United States District Court, E.D. New York
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,
WEST HARLEM COMMUNITY ORGANIZATION, INC., Defendant.
REPORT & RECOMMENDATION
M. Gold United States Magistrate Judge.
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.
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.
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.
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.
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.
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).
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
Section 301 of the LMRA
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).
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).