Upstate New York Engineers Health Fund et al v. South Buffalo Electric, Inc. et al
DECISION AND ORDERED, that Plaintiffs Motion for Reconsideration (Dkt. No. 29) is GRANTED in part and DENIED in part; and it is further ORDERED, that Plaintiffs are awarded $346,650.16 plus post-judgment interest at the rate pursuant to 28 U.S.C . § 1961 against defendant South Buffalo Electric, Inc., consisting of (1) $200,176.07 in unpaid contributions and deductions, (2) $46,926.64 in interest due to unpaid and late paid contributions, (3) $70,888.82 in liquidated dama ges due to unpaid and late paid contributions, (4) $10,944.50 in interest and liquidated damages for late payments under the LMRA, and (5) $17,714.13 in attorneys fees and costs; and it is further ORDERED, that of the $346,650.16 award ed against South Buffalo, the Paolinis are jointly and severally liable for $217,890.20 plus post-judgment interest at the rate pursuant to 28 U.S.C. § 1961, consisting of (1) $200,176.07 in unpaid contributions and deductions, and (2) $17,714.13 in attorneys fees and costs; and it is further ORDERED, that Plaintiffs request for injunctive relief is DENIED; and it is further ORDERED, that Plaintiffs request for additional attorneys fees and costs is DENIED; and it is further ORDERED, that Plaintiffs may file supplemental affidavits within thirty days of this Decision and Order as to the following: (1) unpaid contributions and deductions from July 23, 2015 through December 2015, and (2) prejudgment interest on withheld payments. Signed by Senior Judge Lawrence E. Kahn on October 6, 2017. (sas)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
UPSTATE NEW YORK ENGINEERS
HEALTH FUND, et al.,
SOUTH BUFFALO ELECTRIC, INC.,
DECISION AND ORDER
This matter returns to the Court on a motion for reconsideration filed by plaintiffs Upstate
New York Engineers Health Fund, Upstate New York Engineers Pension Fund, Upstate New
York Engineers S.U.B. Fund, Upstate New York Engineers Training Fund, Operating Engineers
Local 17 Training Fund, Central Pension Fund of the International Union of Operating Engineers
and Participating Employers, and the International Union of Operating Engineers, Local Union
No. 17. Dkt. Nos. 29 (“Motion”), 29-1 (“Clark Affidavit”), 29-2 (“Memorandum”). Plaintiffs
request reconsideration of the Court’s March 29, 2017 memorandum-decision and order partially
granting Plaintiffs’ motions for default judgment. Dkt. No. 27 (“March Order”); see also Dkt.
Nos. 20 (“Default Motion”), 24 (“Second Default Motion”). For the following reasons, Plaintiffs’
Motion is granted in part and denied in part.
The Court assumes the parties’ familiarity with the facts and history of this case and
recites only those facts necessary to the resolution of Plaintiff’s Motion. For further background,
reference is made to the March Order.
Defendant South Buffalo Electric, Inc. is a New York corporation, and defendants Arnold
A. and Arnold J. Paolini are officers and shareholders of South Buffalo. Plaintiffs commenced
this action on July 23, 2015, Dkt. No. 1 (“Complaint”), and Defendants did not answer or
otherwise move in response to the Complaint, Docket. The Complaint sought monetary and
injunctive relief under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001 et seq., and the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C.
§ 185. Compl. On October 6, 2015, Plaintiffs requested entry of default as to all Defendants, Dkt.
No. 7, which the Clerk of the Court granted on October 7, 2015, Dkt. No. 9. Plaintiffs filed a
motion for default judgment under Rule 55 of the Federal Rules of Civil Procedure on August
26, 2016. First Default Mot.; see also Dkt. No. 20-1 (“First Memorandum”).
Plaintiffs’ First Default Motion was filed against the Paolinis and not against South
Buffalo, but Plaintiffs submitted a second motion for default judgment as to South Buffalo on
November 1, 2016. Second Default Mot.; see also Dkt. No. 24-1 (“Second Memorandum”).
Defendants did not oppose either motion for default judgment or otherwise appear in this action.
On March 29, 2017, the Court granted in part and denied in part Plaintiffs’ motions. Mar. Order
Plaintiffs offer four grounds for reconsideration. Mem. at 4–5. First, Plaintiffs claim the
Court mistakenly reduced their damages from unpaid contributions and deductions by
$28,716.87. Id. at 10–12. Second, Plaintiffs assert that the Court erred in its calculation of
interest and liquidated damages as a result of the reduction in unpaid contributions and
deductions. Id. at 4; see also Clark Aff. ¶¶ 7–9. Third, Plaintiffs argue that the Court erred in
denying their request for an injunction to obtain an audit from South Buffalo. Mem. at 13–16.
Finally, Plaintiffs assert that the Court’s fee award was unreasonably low compared to awards
given by other courts in the Northern District of New York. Id. at 17–22.
A motion for reconsideration may be granted where there is “an intervening change of
controlling law, the availability of new evidence, or the need to correct a clear error or prevent a
manifest injustice.” Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers &
Lybrand, LLP, 322 F.3d 147, 167 (2d Cir. 2003) (quoting Virgin Atl. Airways, Ltd. v. Nat’l
Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)). “The standard for granting a motion for
reconsideration ‘is strict and reconsideration will generally be denied unless the moving party can
point to controlling decisions or data that the court overlooked—matters, in other words, that
might reasonably be expected to alter the conclusion reached by the court.’” Advanced Fiber
Techs. Tr. v. J&L Fiber Servs., Inc., 751 F. Supp. 2d 348, 382–83 (N.D.N.Y. 2010) (Kahn, J.)
(quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)). “[R]econsideration
‘should not be granted where the moving party seeks solely to relitigate an issue already
decided.’” Id. at 383 (quoting Shrader, 70 F.3d at 257).
A. Unpaid Contributions and Deductions
Plaintiffs first argue that the Court erred in declining to award $200,176.07 in
contributions and deductions for the period of January 1, 2012 through September 30, 2016.
Mem. at 8–13. In its March Order, the Court limited Plaintiffs “to the $141,988.49 in unpaid
contributions and deductions for the period of July 2014 through March 2015 that they alleged in
the Complaint.” Mar. Order at 6. The Court explained that Plaintiffs were limited to the damages
pleaded in their Complaint and “may not now demand $170,709.35 in contributions and
deductions for the period of January 1, 2012, through December 31, 2015.” Id. The Court also
stated that the Plaintiffs could not “seek additional damages for the time period before this action
was filed.” Id. The Court agrees with Plaintiffs that these conclusions were error.
It is well established in the Second Circuit that “plan trustees may collect the unpaid
contributions and the actual costs incurred in collecting unpaid contributions . . . [because]
ERISA’s purpose is to secure guaranteed pension payments to participants by insuring the honest
administration of financing sound plans.” Eng’rs Joint Welfare, Pension, Supplemental
Unemployment Benefit & Training Funds v. B.B.L. Constructors, Inc., 825 F. Supp. 13, 17
(N.D.N.Y. 1993). Generally, plaintiffs “may not recover an amount greater than that sought in
their [complaint or] amended complaint.” Bricklayers Ins. & Welfare Fund v. Golden Vale
Constr., Inc., No. 06-CV-1028, 2007 WL 3232244, at *7 (E.D.N.Y. Oct. 31, 2007); see also Bd.
of Trs. of United Union Roofers v. Best Roofing of N.J., Inc., No. 12-CV-1655, 2014 WL
1311809, at *6 (E.D.N.Y. Mar. 31, 2014) (“Plaintiff may not now seek higher amounts for the
periods that were already outstanding at the time the complaint was filed.”). But there is an
important exception to this general rule. Courts have awarded sums greater than the total
requested in a complaint when the complaint provides notice to defendants that the amount of
damages sought is subject to increase. E.g., Mason Tenders Dist. Council Welfare Fund v. I.M.I.
Const. Corp., No. 99-CV-12105, 2004 WL 1700615, at *2 (S.D.N.Y. July 30, 2004) (“Plaintiffs
here should not be limited to the dollar figures in the complaint because . . . the complaint . . .
specifically refers to other (unquantified) amounts to be determined by subsequent audit [of the
defendant’s records].”); B.B.L. Constructors, 825 F. Supp. at 16 (finding that plaintiff provided
adequate notice where defendant had “timely received a copy of the reply affidavit which
claimed the additional monies at variance with plaintiffs’ complaint and also clearly explained
the reasons for the variance”). Cf. Silge v. Merz, 510 F.3d 157, 160 (2d Cir. 2007) (“By limiting
damages to what is specified in the ‘demand for judgment,’ the rule ensures that a defendant who
is considering default can look at the damages clause, satisfy himself that he is willing to suffer
judgment in that amount, and then default without the need to hire a lawyer.”); Best Roofing,
2014 WL 1311809, at *6 (denying a request for unpaid benefits contributions because “[n]othing
in the complaint nor in plaintiffs’ submissions requesting entry of default judgment suggest that
plaintiffs would seek damages that would be so many times higher” than those alleged in the
complaint). Thus, notice is a key factor to determining whether a plaintiff may seek damage
above those pleaded in its complaint. If defendants have adequate notice that actual damages may
differ from those originally sought, ERISA plaintiffs can obtain more money than they initially
request in their complaint.
In the March Order, the Court followed the general rule, holding that “Plaintiffs may not,
however, seek additional damages for the time period before this action was filed.” Mar. Order
at 6. On reconsideration, the Court concludes that Plaintiffs need not be limited to the
$141,988.49 explicitly requested in the Complaint, Compl. ¶¶ 32, 42, 43, because the Complaint
itself put Defendants on notice of the possibility of a larger damages figure. Plaintiffs based their
$141,988.49 request on South Buffalo’s remittance reports, id. ¶ 30, but explicitly requested an
audit of Defendants’ records to assess the accuracy of those reports, id. ¶¶ 38–43. “In the event
[that the audit revealed that Defendants] ha[d] not properly submitted accurate reports,” Plaintiffs
alleged that they were entitled to “any and all contributions that are determined to be due.” Id.
¶ 43. Because the Complaint “specifically refers to other (unquantified) amounts to be
determined by subsequent audit,” Mason Tenders, 2004 WL 1700615, at *2, Defendants were on
notice that they faced potential damages above $141,988.49, and thus Plaintiffs are not limited to
this amount. Additionally, Defendants “clearly had notice of the varying amount in [P]laintiffs’
[Second Default Motion],” B.B.L. Constructors, 825 F. Supp. at 17, which sought $200,176.07 in
contributions and deductions after two audits had been conducted to cover the period from
January 1, 2012 through May 31, 2016, Second Mem. at 8–9. “Therefore, ‘the amended [motion
for] default judgment in the case at hand satisfies the notice principles Rule 54(c) seeks to
protect.’” B.B.L. Constructors, 825 F. Supp. at 18 (quoting Fustok v. Conticommodity Services,
Inc., 122 F.R.D. 151, 157 (S.D.N.Y. 1988)). The Court therefore modifies the March Order to
award Plaintiffs $200,176.07 in unpaid contributions and deductions.
B. Interest and Liquidated Damages Calculations
Under ERISA’s theory for recovery of damages, the amount of unpaid contributions and
deductions determines what the calculations are for both interest and liquidated damages.
§ 1132(g)(2). In the March Order, the Court denied Plaintiffs’ requests for interest and liquidated
damages because the requests “include[d] interest on unpaid contributions that [the Court
concluded] Plaintiffs [were] not entitled to” and sought liquidated damages above the statutory
limit. Mar. Order at 7–9. Because the Court mistakenly reduced the award for unpaid
contributions and deductions in its prior order, Plaintiffs’ requests for interest and liquidated
damages were also erroneously denied. Now that Plaintiffs’ award for unpaid contributions and
deductions has been correctly assessed at $200,176.07, the Court can reinstate Plaintiffs’ requests
for interest and liquidated damages based on that amount. The Court therefore awards Plaintiffs’
requests from the Second Default Judgment for $46,926.64 in interest, and $70,888.82 in
liquidated damages based on their request for $200,176.07 in unpaid contributions. Second Mem.
at 8–9; see also Clark Aff. ¶¶ 7–8; Dkt. No. 24-3 (“St. Fleur Affidavit”) ¶ 21.
In their Motion, Plaintiffs also challenge the Court’s determination that there were
inconsistencies between the affidavits and the Second Memorandum which led the Court to deny
Plaintiffs’ requests for interest and liquidated damages. Mar. Order at 7–9. The Court declined to
grant Plaintiffs interest and liquidated damages claims due to confusion surrounding the amount
alleged in the Second Default Motion versus the amounts listed in the St. Fleur Affidavit. Id. at 7
n.4, 8. See also Second Mem. at 9; St. Fleur Aff. ¶ 21. Plaintiffs have explained that the
inconsistencies were due to the fact that the St. Fleur Affidavit combined the unpaid and late paid
contribution amounts into a single calculation of total debt owed by South Buffalo, while the
Second Memorandum separated the unpaid and late paid amounts and placed all late paid
amounts in a different section of the memo. Clark Aff. ¶¶ 7–8. The Court is uncertain why
Plaintiffs separated late payments for interest and liquidated damages from its total ERISA claim
and instead placed these amounts in the LMRA section of its brief. Nonetheless, the Court
concludes that Plaintiffs have adequately explained the inconsistencies in these amounts and
grants Plaintiffs’ requests for interest and liquidated damages based on the $200,176.07 figure
requested in their Second Default Motion as stated above.
C. Injunctive Relief
Plaintiffs argue that the Court erroneously refused to issue an order compelling South
Buffalo to submit to an audit because they are contractually entitled to obtain audits from South
Buffalo, and that Plaintiffs should not have to show irreparable harm to obtain such an audit.
Mem. at 13–16. The Court is not persuaded. It is well established that ERISA plaintiffs are
entitled to an injunction when they face “recalcitrant ERISA defendants . . . who both failed to
make contributions and cooperate with an audit.” Upstate N.Y. Eng’rs Health Fund by Harrigan
v. DiPizio Constr. Co., No 14-CV-1539, 2017 WL 3016834, at *12 (N.D.N.Y. July 14, 2017)
(quoting Sullivan v. Marble Unique Corp., No. 10-CV-3582, 2011 WL 5401987, at *14
(E.D.N.Y. Aug. 30, 2011)). Plaintiffs do not suggest that South Buffalo has exhibited such
recalcitrance. Thus, they are not entitled to an injunction.
Plaintiffs cite several cases for the proposition that they are not required to show
irreparable harm, but these cases involved defendants that refused to submit to requested audits.
See Cent. States, Southeast & Southwest Areas Pension Fund v. Cent. Transp., Inc., 472 U.S.
559, 563–65 (1985) (finding that because “Central Transport refused to allow the requested
audit,” the employers were obligated by their trust agreement to allow an audit to take place);
Trs. of the Sheetmetal Workers Nat’l Pension Fund v. Steel & Duct Fabrication, Inc., 124
F. Supp. 3d 187, 198 (E.D.N.Y. 2015) (“[T]he defendants’ refusal to submit to an audit
triggered . . . plaintiffs’ right to seek and obtain an order ordering defendants to produce their
books and records for an audit.”). There is no evidence that South Buffalo resisted the two audits
already conducted by Plaintiffs, and the Court reiterates its determination that “South Buffalo
does not appear to intend to frustrate any judgment or show contempt for the judicial process.”
Mar. Order at 12. Plaintiffs have failed to show that they face irreparable harm and their request
for an injunction was correctly denied.
D. Attorney’s Fees
Finally, Plaintiffs challenge the Court’s decision to award $210 an hour for attorney
services and $80 an hour for paralegal services. Mem. at 17–22. Plaintiffs point the Court to
several ERISA and LMRA cases where courts awarded higher fees. Id. at 20–21. But the Court
finds that recent ERISA default judgment cases support the conclusion that $210 and $80 an hour
for attorney and paralegal services, respectively, are appropriate rates under the “presumptively
reasonable fee” standard employed in this District. Mar. Order at 9; see also DiPizio Constr. Co.,
2017 WL 3016834, at *9–10 (awarding $210 an hour for attorneys and $80 an hour for paralegals
in an ERISA case); Eng’rs Joint Welfare Fund v. Western N.Y. Contractors, Inc., No. 09-CV417, 2010 WL 2682224, at *4 (N.D.N.Y. July 2, 2010) (same). The Court acknowledges that
there may be a spectrum of reasonable fee awards in this District, but Plaintiffs have failed to
demonstrate that the award in this case was clearly erroneous. Thus, Plaintiffs’ request for higher
fees was properly denied.
Accordingly, it is hereby:
ORDERED, that Plaintiffs’ Motion for Reconsideration (Dkt. No. 29) is GRANTED in
part and DENIED in part; and it is further
ORDERED, that Plaintiffs are awarded $346,650.16 plus post-judgment interest at the
rate pursuant to 28 U.S.C. § 1961 against defendant South Buffalo Electric, Inc., consisting of
(1) $200,176.07 in unpaid contributions and deductions, (2) $46,926.64 in interest due to unpaid
and late paid contributions, (3) $70,888.82 in liquidated damages due to unpaid and late paid
contributions, (4) $10,944.50 in interest and liquidated damages for late payments under the
LMRA, and (5) $17,714.13 in attorney’s fees and costs; and it is further
ORDERED, that of the $346,650.16 awarded against South Buffalo, the Paolinis are
jointly and severally liable for $217,890.20 plus post-judgment interest at the rate pursuant to 28
U.S.C. § 1961, consisting of (1) $200,176.07 in unpaid contributions and deductions, and
(2) $17,714.13 in attorney’s fees and costs; and it is further
ORDERED, that Plaintiffs’ request for injunctive relief is DENIED; and it is further
ORDERED, that Plaintiffs’ request for additional attorney’s fees and costs is DENIED;
and it is further
ORDERED, that Plaintiffs may file supplemental affidavits within thirty days of this
Decision and Order as to the following: (1) unpaid contributions and deductions from July 23,
2015 through December 2015, and (2) prejudgment interest on withheld payments; and it is
ORDERED, that the Clerk of the Court shall enter an amended judgment in accordance
with this Decision and Order; and it is further
ORDERED, that the Clerk of the Court serve copies of this Decision and Order on all
parties in accordance with the Local Rules.
IT IS SO ORDERED.
October 06, 2017
Albany, New York
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?