rules of Civil Procedure establishes a two-step process for obtaining a default judgment. See Shariffv. Beach 90th Street Realty Corp., 2013 WL 6835157, at *3 (E.D.N.Y. Dec. 20, 2013). First, "[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default." Fed.R.Civ.P. 55(a). Second, once a default has been entered against a defendant, and the defendant fails to appear or move to set aside the default under Rule 55(c), the court may, on a plaintiffs motion, enter a default judgment against that defendant. Fed.R.Civ.P. 55(b)(2).

         A defendant who fails to answer or defend is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. See Greyhound Exhibit group, Inc. v. E.L. U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992); Morales v. B&M Gen. Renovation Inc., 2016 WL 1266624, at *2 (E.D.N.Y. Mar. 9, 2016), report and recommendation adopted by, 2016 WL 1258482 (E.D.N.Y. Mar. 29, 2016). ''Nevertheless, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit conclusions of law." Labarbera v. ASTC Labs. Inc., 752 F.Supp.2d 263, 270 (E.D.N.Y. 2010) (citation and quotation marks omitted); see also Au Bon Pain Corp. v. Ariect, Inc., 653 F.2d 61, 65 (2d Cir. 1981). A court therefore retains the discretion to determine whether a final default judgment is appropriate. See Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). Even after a defendant has defaulted, "[a] plaintiff must. . . establish that on the law it is entitled to the relief it seeks, given the facts as established by the default." U.S. v. Ponte, 246 F.Supp.2d 74, 76 (D. Me. 2003) (citation omitted). See also An Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) (recognizing the court's authority, even after default, to determine whether plaintiff has stated a cause of action).

         B. Liability

         As noted, plaintiffs assert claims under the LMRA and ERISA. For the reasons that follow, plaintiffs' complaint asserts valid claims against West Harlem Community for both LMRA and ERISA violations.

         I. Section 301 of the LMRA

         Section 301 of the LMRA provides for federal jurisdiction over "[s]uits for violations of contracts between an employer and a labor organization representing employees in an industry affecting commerce." 29 U.S.C. § 185(a). Plaintiffs allege that "[West Harlem Community] is an 'employer' within the meaning of the National Labor Relations Act." Compl. ¶ 8. Plaintiffs also allege that West Harlem Community, at all times relevant to this action, has been a party to or otherwise bound by the terms and conditions of the CBA between the Union and HSSBC. Compl. ¶ 11; Versocki Aff. ¶ 10, Paul Aff. ¶ 11. Defendant is also bound by the Trust Agreement. Compl. ¶ 13. The CBA required defendant to pay employee welfare benefit contributions and wage deductions to the Fund, "in agreed amounts and specified percentages of the cost of health care premiums for employees covered by the [CBA]." Versocki Aff. ¶ 10; Compl. ¶ 12; CBA, Art. XII, Sec. 2(c).

         Plaintiffs allege that defendant failed to remit the contributions required under the CBA. Compl. ¶ 14; Statement of Liability, Versocki Aff. Ex. D. Plaintiffs' allegation that West Harlem Community failed to provide the requisite fringe benefit contributions during various months between July 2015 and December 2016 establishes a violation of Section 301 because it demonstrates that West Harlem Community failed to comply with the terms of the CBA and the Trust Agreement. See Bricklayers Ins. and Welfare Fund v. Everest Masonry Const, et al, 2017 WL 4179853, at *2 (E.D.N.Y. June 26, 2017) (finding that the defendant-employer's failure to remit contributions required by the applicable CBA constituted a violation of Section 301 of the LMRA), report and recommendation adopted by, 2017 WL 4217116 (E.D.N.Y. Sept. 20, 2017); Annuity, Welfare and Apprenticeship Skill Improvement & Safety Funds of the Int'l Union of Operating Eng'rs, Local 15, ISA, 15C& 15D, AFL-CIO v. A.G. Constr. Corp., 2014 WL 354647, at *3 (E.D.N.Y. Jan. 31, 2014) (same); Gesualdi v. D & E Top Soil & Trucking Inc., 2013 WL 1729269, at *3 (E.D.N.Y. Mar. 26, 2013) (same), report and recommendation adopted by, 2013 WL 1728893 (E.D.N.Y. Apr. 22, 2013).

         2. Sectio ...


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