Blasters, Drillrunners and Miners Union Local 29 v. Trocom Construction Corp.
ORDER ADOPTING REPORT AND RECOMMENDATION. For the reasons set forth in the attached Order, Magistrate Judge Go's well-reasoned and thorough Report and Recommendation 24 is incorporated by reference and adopted in its entirety, and petitioner& #039;s objections 25 are overruled. Accordingly, the court grants respondent's motion to vacate entry of default 16 and denies petitioner's motion for entry of default judgment 6 . The parties shall appear before Magistrate Judge Go at a conference to be scheduled by the Magistrate Judge. Ordered by Judge Kiyo A. Matsumoto on 3/29/2012. (Ravi, Sagar)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
BLASTERS, DRILLRUNNERS AND MINERS
UNION LOCAL 29,
ORDER ADOPTING REPORT
TROCOM CONSTRUCTION CORP.,
MATSUMOTO, United States District Judge:
On October 19, 2010, petitioner Blasters, Drillrunners
and Miners Union Local 29 (“Local 29”) commenced this action to
enforce an arbitration award against respondent Trocom
Construction Corp. (“Trocom”).
After Trocom defaulted and the
Clerk of the Court entered default on February 24, 2011, Local 29
moved for a default judgment against Trocom on March 3, 2011,
which this court referred to Magistrate Judge Marilyn D. Go on
March 4, 2011.
Subsequently, Trocom appeared in the action and
filed a motion on April 7, 2011 to vacate the entry of default,
which Local 29 opposed.
Currently before the court is the Report and
Recommendation issued by Magistrate Judge Go on August 15, 2011,
recommending that the court grant Trocom’s motion to vacate the
notation of default and deny Local 29’s motion for entry of
(ECF No. 24, Report and Recommendation.)
Local 29 timely objected to the Report and Recommendation.
ECF No. 25, Petitioner’s Objections to Magistrate Judge’s Report
and Recommendation (“Pet. Obj.”).)
In reviewing a Report and
Recommendation, the district court “may accept, reject, or
modify, in whole or in part, the findings or recommendations made
by the magistrate judge.”
28 U.S.C. § 636(b)(1).
In light of
Local 29’s timely objections, the court has undertaken a de novo
review of the full record including the applicable law, the
underlying record, the parties’ submissions on the instant
motions and accompanying affidavits, the Report and
Recommendation, and Local 29’s objections to the Report and
Recommendation, to which Trocom did not respond.
the reasons set forth below, the court adopts Magistrate Judge
Go’s thorough and well-reasoned Report and Recommendation in its
STATEMENT OF FACTS
The facts and procedural history regarding the instant
motions are set forth in detail in the Report and Recommendation.
The court reviews de novo the facts in the record relevant to the
On December 2, 2004, Local 29 and Trocom entered into a
one-page short-form agreement (the “2004 Short-Form Agreement”)
that bound Trocom to the collective bargaining agreement (“CBA”)
between the General Contractors Association of New York (the
“GCANY”) and Local 29 in effect from July 1, 2002 to June 30,
2006 (the “2002 CBA”) and “as amended and extended from time to
(Pet. Obj. at 2-3; ECF No. 17, Affidavit of Salvatore
Trovato (“Trovato Aff.”) ¶ 6; ECF No. 17-2, the 2004 Short-Form
Trocom asserts that it has not been a party to any
other CBA with Local 29 and was not a member of the GCANY at any
(Trovato Aff. ¶¶ 7-8.)
The 2002 CBA also contained an “evergreen clause”:
This Agreement shall continue in effect until and
including June 30, 2006, and during each year
thereafter unless on or before the fifteenth (15th) day
of March 2006, or on or before the fifteenth (15th) day
of March of any year thereafter, written notice of
termination or proposed changes shall have been served
by either party on the other party.
In the event that written notice shall have been
served[,] an agreement supplemental hereto, embodying
such changes agreed upon, shall be drawn up and signed
by June 30th of the year in which the notice shall have
(ECF No. 17-3, 2002 CBA, Art. IV.)
According to Local 29, “a
successor agreement was negotiated between Local 29 and the
[GCANY]” in 2006, which was in effect from July 1, 2006 to June
30, 2011 (the “2006 CBA”).
(Pet. Obj. at 3; see ECF No. 17-4,
There is no evidence in the record that Trocom was
served with written notice of any proposed changes to the 2002
CBA, participated in the negotiation of the 2006 CBA, signed the
2006 CBA, or received any notice of the existence of the 2006 CBA
until after the arbitration award was issued.
In connection with a dispute arising in 2009 from
Trocom’s alleged failure to use members of Local 29 to perform
drilling work at certain job sites, an arbitration hearing was
held on April 28, 2010, at which Trocom did not appear.
21-4, Arbitration Opinion and Award dated June 10, 2010
(“Arbitration Opinion”) at 1-3.)
The arbitrator found that
Trocom was bound by and had violated the 2006 CBA and entered an
award in favor of Local 29 in the amount of approximately
$128,000 plus attorneys’ fees and costs.
(Id. at 1, 6.)
Finally, on October 19, 2010, Local 29 commenced this action to
enforce the arbitration award against Trocom.
Local 29 poses two primary objections to the Report and
Recommendation, each of which the court will address in turn.
Objection One: Trocom Has Not Established that It Has
a Potentially Meritorious Defense
Local 29 objects to the determination in the Report and
Recommendation that Trocom has proffered a potentially
(Pet. Obj. at 7-12.)
In support of its
objection, Local 29 contends that the Report and Recommendation
erroneously relies on Tile Setters & Tile Finishers Union, Local
Union No. 7 v. Speedwell Design/BFK Enter., LLC, No. 06-cv-5211
(KAM), 2009 U.S. Dist. LEXIS 27270 (E.D.N.Y. Mar. 31, 2009)
(“Speedwell”), because it is distinguishable from the present
(Pet. Obj. at 8, 10-12.)
Additionally, Local 29 asserts
that, because the 2002 CBA contained a “sweeping” arbitration
clause and an “evergreen clause,” the arbitrator, rather than the
court, should determine whether the parties continued to be bound
by the 2002 CBA after June 30, 2006.
(Id. at 9-10.)
Local 29 argues that because this is an action to enforce an
arbitration award, the determination by the arbitrator is
entitled to judicial deference.
(Id. at 8.)
As an initial matter, the contentions in Local 29’s
objections were presented to Magistrate Judge Go nearly word-forword in Local 29’s submission on Trocom’s underlying motion to
vacate the default.
Where, as here, objections to a Report and
Recommendation merely rehash arguments presented to the
Magistrate Judge, the standard of review undertaken by the
District Court is not de novo but clear error.
See Michaud v.
Nippon Cargo Airlines, Co., No. 09-CV-3375(RRM), 2011 U.S. Dist.
LEXIS 128705, at *3 (E.D.N.Y. Nov. 7, 2011) (“When a party simply
reiterates the original arguments made to the magistrate judge,
the Court will review the report strictly for clear error.”
(citation omitted)); Ortiz v. Barkley, 558 F. Supp. 2d 444, 451
(S.D.N.Y. 2008) (“Reviewing courts should review a report and
recommendation for clear error where objections are merely
perfunctory responses, argued in an attempt to engage the
district court in a rehashing of the same arguments set forth in
the original petition.” (citations omitted) (internal quotation
The court has nevertheless conducted a de novo
review of the Report and Recommendation and finds that it
adequately addresses Local 29’s objections, which are without
On de novo review, this court agrees with Magistrate
Judge Go’s analysis.
Magistrate Judge Go properly and thoroughly
considered a number of factors relevant to determining whether to
vacate the entry of default.
(See Report and Recommendation at
One of the factors, whether the defaulting party has
proferred a potentially meritorious defense, is relevant to
Local 29’s objection based on Speedwell.
(Pet. Obj. at 8, 10-
In Speedwell, this court, relying on the Second Circuit’s
decision in Dow Elec., Inc. v. IBEW Local Union No. 910, 283 F.
App’x 841 (2d Cir. 2008) (summary order), held in the context of
a summary judgment motion that an employer who was a party to a
CBA signed in 2001 was not bound by a successor CBA signed in
2003 where the employer (1) had no notice of the negotiation of
the successor CBA, (2) did not participate in negotiating the
successor CBA, (3) did not sign the successor CBA, (4) was not a
member of the employer associations that received notice,
negotiated, and signed the successor CBA, and (5) never received
a copy of the successor CBA prior to the commencement of the
See Speedwell, 2009 U.S. Dist. LEXIS 27270, at *27-32.
Magistrate Judge Go carefully considered Local 29’s
argument that Speedwell is distinguishable from the present
action and concluded that Trocom had “proferred a potentially
meritorious defense” by presenting facts that, “if proven at
trial, would constitute a complete defense.”
Recommendation at 8-10 (quoting SEC v. McNulty, 137 F.3d 732, 740
(2d Cir. 1998)).)
For example, like in Speedwell, it is
undisputed that the 2006 CBA was a “successor” to the 2002 CBA
(Pet. Obj. at 3), and there is no evidence that Trocom (1) signed
the 2006 CBA, (2) was a member of the GCANY that received notice,
negotiated, and signed the 2006 CBA, (3) had any notice of the
negotiation of the 2006 CBA, (4) participated in negotiating the
2006 CBA, or (5) received a copy of the 2006 CBA or any notice of
any amendments or extensions of the 2002 CBA until the
arbitration award was issued.
(See Trovato Aff. ¶¶ 8-9.)
court has also considered Local 29’s argument regarding the
“evergreen clause” in the 2002 CBA (Pet. Obj. at 9) but finds
that it does not affect the court’s determination of whether
there is a potentially meritorious defense in this limited
context of ruling on a motion to vacate entry of default.
Additionally, Magistrate Judge Go correctly concluded
that this court has jurisdiction over the question of
arbitrability because the issue here is not only whether the
underlying dispute between Local 29 and Trocom was subject to the
arbitration provision of the 2006 CBA, but whether Trocom was
bound by the 2006 CBA in the first place - an issue that is
squarely within the court’s jurisdiction.
Recommendation at 10.)
(See Report and
“Among ‘questions of arbitrability’
presumptively reserved for a court, the Supreme Court has
identified ‘dispute[s] about whether the parties are bound by a
given arbitration clause’ . . . .”
Anderson v. Beland (In re Am.
Express Fin. Advisors Secs. Litig.), No. 10-3399, 2011 U.S. App.
LEXIS 22209, at *40 (2d Cir. Nov. 3, 2011) (citing Howsam v. Dean
Witter Reynolds, 537 U.S. 79, 84 (2002)); see also John Wiley &
Sons, Inc. v. Livingston, 376 U.S. 543, 546-47 (1964) (holding
that a court must decide the question of “whether [a party],
which did not itself sign the collective bargaining agreement on
which the Union’s claim to arbitration depends, is bound at all
by the agreement’s arbitration provision”).
The question of
whether a party is bound by a CBA containing an arbitration
provision is thus appropriate for judicial determination.
Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 209 (1991)
(“[R]efus[ing] to apply [the presumption of arbitrability]
wholesale in the context of an expired bargaining agreement, for
to do so would make limitless the contractual obligation to
arbitrate.”); Cleveland Wrecking Co. v. Iron Workers Local 40,
136 F.3d 884, 888 (2d Cir. 1997) (recognizing “the wellestablished principle that ‘the question of arbitrability -
whether a collective-bargaining agreement creates a duty for the
parties to arbitrate the particular grievance - is undeniably an
issue for judicial determination.’” (quoting AT&T Tech., Inc. v.
Communications Workers, 475 U.S. 643, 649 (1986))); Speedwell,
2009 U.S. Dist LEXIS 27270, at *21 (“The existence of a valid
contract to arbitrate, and the scope of that contract to
arbitrate, are matters for the court, not the arbitrator.”).
Although Speedwell may be distinguishable from the
facts of this case in certain respects, in the context of a
motion to vacate entry of default, the court need not decide
whether Trocom’s defense will ultimately succeed but only must
determine “whether the evidence submitted, if proven at trial,
would constitute a complete defense.”
Enron Oil Corp. v.
Diakuhara, 10 F.3d 90, 98 (2d Cir. 1993) (emphasis added); see
also State St. Bank & Trust Co. v. Inversiones Errazuriz
Limitada, 374 F.3d 158, 168 (2d Cir. 2004) (“Default judgments
‘are generally disfavored and are reserved for rare occasions.’
As such, the criteria for vacating a default judgment pursuant to
Rule 60, including the meritorious defense factor, ‘should be
construed generously.’” (citations omitted)); Sony Corp. v. Elm
State Electronics, Inc., 800 F.2d 317, 320 (2d Cir. 1986)
(recognizing the “strong preference for resolution of disputes on
their merits and . . . for resolving doubts in favor of a trial
on the merits.” (citations omitted)).
Accordingly, the court
finds that Trocom has established that it can proffer a
meritorious defense that it was not bound by the 2006 CBA, and
the court overrules Local 29’s first objection.
Trocom’s Default Was Willful
Local 29’s second objection to the Report and
Recommendation is that Trocom’s default was willful.
at 7, 12-14.)
To establish willfulness, the Second Circuit
requires evidence that the defaulting party engaged in deliberate
or egregious conduct or made a strategic decision and
deliberately chose not to appear.
See Pecarsky v.
Galaxiworld.com Ltd., 249 F.3d 167, 172 (2d Cir. 2001); Am.
Alliance Ins. Co. v. Eagle Ins. Co., 92 F.3d 57, 61 (2d Cir.
Additionally, “Rule 60(b) [of the Federal Rules of Civil
Procedure] expressly contemplates that some types of ‘neglect’
Am. Alliance Ins. Co., 92 F.3d at 61.
29 proffers several facts in support of its objection (Pet. Obj.
at 13-14), all of which were essentially cut-and-pasted from its
submission to Magistrate Judge Go and adequately addressed in the
Report and Recommendation.
The court will nevertheless conduct a
de novo review of the determination in the Report and
Recommendation that Trocom’s default was not willful.
and Recommendation at 4-8.)
First, Local 29 claims that it served Trocom with an
arbitration demand by fax, conventional mail, and certified mail,
evidenced by a return receipt from Trocom.
Russo Aff. ¶ 18.)
(Pet. Obj. at 13;
In response, Trocom President Salvatore
Trovato claims that neither he nor any individual with authority
to take action ever received notice of the arbitration until
after the award was issued.
(Trovato Aff. ¶ 12.)
explains that at the time the notice was sent, he was absent from
the office for extended periods of time due to illness.
Second, Local 29 claims that Trocom never sought to
stay the arbitration, received a notice stating the date of the
arbitration hearing, and failed to appear at the hearing.
Obj. at 13.)
If, however, Mr. Trovato or an upper-level Trocom
employee did not receive notice of the arbitration until after
the award was issued, it would not have been possible for Trocom
to seek a stay, receive notice of a hearing, or appear at that
Third, Local 29 argues that Trocom acknowledged
receiving a copy of the arbitration award but did not attempt to
In response, Mr. Trovato explained that upon
receipt of the award, he wrote a letter to Local 29’s counsel,
Mr. Russo, and the arbitrator, Mr. O’Beirne, explaining that
Trocom was not bound to a CBA, had no notice of the arbitration,
and sought “to challenge the arbitration award and/or reach an
(Trovato Aff. ¶ 14.)
Having received no
reply to his letter, Mr. Trovato reasonably assumed that Local 29
had lost interest or realized that Trocom was not bound by a CBA.
Because Mr. Trovato considered the matter resolved, he did not
follow up on the matter until he received notice of the entry of
default in this case, after which he took immediate action.
Fourth, Local 29 asserts that Trocom was served with
the petition in this proceeding and never responded, and that
Trocom only made an appearance in this case after a default was
entered against it.
(Pet. Obj. at 13-14.)
argues that it was not properly served.
In response, Trocom
Trovato explains that the affidavit of service states that the
petition was served on “Anthony S.,” who is described as a sixfoot tall white male, age sixty, with brown hair, and that Trocom
“does not employ any individual who meets this description.”
(Trovato Aff. ¶ 17; see also ECF No. 2, Summons Returned
Trocom further contends that, even if it was properly
served, any failure to respond to the petition is attributable to
“simple and unintentional office error.”
(ECF No. 18,
Respondent’s Memorandum in Support of Motion to Vacate
Petitioner’s Default Judgment at 4.)
Finally, Local 29 notes that Trocom has defaulted in
other federal cases.
(Pet. Obj. at 14.)
In response, Trocom
claims that one cannot infer willfulness from past defaults
because to do so would be to “speculate as to the underlying
reasons for the referenced default judgments.”
(ECF No. 23,
Respondent’s Reply Memorandum of Law in Further Support of its
Motion to Vacate Petitioner’s Default Judgment at 3).
Report and Recommendation specifically notes, the defaults in
other cases are of limited probative value.
Recommendation at 7.)
Trocom did not did not contest entry of
default or default judgment in the other federal cases, satisfied
the default judgment entered in two of the three cases, and the
plaintiff voluntarily dismissed the third case.
In light of Trocom’s explanations and the fact that
default judgment is a “weapon of last, rather than first,
resort,” Davis v. Musler, 713 F.2d 907, 916 (2d Cir. 1983)
(citation omitted), the Report and Recommendation correctly
concluded that Local 29’s evidence of default in other cases and
of Trocom’s conduct in the underlying arbitration is insufficient
to establish egregious or deliberate conduct amounting to
willfulness with regard to Trocom’s conduct in this action.
(Report and Recommendation at 4-8.)
Even if Trocom’s claims that
it was not served with notice of the arbitration or of this
lawsuit may be questionable, “[a]ny doubt as to whether a default
should be set aside should be resolved in favor of the defaulting
Westchester Fire Ins. Co. v. Moyes, No. 08-cv-10726,
2009 U.S. Dist. LEXIS 66859, at *5 (S.D.N.Y. July 30, 2009)
(citing Enron Oil Corp., 10 F.3d at 98).
explanations raise serious doubts as to whether Trocom’s default
Mr. Trovato’s absence and inadequate service due to
office error coupled with Local 29’s failure to respond to Mr.
Trovato’s post-arbitration letter adequately address Local 29’s
proffered evidence in support of its objection.
Local 29’s second objection is overruled.
The court also agrees with Magistrate Judge Go’s
determination that Local 29 would not be prejudiced in this
action if the entry of default is vacated.
Recommendation at 8.)
Moreover, Local 29 failed to object to
Magistrate Judge Go’s determination of this issue.
See Urena v.
New York, 160 F. Supp. 2d 606, 609-10 (S.D.N.Y. 2001) (“To accept
the report and recommendation of a magistrate, to which no timely
objection has been made, a district court need only satisfy
itself that there is no clear error on the face of the record.”
(quoting Nelson v. Smith, 618 F. Supp. 1186, 1189 (S.D.N.Y.
After considering the Second Circuit’s strong
preference for resolving disputes on the merits, see, e.g.,
Pecarsky, 249 F.3d at 172, and upon a de novo review, the court
finds that Magistrate Judge Go thoroughly considered Local 29’s
Accordingly, the court agrees that Trocom’s
motion to vacate entry of default should be granted and that
Local 29’s motion for default judgment should be denied.
court adopts the Report and Recommendation in its entirety as the
opinion of the court.
For the reasons set forth above, Magistrate Judge Go’s
well-reasoned and thorough Report and Recommendation is
incorporated by reference and adopted in its entirety, and
petitioner’s objections are overruled.
For the reasons set forth
above and in the Report and Recommendation, the court grants
Trocom’s motion to vacate entry of default and denies Local 29’s
motion for entry of default judgment.
The parties shall appear
before Magistrate Judge Go at a conference to be scheduled by the
March 29, 2012
Brooklyn, New York
_______ __ /s/__
KIYO A. MATSUMOTO
United States District Judge
Eastern District of New York
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