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

United States District Court, S.D. New York

January 11, 2020



          John G. Koeltl, United States District Judge.

         There are four petitioners in this case: (1) Trustees of the New York City District Council Of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educational and Industry Fund (“ERISA Funds”); (2) Trustees of the New York City Carpenters Relief and Charity Fund (“Charity Fund”); (3) Carpenter Contractor Alliance of Metropolitan New York (“CCA Metro, ” together with the ERISA Funds and Charity Fund, “Funds”); and (4) New York City District Council of Carpenters (“Union”). The Funds and the Union petition to confirm an arbitration award pursuant to section 301 of the Labor Management Relations Act of 1947 (“LMRA”), as amended, 29 U.S.C. § 185, and move this Court to confirm the arbitration award, as well as award attorney's fees, costs, and post-judgment interest at the statutory rate and other relief as is just and proper.

         The Trustees of the ERISA Funds are employer and employee trustees of multiemployer labor-management trust funds organized and operated in accordance with ERISA. Pet. ¶ 4. The trustees are fiduciaries of the ERISA Funds within the meaning of Section 3(21) of ERISA, 29 U.S.C. § 1002(21). Id. The Trustees of the Charity Fund are trustees of a charitable organization established under Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3). Id. at ¶ 5. CCA Metro is a New York not-for-profit corporation. Id. at ¶ 6. The New York City District Council of Carpenters is a labor union within the meaning of the LMRA, represents employees in an industry affecting commerce within the meaning of Section 501 of the LMRA, 29 U.S.C § 142, and is the certified bargaining representative for certain employees of the respondent. Id. at ¶ 7. The respondent, Dreamland Construction, Inc., is a corporation incorporated in New York. Id. at ¶ 8. The respondent is an employer within the meaning of Section 3(5) of ERISA, 29 U.S.C. § 1002(5). Id. The respondent has not opposed the petition. For the following reasons, the petition is granted.


         The following uncontested facts are taken from the complaint and evidence submitted in support of the petition.

         On or about August, 2012, and September, 2013, the respondent entered into a Project Labor Agreement Covering Specified Renovation & Rehabilitation of City Owned Buildings (“PLA”). Id. at ¶ 9. The PLA incorporated the Collective Bargaining Agreement between the Building Contractors Association, Inc. and the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO (“CBA”). Id. at ¶ 11; Pet. Ex. B.[1] The CBA requires that the respondent remit contributions to the Funds for every hour worked by its employees within the trade and geographical jurisdiction of the Union and furnish its books and records to the Funds upon request for the purposes of auditing such contributions. Pet. ¶¶ 12-13.

         The CBA also binds employers to the Funds' Collection Policy. Id. at ¶ 14.[2] The Collection Policy states “[i]n the event that an employer refuses to permit a payroll review and/or audit . . . the Fund Office shall determine the estimated amount of the employer's delinquent contributions based on the . . . highest number of average hours reported per week for any period of four consecutive weeks during the audit period.” Id. at ¶ 15. The CBA provides that in the event that a “dispute or disagreement arise between the parties hereto . . . concerning any claim arising from payments to the Fund of principal and/or interest which is allegedly due, either party may seek arbitration of the dispute before the impartial arbitrator.” Id. at ¶ 16. The CBA and Collection Policy provide that, should the Funds be required to arbitrate a dispute or file a lawsuit over unpaid contributions, the Funds shall be entitled to collect, in addition to the delinquent contributions: (1) interest on the unpaid contributions at the prime rate of Citibank plus 2%; (2) liquidated damages in the amount of twenty percent (20%) of the unpaid contributions; and (3) reasonable costs and attorneys' fees incurred by the Funds in collecting the delinquencies. Id. at ¶ 17.

         This dispute arose when the respondent failed to grant the Funds access to its books and records to conduct an audit covering the period beginning March 28, 2015. Id. at ¶ 18. Pursuant to the Collection Policy, the Funds determined that the respondent's estimated delinquent contributions were $63, 631.68. Id. at ¶ 19. Pursuant to the CBA's arbitration clause, the petitioners initiated arbitration before the designated arbitrator, Roger E. Maher. Id. at ¶ 20. The arbitrator provided notice of the hearing on March 18, 2019, Pet. Ex. F, and the hearing was held on July 10, 2019, Pet Ex. G. The respondent did not appear at the hearing. Id.

         The arbitrator examined the evidence and stated that the uncontroverted testimony and evidence established that the respondent was bound to the CBA, which became effective on September 25, 2013. Id. The arbitrator also examined the evidence of a summary report of the estimated amount due of $63, 631.68, and determined that the respondent violated the CBA when it failed to permit the Funds auditors to examine its books and records. Id. On July 15, 2019, the arbitrator ordered the respondent to pay the Funds the sum of $88, 141.92, consisting of (a) principal of $63, 631.68; (b) interest of $9, 383.90; (c) liquidated damages of $12, 726.34; (d) court costs of $400; (e) attorney's fees of $1, 500; and (f) arbitrator's fees of $500. Id. The arbitrator also found that interest would accrue at an annual rate of 7.5% from the date of the award. Id. The petitioners contend that the respondent has failed to pay any portion of the award. Pet. ¶ 24.

         The petitioners seek to confirm the award issued by the arbitrator. In addition, they ask the Court to approve (i) attorney's fees totaling $1, 567.50 and court costs totaling $70, arising out of this petition and (ii) post-judgment interest at the statutory rate.


         A district court's role in reviewing an arbitration award is extremely limited. United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29 (1987); United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960). The Supreme Court has explained that district courts “are not authorized to reconsider the merits of an award even though the parties may allege that the award rests on errors of fact or on misinterpretation of the contract.” Misco, 484 U.S. at 36. The Court instructed that “[a]s long as the arbitrator's award ‘draws its essence from the collective bargaining agreement,' and is not merely ‘his own brand of industrial justice,' the award is legitimate.” Id. (quoting United Steelworkers, 363 U.S. at 597). Accordingly, an arbitration award is to be confirmed if there is even a “barely colorable justification” for the decision. United States Steel and Carnegie Pension Fund v. Dickinson, 753 F.2d 250, 252 (2d Cir. 1985); see also Trustees of New York City Dist. Council of Carpenters Pension Fund v. Stop & Work Constr., Inc., No. 17CV5693, 2018 WL 324267, at *2 (S.D.N.Y. Jan. 5, 2018).

         The Second Circuit Court of Appeals has explained that a default judgment is generally inappropriate in a proceeding to confirm or vacate an arbitration award because “[a] motion to confirm or vacate an [arbitration] award is generally accompanied by a record, such as an agreement to arbitrate and the arbitration award decision itself. . . . [T]he petition and accompanying record should [be] treated as akin to a motion for summary judgment based on the movant's submissions.” D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 109 (2d Cir. 2006).

         The standard for granting summary judgment is well established. “The [C]ourt shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986); Darnell v. Pineiro, 849 F.3d 17, 22 (2d Cir. 2017). The substantive law governing the case will identify those facts that are material and “[o]nly disputes over facts that might affect the outcome of the ...

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