Trustees of the Pavers and Road Builders District Council Welfare, Pension, Annuity and Apprenticeship, Skill Improvement and Safety Funds v. M.C. Landscape Group, Inc.

Filing 75

MEMORANDUM AND ORDER ADOPTING REPORT AND RECOMMENDATIONS: For these reasons, the Court adopts the R&R's recommendations and grants the Trustees' motion for summary judgment in its entirety; finds MC liable for its unpaid contributions; and orders MC to pay the Trustees a total of $420,006.97 in damages, which reflects $264,981.94 in delinquent contributions, $102,028.64 in interest on these delinquent contributions, and $52,996.39 in liquidated damages. The Court also grants the Trustees' request to have the amount of their reasonable attorney's fees and costs assessed in a separate proceeding and respectfully refers this matter back to Magistrate Judge Scanlon for a determination of these costs and fees. Ordered by Chief Judge Carol Bagley Amon on 3/28/2016. (Fernandez, Erica)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

U.I.

Plaintiffs,

COURT E.D.N.Y.

* MAR 29 2016 *

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TRUSTEES OF THE PAVERS AND ROAD
BUILDERS DISTRICT COUNCIL WELFARE,
PENSION, ANNUITY AND
APPRENTICESHIP, SKILL IMPROVEMENT,
AND SAFETY FUNDS,

FILED
.a=.. omca

BROOKLYN OFFICE
NOT FOR PUBLICATION
MEMORANDUM & ORDER
12-CV-834 (CBA) (VMS)

-againstM.C. LANDSCAPE GROUP, INC.,
Defendant.

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AMON, Chief United States District Judge:

The Trustees of the Pavers and Road Builders District Council Welfare, Pension, Annuity
& Apprenticeship, Skill Improvement & Safety Funds ("Trustees") bring this action against
M.C. Landscape Group, Inc. ("MC") alleging violations of sections 502 and 515 of the
Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132, 1145, and
section 301 of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 185, to
collect delinquent employer contributions to a group of employee benefit plans. (See D.E. # 14.)
The Trustees moved for summary judgment, (see D.E. # 29), and the Court referred that
motion to the Honorable Vera M. Scanlon, United States Magistrate Judge, for report and
recommendation ("R&R"). (D.E. dated Nov. 13, 2013.) Magistrate Judge Scanlon's
comprehensive R&R recommends that the Trustees' motion be granted and MC be found liable
and ordered to pay its delinquent contributions plus statutory damages. (See D.E. # 68.) For the
following reasons, the Court adopts those recommendations.

BACKGROUND
The Court presumes familiarity with the factual and procedural history of this case, as set
forth in the R&R. (See R&R at 1-26.) In short, MC is a landscaping company that regularly
works on publicly funded projects requiring it to use union labor. (Id. at 5.) MC entered into
two collective bargaining agreements ("CBAs") with the Highway, Road, and Street
Construction Laborers Local Union 1010 ("Local 1010"), which were in place from mid-2009 to
mid-2015. (Id. at 6-7.) The CBAs required MC to contribute to various Local 1010 benefit
funds in amounts corresponding to the hours that MC's employees worked on "covered work,"
as defined by the CBAs. (Id. at 8.) MC was required to submit periodic remittance reports
confirming the amount of covered work employees performed and acknowledging its obligations
under ERISA to make contributions to the funds. (Id. at 9-10.) MC did submit such reports, but
when the Local 1010 benefit funds sought the contributions owed, MC refused to pay. (Id. at
15-20.) MC claimed the remittance reports were inaccurate and that some of the workers who
performed covered work were not authorized to work in the United States. (Id. at 20-22.) This
suit followed.
STANDARD OF REVIEW
When deciding whether to adopt a report and recommendation, a 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)(l). To accept those portions of an R&R 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." Jarvis v. N. Am. Globex Fund. L.P., 823 F. Supp. 2d 161, 163
(E.D.N.Y. 2011) (internal quotation marks and citation omitted). But "[t]he district judge must
determine de novo any part of the magistrate judge's disposition that has been properly objected

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to." Fed. R. Civ. P. 72(b)(3). "However, to the extent that a party makes only conclusory or
general objections, or simply reiterates the original arguments, the court reviews the Report and
Recommendation only for clear error." Soley v. Wasserman, 823 F. Supp. 2d 221, 228
(S.D.N.Y. 2011) (internal quotation marks and citations omitted).
DISCUSSION

MC makes three objections to the R&R. The first two objections are (I) that the
Immigration Reform and Control Act of 1986 ("IRCA"), 8 U.S.C. § 1324a et seq., prohibits
awarding unpaid contributions to the Trustees for hours worked by undocumented workers and
(2) that MC President Mariano Capparelli's October 22, 2013, declaration raises a triable issue as
to the accuracy of the remittance reports that MC submitted to Local 1010. (See D.E. # 71, Obj.
to Report and Rec., "MC Obj.," at 2.) The third objection is that summary judgment on damages
is improper because of the first two objections on liability. (Id. at 16.) The first two of these
objections, however, simply reiterate arguments made to Magistrate Judge Scanlon, and the third
wholly relies on the first two. Therefore these objections do not merit de novo review. See
Soley. 823 F. Supp. 2d at 228. However, in an abundance of caution the Court has reviewed
these issues de novo. Having done so, the Court adopts the R&R's comprehensive analysis of
the issues and its recommended conclusions, with the following additional comments. 1
The Court agrees with Magistrate Judge Scanlon's conclusion that IRCA does not
prohibit the award of unpaid contributions to the Trustees. As the R&R explains, ERISA awards
unpaid contributions based on work that was actually and already performed. (See R&R at 29-

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The R&R also rejected MC's two secondary arguments, namely that ERJSA section 515 rendered the CBAs
unenforceable as inconsistent with the law and that a breach of the "qualified employee" portion of the CBAs
entitled MC to an offset of its contributions. (See R&R at 36-39.) MC has not objected to these conclusions, except
by its statement that "MC objects to the R&R in its entirety," (MC Obj. at 4), which is too "conclusory [and]
general" to necessitate de novo review, see Soley, 823 F. Supp. 2d at 228. The Court has therefore reviewed these

conclusions for clear error and, finding none, adopts them.

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31.) In this sense, ERIS A awards are similar to awards under the Fair Labor Standards Act
("FLSA"), which courts consistently permit undocumented workers to recover despite IRCA,
(see id. at 30-31 (collecting cases including Lamonica v. Safe Hurricane Shutters. Inc., 711 F.3d
1299, 1306 (11th Cir. 2013), and Lucas v. Jerusalem Cafe. LLC, 721F.3d927, 934 (8th Cir.
2013), cert. denied 134 S. Ct. 1515)), and to awards under New York's worker's compensation
law, which the Second Circuit has permitted undocumented workers to recover despite IRCA,
(see id. at 30 (citing Madeira v. Affordable Housing Found., Inc., 469 F.3d 219, 243 (2d Cir.
2006))). As the R&R also makes clear, ERISA awards are unlike "post-termination backpay"
awards under the National Labor Relations Act ("NLRA") for work that would have been
performed but for the employer's illegal action, but that was not actually performed. (See id. at
34--35 (distinguishing Hoffman Plastic Compounds. Inc. v. NLRB, 535 U.S. 137 (2002), which
held that backpay awards to an undocumented worker under the NLRA for "years of work not
performed" were impermissible under IRCA); see also Colon v. Major Perry Street Coro., 987 F.
Supp. 2d 451, 453 (S.D.N.Y. 2013) (distinguishing impermissible post-termination backpay from
permissible retrospective backpay for purposes of determining whether IRCA precludes certain
recovery).) Here the benefits are grounded in completed, actually performed work-indeed
MC's remittance reports calculate the work at issue down to the hour, (see R&R at 16-17).
Requiring MC to honor its collectively bargained agreement is thus retrospective only, requiring
and assuming no continued IRCA violation. The Court therefore adopts the R&R's conclusion
that IRCA does not prevent recovery under ERISA here.
The Court also agrees with Magistrate Judge Scanlon that MC fails to raise a genuine
dispute over the accuracy of the remittance reports. (See R&R at 39-45.) At a March 27, 2013,
deposition, MC President Capparelli testified that during the time period at issue it was his

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practice to review these remittance reports before they were submitted. (See D.E. # 34-1 at
14:14-16, 15:21-23.) Capparelli specifically testified that he had in fact reviewed eleven of the
fourteen remittance reports at issue. (Id. at 15:24-16:1.) When presented with those reports at
the deposition, Capparelli was told repeatedly to take time to look them over. (See id. at 16:5-6;
16:10-13; 16:14-16 ("So take as long as you need, just a few minutes to look at them, and we'll
continue. You can tell me when you're done.").) He then testified that he believed the reports to
be accurate and, to his knowledge, there was nothing inaccurate in them. (Id. at 16:7-9, 18-22.)
Capparelli now contradicts that testimony with a later affidavit, which states that certain "books
and records" not before the Court show inaccuracies in the remittance reports. (See D .E. # 41.)
But Capparelli cannot escape his earlier testimony by relying on an affidavit that provides only a
hearsay account of the contents of books and records not before the Court. (See R&R at 39-45.)
The Court therefore adopts the R&R's conclusion that there is no genuine dispute over this issue.
Finally, the Court adopts the R&R's recommendation as to damages. As the R&R
explains, under ERISA, plaintiffs are entitled to delinquent contributions, interest on unpaid
contributions, liquidated damages, and attorney's fees and costs. (See id. at 45 (quoting 29
U.S.C. § l 132(g)(2)).) And as the R&R meticulously details, the amounts of plaintiffs
entitlement with respect to delinquent contributions, interest on unpaid contributions, and
liquidated damages are adequately supported by uncontradicted evidence in the record. (See id.
at 46-49.) The Court therefore rejects MC's final objection and adopts the R&R's
recommendation that plaintiffs are entitled to damages of:
•
•

$264,981.94 in delinquent contributions;
$89,225.40 in interest on unpaid contributions for the time period from June 5,
2012 (the midpoint ofMC's delinquency) to October 16, 2015 (the date of the
R&R); plus an additional per diem interest of$72.60 from October 16, 2015,
through March 28, 2016, the date of this Court's decision; plus $824.24 in interest

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•

on MC's prior late payment of contributions; for a total of$102,028.64 in unpaidcontribution interest; and
$52,996.39 in liquidated damages.

With respect to attorney's fees, the Trustees request a later proceeding to calculate
damages. The R&R recommends granting this request and referring the matter back to
Magistrate Judge Scanlon to determine the Trustees' reasonable attorney's fees and costs. (See
id. at 49-50.) The Court adopts this recommendation.

CONCLUSION
For these reasons, the Court adopts the R&R's recommendations and grants the Trustees'
motion for summary judgment in its entirety; finds MC liable for its unpaid contributions; and
orders MC to pay the Trustees a total of $420,006.97 in damages, which reflects $264,981.94 in
delinquent contributions, $102,028 .64 in interest on these delinquent contributions, and
$52,996.39 in liquidated damages.
The Court also grants the Trustees' request to have the amount of their reasonable
attorney's fees and costs assessed in a separate proceeding and respectfully refers this matter
back to Magistrate Judge Scanlon for a determination of these costs and fees.
SO ORDERED.
Dated: March 28, 2016
Brooklyn, New York

s/Carol Bagley Amon
1

Carol Bagle/Arnon 0
Chief United States District Judge

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