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
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