UFCW Local One Pension Fund et al v. Natoli Independent Retailers, Inc.
Filing
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MEMORANDUM-DECISION and ORDERED, that Plaintiffs Motion for Default Judgment (Dkt. No. 7) is GRANTED; and it is further ORDERED, that the Clerk of the Court shall enter judgment in favor of Plaintiff UFCW Local One Pension Fund and against Defendant in the sum of $86,995.72; and it is further ORDERED, that the Clerk of the Court shall enter judgment in favor of Plaintiff UFCW Local One Health Fund and against Defendant in the sum of $13,759.07; and it is further ORDERED, that the Clerk of the Court shall enter judgment in favor of Plaintiffs and against Defendant for attorneys fees and costs in the amount of $6,791.99. Signed by Senior Judge Lawrence E. Kahn on October 09, 2012. (sas)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF NEW YORK
UFCW LOCAL ONE PENSION FUND,
and its Trustees Frank C. DeRiso, John P.
Barrett, Robert Boehlert, Eric Glathar,
Kristine Wydro, and Raymond Wardynski;
and UFCW LOCAL ONE HEALTH
CARE FUND, and its Trustees Frank C.
DeRiso, John P. Barrett, Robert Boehlert,
Eric Glathar, Kristine Wydro, and
Raymond Wardynski,
Plaintiffs,
-against-
6:12-CV-00682 (LEK/TWD)
NATOLI INDEPENDENT RETAILERS,
INC., doing business as Great American –
Cincinnatus,
Defendant.
MEMORANDUM-DECISION and ORDER
I.
INTRODUCTION
Plaintiffs UFCW Local One Pension Fund (“Pension Fund”) and UFCW Local One Health
Care Fund (“Health Fund”), along with Fund Trustees Frank C. DeRiso, John P. Barrett, Robert
Boehlert, Eric Glathar, Kristine Wydro, and Raymond Wardynski (collectively, “Plaintiffs”) brought
this action against Defendant Natoli Independent Retailers, Inc. doing business as Great American –
Cincinnatus (“Defendant”) to collect delinquent payments to a multiemployer pension plan pursuant
to the Employee Retirement Income Security Act (“ERISA”). Dkt. No. 1 (“Complaint”) at 1-2.
After Defendant failed to answer, Plaintiffs filed a Request for entry of default on June 11, 2012.
Dkt. No. 5. The Clerk of the Court executed a Certificate of default on June 12, 2012. Dkt. No. 6.
Presently before the Court is Plaintiffs’ Motion for default judgment, filed on July 13, 2012. Dkt.
No. 7 (“Motion”). For the reasons that follow, Plaintiffs’ Motion is granted.
II.
BACKGROUND
Plaintiffs allege in the Complaint that both the Pension Fund and Health Fund are
multiemployer benefit plans within the meaning of §§ 3(3) and 3(37) of ERISA, 29 U.S.C.
§§ 1002(3) and 1002(37), and are intended to provide retirement and health benefits, respectively, to
eligible employees. Compl. ¶¶ 2, 7. Plaintiffs further allege that the United Food and Commercial
Workers District Local One (“Union”) and Defendant were parties to collective bargaining
agreements (“agreements”) obligating Defendant to make certain contributions to both the Pension
Fund and the Health Fund. Id. ¶¶ 13, 28.
According to Plaintiffs, Defendant failed to make required contributions to the Pension Fund
for the months of June 2008 through October 2008, December 2008, March 2009 through
September 2009, and December 2009 through March 2010, and owes the Pension fund $7,083.86 in
delinquent contributions for this period. Id. ¶ 17. Payroll audits conducted for calendar years 2008
and 2009 determined that Defendant owed an additional $992.55 and $266.14, respectively, in
delinquent contributions to the Pension Fund. Id. ¶¶ 19-20. On April 18, 2011, counsel to the
Pension Fund sent a demand letter notifying Defendant that it failed to pay delinquent contributions
and interest for the period January 2008 through March 2010. Id. ¶ 21.
The Board of Trustees of the Pension Fund determined that Defendant effected a “complete
withdrawal” pursuant to ERISA § 4203 on April 15, 2010, when Defendant ceased all of its
operations covered by the Pension Fund. Id. ¶ 22. On June 10, 2011, the Pension Fund notified
Defendant that, as a result of that determination, Defendant owed “withdrawal liability” in the
amount of $60,022.00 and provided an installment payment schedule with the first payment due
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July 1, 2011. Id. ¶ 23.
Defendant did not submit the first installment payment by the July 1, 2011 due date. Id.
¶ 24. On September 29, 2011, the Pension Fund advised Defendant that it was delinquent in its
“withdrawal liability” payment and would be in default if it did not pay within sixty days. Id. ¶ 25.
On December 28, 2011, the Pension Fund advised Defendant that because the Pension Fund had not
received payment within sixty days, Defendant was in default. Id. ¶ 26.
Plaintiffs also allege that Defendant failed to pay required contributions to the Health Fund
for the months of December 2009 through March 2010 and owes the Fund $9,654 in delinquent
contributions for that period. Id. ¶ 32. Further, in May 2010, the Health Fund conducted a payrull
audit for calendar year 2009 and determined that Defendant owed $256.00 in delinquent
contributions to the Fund. Id. ¶ 34. On April 18, 2011, counsel to the Health Fund sent a demand
letter notifying Defendant that it owed the Health Fund delinquent contributions and interest for the
months of January 2009 through March 2010. Id. ¶ 35.
According to Plaintiffs, Defendant owes the Pension Fund $60,022.00 for withdrawal
liability, $8,341.75 for delinquent contributions, $4,959.63 for interest, and $13,672.35 for
liquidated damages. Mot. at 2. Plaintiffs claim that Defendant owes the Health Fund a total of
$13,759.07, including $9,910.00 for delinquent contributions, $1,867.07 for interest, and $1,982.00
for liquidated damages. Id. Plaintiffs also seek a total of $6,791.99 for attorneys’ fees and costs.
Id.
III.
DISCUSSION
A. Standard of Review
After the clerk has filed an entry of default against a party that has failed to plead or
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otherwise defend, a court may enter default judgment upon application of the opposing party. FED.
R. CIV. P. 55(b). Default judgment is an extreme sanction, and decisions on the merits are favored.
Meehan v. Snow, 652 F.2d 274, 277 (2d Cir.1981). However, default judgment is ordinarily
justified when a party fails to respond after having received proper notice. See Bermudez v. Reid,
733 F.2d 18, 21 (2d Cir. 1984). After an entry of default has been entered, all of the well-pleaded
allegations in a complaint pertaining to liability are deemed true. See Transatlantic Marine Claims
Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997) (recognizing that the factual
allegations in the complaint, except those relating to damages, are deemed true after default).
However, a court cannot take allegations in a complaint regarding damages as true. Credit
Lyonnais Sec. (USA), Inc., v. Alcantara, 183 F.3d 151, 154-155 (2d. Cir. 1999). After establishing
liability, a court must conduct an inquiry to ascertain the amount of damages with reasonable
certainty. Transatlantic, 109 F.3d at 111. To determine the amount of damages in the context of a
default judgment, “the court may conduct such hearings or order such references as it deems
necessary and proper.” FED. R. CIV. P. 55(b)(2). However, “it [is] not necessary for the District
Court to hold a hearing, as long as it ensured that there [is] a basis for the damages specified in the
default judgment.” Fustok v. ContiCommodity Serv., Inc., 873 F.2d 38, 40 (2d Cir. 1989); see
Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir.1991) (a full evidentiary hearing
was not necessary where district judge was “inundated with affidavits, evidence, and oral
presentations”); Bricklayers and Allied Craftworkers Local 2, Albany, N.Y. Pension Fund v.
Northeast King Construction Co., No. 1:06-CV-0806, 2009 WL 1706586, at *1 (N.D.N.Y. June 16,
2009) (Kahn, J.).
B. Liability
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Here, Defendant has failed to appear in this action or to answer Plaintiffs’ Complaint,
despite having been duly served. See Dkt. Nos. 4, 5, 6. Because Defendant has failed to appear,
and because the Clerk has made an entry of default, the Court deems all relevant and well-pleaded
factual allegations in Plaintiffs’ Complaint as true in determining liability.
In the Complaint, Plaintiffs claim that Defendant has violated 29 U.S.C. § 1145 as to both
the Pension Fund and the Health Fund. Compl. ¶¶ 37, 47. 29 U.S.C. § 1145 states that:
Every employer who is obligated to make contributions to a multiemployer plan
under the terms of the plan or under the terms of a collectively bargained agreement
shall, to the extent not inconsistent with law, make such contributions in accordance
with the terms and conditions of such plan or such agreement.
The Court has reviewed all submissions, and finds that Plaintiffs have sufficiently alleged that
Defendant: (1) is an “employer” as defined in 29 U.S.C. § 1002(5); and (2) is obligated to make
contributions to two multiemployer plans – the Pension Fund and the Health Fund – under the terms
of one or more collective bargaining agreements. Further, Plaintiffs have alleged that Defendant
was delinquent in making monthly contributions to both the Pension Fund and the Health Fund in
violation of the agreements. Accordingly, taking all of Plaintiffs’ allegations as true, the Court finds
that Plaintiffs have established each of the elements necessary to state a claim pursuant to 29 U.S.C.
§ 1145 as to both the Pension Fund and the Health Fund.
Plaintiffs also allege that Defendant ceased all operations covered by the Pension Fund on
April 15, 2010. Compl. ¶ 22. Taking this allegation as true, Plaintiffs have sufficiently established
that Defendant made a “complete withdrawal” from the Pension Fund as defined by ERISA. See 29
U.S.C. § 1383 (“a complete withdrawal from a multiemployer plan occurs when an employer . . .
permanently ceases all covered operations under the plan”). The Pension Fund notified Defendant
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of: (1) its withdrawal liability; (2) the installment payment schedule; and (3) the first payment due
July 1, 2011, all in compliance with the notification requirements of 29 U.S.C. § 1399(b). Plaintiffs
further allege that Defendant failed to make that first payment and failed to cure the delinquency
within 60 days of notification. Compl. ¶¶ 24-25. Accordingly, Defendant is in default pursuant to
29 U.S.C. § 1399(c)(5)(A), and the Pension Plan was entitled to “require immediate payment of the
outstanding amount of [Defendant’s] withdrawal liability.” 29 U.S.C. § 1399(c)(5).
C. Damages
1. Pension Fund
1. Delinquent Contributions and Withdrawal Liability
Because Defendant is found to have violated § 1145 as to the delinquent contributions,
Plaintiffs are entitled to receive as damages the total amount of any unpaid contributions. 29 U.S.C.
§ 1132(g)(2)(A). Further, Defendant’s failure to make withdrawal liability payments when due
should also be treated as a contribution delinquency under 29 U.S.C. § 1145. 29 U.S.C. § 1451(b).
Here, Plaintiffs have submitted documentation from a Fund administrator with personal
knowledge of the facts of this case. Dkt. No. 7-5 (“Goldberger Declaration”). This documentation
states under oath that Defendant owes $7,083.86 for unpaid contributions between June 2008 and
March 2010, as well as deficits of $992.55 and $266.14 that were discovered through payroll audits
conducted in May 2009 and May 2010. Id. ¶¶ 7-9. The documentation further states that the
withdrawal liability, that became due in full upon Defendant’s default pursuant to 29 U.S.C. §
1399(c)(5)(A), totaled $60,022.00. Id. ¶ 12. Accordingly, the Court awards Plaintiffs $8,341.751 in
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The amounts listed in the Goldberger Declaration add up to $8,342.55. The Court
assumes that there was a clerical error in one of the listed amounts, and therefore awards $8,341.75,
the amount requested in both the Motion for default judgment and the proposed order. Mot.; Dkt.
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damages for delinquent contributions and $60,022.00 for withdrawal liability.
2. Interest on Unpaid Contributions
Plaintiffs are also entitled to receive interest on all delinquent contributions. 29 U.S.C. §
1132(g)(2)(B). Pursuant to the terms of the Fund, Defendant owes interest on any delinquent
contributions calculated at a monthly rate of prime plus two percent or eight percent, whichever is
greater. Compl. ¶ 40. Plaintiffs have submitted documentation stating that Defendant owes interest,
calculated through July 12, 2012, of $4,959.63. Goldberger Decl. ¶ 21. The Court therefore awards
Plaintiffs $4,959.63 in interest.
3. Liquidated Damages
Under 29 U.S.C. § 1132(g)(2)(C), Plaintiffs are entitled to the liquidated damages provided
for under the plan, so long as they do not exceed twenty percent of the unpaid contributions. Under
the terms of the Fund’s Trust Agreement and the Delinquency Policy, Plaintiffs are entitled to
liquidated damages in the amount of twenty percent of unpaid contributions and withdrawal liability
due. Compl. ¶¶ 41, 45. Here, twenty percent of all delinquent contributions and withdrawal
liability (($60,022.00 + $8,341.75) * 0.20) equates to $13,672.35. See Goldberger Decl. ¶ 21.
Accordingly, the Court awards Plaintiffs liquidated damages in the amount of $13,672.35.
2. Health Fund
1. Unpaid Contributions
Because Defendant is found to have violated § 1145, Plaintiffs are entitled to receive as
damages the total amount of any unpaid contributions. 29 U.S.C. § 1132(g)(2)(A). Here, Plaintiffs
have submitted documentation from a Fund administrator with personal knowledge of the facts of
No. 7-6 (“Proposed Order”).
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this case, which states that Defendant owes $9,654.00 for unpaid contributions between December
2009 and March 2010, as well as a deficit of $256.00 that was discovered through a payroll audit
conducted in May 2010. Goldberger Decl. ¶¶ 23-24. Accordingly, the Court awards Plaintiffs
$9,910.00 in damages for unpaid contributions to the Health Fund.
2. Interest on Unpaid Contributions
Plaintiffs are also entitled to receive interest on all delinquent contributions. 29 U.S.C.
§ 1132(g)(2)(B). Pursuant to the terms of the Fund, Defendant owes interest on any delinquent
contributions calculated at a monthly rate of prime plus two percent or eight percent, whichever is
greater. Compl. ¶ 40. Plaintiffs have submitted documentation stating that Defendant owes interest
of $1,867.07 on unpaid Health Fund contributions calculated through July 12, 2012. Goldberger
Decl. ¶ 26. The Court therefore awards Plaintiffs $1,867.07 in interest.
3. Liquidated Damages
Under 29 U.S.C. § 1132(g)(2)(C), Plaintiffs are entitled to the liquidated damages provided
for under the plan, so long as they do not exceed twenty percent of the unpaid contributions. Under
the terms of the Helath Fund’s Trust Agreement and Delinquency Policy, Plaintiffs are entitled to
liquidated damages in the amount of twenty percent of unpaid contributions. Compl. ¶ 51. Here,
twenty percent of all unpaid Health Fund contributions amounts to $1,982.00. See Goldberger Decl.
¶ 26. Accordingly, the Court awards Plaintiffs liquidated damages in the amount of $1,982.00.
3. Attorneys’ Fees and Costs
Under 29 U.S.C. § 1132(g)(2)(D), Plaintiffs are entitled to recoup reasonable attorneys’ fees
and costs. Further, the terms of the Funds’ Trust Agreement and Delinquency Policy allow for
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reasonable attorneys’ fees and costs incurred in collecting payment of unpaid contributions. Compl.
¶¶ 41, 45, 51. Accordingly, Plaintiffs are entitled to an award of reasonable costs and attorneys’
fees.
Courts in the Second Circuit employ a “presumptively reasonable fee” standard to
determine the amount to award as attorneys’ fees. Arbor Hill Concerned Citizens Neighborhood
Ass’n v. County of Albany, 522 F.3d 182, 184 (2d Cir. 2008). In order to determine what is a
presumptively reasonable fee,2 the court assesses “case-specific considerations at the outset,
factoring them into its determination of a reasonable hourly rate for the attorneys’ work,” which is
then multiplied by a reasonable number of hours expended by counsel. McDaniel v. County of
Schenectady, 595 F.3d 411, 420 (2d Cir. 2010).
Plaintiffs seek a total of $5,508.00 in attorneys’ fees charged by the law firm Slevin & Hart,
P.C. and $790.00 in attorneys’ fees charged by the law firm Getnick Livingston Atkinson & Priore,
LLP. Dkt. No. 7-1 ¶¶ 21-22, 27-28. In support of this request, Plaintiffs have submitted detailed
billing records, as well as declarations from the attorneys outlining their experience and credentials.
Dkt. Nos. 7-1, 7-2, 7-3, 7-4.
The Court has reviewed the documentation submitted by Plaintiffs, and finds that all time
billed is supported by contemporaneous time records that show – for each attorney – the date or
dates worked, the hours expended, and the nature of the tasks completed. Id. The Court has
undertaken an independent review of the record and considered all relevant factors, and finds that
the time billed by Plaintiffs’ attorneys on this matter is reasonable. Further, the hourly rates
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Even though Plaintiffs’ Motion is unopposed, a reviewing court should still examine the
reasonableness of the costs and fees requested. See, e.g., Worldcom Technologies, Inc. v. Sequel
Communications, Inc., No. 00 CIV. 1598, 2001 WL 1346178 (S.D.N.Y. Nov. 1, 2001).
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requested by each attorney are within the range considered to be reasonable in this district, and are
justified by the experience and expertise of the attorneys who worked on this matter. Accordingly,
the Court grants attorneys’ fees in the amount of $6,298.00.
Plaintiffs also seek costs in the amount of $56.69 expended by Slevin & Hart, P.C. and
$473.30 expended by Getnick Livingston Atkinson & Priore, LLP. After reviewing the record, the
Court finds that these amounts are warranted and therefore awards Plaintiffs $493.99 in costs and
disbursements.
IV.
CONCLUSION
Accordingly, it is hereby:
ORDERED, that Plaintiffs’ Motion for Default Judgment (Dkt. No. 7) is GRANTED; and
it is further
ORDERED, that the Clerk of the Court shall enter judgment in favor of Plaintiff UFCW
Local One Pension Fund and against Defendant in the sum of $86,995.72;3 and it is further
ORDERED, that the Clerk of the Court shall enter judgment in favor of Plaintiff UFCW
Local One Health Fund and against Defendant in the sum of $13,759.07;4 and it is further
ORDERED, that the Clerk of the Court shall enter judgment in favor of Plaintiffs and
against Defendant for attorneys’ fees and costs in the amount of $6,791.99; and it is further
ORDERED, that the Clerk serve a copy of this Order on all parties.
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This amount is comprised of $60,022.00 for withdrawal liability, $8,341.75 for unpaid
contributions, $4,959.63 in interest, and $13,672.35 in liquidated damages. The Court presumes
that the statement in Plaintiffs’ Motion summing the above numbers to $89,032.42 was a clerical
error. Mot. at 2.
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This amount is comprised of $9,910.00 in unpaid contributions, $1,867.07 in interest, and
$1,982.00 in liquidated damages.
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IT IS SO ORDERED.
DATED:
October 09, 2012
Albany, New York
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