Trustees of the Sheet Metal Workers' National Pension Fund et al v. Metropolitan Construction Systems, Inc. et al

Filing 18

ADOPTION ORDER - Accordingly, the October 2, 2015 16 Report and Recommendation is adopted in its entirety, and the Plaintiffs 11 motion for a default judgment is granted. The Clerk of the Court is respectfully directed to enter judgment in favor of the Plaintiffs in the amount of $6,820.30, plus legal fees of $2,190 and costs of $660, and to close the case. So Ordered by Judge Arthur D. Spatt on 11/24/2015. c/ecf Judgment Clerk. (Coleman, Laurie)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
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TRUSTEES of the SHEET METAL
WORKERS’ NATIONAL PENSION FUND;
TRUSTEES of the NATIONAL ENERGY
MANAGEMENT INSTITUTE COMMITTEE
FOR THE SHEET METAL AND AIR
CONDITIONING INDUSTRY; TRUSTEES
of the SHEET METAL OCCUPATIONAL
HEALTH INSTITUTE TRUST; TRUSTEES
of the INTERNATIONAL TRAINING
INSTITUTE FOR THE SHEET METAL
AND AIR CONDITIONING INDUSTRY;
TRUSTEES OF THE SHEET METAL
WORKERS
INTERNATIONAL
ASSOCIATION SCHOLARSHIP FUND
AND TRUSTEES of the NATIONAL
STABILIZATION AGREEMENT OF THE
SHEET METAL INDUSTRY FUND,
Plaintiffs,
-againstMETROPOLITAN
CONSTRUCTION
SYSTEMS, INC., METROPOLITAN ROOF
SYSTEMS, INC., AND THOMAS MARTIN,
AS AN INDIVIDUAL,
Defendants.
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APPEARANCES:
Jeffrey S. Dubin, Esq.
Attorney for the Plaintiffs
464 New York Avenue, Suite 100
Huntington, NY 11743
NO APPEARANCES:
The Defendants

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FILED 
CLERK 

11/24/2015 9:34 am

U.S. DISTRICT COURT 
EASTERN DISTRICT OF NEW YORK 
LONG ISLAND OFFICE 

ADOPTION ORDER
15-CV-0314(ADS)(AYS)

SPATT, District Judge:
On January 21, 2015, the Plaintiffs Trustees of the Sheet Metal Workers’
National Pension Fund; Trustees of the National Energy Management Institute
Committee for the Sheet Metal and Air Conditioning Industry; Trustees of the
Sheet Metal Occupational Health Institute Trust; Trustees of the International
Training Institute for the Sheet Metal and Air Conditioning Industry; Trustees of
the Sheet Metal Workers International Association Scholarship Fund; and Trustees
of the National Stabilization Agreement of the Sheet Metal Industry Fund
(collectively, the “Plaintiffs”) commenced this action against the Defendants
Metropolitan Construction Systems, Inc., Metropolitan Roof Systems, Inc., and
Thomas Martin, in his individual capacity (collectively, the “Defendants”), under
Section 502 of the Employee Retirement Income Security Act of 1974, as amended,
29 U.S.C. § 1132 et seq., to recover unpaid fringe benefit contributions and related
damages.
On March 16, 2015, the Clerk of the Court noted the Defendants’ default.
On March 19, 2015, the Plaintiffs moved for a default judgment.
On March 20, 2015, this Court referred the matter to United States
Magistrate Judge Anne Y. Shields for a recommendation as to whether the motion
for a default judgment should be granted, and if so, whether damages should be
awarded, including reasonable attorneys’ fees and costs.
On October 2, 2015, Judge Shields issued a Report and Recommendation (the
“R&R”), recommending that the Plaintiffs’ motion for a default judgment be

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granted, and that the Defendants be held jointly and severally liable for the
following damages:

(i) unpaid contributions in the amount of $5,683.58;

(ii) liquidated damages in the amount of $1,136.72; (iii) attorneys’ fees in the
amount of $2,190; and (iv) litigation costs in the amount of $660, for a total award of
$9,670.30.
With respect to interest on the unpaid contributions, Judge Shields found
that the documentary evidence submitted by the Plaintiffs failed to establish the
8.5% annual interest rate sought.

In particular, Judge Shields found that the

applicable collective bargaining agreements and related trust agreements contained
varying and inconsistent provisions relating to the rate at which prejudgment
interest accrues on unpaid contributions. Accordingly, on the record before her,
Judge Shields recommended that the Plaintiffs’ request for prejudgment interest be
denied without prejudice to renew upon submission of additional supporting
documentation.
Further, Judge Shields questioned the reasonableness of the Plaintiffs’
request for reimbursement of $1,470, which was allegedly spent in May 2012 to
conduct an audit that revealed then-outstanding contributions of only $152.25.
Moreover, Judge Shields noted that the Plaintiffs had failed to supply
documentation sufficient to demonstrate the billing rates and hours actually
expended on the subject audit.

Accordingly, Judge Shields recommended also

denying without prejudice this aspect of the Plaintiffs’ motion, again with leave to
renew upon the submission of additional supporting documentation.

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Judge Shields further discussed whether the Plaintiffs should be awarded
certain pre-litigation liquidated damages, which the Plaintiffs had characterized as
“late fees.” Initially, with respect to the portion of these damages relating to June
2008, Judge Shields found them to be outside the applicable six-year statute of
limitations. She recommended denying as untimely this portion of the motion. As
to the remaining pre-litigation liquidated damages, Judge Shields noted that the
applicable trust agreements contained varying and inconsistent provisions relating
to the manner in which they are to be assessed. The court further found, as a
matter of contract law, that the Plaintiffs’ supporting documentation was
insufficient to demonstrate that these damages were not an unenforceable penalty.
See R&R at 18-19 (noting that the Plaintiffs had failed to satisfactorily establish
either portion of two-prong test for determining the enforceability of a liquidated
damages provision in a labor agreement). Accordingly, Judge Shields recommended
that the branch of the Plaintiffs’ motion seeking an award of such damages also be
denied without prejudice and with leave to renew upon the submission of additional
supporting documentation.
On October 7, 2015, the Plaintiffs filed proof of service of the R&R on the
Defendants.
More than fourteen days have elapsed since service of the R&R on the
Defendants, each of whom has failed to file an objection. Nor have the Plaintiffs
submitted any additional proof.

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Pursuant to 28 U.S.C. § 636(b) and Federal Rule of Civil Procedure 72, this
Court has reviewed the R&R for clear error, and finding none, now concurs in both
its reasoning and its result.
Accordingly, the October 2, 2015 Report and Recommendation is adopted in
its entirety, and the Plaintiffs’ motion for a default judgment is granted. The Clerk
of the Court is respectfully directed to enter judgment in favor of the Plaintiffs in
the amount of $6,820.30, plus legal fees of $2,190 and costs of $660, and to close the
case.
It is SO ORDERED
Dated:

Central Islip, New York
November 24, 2015

/s/ Arthur D. Spatt__________________
ARTHUR D. SPATT
United States District Judge

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