The Annuity, Welfare and Apprenticeship Skill Improvement & Safety Funds of the International Union Of Operating Engineers, Local 15, 15A, 15C and 15D et al v. Persico Contracting & Tracking, Inc.

Filing 32

MEMORANDUM OPINION AND ORDER The Court has carefully considered all of the parties' arguments. To the extent not specifically discussed above, they are either moot or without merit. The plaintiffs' motion for summary judgment is granted. Th e Court awards the plaintiff $24,602.60 in damages and orders the defendant to submit to an audit by the plaintiffs at the defendant's expense. The Court will enter the Judgment proposed by the plaintiffs and include the requirement that th e defendant make its books and records available for an audit by the plaintiffs at the defendant's expense. The Clerk is directed to close the case. (re: 17 MOTION for Summary Judgment as against Defendant Persico Contracting) (Signed by Judge John G. Koeltl on 7/14/11) (djc)

USOCSDNY
DOCUMENT
ELECTRONICALLY FILED
DOC#
.
DATE FILED:

UNITED STATES DISTRICT COURT

7/J57';ii1!

SOUTHERN DISTRICT OF NEW YORK

THE ANNUITY, WELFARE, APPRENTICESHIP
SKILL IMPROVEMENT & SAFETY FUNDS of
the INTERNATIONAL UNION OF OPERATING
ENGINEERS, LOCAL 15, 15A, 15C, and
lSD, AFL-CIO by its TRUSTEES JAMES
T. CALLAHAN, FRANCIS P. DIMENNA,
ROBERT SHAW and JOHN BRUNETTI,

10 Civ. 5221 (JGK)

MEMORANDUM OPINION AND

ORDER

Plaintiffs,
- against ­
PERSICO CONTRACTING & TRUCKING,
INC. ,
Defendant.

JOHN G. KOELTL, District Judge:
The Annuity, Welfare, Apprenticeship Skill Improvement &
Safety Funds of the International Union of Operating Engineers,
Local 15, 15A, 15C, and lSD, AFL-CIO by its Trustees James T.
Callahan, Francis P. Dimenna, Robert Shaw and John Brunetti
(collectively "the plaintiffsll) bring this action against
Persico Contracting & Trucking, Inc.,

("the defendant") under

sections 502 and 515 of the Employee Retirement Income Security
Act of 1974 ("ERISA"), 29 U.S.C.

§§

1132 and 1145.

The

plaintiffs now move for summary judgment pursuant to Federal
Rule of Civil Procedure 56.

I.

The standards applicable to a summary judgment motion are
well established.

"The Court shall grant summary judgment if

the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to jUdgment as a matter
of law."

Fed. R. Civ. P. 56 (a).

"The party seeking summary

judgment bears the burden of establishing that no genuine issue
of material fact exists .

Rodriguez v. City of New York,

"

72 F.3d 1051, 1060-61 (2d Cir. 1995).

In determining whether

that burden has been met, the Court is required to resolve all
ambiguities and credit all factual inferences that could be
drawn in favor of the party against whom summary judgment is
sought.

See, e.g., Anderson v. Liberty Lobby, Inc., 477 U.S.

242, 255 (1986); Matsushita Elect. Indust. Co. v. Zenith Radio
Corp., 475 U.S. 574, 587 (1986).

"It is not the province of the

court itself to decide what inferences should be drawn . . . ; if
there is any evidence in the record from any source from which a
reasonable inference could be drawn in favor of the nonmoving
party, summary judgment is improper

"

Howley v. Town of

Stratford, 217 F.3d 141, 151 (2d Cir. 2000).

"[I]n determining

whether the moving party has met this burden of showing the
absence of a genuine issue for trial, the district court may not
rely solely on the statement of undisputed facts contained in
2

the moving party's Rule 56.1 statement.

It must be satisfied

that the citation to evidence in the record supports the
assertion.

It

Vermont Teddy Bear Co., Inc. v. 1-800 Beargram Co.,

373 F.3d 241, 244

(2d Cir. 2004).

See also Bank of Am., N.A.

v. Vergest Ltd., No. 10 Civ. 4682, 2011 WL 92751, at *1
(S.D.N.Y. Jan. 11, 2011)

II.

A.

Pursuant to Local Civil Rule 56.1, a party moving for
summary judgment must submit along with its notice of motion a
statement of material facts (a "56.1 statement
alleges there is no genuine issue to be tried.

lt

as to which it

)

Each statement

must be followed by a citation to evidence which would be
admissible, as required by Fed. R. Civ. P. 56(e).

The party

opposing the motion must submit a responsive statement of facts
as to which a triable issue remains.

If the opposing party

fails to submit a responsive statement, then the facts set forth
in the moving party's 56.1 statement are deemed admitted.

Local

see also Holtz v. Rockefeller & Co.,

Civil Rule 56.1(a)-(c)

i

Inc., 258 F.3d 62, 73

(2d Cir. 2001).
3

However, "(t]he local

rule does not absolve the party seeking summary judgment of the
burden of showing that it is entitled to judgment as a matter of
law, and a Local 56.1 statement itself is not itself a vehicle
for making factual assertions that are otherwise unsupported in
the record."

Holtz, 258 F.3d at 74.

Moreover, "raJ district

court has broad discretion to determine whether to overlook a
party's failure to comply with local court rules." Id. at 73.
In this case, the plaintiffs have submitted a 56.1
statement with their motion for summary judgment. The statements
were properly supported by citations to admissible evidence. The
defendant has not submitted a response to the plaintiffs' 56.1
statement, nor has it proposed a competing version of the facts
anywhere in the record. 1

Therefore, the Court deems the facts

set forth in the plaintiffs' 56.1 statement to be admitted,
insofar as they are supported by the factual record in this
case.

See Cress v. Wilson, No. 06 Civ. 2717, 2008 WL 5397580,

at *5-6 (S.D.N.Y. Dec. 29, 2008).

lThe defendant's response to the plaintiffs' motion consists of an affidavit
from Rogelio Gan, controller for the defendant, and attached exhibits. The
documents essentially assert that there are "no less than two major
mistakes," in the plaintiffs' audit and that with additional discovery, more
mistakes may be found.
The allegations in the defendant's papers are
addressed below.

4

B.

The evidence submitted to the court reflects the following
facts.
The Annuity, Welfare, Apprenticeship Skill Improvement &
Safety Funds (collectively "the Funds") of the International
Union of Operating Engineers Local IS, 15A, 15C and lSD, AFL-CIO
(collectively "Local 15") are joint trustee funds established by
"various trust indentures" pursuant to the Labor Management
Relations Act, 29 U.S.C.

§

186, and constitute multi­

employer/employee benefit plans within the meaning of ERISA, 29
U.S.C.

§§

1002(3) and (37).

James T. Callahan, Francie P.

Dimenna, Robert Shaw and John Brunetti (collectively "the
Trustees") are the trustees of the Funds and are fiduciaries
within the meaning of ERISA, 29 U.S.C.

§

1002(21).

The Funds

are responsible for the collection of certain pension and fringe
benefit contributions from businesses that have collective
bargaining agreements ("CBAs") with Local 15.

The defendant is

a contracting company and an employer within the meaning of
ERISA, 29 U.S.C.

§

1002(5).

In October 2000, the defendant entered into a CBA with
Local 15.

(PI.'s 56.1 Stmt. , 1.)
5

The Agreement to be bound by

the CBA was signed by both the plaintiffs' and the defendant's
representatives.

(Steinberg Aff. Ex. C ("Agreement") at 1.)

The CBA contained terms and conditions for the employment of the
defendant's employees whose jobs fell under the jurisdiction of
Local 15 as well as requiring the payment of fringe benefit
contributions by the defendant on behalf of those employees
("qualifying employees") .

(PI.'s 56.1 Stmt. ~~ 2-3.)

The

Agreement required that the signatories agree to be bound by all
trust agreements and regulations created by the plaintiffs.
(Agreement at 1.)

The plaintiffs' trust agreement gives the

plaintiffs the authority to establish rules and regulations for
the operation of the Funds.
(d).)

(Steinberg Aff. Ex. D Art. VI Sec.

Pursuant to that authority, the plaintiffs promulgated a

set of general policies for the collection of required
contributions, which includes the right of the plaintiffs to
collect all due contributions, establish an audit program,
require delinquent employers to pay contributions, interest,
attorneys' fees and "other expenses incurred by Local 15."
(Steinberg Aff. Ex. E at 1-2.)

In order to pay required fringe

benefit contributions, contributing employers like the defendant
pre-purchase stamps and distribute them to qualifying employees
in proportion to the number of eligible hours they worked.

6

(Steinberg Aff. Ex. E at 2.)i see also (Keenan Aff. , 4.)
qualifying employees then redeem the stamps.
With the consent of the defendant

The

(Keenan Aff. , 4.)

the plaintiffs conducted

I

an audit of the defendantls books and determined that the
defendant owed $13 / 043.00 in unpaid fringe benefit contributions
and interest for the period of October 11 2006 1 to June 30 1
2007.

(Callahan Aff. "

("Auditll) at 4.)

21 4)

i

see also (Steinberg Aff. Ex. F

The auditor accounted for all stamps purchased

by the defendant but not redeemed by the employees and credited
them to the appropriate participant.

(Audit at 1.)

The audit

report also found that the defendant underreported its
employees
report

I

I

gross wages.

(Audit at 2.)

In response to the audit

the plaintiffs filed this action alleging (I) the

defendant violated 29 U.S.C.

§

1145 by failing to make required

fringe benefit contribution payments between October 11 2006 1
and June 30 1 2007 1 and (2) that the defendant underreported the
number of employees/ the number of hours worked and the wages
paid to employees

I

as well as the contributions due to the

plaintiffs from July 11 2009 to present.

The plaintiffs seek

$13 / 043.00 in delinquent fees and interest I

attorneys

I

fees

l

$6 / 290.66 in

as well as $ 2 / 713.00 in auditors

$398.00 for the costs of filing this action.

I

fees and

The plaintiffs

also seek an order requiring the defendant to submit its records
7

to the plaintiffs for audit at the defendant's expense, in
accordance with 29 U.S.C. § 1132(g) (2) (E).
In response, the defendant claims it purchased the required
stamps for at least two of its qualifying employees, and argues
that with more time for discovery, it may find more errors in
the plaintiffs' audit.

(Gan Aff. "

5, 8, 9.)

III.

Section 515 of ERISA provides:
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.
29 U.S.C. § 1145.
contributions,

If an employer fails to make the required

"a fiduciary of the plan may sue the employer, or

another fiduciary of the plan, as that term is defined under
ERISA, to recover the unpaid contributions."

Finkel v.

Romanowicz, 577 F.3d 79, 85 (2d Cir. 2009).

ERISA includes

trustees in its definition of fiduciary, and the defendant does
not contest that the trustees are fiduciaries of the Funds
within the meaning of ERISA.

Therefore the plaintiffs have

standing to bring this action under § 1145.
8

29 U.S.C. §

1002(14) (a).

Further, the plaintiffs' audit plainly shows the

delinquency of the defendant in paying its required fringe
benefit contributions.

See (Steinberg Aff. Ex. F ("Audit") at

5.)

In opposition to the plaintiffs' motion, the defendant
contends that it provided the required stamps to at least two
qualifying employees and that with more discovery it could
potentially find additional errors in the plaintiffs' audit.
(Gan Aff. ~~ 5, 8, 9.)

In support of its contention, the

defendant attaches photocopied pay stubs for employees Andrew J.
Luneau ("Luneau

ll

)

and Chad Dobish ("Dobish

ll

).

(Gan Aff. Ex. A.)

Stamps from Local 15 are attached to each employee's pay stub.
The defendant asserts that these attachments prove that it paid
fringe benefit contributions to these employees. Based on this
alone, the defendant claims that the audit is flawed and urges
the Court to allow for further discovery.
A.)

(Gan Aff.

~

~

5,7, Ex.

The evidence, however, does not support the defendant's

contention or a need for further discovery.
Luneau and Dobish are members of Local 15 and 15A,
divisions for employees who operate heavy machinery.
AfL in Further Supp ("Keenan Reply Aff. II)

~~

3 -4. )

(Keenan
Therefore,

they should receive stamps from division 15A of Local 15.
(Keenan Reply Aff. ~ 3.)

However, the stamps attached to their
9

paystubs are clearly marked "15D 1
related to surveyors.
defendant/s assertion

a division of Local 15

1I

(Gan Aff. Ex. A.)
l

Contrary to the

because neither Luneau nor Dobish were

given the correct stamps

1

the plaintiffs

l

did not receive the

appropriate fringe benefit contributions as required by the CBA.
(Keenan Reply Aff. , 5.)

Moreover

1

because the value of a 15D

stamp is less than that of a 15A stamp

1

have received adequate contributions

as required by the CBA

1

even if the 15D stamps were redeemable.
3.)

the plaintiffs would not
1

(Keenan Reply Aff. ,

Aside from the two employees discussed above

1

the defendant

offers no evidence to question the accuracy of the audit, nor
does the defendant offer evidence which contests the causes of
action against it.

2

Moreover, the defendant has had ample time

to review its own records since the audit report was released on
April 20

1

2010, and the defendant offers no persuasive reasoning

for why additional time for discovery is necessary.
2.)

(Audit at

Accordingly, the plaintiffs are entitled to summary

judgment as to their claims of the defendant's violation of

§

1132 and § 1145.

2The defendant does not assert either of the two defenses available to
employers against whom judgment is sought for unpaid fringe benefit
contributions, (1) that the contributions are illegal or (2) that the
collective bargaining agreement is void.
See Benson v. Brower's Moving &
Storage, Inc., 907 F.2d 310, 314 (2d Cir. 1990) (collecting cases).

10

IV.

Pursuant to 29 U.S.C.

§

1132, the defendants request an

award of damages for the defendant's failure to pay fringe
benefit contributions as required by the CBA and
For claims under

§

§

1145.

1145, ERISA provides for the recovery of

unpaid contributions, interest on unpaid contributions,
statutory damages in the amount of the owed interest or in the
form of predetermined liquidated damages, reasonable attorneys'
fees and costs of filing the action, and other legal and
equitable relief as the court should deem appropriate.
U.S.C.

§

29

1132(g) (2).

A.

The plaintiffs' audit report reflects unpaid contributions
totaling $11,830.

(Audit at 5.)

The defendant has offered no

evidence to contradict this figure, nor is there reason to
believe that it can provide evidence which will contradict the
findings of the audit.

Accordingly, the plaintiffs' are

entitled to an award of $11,830.00, the amount of the unpaid
contributions.
11

B.

ERISA instructs that any awarded interest on unpaid
contributions be calculated using the rate determined in the
plan, if provided.

29 U.S.C.

§

1132(g) (2) (b).

The plaintiffs

have calculated interest in accordance with Local 15's
collection and audit procedures, which stipulate that all
delinquent contributions are subject to additional interest at
1% above the prime rate.

(Steinberg Aff. Ex. E at 3.)

The

plaintiffs submit that the amount of interest is $1,685.47,
which represents the application of the prescribed interest
rate, 4.25%, from the date the contributions were first due
through the filing of this motion, accrued annually.
(Steinberg Aff.

~

8) i see also (Audit at 5)

i

Mason Tenders Dist.

Council v. Envirowaste & Transcontractors, Inc., No. 98 Civ.
4040, 1999 WL 370667, at *2 (S.D.N.Y. June 7, 1999) (calculating
the interest rate from the date ERISA contributions first became
due).

Accordingly, the plaintiffs are entitled to an interest

award in the amount of $1,685.47, up to the date of the filing
of the current motion.

12

c.

ERISA also provides for an award of statutory damages in
the amount of either the accrued interest or liquidated damages
if provided for in the plan.

29 U.S.C.

§

1132(g) (2) (C).

Because the plan in this case does not provide for liquidated
damages, the plaintiffs are entitled to statutory damages in the
amount of the interest on the unpaid contributions, $1,685.47.

D.

In an action under

§

1145, an award to the prevailing party

for attorneys' fees and costs is mandatory. See Tr.s of
Bricklayers & Allied Craftworkers Local 5 N.Y. Retirement v.
Helmer-Cronin Const., Inc., No. 03 Civ. 0748, 2005 WL 3789085,
at *3 (S.D.N.Y. Oct. 24, 2005) (citing Labarbera v. Clestra
Hauserman, Inc., 369 F.3d 224, 226 (2d Cir. 2004)).
In order to determine what constitutes "reasonable"
attorneys' fees,

the starting point is the "lodestar amount,"

which is the number of hours reasonably expended on the
litigation multiplied by a reasonable hourly rate for attorneys
and paralegals.
559 (1992)

i

See City of Burlington v. Dague, 505 U.S. 557,

McDonald v. Pension Plan of the NYSA-ILA Pension
13

Trust Fund, 450 F.3d 91, 96-98 (2d Cir. 2006)

i

Grant v.

Martinez, 973 F.2d 96, 99 (2d Cir. 1992); Indep. Living Aids,
Inc. v. Maxi-Aids, Inc., 25 F.Supp.2d 127, 132 (E.D.N.Y. 1998) i
Scanlon v. Kessler, No. 97 Civ. 1140, 1998 WL 726047 at *2-3
(S.D.N.Y. Oct. 14, 1998).

The fee applicant bears the burden of

submitting contemporaneous time records that support the hours
worked and rates claimed.

See N.Y. State Assln. for Retarded

Children, Inc. v. Carey, 711 F.2d 1136, 1147 (2d Cir. 1983).
There is a "strong presumption" that the lodestar is reasonable.
See City of Burlington, 505 U.S. at 557; Lunday v. Albany, 42
F.3d 131, 134 (2d Cir. 1994).

The party that asks the court to

depart from the lodestar amount bears the burden of proving that
such a departure is necessary to the calculation of a reasonable
fee.

See Grant, 973 F.2d at 101.
Once the lodestar is calculated, other considerations may

justify an adjustment of the fee upward or downward, including
in particular the degree of success obtained.

See Orchano v.

Advanced Recovery, Inc., 107 F.3d 94, 96-97 (2d Cir. 1997)
(citing Hensley v. Eckerhart, 461 U.S. 424, 434

(1983))

i

see

also BNP-Dresdner Bank ZAO v. Hague, No. 98 Civ. 1109, 1998 WL
831353 at *1 (S.D.N.Y. Nov. 30, 1998).
The plaintiffs request a lodestar award of $6,290.66, the
result of 20.25 hours of work by James M. Steinberg at a rate of
14

$310.65 per hour.

(Steinberg Aff.

~

12.)

The plaintiffs have

included a list of all work done by their attorney that
specifies how the work relates to this action.
Ex. H.)

(Steinberg Aff.

All of the billed hours relate directly to this action

and are of a reasonable duration.

$310.65 per hour is a

reasonable rate for an attorney in the Southern District of New
York.

See Tr.s of N.Y. Oil Heating Ins. Fund v. Anchor Tank

Lines Corp., No. 09 Civ. 9997, 2011 WL 767162, at *4 (S.D.N.Y.
Mar. 4, 2011), report and recommendation adopted as modified,
sub nom. Romita v. Anchor Tank Lines Corp., No. 09 Civ. 9997,
2011 WL 1641981 (S.D.N.Y. Apr. 29, 2011) (collecting cases).
Moreover, the defendant does not challenge the plaintiffs'
calculation of attorneys' fees.

Therefore, $6,290.66 is a

reasonable award for attorneys' fees.

E.

The prevailing party in an ERISA action is also entitled
to,

"those reasonable out-of-pocket expenses incurred by the

attorney and which are normally charged fee-paying clients."
King v. JCS Enterprises, Inc., 325 F. Supp. 2d 162, 171
(E.D.N.Y. 2004) (quoting

Reichman v. Bonsignore, Brignati &

Mazzotta, P.C., 818 F.2d 278, 283 (2d Cir. 1987)).
15

The

plaintiffs submit that the costs of filing this action were
$398.00, which includes a $350.00 filing fee for filing the
Complaint, as well as a $48.00 service fee incurred when the
plaintiffs served the defendant with the summons and complaint.
These costs are reasonable and are normally charged to fee­
paying clients.

See Perishable Food Indus. Pension Fund v. Am.

Banana Co., Inc., No. 01 Civ. 1922, 2003 WL 21542316, at *6
(S.D.N.Y. July I, 2003), report and recommendation adopted, 01
Civ. 1922 (2003) (No. 13).

As a result, the plaintiffs are

entitled to $398.00 for costs.

F.

While ERISA does not specifically provide for the recovery
of auditor fees,

it does allow for the recovery of "such other

legal or equitable relief as the court deems appropriate."
U.S.C.

§

1132(g) (2) (E).

29

Courts have routinely considered

auditors' fees to be an appropriate component of an award to a
prevailing party in an ERISA action, particularly where a CBA
specifically provides for the recovery of such fees.

See

Helmer-Cronin, 2005 WL 3789085, at *7 (collecting cases).

Here,

the collection and audit policies of Local 15 give the
plaintiffs the right "to require that the delinquent employer
16

pay the cost of [an] audit . . .
1.)

"

(Steinberg Aff. Ex. E at

The plaintiffs paid $2,713.00 for the audit of the

defendant's books, which appears reasonable for this action. See
The Annuity, Welfare & Apprenticeship Skill Improvement & Safety
Funds of the Int'l Union of Operating Eng'rs, Local IS, 15A, 15C

& ISO, AFL-CIO v. Qualcon Constr., LLC, 10 Civ. 4994, 2011 WL
2207519 at *3 (S.D.N.Y. Apr. 29, 2011) report and recommendation
adopted, 10 Civ.4994, 2011 WL 2207546, at *2 (S.D.N.Y. June 6,
2011) .
Accordingly, the plaintiffs are entitled to an award of
damages in the amount of $24,602.60 for unpaid contributions,
interest, statutory damages, attorneys' fees and costs, and the
cost of the audit.

v.

Finally, the plaintiffs request that the defendant turn
over all books and records for an audit at the defendant's
expense.

The CBA and Local IS's collection and audit policies,

by which the parties are bound, expressly provide that the Funds
have:
[T] he
right
to
audit
the
financial
records
contributing employers, including but not limited
payroll ledgers, federal and state tax returns,
Form 941 and such other books and records of
17

of
to
IRS
the

employers necessary in order for the auditor to
ascertain if proper contributions have been made .
[and] the right to require the delinquent employer pay
the cost of the audit.
(Steinberg Aff. Ex. E at 1.)

Accordingly, the defendant is

ordered to submit to the plaintiffs for inspection all
records and documents that are relevant to determining
whether the defendant has underreported the number of
employees, the amount of employee hours and wages, or the
contributions due for the period of July I, 2009 to date.
The defendant is also required to pay the costs of the
audit, in accordance with the CBA, Local IS's collection
and audit procedures, and 29 U.S.C.

§

1132(g) (2) (E).

See

Maguire v. Am. Piles, Inc., No. 01 Civ. 9483, 2002 WL
31626972, at *1-2 (S.D.N.Y. Nov. 21, 2002) (requiring audit
at employer's expense to discover possible ERISA
violations) .

Conclusion

The Court has carefully considered all of the parties'
arguments.

To the extent not specifically discussed above, they

are either moot or without merit.
summary judgment is granted.

The plaintiffs' motion for

The Court awards the plaintiff

$24,602.60 in damages and orders the defendant to submit to an
18

audit by the plaintiffs at the defendant's expense.

The Court

will enter the Judgment proposed by the plaintiffs and include
the requirement that the defendant make its books and records
available for an audit by the plaintiffs at the defendant's
expense.

The Clerk is directed to close the case.

SO ORDERED.
Dated:

New York, New York
JU1y'1, 2011
Judge

19