Gesualdi et al v. Specialty Flooring Systems, Inc.

Filing 34

MEMORANDUM & ORDER ADOPTING REPORT AND RECOMMENDATION - For the foregoing reasons, Judge Lindsay's R&R is ADOPTED and Plaintiffs' motion for damages is GRANTED in the following respects: (1) delinquent contributions, liquidated damage s, and audit fees as to Audit #08-0424 for a total of $1,378.73 as well as interest of $110.45 through March 12, 2008 plus accrued interest until payment; (2) delinquent contributions and audit fees as to Audit #07-0775 for a total of &# 036;2,540.38; (3) interest on late paid contributions for the months of July 2008, May 2009, and June 2009 for a total of $1,088.95; (4) an Order directing Defendant to submit to an audit for the period of January 2011 through January 2012; a nd (5) attorneys' fees and costs in the total amount of $17,254.83. Accordingly, Plaintiffs are GRANTED damages in the aforementioned amounts and Defendant is ORDERED to submit to an audit for the period of January 2011 through Januar y 2012. In all other respects, however, Plaintiffs' objections are SUSTAINED and Judge Lindsay's R&R is REJECTED. Plaintiffs' motion is therefore REFERRED back to Judge Lindsay for a calculation of damages regarding: (1) delinquen t contributions, interest, liquidated damages, and audit fees for Audit #08-0425-RI, Audit #09-403, and Audit #09-404; and (2) interest and liquidated damages for Audit #07-0775. Thus, a ruling on those portions of Plaintiffs' motion for damages is DEFERRED. So Ordered by Judge Joanna Seybert on 9/27/2013. C/ECF (Valle, Christine)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
---------------------------------------X
THOMAS GESUALDI, LOUIS BISIGNANO,
DOMINICK MARROCCO, ANTHONY PIROZZI,
JOSEPH A. FERRARA, SR., FRANK H.
FINKEL, MARC HERBST, DENISE
RICHARDSON, THOMAS F. CORBETT, and
ANTHONY D’AQUILA, as Trustees and
Fiduciaries of the Local 282
Welfare Trust Fund, the Local 282
Pension Trust Fund, the Local 282
Annuity Trust Fund, the Local 282
Job Training Trust Fund, and the
Local 282 Vacation and Sick Leave
Trust Fund,

MEMORANDUM & ORDER
11-CV-5937(JS)(ARL)

Plaintiffs,
-againstSPECIALTY FLOORING SYSTEMS, INC.,
Defendant.
---------------------------------------X
APPEARANCES
For Plaintiffs:
Jonathan Michael Bardavid, Esq.
Trivella & Forte, LLP
1311 Mamaroneck Avenue, Suite 170
White Plains, NY 10605
For Defendant:

No appearances.

SEYBERT, District Judge:
Plaintiffs Thomas Gesualdi, Louis Bisignano, Dominick
Marrocco,

Anthony

Pirozzi,

Joseph

A.

Ferrara,

Sr.,

Frank

H.

Finkel, Marc Herbst, Denise Richardson, Thomas F. Corbett, and
Anthony

D’Aquila

fiduciaries
Training

of

Trust,

(collectively

the

“Plaintiffs”),

Local

282

Welfare,

Vacation

and

Sick

as

Trustees

and

Pension,

Annuity,

Job

Leave

Trust

Funds

(“the

Funds”)

commenced

this

action

against

Defendant

Specialty

Flooring Systems, Inc. (“Defendant”) on December 6, 2011 for
violations of the Employees Retirement Income Security Act of
1974,

29

Management

U.S.C.

(“LMRA”).

§

1001,

Relations

Act

et
of

seq.

1947,

(“ERISA”)
29

U.S.C.

and
§

the

141,

Labor

et

seq.

Currently pending before the Court is Plaintiffs’

letter motion for damages (Docket Entry 27) and Magistrate Judge
Arlene R. Lindsay’s Report and Recommendation (“R&R”) regarding
the aforesaid motion (Docket Entry 30) to which Plaintiffs have
partially

objected.

For

the

foregoing

reasons,

Plaintiffs’

motion is GRANTED IN PART and ruling is DEFERRED IN PART and
Judge Lindsay’s R&R is ADOPTED IN PART and REJECTED IN PART.
BACKGROUND
Plaintiffs
Defendant

on

served

December

8,

the

2011.

Summons
(See

and

Docket

Complaint
Entry

2.)

on
On

January 10, 2012, Plaintiffs sought a Certificate of Default
(Docket

Entry

3),

which

the

Clerk

following day (Docket Entry 4).

of

the

Court

issued

the

Plaintiffs then moved for a

default judgment (Docket Entry 5), and the Court referred the
motion

to

Judge

Lindsay

for

an

R&R

(Docket

Entry

12).

On

October 9, 2012, Judge Lindsay issued her R&R recommending that
the default judgment be entered but that an award of damages be
denied with leave to renew.
1.)

(10/9/12 R&R, Docket Entry 18, at

Judge Lindsay found that “[t]he facts support[ed] a finding
2

that the defendant violated the Agreements as well as ERISA” and
she therefore recommended that a default judgment be entered.
(10/9/12 R&R at 4.)

She also determined that Defendant had not

submitted remittance reports from January 2011 through January
2012, as required, and recommended that Defendant be ordered to
submit such reports.
The

R&R

(10/9/12 R&R at 5.)

went

on,

however,

to

recommend

“that

the

balance of the plaintiffs’ requests for damages be denied . . .
because

the

documentary

evidence

submitted

does not provide the basis for an award.”

by

the

plaintiffs

(10/9/12 R&R at 5.)

Judge Lindsay came to this conclusion because Plaintiffs had
calculated their $97,870.87 estimate based on the last twelve
positive

remittance

reports,

rather

than

the

previous

twelve

months of reports, regardless of whether they were positive or
negative.

(10/9/12 R&R at 5.)

“Specifically, counsel estimated

the contributions due for 2011 based on the defendant’s May 2009
and June 2008 reports, which reflected 153.5 and 1,471 hours of
covered

employment

indication

that

the

respectively.
defendant

reports until January 2011.”
No

objections

were

However,

stopped

there

submitting

is

no

remittance

(10/9/12 R&R at 5-6.)
received

Judge Lindsay’s R&R on January 7, 2013.

and

the

Court

adopted

(See Docket Entry 23.)

On January 28, 2013, Plaintiffs submitted the pending motion for
damages, primarily relying upon their prior submissions.
3

(Pls.’

Ltr. Mot., Docket Entry 27.)

Plaintiffs’ motion admits that the

Defendant submitted remittance reports indicating zero hours for
the period of January through December 2010.
at 1-2.)

(Pls.’ Ltr. Mot.

Accordingly, Plaintiffs concede that, currently, they

are not entitled to a definitive monetary award for the period
of January 2011 through January 2012.

(Pls.’ Ltr. Mot. at 2.)

However, they request that the Court order Defendant to submit
to an audit for that period.

(Pls.’ Ltr. Mot. at 2.)

Plaintiffs also request damages, based, in part, on
five separate audits, in the following amounts: (1) $9,275.23
for

audited

contribution

deficiencies

for

the

periods

from

September 26, 2005 through October 31, 2006 (Audit #07-0775),
November 1, 2006 through June 30, 2007 (Audit #08-0424 and #080425-R1), and July 1, 2007 through June 30, 2008 (Audit #09-0403
and #09-040); (2) $9,242.42 plus $4.56 per diem in interest from
June

4,

2012

contributions

for
for

interest
July

2008,

on
May

the

audits

2009,

and

and

late

June

2009;

paid
(3)

$9,290.75 plus $4.56 in per diem liquidated damages from June 4,
2012

for

liquidated

contributions

from

damages

July

on

2008,

May

the

audits

2009,

and

and

late

June

2009;

paid
(4)

$5,849.80 in audit fees; and (5) $19,711.33 in attorneys’ fees
and costs.

(Pls.’ Ltr. Mot. at 2.)

4

DISCUSSION
Judge Lindsay’s R&R provides an analysis of damages
for

each

of

the

five

audits.

First,

she

recommends

that

Plaintiffs be awarded delinquent contributions in the amount of
$651.86
interest

in
on

delinquent
the

contributions

unpaid

for

contributions

Audit

for

this

#08-0424
audit

in

and
the

amount of $110.45 through March 12, 2008 plus accrued interest
until the date of payment.

(6/6/13 R&R at 7, 11-12.)

She

further recommends that Plaintiffs be awarded liquidated damages
of $130.17 and audit fees of $596.70 for this audit.
R&R at 13-14.)

(6/6/13

Plaintiffs have not objected to any of these

recommendations.
Second,
0425-RI,

Audit

for

three

#09-403,

of

the

and

audits--namely

Audit

Audit

#09-404--Judge

#08-

Lindsay

determined that there was no basis to determine the appropriate
amount of damages, and therefore recommended denying Plaintiffs’
requests for unpaid contributions, interest, liquidated damages,
and audit fees with leave to renew upon Plaintiffs’ submission
of the appropriate documentation.

Plaintiffs have objected to

these recommendations.
Third,
awarding

for

Plaintiffs

Audit

$1,524.78

$1,015.60 in audit fees.
not object.

#07-0775
in

Judge

delinquent

Lindsay

recommends

contributions

(6/6/13 R&R at 6, 14.)

and

Plaintiffs do

However, she also found that “the documentation for
5

the calculation of interest on the unpaid contributions reported
in Audit #07-0775 is deficient and does not provide a basis for
the

amount

of

Accordingly,

interest

she

sought.”

recommends

(6/6/13

denying

R&R

Plaintiffs’

at

11.)

request

for

interest based upon this audit as well as liquidated damages in
this regard with leave to renew.

Plaintiffs have objected to

this recommendation.
Fourth,
awarded

a

Judge

Lindsay

of

$1,088.95

total

recommends
in

that

interest

Plaintiffs
on

late

be

paid

contributions for the months of July 2008, May 2009, and June
2009 (6/6/13 R&R at 12), to which Plaintiffs do not object.
Fifth, she recommends that the Court issue an order
“directing defendants to permit and cooperate in an audit of its
books

and

records

and

to

furnish

to

the

Funds

information,

books, records and reports . . . so that the plaintiffs may
. . . ascertain if there were any delinquent contributions owed
. . . for

the

period

(6/6/13 R&R at 9.)

January

2011

through

January

2012.”

She further recommends “that if defendant

fails to permit an audit, plaintiffs shall calculate damages, if
any, pursuant to the Trust Agreement.”

(6/6/13 R&R at 10.)

Again, Plaintiffs do not object to the R&R in this regard.
Finally,
Plaintiffs

be

Judge

awarded

Lindsay

attorneys’

6

also

fees

and

recommended
costs

in

a

that
total

amount of $17,254.83.

(6/6/13 R&R at 18-20.)

Plaintiffs do not

object to the R&R as to these recommendations.
The Court will first address the standard of review
before

addressing

the

recommendations

and

Plaintiffs’

objections.
I.

Standard of Review
“When evaluating the report and recommendation of a

magistrate judge, the district court may adopt those portions of
the report to which no objections have been made and which are
not facially erroneous.”

Walker v. Vaughan, 216 F. Supp. 2d

290, 291 (S.D.N.Y. 2002) (citation omitted).

A party may serve

and file specific, written objections to a magistrate’s report
and

recommendation

within

fourteen

days

of

receiving

recommended disposition.

See FED. R. CIV. P. 72(b)(2).

receiving

objections

any

recommendation,

timely
the

district

“court

to
may

the

the
Upon

magistrate’s

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)(C); see

also FED. R. CIV. P. 72(b).

A party that objects to a report and

recommendation

out

must

point

the

specific

report and recommendation to which they object.

portions

of

the

See Barratt v.

Joie, No. 96-CV-0324, 2002 WL 335014, at *1 (S.D.N.Y. Mar. 4,
2002) (citations omitted).

7

When

a

party

raises

an

objection

to

a

magistrate

judge’s report, the Court must conduct a de novo review of any
contested sections of the report.

See Pizarro v. Bartlett, 776

F. Supp. 815, 817 (S.D.N.Y. 1991).

But if a party “makes only

conclusory

or

or

original

general

arguments,

objections,
the

Court

simply

reviews

Recommendation only for clear error.”
Inc.,

249

F.R.D.

48,

51

(E.D.N.Y.

marks and citation omitted).

reiterates

the

Report

his
and

Pall Corp. v. Entegris,
2008)

(internal

quotation

Furthermore, even in a de novo

review of a party’s specific objections, the Court ordinarily
will

not

consider

“arguments,

case

law

and/or

evidentiary

material which could have been, but [were] not, presented to the
magistrate judge in the first instance.”
02-CV-1776,

2006

WL

3704784,

at

*1

Kennedy v. Adamo, No.

(E.D.N.Y.

Sept.

1,

2006)

(internal quotation marks and citation omitted).
II.

Recommendations and Objections
As previously noted, Plaintiffs do not object to a

number

of

Judge

Plaintiffs

do

regarding

Audit

Lindsay’s

not

object

#08-0424;

to

recommendations.
Judge

delinquent

Lindsay’s

Specifically,
recommendations

contributions

and

audit

fees as to Audit #07-0775; interest on late paid contributions
for the months of July 2008, May 2009, and June 2009; the entry
of an Order directing Defendant to submit to an audit for the
period of January 2011 through January 2012; and attorneys’ fees
8

and

costs.

The

Court

has

carefully

reviewed

and

considered

these recommendations and, finding them to be well-reasoned and
free

of

clear

respects.

error,

ADOPTS

Judge

Lindsay’s

R&R

in

these

Accordingly, Plaintiff’s motion is GRANTED insofar as

it seeks the aforementioned damages.
A.

Audit #08-0425-RI
Thus, the Court turns to those portions of the R&R to

which Plaintiffs object, beginning with an analysis of Audit
#08-0425-RI.

Judge Lindsay found that there was no basis upon

which to determine the appropriate amount of damages for the
period covered by Audit #08-0425-RI and therefore recommended
that Plaintiffs’ request for damages in this regard be denied
with

leave

to

renew.

(6/6/13

R&R

at

7.)

In

making

this

determination, she stated that “although the Declaration of Ken
Jones states that the payroll audit report that was issued on
January 31, 2011 for Audit #08-0425-RI reflects that $1,447.24
is due and owing, the underlying report attached as an Exhibit C
is dated March 15, 2008, refers to Audit #08-0425, and does not
reflect

this

omitted).)

amount.”

(6/6/13

R&R

at

7

(internal

citation

In addition, and based upon this recommendation,

Judge Lindsay also recommends that interest, liquidated damages,
and audit fees be denied with leave to renew.
Plaintiffs
they

argue,

they

object

to

these

adequately

recommendations

supported
9

their

because,

request

for

delinquent contributions, as the relevant audit is annexed as
Exhibit C to the Declaration of Theresa Cody, dated March 30,
2012.

(Pls.’ Ob. Br., Docket Entry 33, at 2-3.)

Thus, while

Judge Lindsay correctly determined that the auditor, Ken Jones,
did not attach Audit #08-0425-RI to his Declaration, Plaintiffs
did

provide

Audit

Declaration.

A

#08-0425-RI

review

of

as

the

an

attachment

docket

reveals

to

the

Cody

that

the

Cody

Declaration, filed as Docket Entry 7, indeed attaches the audit
report for Audit #08-0425-RI as Exhibit C.
& Ex. C.)
are

(See Cody Decl. ¶ 26

Accordingly, Plaintiffs’ objections in this regard

SUSTAINED

Plaintiffs’

and

the

damages

R&R

for

is

REJECTED

delinquent

insofar

as

contributions,

it

denied

interest,

liquidated damages, and audit fees for Audit #08-0425-RI because
Plaintiffs did not provide the audit report.
for

damages

is

thus

again

REFERRED

to

Plaintiffs’ motion

Judge

Lindsay

for

a

calculation of damages in this respect and ruling is DEFERRED in
this regard.
B.

Audit #09-403 and Audit #09-404
For the period July 1, 2007 through June 30, 2008, two

audits were conducted--Audit #09-403 and Audit #09-404.
these

two

audits,

Judge

Lindsay

determined

that

the

As to
amounts

reflected in the audits far exceeded the amounts that Plaintiffs
requested in their Complaint and in their supplemental letter
dated January 22, 2013.

(6/6/13 R&R at 8.)
10

For example, the

payroll audit report for Audit #09-403 reflects that $4,675.68
is due and owing, but Plaintiffs request $338.65 pursuant to
this audit.
is

due

and

audit.

Similarly, Audit #09-404 reflects that $23,700.18
owing,

but

Plaintiffs

request

$5,293.50

for

this

Accordingly, Judge Lindsay found that there was no basis

upon which to determine the appropriate amount of damages, if
any, for this time period and recommends that Plaintiffs’ motion
for an award of damages based on Audit #09-403 and Audit #09-404
be denied without prejudice to renewal.
with

Audit

#08-0425-RI,

she

also

(6/6/13 R&R at 8.)

recommends

that

As

interest,

liquidated damages, and audit fees for Audit #09-403 and Audit
#09-404 be denied given that the documentation for the requested
damages was lacking.
Plaintiffs maintain that the differences in the audit
reports were explained in the Cody Declaration.

Specifically,

they argue that the Cody Declaration explains that Defendant was
entitled to a credit of $4,337.03 on Audit #09-403, leaving a
balance of $338.65.

(Pls.’ Ob. Br. at 3.)

In addition, they

assert that the Cody Declaration states that the Funds Office
reviewed
entitled
owed.

Audit
to

a

#09-404
credit

of

and

determined

$18,406.68,

that

leaving

Defendant
$5,293.50

was
still

(Pls.’ Ob. Br. at 3-4.)
Once, again, the Court has reviewed the docket and the

Cody Declaration and finds that Plaintiffs’ representations are
11

indeed

accurate.

Ms.

Cody’s

Declaration

contains

a

section

entitled “Adjustments,” in which she explains that “the Trust
Agreement allows the Funds to adjust the amounts due for audited
deficiencies based on records of an employer’s account balance
with the Funds.”

(Cody Decl. ¶ 20 (citing Puccio Decl. Ex. A

(Trust Agreement), Art. IX, Sec. 2, at 30).)

She goes on to

define the specific amounts for which the Funds Office credited
Defendant for each of the two audits.

(Cody Decl. ¶¶ 22-24.)

Judge Lindsay’s R&R does not discuss these adjustments nor does
it make any reference to the Cody Declaration in finding that
the

documentary

evidence

proffered

by

Plaintiffs

failed

to

support their requested award for delinquent contributions for
this time period.

(See 6/6/13 R&R at 7-8.)

Accordingly, Plaintiffs’ objections in this regard are
SUSTAINED
Plaintiffs’

and

the

damages

R&R
for

is

REJECTED

delinquent

insofar

as

contributions,

it

denied

interest,

liquidated damages, and audit fees for Audit #09-403 and Audit
#09-404 because Plaintiffs did not provide proper documentary
evidence.

Plaintiffs’ motion for damages is thus REFERRED to

Judge Lindsay for a calculation of damages in this respect and a
ruling on Plaintiffs’ motion for damages is DEFERRED in this
regard.

12

C.

Audit #07-0775
Plaintiffs also object to particular recommendations

regarding

Audit

documentation

#07-0775.

for

the

Judge

calculation

Lindsay
of

found

interest

that

on

the

“the
unpaid

contributions reported in Audit #07-0775 is deficient and does
not provide a basis for the amount of interest sought.”
R&R

at

11.)

She

made

this

determination

because

(6/6/13

the

Jones

Declaration refers to Exhibit B at pages 7 to 8 as support for
the amount of interest that Plaintiffs seek for this audit, but
that exhibit refers to a different audit and a different time
period.

Given

recommends
renew.

that

that

interest

liquidated

cannot

damages

be
be

calculated,
denied

with

she

also

leave

to

(6/6/13 R&R at 12-13.)
Plaintiffs concede that the Jones Declaration cites to

the incorrect exhibit, but maintain that they have provided the
correct audit and intended to cite to Exhibit A of the Jones
Declaration

rather

than

Exhibit

C.

(Pls.’

Ob.

Br.

at

4.)

Plaintiffs further maintain that Ms. Cody’s Declaration explains
and updates the interest and liquidated damages calculations for
Audit #07-0775.

(Pls.’ Ob. Br. at 4.)

The Jones Declaration attaches the audit report for
Audit #07-0775 as Exhibit A.
explains

that

“[f]or

Audit

Furthermore, the Cody Declaration
#07-0775,

through March 12, 2008 equals $533.27.”
13

interest

as

calculated

(Cody Decl. ¶ 29.)

As

interest continues to accrue, the Declaration further provides
that

“[t]he

$1,125.84.

additional

interest

due

for

this

period

equals

Therefore, the total interest due for Audit #07-0775

equals $1,659.11.”

(Cody Decl. ¶ 29.)

Again, Judge Lindsay’s

R&R neither references the audit report at Exhibit A to the
Jones

Declaration

Declaration

in

or

the

finding

relevant

that

portions

Plaintiffs

had

of
not

the

Cody

adequately

supported their request for interest and liquidated damages on
Audit

#07-0775.

(See

6/6/13

R&R

at

11.)

Accordingly,

Plaintiffs’ objections are SUSTAINED and the R&R is REJECTED
insofar as it recommends denying interest and liquidated damages
as

to

Audit

#07-0775

because

Plaintiffs

did

sufficient basis for the amounts sought.

not

provide

a

Plaintiffs’ motion

for damages is thus REFERRED to Judge Lindsay for a calculation
of damages in this respect and a ruling on Plaintiffs’ motion
for damages is DEFERRED in this regard.
CONCLUSION
For

the

foregoing

reasons,

Judge

Lindsay’s

R&R

is

ADOPTED and Plaintiffs’ motion for damages is GRANTED in the
following

respects:

(1)

delinquent

contributions,

liquidated

damages, and audit fees as to Audit #08-0424 for a total of
$1,378.73 as well as interest of $110.45 through March 12, 2008
plus

accrued

interest

until

payment;

(2)

delinquent

contributions and audit fees as to Audit #07-0775 for a total of
14

$2,540.38;

(3)

interest

on

late

paid

contributions

for

the

months of July 2008, May 2009, and June 2009 for a total of
$1,088.95;

(4)

an

Order

directing

Defendant

to

submit

to

an

audit for the period of January 2011 through January 2012; and
(5) attorneys’ fees and costs in the total amount of $17,254.83.
Accordingly,

Plaintiffs

are

GRANTED

damages

in

the

aforementioned amounts and Defendant is ORDERED to submit to an
audit for the period of January 2011 through January 2012.
In all other respects, however, Plaintiffs’ objections
are SUSTAINED and Judge Lindsay’s R&R is REJECTED.
motion

is

therefore

REFERRED

back

to

Judge

Plaintiffs’

Lindsay

for

a

calculation of damages regarding: (1) delinquent contributions,
interest, liquidated damages, and audit fees for Audit #08-0425RI,

Audit

#09-403,

and

Audit

#09-404;

liquidated damages for Audit #07-0775.

and

(2)

interest

and

Thus, a ruling on those

portions of Plaintiffs’ motion for damages is DEFERRED.
SO ORDERED.

/s/JOANNA SEYBERT_______
Joanna Seybert, U.S.D.J.
Dated:

September 27, 2013
Central Islip, New York

15