Sheet Metal Workers' National Pension Fund et al v. Accra Sheetmetal LLC et al
Filing
30
MEMORANDUM OF DECISION AND ORDER denying 25 Motion for Summary Judgment; It is hereby ORDERED, that the Plaintiffs motion for summary judgment is denied without prejudice with leave to renew upon a more complete summary judgment record. The summa ry judgment record should include evidence establishing that the Plaintiffs are entitled to the specific relief they seek, such as providing documentation with respect to the employees who Accra allegedly failed to make contributions for and the numb er of hours these employees worked. In this way, the Court will then be able to properly assess the Plaintiffs claim for unpaid contributions allegedly owed by the Defendants to the Benefit Funds; and it is further ORDERED, that there will be no paym ent for the legal work done with regard to this motion, but an award may be granted for the legal work done in connection with the Plaintiffs renewed application in the event the Plaintiffs prevail.. Ordered by Judge Arthur D. Spatt on 1/2/2014. (Coleman, Laurie)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------- X
SHEET METAL WORKERS’ NATIONAL
PENSION FUND; NATIONAL ENERGY
MANAGEMENT INSTITUTE COMMITTEE
FOR THE SHEET METAL AND AIR
CONDITIONING INDUSTRY; SHEET METAL
OCCUPATIONAL HEALTH INSTITUTE
TRUST; INTERNATIONAL TRAINING
INSTITUTE FOR THE SHEET METAL AND
AIR CONDITIONING INDUSTRY; and
NATIONAL STABILIZATION AGREEMENT
OF THE SHEET METAL INDUSTRY FUND,
FILED
CLERK
1/2/2014 3:19 pm
U.S. DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
LONG ISLAND OFFICE
MEMORANDUM OF
DECISION AND ORDER
12-CV-3553 (ADS)(WDW)
Plaintiffs,
-againstACCRA SHEETMETAL, LLC., and ORLANDO
STOKES, as an individual,
Defendants.
------------------------------------------------------------X
APPEARANCES:
Jeffrey S. Dubin
Attorney for the Plaintiffs
464 New York Avenue, Suite 100
Huntington, New York 11743
By: Jeffrey S. Dubin, Esq.
Doreen Nanda, Esq., Of Counsel
Muhammad Ikhlas, Esq.
Attorney for the Defendants
100 Church Street, 8th Floor
New York, New York 10007
SPATT, District Judge.
On July 18, 2012, the Plaintiffs Sheet Metal Workers’ National Pension Fund (“Pension
Fund”); National Energy Management Institute Committee for the Sheet Metal and Air
Conditioning Industry (“NEMIC”); Sheet Metal Occupational Health Institute Trust
(“SMOHIT”); International Training Institute for the Sheet Metal and Air Conditioning Industry
(“ITI”); and National Stabilization Agreement of the Sheet Metal Industry Fund (“SASMI,” and
collectively, the “Plaintiffs” or the “Benefit Funds”) commenced this action against the
Defendants Accra Sheetmetal, LLC. (“Accra”), and Orlando Stokes, as an individual (“Stokes,”
and collectively, the “Defendants”). The Plaintiffs are five, multi-employer, employee benefit
plans which, pursuant to § 502 of the Employment Employee Retirement Income Security Act of
1974 (“ERISA”), 29 U.S.C. § 1132, seek to enforce the obligations of the Defendants to make
contributions to these plans and for interest, additional interest, pre-litigation liquidated damages
(late fees), reasonable attorney’s fees and the costs of this action. In addition, the Plaintiffs
allege that the individual Defendant Stokes breached his fiduciary obligations. According to the
Plaintiffs, the Defendants owe approximately $24,221.39.
Presently before the Court is the Plaintiffs’ unopposed motion for summary judgment.
For the reasons set forth below, the motion is denied without prejudice with leave to renew upon
a more complete summary judgment record.
I. BACKGROUND
As indicated above, the Plaintiffs are employee benefit plans within the meaning of
ERISA § 3(3), 29 U.S.C. § 1002(3). In this regard, they provide pension and other employee
benefits to thousands of sheet metal workers and their families located throughout the United
States.
The Defendant Accra is a limited liability company, organized under the laws of the State
of New York, and is a closely held entity. It is considered an employer within the meaning of
ERISA § 3(5), 29 U.S.C. § 1002(5). The Defendant Stokes is the principal owner of Accra and
2
exercised control over its activities and operations. He signed or caused to be signed most of
Accra’s checks and directed the transfer of money between Accra’s accounts.
Pursuant to two Collective Bargaining Agreements (“CBAs”), Accra agreed to provide
contributions to the Benefit Funds for certain hours worked by the participants it employed. The
first CBA covered the period of August 1, 2009 to July 31, 2011 and the second CBA covered
the period of September 15, 2011 to July 31, 2014. The CBAs stated that “contributions are
considered assets of the respective Funds and title to all monies paid into and/or due and owing
said [Benefit] Funds shall be vested in and remain exclusively in the Trustees of the respective
[Benefit] Funds. The Employer shall have no legal or equitable right, title or interest in or to any
sum paid by or due from the Employer.” (Compl., ¶ 11; Amend. Ans., ¶ 1; Dubin Decl., Exh C
and D.)
The CBAs also incorporated by reference the provisions of the Benefits Funds’
Agreements and Declarations of Trust. Those Agreements and Declarations of Trust provided
that “[i]f an Employer fails to pay the required Contributions and submit accurate supporting
remittance reports within five days of the due date, that Employer will be liable for liquidated
damages [also known as “pre-litigation liquidated damages” or “late fees,”] equal to the greater
of 10% of the delinquent Contributions or $50.00.” (Compl., ¶ 12; Amend. Ans., ¶ 1.)
While these CBAs were in full force and effect, Accra employed persons who were
participants in the Benefits Funds within the meaning of ERISA § 3(7), 29 U.S.C. § 1002(7) and
these employees performed work that was covered by the contracts. In addition, Stokes
exercised “authority or control respecting management or disposition” over certain assets of the
Benefit Funds, as defined by 29 U.S.C. § 1002(21)(A), and determined (1) whether Accra made
contributions to the Benefits Funds; (2) whether Accra’s contributions were timely; (3) whether
3
Accra used assets of the Benefits Funds to pay for Accra’s other obligations; and (4) whether
Accra transferred assets of the Benefits Funds to himself.
According to the Plaintiffs, Accra owes pre-litigation liquidated damages to them for the
period of June 1, 2011 through October 31, 2011. (Compl., ¶ 13.) The Plaintiffs also claim that
Accra was supposed to make contributions to the Benefits Funds for the period of November 1,
2011 through May 31, 2012. (Compl., ¶ 16.)
The Defendants admitted to all the above-mentioned allegations in their Amended
Answer. (Amend. Ans., ¶ 1.) However, the Defendants denied that the Plaintiffs were entitled to
the judgments, remedies and compensation that they enumerated in their Complaint; that is, the
Defendants deny that the Plaintiffs are entitled to (1) $10,029.58 in unpaid contributions; (2)
interest of 8.5% on the unpaid contributions from the first day of the month when payment was
due to the date when payment is made; (3) additional interest of 20% on the unpaid contributions
totaling $7,001.72; (4) pre-litigation liquidated damages, or late fees, totaling $4,444.87; and (5)
reasonable attorney’s fees and costs. (Compl., “WHEREFORE ¶”; Amend. Ans., ¶ 6.)
On June 17, 2011, prior to bringing the present action, the Plaintiffs had commenced
another, separate ERISA action against the Defendants (“Accra I”) in which they also sought to
enforce the Defendants’ obligations to make contributions to the Benefit Funds. (See E.D.N.Y.
Case No. 11-CV-2931.) Thereafter, on October 24, 2011, the parties entered into a settlement
stipulation and order (the “Settlement Stipulation Agreement”) that was subsequently “so
ordered” by this Court on November 9, 2011. As part of the Settlement Stipulation Agreement,
the Defendants agreed that under the first CBA, for the period of February 1, 2011 through July
31, 2011, they owed the Plaintiffs contributions totaling $30,590.01, plus additional interest in
the amount of $1,018.30; late fees in the amount of $2,222.41; liquidated damages in the amount
4
of $3,500.87; and attorney’s fees and costs in the amount of $2,854.91. However, the
Defendants defaulted with regard to the Settlement Stipulation Agreement and on March 7,
2013, the Court granted the Plaintiffs’ motion for entry of judgment, thereby granting the
Plaintiffs (1) the full amount agreed to under the Stipulation, which was 45,909.78 less
$20,093.22 for payments made pursuant to the Stipulation, for a total amount of $25,816.56 and
(2) interest on the $25,816.58 award at the rate of 8.5% per annum from June 1, 2012 until July
18, 2012, for the total amount of $288.58.
While Accra I was pending, on July 18, 2012, the Plaintiffs commenced the present
action. Eleven months later, on June 10, 2013, the Plaintiffs filed the instant motion for
summary judgment. Pursuant to 29 U.S.C. § 1132(g), the Plaintiffs seek a judgment holding the
Defendants jointly and severally liable for ERISA contributions amounting to $10,029.58, with
(1) interest at the rate of 8.5% from November 1, 2011 through July 13, 2012 in the sum of
$2,745.22; (2) liquidated damages of $7,001.72; (3) attorney’s fees of $15,177.50; and costs of
$515.00, all totaling $35,469.02. Although their opposition papers were due by July 1, 2013, the
Defendants neither filed nor served any opposition to the Plaintiffs’ motion. To date, the
Defendants have not opposed the Plaintiffs’ motion for summary judgment.
II. DISCUSSION
A. Legal Standard
Pursuant to Federal Rule of Civil Procedure 56(c), a court may not grant a motion for
summary judgment unless “the pleadings, depositions, answers to interrogatories, and
admissions on file, together with affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(c); Globecon Group, LLC v. Hartford Fire Ins. Co., 434 F.3d 165, 170 (2d Cir. 2006). In
5
determining whether an issue is genuine, “[t]he inferences to be drawn from the underlying
affidavits, exhibits, interrogatory answers, and depositions must be viewed in the light most
favorable to the party opposing the motion.” Cronin v. Aetna Life Ins. Co., 46 F.3d 196, 202 (2d
Cir. 1995) (citing United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S. Ct. 993, 8 L. Ed. 2d
176 (1962) (per curiam), and Ramseur v. Chase Manhattan Bank, 865 F.2d 460, 465 (2d Cir.
1989)).
If the moving party meets its initial burden of demonstrating the absence of a disputed
issue of material fact, the burden shifts to the nonmoving party to present “specific facts showing
a genuine issue for trial.” Fed. R. Civ. P. 56(e). The nonmoving party may not then rely solely
on “conclusory allegations or unsubstantiated speculation” in order to defeat a motion for
summary judgment. Scotto v. Almenas, 143 F.3d 105, 114 (2d Cir. 1998). If the evidence
favoring the nonmoving party is “merely colorable . . . or is not significantly probative, summary
judgment may be granted.” Anderson v. Liberty Lobby, Inc., 477, U.S. 242, 249–50, 106 S. Ct.
2505, 91 L. Ed. 2d 202 (1986) (internal citations omitted).
B. As to the Plaintiffs’ Entitlement to Summary Judgment
Where, as here, a motion for summary judgment is unopposed, “the district court may not
grant the motion without first examining the moving party’s submission to determine if it has
met its burden of demonstrating that no material issue of fact remains for trial.” Amaker v.
Foley, 274 F.3d 677, 681 (2d Cir. 2001). Accordingly, the Court turns to the issue of whether
the Plaintiffs have provided sufficient evidence to substantiate the factual assertions with respect
to the Defendants’ obligations under ERISA.
In support of their motion for summary judgment, the Plaintiffs have provided the 2009
to 2011 and 2011 to 2014 Collective Bargaining Agreements (“CBAs”) in which Accra agreed to
6
contribute to the Benefit Funds for certain hours worked by participants which it employed. The
Plaintiffs also provided the Defendants’ Amended Answer, whereby the Defendants admitted
that they entered into the abovementioned CBAs and that Accra employed people who were
participants in the Benefits Funds and who performed work which was covered under those
agreements. The Defendants have not responded to this evidence; have not introduced any
evidence on their own behalf; and, as stated above, have not otherwise opposed summary
judgment.
Nevertheless, the burden of proof in an ERISA action lies first with the Plaintiff Benefit
Funds to “establish a prima facie case by demonstrating the inaccuracy of the employer’s
contributions.” Local 282 Welfare Trust Fund v. A. Morrison Trucking, Inc., CV–92–
2076(JMA), 1993 WL 120081, at *1 (E.D.N.Y. March 30, 1993) (citing Brick Masons Pension
Trust v. Indus. Fence & Supply, Inc., 839 F.2d 1333, 1338 (9th Cir. 1988); Combs v. King, 764
F.2d 818, 825 (11th Cir. 1985)). See also Trs. of Local 807 Labor–Mgmt. Health & Pension
Funds v. River Trucking & Rigging, Inc., No. CV–03–3569JMA, 2005 WL 2290579, at *5
(E.D.N.Y. Sep. 20, 2005) (“Courts have utilized a burden shifting framework in cases where a
benefit fund challenges the contributions owed by an employer. First, the Funds must establish a
prima facie case by demonstrating the inaccuracy of the employer’s contributions. Once the
Funds produce this evidence, the burden then shifts to the employer to produce evidence of the
precise amount of work performed or evidence that the assumptions underlying the audit are
incorrect.”) (citations omitted). Thus, in the present case, the Plaintiffs must show that Accra’s
contributions were inaccurate or unpaid.
However, a review of the record reveals that the Plaintiffs present no evidence
concerning which employees Accra failed to make contributions for or how many hours these
7
employees worked. Indeed, except for attorney’s fees and costs, the Plaintiffs fail to offer any
explanation as to how they reached their calculations with respect to the alleged unpaid
contributions owed by the Defendants to the Benefit Funds. Instead, the Plaintiffs have only
provided the Court with copies of the CBAs and the Benefits Funds’ Agreements and
Declarations of Trust, which outline the Defendants’ obligations but do not demonstrate how the
Defendants failed to meet these obligations. As a consequence, the Court cannot assess the
accuracy of the Plaintiffs’ claims for relief.
Further, while the Defendants in their Amended Answer did admit that they failed to
make certain contributions to the Benefit Funds, they also contested the specific relief sought by
the Plaintiffs. Therefore, although the Plaintiff’s motion for summary judgment is unopposed,
the Court is unable to render judgment as a matter of law in favor of the Plaintiffs since they
failed to meet their burden of proving that no material fact remains for trial, namely the amount
of the benefits due and owing.
Based on this record, the Court finds that the Plaintiffs have failed to satisfy their burden
of showing the Defendants failed to pay all contributions owed by them under the CBAs and,
thus, are not entitled to summary judgment. However, the Court denies the Plaintiffs’ motion
without prejudice with leave to renew upon a more complete summary judgment record. As a
final matter, the Court notes that the Plaintiffs will not be entitled to attorneys’ fees associated
with this motion, but may recover attorney’s fees related to the renewed motion in the event the
Plaintiffs prevail.
8
III. CONCLUSION
For the foregoing reasons, it is hereby
ORDERED, that the Plaintiffs’ motion for summary judgment is denied without
prejudice with leave to renew upon a more complete summary judgment record. The summary
judgment record should include evidence establishing that the Plaintiffs are entitled to the
specific relief they seek, such as providing documentation with respect to the employees who
Accra allegedly failed to make contributions for and the number of hours these employees
worked. In this way, the Court will then be able to properly assess the Plaintiffs’ claim for
unpaid contributions allegedly owed by the Defendants to the Benefit Funds; and it is further
ORDERED, that there will be no payment for the legal work done with regard to this
motion, but an award may be granted for the legal work done in connection with the Plaintiffs’
renewed application in the event the Plaintiffs prevail.
SO ORDERED.
Dated: Central Islip, New York
January 2, 2014
___/s/ Arthur D. Spatt____
ARTHUR D. SPATT
United States District Judge
9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?