Trustees of the Local 522 Pension Fund et al v. Triboro Bar & Restaurant Supply Co., Inc.
Filing
8
ORDER granting in part, denying without prejudice in part, and deferring ruling on in part 6 Plaintiffs' Motion for Default Judgment. For the reasons set forth in the attached Memorandum and Order, the court grants plaintiffs' motion for entry of default judgment against defendant as to liability, denies plaintiffs' application for damages without prejudice, and postpones consideration of plaintiff's request for attorney's fees and costs. Upon the submission of proper documentation, the court will conduct an inquest on plaintiffs' damages and determine the amount of reasonable attorney's fees and costs to which plaintiffs are entitled. Plaintiffs are directed to serve a copy of this Memorandum and Order on defendant and file a declaration of service via ECF by February 27, 2013. Ordered by Judge Kiyo A. Matsumoto on 2/24/2013. (Tolentino, Raymond)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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TRUSTEES OF THE LOCAL 522 PENSION
FUND & THE TRUSTEES OF THE LOCAL
522 WELFARE FUND OF NEW YORK &
NEW JERSEY,
NOT FOR PUBLICATION
ORDER FOR ENTRY
OF JUDGEMENT_______
12-CV-0163 (KAM)(LB)
Plaintiffs,
-againstTRI-BORO & RESTAURANT SUPPLY CO.,
INC.,
Defendant.
-----------------------------------X
KIYO A. MATSUMOTO, United States District Judge:
Plaintiffs, the Trustees of the Local 522 Pension Fund
and the Trustees of the Local 522 Welfare Fund of New York and
New Jersey, commenced this action against Triboro Bar &
Restaurant Supply Co., Inc. (“Triboro” or “defendant”) pursuant
to Sections 502 and 515 of the Employee Retirement Income
Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132 and 1145, and
Section 301 of the Labor Management Relations Act of 1947 (the
“Taft-Hartley Act”), 29 U.S.C. § 185, to recover certain unpaid
contributions due to the Local 522 Pension Fund and the Local
522 Welfare Fund of New York and New Jersey (collectively, the
“Funds”). (See generally ECF No. 1, Complaint filed 1/13/12
(“Compl.”).)
In addition, plaintiffs seek interest on those
unpaid contributions, liquidated damages, reasonable attorney's
fees, and costs. (Id. ¶ 24.)
Upon failure of defendant to appear, answer, or
respond to the Complaint after receiving proper service of
process, plaintiffs now move for (1) entry of default judgment;
(2) unpaid contributions due to the Funds for the period of
January 2012 through May 2012 in the amount of $3,935.00; (3)
interest on those unpaid contributions in the amount of $78.60;
and (4) liquidated damages in the amount of $787. (See ECF No.
6, Exh. 4, Plaintiffs’ Statements of Damages for Judgment by
Def. (“Pls.’ Damages Statement”).)
Plaintiffs also seek
attorney’s fees in the amount of $4,875 and litigation costs in
the amount of $390. (Id.)
Defendant has failed to answer
plaintiffs’ Complaint and has not submitted any opposition to
plaintiffs’ motion for entry of default judgment, despite having
received notice and an opportunity to do so. (See ECF Nos. 2 &
3, Affs. of Serv. of Summons and Compl. on Triboro; ECF No. 7,
Cert. of Serv. of Pls.’ Mot. for Def. Judgment.)
For the reasons set forth below, the court grants
plaintiffs’ motion for entry of default judgment against Triboro
as to liability, denies plaintiffs’ application for damages
without prejudice, and defers consideration of plaintiffs’
motion for attorney’s fees and costs.
2
BACKGROUND
I.
Facts 1
The Funds, multiemployer welfare and pension benefit
plans, are organized and operated in accordance with Section
302(c) of the Taft-Hartley Act. (See Compl. ¶ 4; ECF No. 6, Exh.
2, Aff. in Support of Pls.’ Mot. for Def. Judgment (“Pls.’
Aff.”) at 58-93.) 2
The Funds provide certain benefits to
eligible employees by collecting monetary contributions from
employers who enter into collective bargaining agreements with
Teamsters Local 522 (the “Union”). (See Pls.’ Aff. at 58-93.)
The Union entered into one such collective bargaining agreement
(the “CBA”) with Triboro, a New York corporation.
(Compl. ¶¶ 5-
6; see Pls.’ Aff. at 23-56.)
Pursuant to the CBA, Triboro must remit monthly
contributions to the Funds to provide certain pension and
welfare benefits to Triboro employees covered by the CBA.
(Compl. ¶¶ 7-8; see also Pls.’ Aff. at 23.)
To facilitate the
calculation of such monthly contributions, the CBA obligates
Triboro to submit remittance reports to the Funds, listing the
monthly hours worked by Triboro employees. (Compl. ¶ 13.)
As
fiduciaries to the Funds, plaintiffs may bring any action to
1
The following undisputed facts are taken from plaintiffs’
Complaint, plaintiffs’ motion for default judgment, and the documentary
evidence attached thereto.
2
The court’s citations to the affidavit in support of plaintiffs’
motion for entry of default judgment correspond to the page numbers
automatically generated by the court’s electronic filing system.
3
enforce the terms of the CBA against delinquent employers and to
recoup from those employers unpaid contributions, interest on
those unpaid contributions, liquidated damages, and attorney’s
fees and costs. (See Compl. ¶¶ 4, 10; Pls.’ Aff. at 58-93.)
In their Complaint, plaintiffs allege that Triboro
violated ERISA and the CBA by failing to make required monthly
contributions to the Funds between February 2010 and December
2011. 3 (Compl. ¶¶ 14-21.)
In their motion for entry of default
judgment, plaintiffs further maintain that Triboro failed to
remit the required monthly contributions to the Funds between
January 2012 and May 2012. 4 (Pls.’ Aff. at 3-4; Pls.’ Damages
Statement at 1.)
3
In their motion for entry of default judgment, plaintiffs no
longer appear to request damages relating to Triboro’s unpaid contributions
between February 2010 and December 2011. (See Pls.’ Aff. at 3-4; Pls.’
Damages Statement at 1.) As such, the court will not consider awarding
damages to plaintiffs for that time period.
4
Plaintiffs’ default motion seeks recovery of damages relating to
unpaid contributions that accrued during the pendency of this action, between
January 2012 and May 2012. (See Pls.’ Aff. at 3-4; Pls.’ Damages Statement at
1.) Federal Rule of Civil Procedure 54(c) generally limits a plaintiff's
recovery to the relief sought in the Complaint. See Fed. R. Civ. P. 54(c) ("A
default judgment must not differ in kind from, or exceed in amount, what is
demanded in the pleadings."). As such, damages that accrued during the
pendency of the litigation can be awarded only if the Complaint put the
defendant on notice that plaintiffs may seek additional damages for
contributions that became due and owing during the pendency of this action.
See Trs. of the Plumbers & Pipefitters Nat'l Pension Fund v. Daniel Weintraub
& Assocs., Inc., No. 04-CV-2611, 2007 WL 4125453, at *5 (E.D.N.Y. Nov. 16,
2007); Ames v. STAT Fire Suppression, Inc., 227 F.R.D. 361, 362 (E.D.N.Y.
2005). Here, the Complaint specifically states that: "Plaintiffs also
preserve their right to amend the exact amount of delinquent contributions
sought as well as recover any and all delinquent contributions owed, which
accrue during this action’s proceedings, plus interest thereon, at the time
of final judgment." (Compl. ¶ 22.) Moreover, in its prayer for relief, the
Complaint requests the court to “[o]rder Defendant to pay any and all
delinquent contributions owed to the Funds at the time of final judgment.”
(Id. at p.5 (emphasis added).) Thus, the court finds that defendant has been
4
II.
Procedural History
Plaintiffs filed this action on January 13, 2012, and
properly served defendant with a Summons and the Complaint on
January 17, 2012. (See generally Compl.; Affs. of Serv. of
Summons and Compl. on Triboro.)
At plaintiffs’ request, the
Clerk of the Court entered default against defendant on June 18,
2012. (ECF No. 4, Pls.’ Request for Cert. of Def. filed 6/18/12;
ECF No. 5, Clerk’s Entry of Def. dated 6/18/12.)
On June 19,
2012, plaintiffs moved for entry of default judgment against
defendant. (See ECF No. 6, Pls.’ Mot. for Def. Judgment (“Pls.’
Mot.”); ECF No. 7, Cert. of Serv. of Pls.’ Mot.)
In support of
their default judgment motion, plaintiffs submitted the attorney
affidavit of David Ofenloch, Esq., a copy of the CBA, and copies
of the Funds’ respective Agreements and Declarations of Trust
(the “Trust Agreements”). (See generally Pls.’ Aff.)
DISCUSSION
Pursuant to Federal Rule of Civil Procedure 55, a
movant must complete a two-step process to obtain a default
judgment. Rodriguez v. Almighty Cleaning, Inc., 784 F. Supp. 2d
114, 123 (E.D.N.Y. 2011); La Barbera v. Fed. Metal & Glass
Corp., 666 F. Supp. 2d 341, 346-47 (E.D.N.Y. 2009).
First, the
Clerk of the Court must enter default “[w]hen a party against
given sufficient notice that it could be held liable for damages relating to
unpaid contributions that became due after the filing of the Complaint.
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whom a judgment for affirmative relief is sought has failed to
plead or otherwise defend, and that failure is shown by
affidavit or otherwise.” Fed. R. Civ. P. 55(a); Enron Oil Corp.
v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993).
Second, upon the
Clerk’s entry of default, the movant “may then make an
application for entry of a default judgment, pursuant to Fed. R.
Civ. P. 55(b).” Rodriguez, 284 F. Supp. 2d at 123.
“‘The court
is to exercise sound judicial discretion’ in determining whether
the entry of default judgment is appropriate.” Trs. of Local 7
Tile Indus. Welfare Fund v. City Tile, Inc., No. 10-CV-322, 2011
WL 917600, at *1 (E.D.N.Y. Feb. 18, 2011) (quoting Badian v.
Brandaid Commc’ns Corp., No. 03-CV-2424, 2004 WL 1933573, at *2
(S.D.N.Y. Aug. 30, 2004)), adopted by 2011 WL 864331 (E.D.N.Y.
Mar. 10, 2011).
“In evaluating a motion for default judgment
pursuant to Federal Rule of Civil Procedure 55(b)(2), the
[c]ourt must accept as true the well-pleaded allegations in the
complaint,” except those relating to damages. Id. at *2 (citing
Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151,
154–55 (2d Cir. 1999)).
Here, the Clerk of the Court entered a default against
defendant on June 18, 2012, and plaintiffs thereafter filed the
instant motion for entry of default judgment.
To date,
defendant has not appeared in this action and has failed to
answer the Complaint or oppose plaintiffs’ default motion.
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Consequently, plaintiffs have completed the necessary steps to
obtain a default judgment. See Bricklayers Ins. & Welfare Fund
v. David & Allen Contracting, Inc., No. 05-CV-4778, 2007 WL
3046359, at *2 (E.D.N.Y. Oct. 16, 2007) (“In civil actions, when
a party fails to appear after given notice, the court normally
has justification for entering default.”) (citing Bermudez v.
Reid, 733 F.2d 18, 21 (2d Cir. 1984)).
I.
Liability
Defendant’s default in this case, however, “does not
necessarily conclusively establish . . . defendant’s liability.”
Trs. of the Plumbers Local Union No. 1 Welfare Fund v. Philip
Gen. Constr., No. 05-CV-1665, 2007 WL 3124612, at *3 (E.D.N.Y.
Oct. 23, 2007).
As such, this court “must still determine
whether . . . plaintiff[s] [have] stated a cause of action”
under ERISA and the Taft-Hartley Act in their Complaint. Bd. of
Trs. of the UFCW Local 174 Pension Fund v. Jerry WWHS Co., No.
08-CV-2325, 2009 WL 982424, at *3 (E.D.N.Y. Apr. 10, 2009)
(citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d
Cir. 1981); Philip Gen. Constr., 2007 WL 3124612, at *3
(“Nevertheless, ‘[e]ven after default 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 mere conclusions of law.’” (alteration in original)
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(quoting In re Wildlife Ctr., Inc., 102 B.R. 321, 325 (Bankr.
E.D.N.Y. 1989))).
The Taft-Hartley Act “vests the [c]ourt with
jurisdiction over civil actions for violations of contracts
between an employer and a labor organization that affect
commerce.” City Tile, Inc., 2011 WL 917600, at *1 (citing 29
U.S.C. § 185).
Likewise, “ERISA vests the court with
jurisdiction over civil actions brought by fiduciaries of
employee benefit plans to enforce provisions of such plans.” Id.
(citing 29 U.S.C. §§ 1002(21), 1002(37); 1132(d)(1)).
Under
ERISA, contributions due to an employee benefit fund under a CBA
must be made according to the terms of the CBA. See 29 U.S.C. §
1145; see City Tile, Inc., 2011 WL 917600, at *1.
Here, the Complaint alleges that Triboro, an employer
affecting commerce, and the Union are parties to a CBA
obligating Triboro to remit certain contributions to the Funds,
which are multiemployer benefit plans within the meaning of
ERISA. (Compl. ¶¶ 4-8.)
The Complaint further alleges that
Triboro failed to make such contributions as required under the
CBA. (Id. ¶¶ 13-21; Pls.’ Aff. at 3-4.)
Finally, the Complaint
alleges that plaintiffs are fiduciaries of the Funds and are
therefore authorized to file suit to recover delinquent
contributions from defendant. (Compl. ¶¶ 4, 10.)
Taken
together, plaintiffs’ allegations suffice to establish
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defendant’s liability under the Taft-Hartley Act and ERISA
between January 2012 and May 2012. 5 See Labarbera v. Frank J.
Batchelder Transp. LLC, No 08-CV-3387, 2009 WL 240521, at *3
(E.D.N.Y. Feb. 2, 2009) (finding liability based on allegations
that defendant was party to collective bargaining agreement and
failed to make timely contributions to union employee benefit
funds as required under the agreement).
Accordingly, the court
grants plaintiffs’ motion for entry of default judgment as to
liability.
II.
Damages
“Although the allegations of a complaint pertaining to
liability are deemed admitted upon entry of a default judgment,
allegations relating to damages are not.” Id. (citing Alcantara,
183 F.3d at 155).
Rather, the court “must conduct an inquiry to
ascertain the amount of damages with reasonable certainty.” Id.
(citing Alcantara, 183 F.3d at 155).
In conducting a damages
inquiry, the court need not hold a hearing “‘as long as it [has]
ensured that there [is] a basis for the damages specified in the
default judgment.’” Transatlantic Marine Claims Agency, Inc. v.
Ace Shipping Corp., 109 F.3d 105, 111 (2d Cir. 1997) (quoting
5
As noted previously, the Complaint preserves plaintiffs’ right
to “amend the exact amount of delinquent contributions sought” and to
“recover any and all delinquent contributions owed, which accrue during this
action’s proceedings, plus interest thereon, at the time of final judgment."
(Compl. ¶ 22.) Exercising that right in their default motion, plaintiffs
allege that defendant failed to remit contributions under the CBA between
January 2012 and May 2012 and seek recovery for that period only. (Pls.’ Aff.
at 3-4.) The court therefore finds that plaintiffs have established
liability for the period of January 2012 through May 2012.
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Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38, 40 (2d Cir.
1989)).
Thus, “[e]ven in the absence of a hearing, . . . the
district court cannot simply rely on the plaintiff's statement
of damages.” House v. Kent Worldwide Mach. Works, Inc., 359 F.
App’x 206, 206 (2d Cir. Jan. 4, 2010) (summary order) (citing
Transatlantic Marine Claims Agency, Inc., 109 F.3d at 111).
“Proof of damages must therefore be based on admissible,
authenticated evidence.”
Bd. of Trs. of the United Union of
Roofers v. Dana Restoration, Inc., No. 09-CV-1076, 2010 WL
3925115, at *2 (E.D.N.Y. Sept. 14, 2010) (citing House, 359 F.
App’x at 206), adopted by 2010 WL 3909232 (E.D.N.Y. Sept. 29,
2010).
In support of their request for unpaid contributions,
liquated damages, and interest, plaintiffs submit the affidavit
of David Ofenloch, Esq., counsel of record. (See generally Pls.’
Aff.)
Attached to Mr. Ofenloch’s affidavit are copies of the
applicable Trust Agreements and the CBA, which set forth
Triboro’s contribution obligations to the Funds. (Id. at 23-93.)
Although Mr. Ofenloch avers that Triboro failed to remit
required contributions between January and May 2012, the
affidavit and appended documentary evidence are insufficient to
establish plaintiffs’ damages.
First, in their motion for default judgment,
plaintiffs fail to articulate the method by which the unpaid
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contributions were calculated or estimated and do not submit any
documents to substantiate the amount of delinquent contributions
alleged in Mr. Ofenloch’s affidavit.
Second, although Mr.
Ofenloch affirms that he is “familiar with the facts of this
case,” (id. at 1), he does not state that he reviewed any
remittance reports for the relevant delinquency periods, any
notices or correspondence sent to defendant regarding the
alleged unpaid contributions, audit reports conducted by the
Funds, or other records potentially relevant to the amount of
estimated unpaid contributions set forth in his affidavit.
Nor
does Mr. Ofenloch allege that he is the custodian of any records
regarding plaintiffs’ purported damages.
In fact, there is no
indication that Mr. Ofenloch’s “conclusory statements [regarding
plaintiffs’ damages] are based on [his] first-hand knowledge or
such other source such that the contents of such statements
would be admissible in evidence.” Laborers' Local Union No. 91
Welfare Fund v. Danco Constr., Inc., No. 94-CV-318, 1996 WL
189510, at *1 (W.D.N.Y. Apr. 17, 1996).
Thus, Mr. Ofenloch
“makes assertions about what amounts are owed, but provides no
support . . . for those statements.” Bricklayers Ins. & Welfare
Fund, 2007 WL 3046359, at *4.
Such unsupported and conclusory
assertions are inadequate to establish damages.
Indeed, “[t]he
absence of an affidavit by a person with actual knowledge of the
facts, supported by appropriate documentation, deprives the
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court of the ability to make an independent assessment of the
damages to be awarded” at this time. Id. at *5; see also Danco
Constr., Inc., 1996 WL 189510, at *1 (holding that conclusory
statement regarding unpaid contributions is insufficient proof
of delinquent ERISA contributions).
Accordingly, the court
denies plaintiffs’ application for damages without prejudice to
renew upon submission of proper documentation.
III. Attorney’s Fees and Costs
Having denied plaintiff’s request for damages without
prejudice, the court will postpone consideration of plaintiffs’
application for attorney’s fees and costs pending the submission
of an updated attorney affidavit regarding services rendered in
the re-filing of plaintiffs’ motion for damages.
Plaintiffs
shall direct the updated attorney affidavit and supporting
documentation to the undersigned’s chambers.
CONCLUSION
For the foregoing reasons, the court grants
plaintiffs’ motion for entry of default judgment against
defendant as to liability, denies plaintiffs’ application for
damages without prejudice, and postpones consideration of
plaintiff’s request for attorney’s fees and costs.
Upon the
submission of proper documentation, the court will conduct an
inquest on plaintiffs’ damages and determine the amount of
12
reasonable attorney’s fees and costs to which plaintiffs are
entitled.
Plaintiffs are directed to serve a copy of this
Memorandum and Order on defendant and file a declaration of
service by February 27, 2013.
SO ORDERED.
Dated:
February 24, 2013
Brooklyn, New York
_________/s/_________________
KIYO A. MATSUMOTO
United States District Judge
Eastern District of New York
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