Sheet Metal Workers' National Pension Fund, et al v. Maximum Metal Manufacturers, Inc. et al
OPINION & ORDER re: 32 MOTION for Summary Judgment filed by National Stabilization Agreement of the Sheet Metal Industry Fund, International Training Institute for the Sheet Metal and Air Conditioning Industry, Sheet Metal Workers 9; National Pension Fund, Sheet Metal Occupational Health Institute Trust, National Energy Management Institute Committee for the Sheet Metal and Air Conditioning Industry. Because no application to compel arbitration of plaintiffs' claims u nder the 2005 CBA has been made, the Court does not grant that relief. The Court stands ready to do so, on an appropriate application. The Court directs plaintiffs, within two weeks of this decision, i.e., by Tuesday, September 1, 2015, either to (1) make such a motion or (2) move anew for summary judgment as to the 2005 CBA claim, this time explaining, with reference to on-point case authority, the basis for any claim that the arbitration clause in that CBA does not mandate arbitration. In the event that no such filing is received, the Court expects to dismiss, sua sponte, plaintiffs' claims based on the 2005 CBA, on the grounds that this Court is not a proper forum to resolve these claims, and that if plaintiffs are to pursue such cl aims, they must do so in arbitration. For the reasons stated herein, the Benefits Funds' motion for summary judgment is granted against all defendants for the period from August 1, 2009 through July 31, 2013. However, the Court denies summary judgment as to the portion of the Benefits Funds' claims relating to contributions for the period between March 2009 and July 2009, because those claims are subject to a binding arbitration clause in the 2005 CBA. The Benefits Funds are directed to recalculate the delinquent contributions, interest, liquidated damages, and audit fees to reflect this decision, and to submit to the Court their revised calculations by September 1, 2015. The Benefits Funds are also awarded attorneys' fees, in the amount of $24,217.88, and costs in the amount of $940.68. The Benefits Funds are further directed, by September 1, 2015, to notify the Court as to their intentions with respect to claims under the 2005 CBA, as addressed herein. The Clerk of Court is respectfully directed to terminate the motion pending at docket number 32. (As further set forth in this Order.) (Motions due by 9/1/2015.) (Signed by Judge Paul A. Engelmayer on 8/18/2015) (kko)
Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132, and individual defendants Smith and
Maynard under § 404(a)(1) of ERISA, 29 U.S.C. § 1104(a)(1).
On October 24, 2014, the Benefits Funds moved for summary judgment and filed
supporting materials. To date, defendants have not filed an opposition. For the reasons set forth
below, the Benefits Funds’ motion for summary judgment is granted in part, and denied in part.
The Benefits Funds are employee benefit plans within the meaning of § 3(3) of ERISA,
29 U.S.C. § 1002(3). Rule 56.1, ¶ 1. Maximum Metal, incorporated in New York, is an
employer within the meaning of § 3(5) of ERISA, 29 U.S.C. § 1002(5). Id. ¶¶ 2–3. Maynard is
the principal owner of Maximum Metal, a closely held corporation, id. ¶ 6; Smith exercised
control over Maximum Metal’s activities and operations by determining, inter alia, whether
Maximum Metal made contributions to the Benefits Funds, id. ¶¶ 14–17.
The Collective Bargaining Agreements
Under three consecutive collective bargaining agreements (“CBAs”) between Sheet
Metal Workers’ International Association Local Union No. 28, and Sheet Metal and Air
Conditioning Contractors Association of New York City, Inc. et al., Maximum Metal was
required to make monthly contributions to the Benefits Funds on behalf of its covered
employees. Shaw Decl. ¶¶ 8–10. The first CBA was effective between August 1, 2005 and July
31, 2009, Dubin Decl. Ex. C (“2005 CBA”); the second between August 1, 2009 and July 31,
The facts that form the basis of this Opinion are drawn from the Complaint, Dkt. 1 (“Compl.”);
plaintiffs’ Rule 56.1 Statement, Dkt. 33 (“Rule 56.1”); the declaration of Justin Sargent, Dkt. 35
(“Sargent Decl.”), and the exhibit attached thereto; the declaration of Walter Shaw, Dkt. 36
(“Shaw Decl.”), and the exhibits attached thereto; and the declaration of Jeffrey S. Dubin, Dkt.
37 (“Dubin Decl.”), and the exhibits attached thereto.
2011, Dubin Decl. Ex. D (“2009 CBA”); and the third between September 15, 2011 and July 31,
2014, Dubin Decl. Ex. E (“2011 CBA”). Each CBA incorporates by reference the Agreements
and Declarations of Trust of the Benefits Funds:
The Employer agrees to be bound by the provisions of the Agreement and
Declaration of Trust governing the various National Benefit Funds, and the
interpretations thereof by the respective Board of Trustees of the Funds, as same
may be amended from time to time, and hereby acknowledge[s] that such trust
documents are incorporated herein by reference and are adopted by the Employer.
2005 CBA, Art. XII § 24(A); 2009 CBA, Art. XII § 24(A); 2011 CBA, Art. XII § 24(A). The
declarations of trust state that “‘[c]ontributions’ refer to the monies required to be paid to the
Fund by Employers pursuant to a Collective Bargaining Agreement.” See, e.g., Dubin Decl. Ex.
F, Art. I § 5; accord Dubin Decl. Ex. I, Art. I § 6; Dubin Decl. Ex. J, Art. I § 4. The CBAs set
out the contribution rates for each of the Benefits Funds. 2005 CBA, Art. XII §§ 21–23; 2009
CBA, Art. XII §§ 21–23; 2011 CBA, Art. XII §§ 21–23. They also state that, “[i]f delinquent,
the Employer agrees to pay the interest, liquidated damages, attorneys’ fees and costs as
provided in the respective Trust Agreement.” 2005 CBA, Art. XII § 26; 2009 CBA, Art. XII
§ 25; 2011 CBA, Art. XII § 25.
On October 31, 2013, the Benefits Funds filed a Complaint. Dkt. 1. It alleged that,
between March 1, 2009 and July 31, 2013, Maximum Metal failed to make required
contributions to the Benefits Funds. Dubin Decl. ¶ 30; Compl. ¶ 18. The Benefits Funds seek
the delinquent contributions as well as interest thereon, liquidated damages, audit fees and costs,
and reasonable attorneys’ fees and costs. Compl. ¶ 46.
On February 14, 2014, defendants filed an Answer. Dkt. 15. On October 24, 2014, the
Benefits Funds moved for summary judgment and, in support, filed a brief, a Rule 56.1
Statement, and three declarations. Dkt. 32–37.
On October 31, 2014, defense counsel filed a motion to withdraw as counsel for all three
defendants. Dkt. 39. On November 4, 2014, the Court granted this motion with respect to the
individual defendants, Maynard and Smith; it gave the corporate defendant, Maximum Metal,
one month to obtain successor counsel. Dkt. 41. In a follow-up order, the Court stated that the
deadline for all three defendants to respond to the Benefits Funds’ summary judgment motion
was January 2, 2015. Dkt. 43. The Court warned that, “[i]f the defendants fail to submit
opposition papers to plaintiffs’ motion, the Court will consider the plaintiffs’ summary judgment
motion to be unopposed.” Id. On December 9, 2015, the Court reiterated these deadlines for any
opposition to the summary judgment motion, and repeated its warning. Dkt. 45. On December
12, 2015, the Court granted Maximum Metal’s counsel’s motion to withdraw, and stated that all
deadlines in the case remained in place. Dkt. 47. To date, defendants have not filed an
“It is settled law that a corporation may not appear in a lawsuit against it except through an
attorney, and that, where a corporation repeatedly fails to appear by counsel, a default judgment
may be entered against it pursuant to Rule 55” of the Federal Rules of Civil Procedure. SEC v.
Research Automation Corp., 521 F.2d 585, 589 (2d Cir. 1975) (internal citation omitted).
Because no timely motion for a default judgment against Maximum Metal was filed, however,
the Court reaches the merits of this case with respect to each defendant. The decision the Court
renders here, however, would not have differed had it granted a default judgment against
Maximum Metal and then conducted an inquest into damages. Cf. Bricklayers & Allied
Craftworkers Local 2, Albany, N.Y. Pension Fund v. Moulton Masonry & Constr., LLC, 779 F.3d
182, 189 (2d Cir. 2015) (a default “is not considered an admission of damages” and the court
may, inter alia, conduct hearings to assess damages) (citations and internal quotation marks
Applicable Summary Judgment Standard
To prevail on a motion for summary judgment, the movant must “show 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 movant bears the burden of demonstrating the absence of a
question of material fact. In making this determination, the Court must view all facts “in the
light most favorable” to the non-moving party. Holcomb v. Iona Coll., 521 F.3d 130, 132 (2d
Cir. 2008); see also Celotex Corp v. Catrett, 477 U.S. 317, 323 (1986). To survive a summary
judgment motion, the opposing party must establish a genuine issue of fact by “citing to
particular parts of materials in the record.” Fed. R. Civ. P. 56(c)(1); see also Wright v. Goord,
554 F.3d 255, 266 (2d Cir. 2009). Only disputes over “facts that might affect the outcome of the
suit under the governing law” will preclude a grant of summary judgment. Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether there are genuine issues of
material fact, the Court is “required to resolve all ambiguities and draw all permissible factual
inferences in favor of the party against whom summary judgment is sought.” Johnson v. Killian,
680 F.3d 234, 236 (2d Cir. 2012) (citing Terry v. Ashcroft, 336 F.3d 128, 137 (2d Cir. 2003)).
“Even when a motion for summary judgment is unopposed, the district court is not
relieved of its duty to decide whether the movant is entitled to judgment as a matter of law.” Vt.
Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 242 (2d Cir. 2004); see also Amaker v.
Foley, 274 F.3d 677, 681 (2d Cir. 2001) (“[W]hen a nonmoving party chooses the perilous path
of failing to submit a response to a summary judgment motion, the district court may not grant a
The Court has jurisdiction under § 502 of ERISA, 29 U.S.C. § 1132, which also empowers the
Benefits Funds to bring a civil action to collect the monies owed pursuant to the CBAs.
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. . . .”).
However, “when the moving party has carried its burden . . . , its opponent must do more
than simply show that there is some metaphysical doubt as to the material facts,” Scott v. Harris,
550 U.S. 372, 380 (2007) (citation and internal quotation marks omitted), and must offer “some
hard evidence showing that its version of the events is not wholly fanciful,” Miner v. Clinton
Cnty., N.Y., 541 F.3d 464, 471 (2d Cir. 2008) (citation and internal quotation marks omitted).
Indeed, “the plain language of Rule 56(c) mandates the entry of summary judgment, after
adequate time for discovery and upon motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential to that party’s case.” Celotex Corp.,
477 U.S. at 322. Although “Rule 56(e) permits a proper summary judgment motion to be
opposed by any of the kinds of evidentiary materials listed in Rule 56(c), except the mere
pleadings themselves,” id. at 324, “‘[t]he mere existence of a scintilla of evidence in support of
the [non-moving party’s] position will be insufficient’ to defeat a summary judgment motion,”
Fabrikant v. French, 691 F.3d 193, 205 (2d Cir. 2012) (quoting Anderson, 477 U.S. at 252).
Rule 56.1 of the Local Civil Rules for this District “requires a party moving for summary
judgment to submit ‘a separate, short and concise statement’ setting forth material facts as to
which there is no genuine issue to be tried.” Holtz v. Rockefeller & Co., 258 F.3d 62, 72 (2d Cir.
2001) (quoting Local Rule 56.1(a)). “The facts set forth in a moving party’s statement ‘will be
deemed to be admitted unless controverted’ by the opposing party’s statement.” Id. (quoting
Local Rule 56.1(c)). Again, “while a court ‘is not required to consider what the parties fail to
point out’ in their Local Rule 56.1 statements, it may in its discretion opt to ‘conduct an
assiduous review of the record’ even where one of the parties has failed to file such a statement.”
Id. (quoting Monahan v. N.Y.C. Dep’t of Corr., 214 F.3d 275, 292 (2d Cir. 2000)).
For the reasons that follow, the Court grants summary judgment to the Benefits Funds
with respect to their claims based on the 2009 and 2011 CBAs. However, the Court denies
summary judgment as to their claims based on the 2005 CBA. The Court first addresses the
Benefits Funds claims based on the 2005 CBA, and then addresses their claims based on the
2009 and 2011 CBAs.
Claims Based on the 2005 CBA
The arbitration clause in the 2005 CBA is as follows:
Any and all complaints, disputes, claims, differences, and/or grievances arising out
of or relating to the interpretation or application of the provisions of this Agreement
shall be settled, adjusted and disposed of in the following manner: . . .
(D) Grievances not resolved under procedure described in (C) above because of
deadlock or otherwise shall be referred to arbitration as set forth in Section 2 of
this Article XVI.
2005 CBA, Art. XVI § 1 (emphasis added).
With regard to plaintiffs’ claims based on the 2005 CBA, the Court denies plaintiffs’
motion for summary judgment. The arbitration clause in the 2005 CBA is binding, and plaintiffs
have not explained why it does not apply or is overcome here. Absent such a showing, the Court
is compelled to hold that, even if the Benefits Funds are entitled to the relief they seek if pursued
in a proper forum, they cannot—in this non-arbitral forum—recover the delinquent
contributions, and associated interest, liquidated damages, and audit fees and costs they seek for
the period of March 1, 2009 through July 31, 2009.
This conclusion flows from well-established legal principles regarding agreements to
arbitrate. First, the Federal Arbitration Act (“FAA”) provides that an arbitration agreement
“shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract.” 9 U.S.C. § 2. The Act, based on Congress’s powers to
regulate interstate commerce and admiralty, applies to any “contract evidencing a transaction
involving commerce.” Id.; see also Southland Corp. v. Keating, 465 U.S. 1, 10 (1984); Prima
Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 400 (1967).
In resolving a claim that an action must be directed to arbitration under an arbitration
agreement, the Court must determine: (i) whether the parties entered into an agreement to
arbitrate; (ii) if so, the scope of that agreement; (iii) if federal statutory claims are asserted,
whether Congress intended those claims to be nonarbitrable; and (iv) if some, but not all, claims
are subject to arbitration, whether to stay the balance of the proceedings pending arbitration. See
Guyden v. Aetna, Inc., 544 F.3d 376, 382 (2d Cir. 2008); JLM Indus., Inc. v. Stolt-Nielsen SA,
387 F.3d 163, 169 (2d Cir. 2004).
Where a binding agreement to arbitrate is found, “doubts concerning the scope of an
arbitration clause should be resolved in favor of arbitration.” Applied Energetics, Inc. v.
NewOak Capital Mkts., LLC, 645 F.3d 522, 526 (2d Cir. 2011). Indeed, “where the contract
contains an arbitration clause, there is a presumption of arbitrability . . . unless it may be said
with positive assurance that the arbitration clause is not susceptible to an interpretation that
covers the asserted dispute.” AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643,
650 (1986) (citation and internal quotation marks omitted); accord Volt Info. Sciences, Inc. v. Bd.
of Trs. of Leland Stanford Jr. Univ., 489 U.S. 468, 475–76 (1989); Paramedics Electromedicina
Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 653 (2d Cir. 2004).
The Second Circuit has established a roadmap for determining whether a particular
dispute falls within the scope of an agreement’s arbitration clause:
First, recognizing there is some range in the breadth of arbitration clauses, a court
should classify the particular clause as either broad or narrow. [Second], if
reviewing a narrow clause, the court must determine whether the dispute is over an
issue that is on its face within the purview of the clause, or over a collateral issue
that is somehow connected to the main agreement that contains the arbitration
clause. Where the arbitration clause is narrow, a collateral matter will generally be
ruled beyond its purview. Where the arbitration clause is broad, there arises a
presumption of arbitrability and arbitration of even a collateral matter will be
ordered if the claim alleged implicates issues of contract construction or the parties’
rights and obligations under it.
Louis Dreyfus Negoce S.A. v. Blystad Shipping, 252 F.3d 218, 224 (2d Cir. 2001) (citation
omitted); accord JLM Indus., Inc., 387 F.3d at 172.
Applying these principles here, the 2005 CBA contains a facially valid agreement to
arbitrate. The parties have not disputed the validity of the 2005 CBA in general or its arbitration
Next, to determine the scope of the 2005 CBA arbitration clause, the Court considers the
clause’s text. The clause states that “[a]ny and all complaints, disputes, claims, differences,
and/or grievances arising out of or relating to the interpretation or application of the provisions
of this Agreement . . . shall be referred to arbitration as set forth in Section 2 of this Article
XVI.” 2005 CBA, Art. XVI § 1. The Second Circuit has described arbitration clauses that cover
“any and all” claims as “inclusive, categorical, unconditional and unlimited.” PaineWebber Inc.
v. Bybyk, 81 F.3d 1193, 1199 (2d Cir. 1996). And it has stated that although the phrase “aris[ing]
under” in an arbitration clause ordinarily limits the clause’s scope, such is not so where the
phrase is accompanied by the expansive phrase “relating to,” in which case the arbitration clause
is to be construed broadly. ACE Capital Re Overseas Ltd. v. United Life Ins. Co., 307 F.3d 24,
32 (2d Cir. 2002). Such is the case here. The operative text here—embracing “any and all . . .
disputes . . . arising out of or relating to”—makes this a quintessentially broad arbitration clause.
If there were any doubt about the scope of the arbitration clause (and there is not), it
would be dispelled by comparing the arbitration clause in the 2005 CBA with that in the 2009
and 2011 CBAs. The arbitration clause reads as follows in the 2009 and 2011 CBAs:
Any and all complaints, disputes, claims, differences and/or grievances (except that
delinquent contributions may also be resolved outside this procedure by bringing
an action in federal court or through a motion for administrative expenses/proof of
bankruptcy court) arising out of or relating to the interpretation or application of
the provisions of this Agreement shall be settled, adjusted, and disposed of . . .
[primarily through arbitration].
2009 CBA, Art. XVI § 1; 2011 CBA, Art. XVII § 1 (emphasis added). Unlike the 2005 CBA’s
sweeping arbitration clause, the 2009 and 2011 CBAs contain an express exception that permits
disputes about delinquent contributions to be brought in federal court. This change from 2005 to
2009 confirms the Court’s construction of the arbitration clause in the 2005 CBA.
The Court next examines whether Congress intended the claims in this case, which are
brought under ERISA, a federal statute, to be nonarbitrable. The Second Circuit has held, “after
careful review of ERISA’s text and legislative history, that Congress did not intend to preclude
waiver of a judicial forum for claims arising under ERISA.” Feinberg v. Bear, Stearns & Co.,
No. 90 Civ. 5250 (JFK), 1991 WL 79309, at *3 (S.D.N.Y. May 3, 1991); accord Bird v.
Shearson Lehman/Am. Exp., Inc., 926 F.2d 116, 122 (2d Cir. 1991). Such claims may therefore
be settled through arbitration.
Accordingly, based on the presence of a mandatory clause committing this dispute to
arbitration, the Court denies the Benefits Funds’ summary judgment motion insofar as it is based
on the 2005 CBA. 4 The Court is mindful that the Benefits Funds did not address the arbitration
clause of the 2005 CBA in their moving papers; the Benefits Funds are therefore at liberty to
move anew for summary judgment as to this claim in the event that there is evidence or legal
authority undermining this Court’s determination. Otherwise, on an appropriate motion, the
Court will compel arbitration as to this claim.
The Court next turns to the Benefits Funds’ claims based on the 2009 and 2011 CBAs. If
those claims too were required to be resolved through arbitration—i.e., if all claims in this case
are required to be arbitrated—then the Court, upon granting a motion to compel arbitration,
would stay this case pending the completion of arbitration. Katz v. Cellco P’ship, 14 Civ. 138,
2015 WL 4528658, at *4 (2d Cir. July 28, 2015) (holding that a stay of proceedings is mandated
“when all of the claims in an action have been referred to arbitration and a stay requested”)
(emphasis added). But, if the Court is a proper forum to resolve the claims based on the 2009
and 2011 CBAs, then the Court may do so, notwithstanding the presence of claims (from the
2005 CBA) that may be resolved only in arbitration.
Claims based on the 2009 and 2011 CBAs
The 2009 and 2011 CBAs do not contain a similar arbitration clause. Rather, as noted,
the clause in these two CBAs contains an exception that permits disputes over delinquent
contributions to be brought in federal court. 2009 CBA, Art. XVI § 1; 2011 CBA, Art. XVII § 1.
The Court therefore examines the merits of the delinquent contributions claims brought under
To be sure, there are limited exceptions to the 2005 CBA’s sweeping arbitration clause, see
2005 CBA, Art. XVI, § 1, A–C, but the Benefits Funds have made no allegations and no
showing that any of these exceptions applies here.
Whether Maximum Metal, the Corporate Defendant, is Liable
Maximum Metal entered into contracts that required it to contribute to the Benefits Funds
“for certain hours worked by participants employed by” Maximum Metal. Dubin Decl. ¶ 11; see
also Dubin Decl. Ex. L ¶ 1 (“Settlement Stipulation”) (“Defendant Maximum Metal
Manufacturers, Inc. agrees that it is a party to a collective bargaining agreement with Local
Union 28, Sheet Metal Workers’ International Association.”). The records of the Benefits Funds
indicate that Maximum Metal failed to make contractually mandated contributions on several
occasions between August 2009 and July 31, 2013, thus breaching the 2009 and 2011 CBAs.
Shaw Decl. Ex. B. Maximum Metal has not submitted any contrary evidence; therefore, the
Court finds this as fact. See T.Y. v. N.Y.C. Dep’t of Educ., 584 F.3d 412, 418 (2d Cir. 2009) (“A
nonmoving party’s failure to respond to a Rule 56.1 statement permits the court to conclude that
the facts asserted in the statement are uncontested and admissible.”).
Whether Smith and Maynard, the Individual Defendants, are Liable
The Benefits Funds also seek to hold individual defendants Smith and Maynard liable for
the delinquent contributions. To the extent Smith and Maynard are fiduciaries under ERISA,
they are properly held individually liable for Maximum Metal’s delinquent contributions. That is
because ERISA protects employee pension and retirement plans by creating “strict standards of
[fiduciary] conduct, also derived from the common law of trusts—most prominently, a standard
of loyalty and a standard of care.” Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp.,
Inc., 472 U.S. 559, 570 (1985). “Under ERISA, the duty of loyalty is expressed as follows:
‘(1) [A] fiduciary shall discharge his duties with respect to a plan solely in the interest of the
participants and beneficiaries and—(A) for the exclusive purpose of: (i) providing benefits to
participants and their beneficiaries.’” Harris Trust & Sav. Bank v. John Hancock Mut. Life Ins.
Co., 302 F.3d 18, 26 (2d Cir. 2002) (quoting 29 U.S.C. § 1104(a)(1)(A)(i)). ERISA
“supplements the duty of loyalty with an express prohibition on self-dealing.” United Teamster
Fund v. MagnaCare Admin. Servs., LLC, 39 F. Supp. 3d 461, 468–69 (S.D.N.Y. 2014); see also
29 U.S.C. § 1106(b) (“A fiduciary with respect to a plan shall not—(1) deal with the assets of
the plan in his own interest or for his own account . . . .”).
To determine whether Maynard and Smith are fiduciaries, the Court conducts a two-part
inquiry: “(1) Whether unpaid contributions are assets of the Benefit Funds; and (2) whether
Defendants exercised discretionary authority or control over those assets.” Sheet Metal Workers’
Nat’l Pension Fund v. AUL Sheet Metal Works Inc., No. 10 Civ. 1371 (KBF), 2012 WL 32237,
at *4 (S.D.N.Y. Jan. 5, 2012); accord NYSA-ILA Med. & Clinical Servs. Fund v. Catucci, 60 F.
Supp. 2d 194, 200–01 (S.D.N.Y. 1999)).
With regard to the first part of this inquiry, “[d]elinquent contributions to a benefit fund
are fund assets if so defined in the agreement creating the fund.” Trs. of the Plumbers Local
Union No. 1 Welfare Fund, Additional Sec. Ben. Fund, Vacation & Holiday Fund, Trade Educ.
Fund & 401(k) Sav. Plan v. Philip Gen. Constr., No. 05 Civ. 1665 (NG) (RLM), 2007 WL
3124612, at *5 (E.D.N.Y. Oct. 23, 2007); see also United States v. Panepineto, 818 F. Supp. 48,
51 (E.D.N.Y. 1993); Hanley v. Giordino’s Restaurant, Inc., No. 94 Civ. 4696 (RPP), 1995 WL
442143, at *4 (S.D.N.Y. July 26, 1995). Here, each CBA states that:
Employer contributions are considered assets of the respective Funds and title to all
monies paid into and/or due and owing said Funds shall be vested in and remain
exclusively in the Trustees of the respective funds. The Employer shall have no
legal or equitable right, title or interest in or to any sum paid by or due from the
2005 CBA, Art. XII § 24(B); 2009 CBA, Art. XII § 24(B); 2011 CBA, Art. XII § 24(B). This
language is crystal clear: The unpaid contributions are explicitly plan assets under ERISA.
With regard to the second part of the inquiry, the record evidence shows that the
individual defendants exercised discretionary control over Maximum Metal’s assets. “Congress
intended ERISA’s definition of fiduciary ‘to be broadly construed.’” LoPresti v. Terwilliger,
126 F.3d 34, 40 (2d Cir. 1997) (quoting Blatt v. Marshal & Lassman, 812 F.2d 810, 812 (2d Cir.
1987)). An individual may be an ERISA fiduciary by “exercis[ing] any authority or control
respecting management or disposition of [plan] assets.” Id. (quoting 29 U.S.C. § 1002(21)(A))
(emphasis and second brackets in original). Here, Maynard was Maximum Metal’s principal
owner and “exercised control over the activities and operations” of the closely held corporation,
Rule 56.1, ¶ 13 (citing Dubin Decl. Ex. K (defendants’ responses to request for admission, no.
8)); and Smith “determined whether or not Maximum Metal made contributions to the Benefits
Funds,” id. ¶ 14 (citing Dubin Decl. Ex. K (defendants’ responses to request for admission, no.
9)), and “decided which accounts payable were to be paid by Maximum Metal,” id. ¶ 17 (citing
Dubin Decl. Ex. K (defendants’ responses to request for admission, nos. 9, 11, 15, 21, 27, 29)).
Maynard and Smith thus exercised discretionary control and discretionary authority,
respectively, over the Benefits Funds. Indeed, in a recent Settlement Stipulation in a separate
case in which the same Benefits Funds brought ERISA claims under the same CBAs for
delinquent contributions, Maynard and Smith “agree[d] that they are liable as individuals for the
contributions sought.” Dubin Decl. Ex. L, ¶ 2 (citing Sheet Metal Workers’ Nat’l Pension Fund
v. Maximum Metal Manufacturers Inc., 13 Civ. 1592 (AKH), Settlement Stipulation (Dec. 9,
2013)). Accordingly, the Court finds that Maynard and Smith are fiduciaries.
When fiduciaries breach their duties, they are personally liable for the losses to the funds
resulting from their breach. Sheet Metal Workers’ Nat’l Pension Fund, 2012 WL 32237, at *5;
29 U.S.C. § 1109(a). The Court thus finds that Maynard and Smith each failed to make required
contributions to the Benefits Funds during the period between August 1, 2009 and July 31, 2013,
and thereby breached their “obligation to hold assets of the Benefit[s] Funds for the exclusive
benefit of the participants and beneficiaries of the Funds.” Id.
The Court notes that two theoretically available defenses to individual liability have not
been raised. Maynard and Smith do not “argue or even suggest that the required contributions
are illegal or that the CBA is void.” Sheet Metal Workers Nat’l Pension Fund v. Evans, No. 12
Civ. 3049 (JFB) (GRB), 2014 WL 2600095, at *7 (E.D.N.Y. June 11, 2014). “Therefore, the
Court must enforce the unambiguous terms of the CBA, which make defendant[s] liable to
plaintiffs for the delinquent contributions.” Id. As such, the Court finds Maynard and Smith
individually liable for the delinquent contributions owed to the Benefits Funds under the 2009
and 2011 CBAs.
Under ERISA § 502(g)(2), “[i]n any action . . . for or on behalf of a plan to enforce
section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall
award the plan—(A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an
amount equal to the greater of—(i) interest on the unpaid contributions, or (ii) liquidated
damages provided for under the plan in an amount not in excess of 20 percent . . . ,
(D) reasonable attorneys’ fees and costs of the action, to be paid by the defendant, and (E) such
other legal or equitable relief as the court deems appropriate.” 29 U.S.C. § 1132(g)(2).
Here, the Benefits Funds have submitted rate sheets that “show the contract contribution
rates for the various Funds for the various categories of employees,” Shaw Decl. ¶ 20; see also
Shaw Decl. Ex. A, and schedules of past contributions which “show the amounts due from an
employer[,] the amounts contributed by that employer, and the balances owed by that employer,
to the various Funds,” Shaw Decl. ¶ 23; see also Shaw Decl. Ex. B. The audit reports reflect that
Maximum Metal owes a total of $166,367.37 in fund contributions, interest (calculated through
October 22, 2014), liquidated damages, and audit fees and costs. 5 Shaw Decl. Ex. D. The
defendants have not disputed this data, let alone come forward with evidence supporting a
contrary damages calculation.
The Court therefore grants summary judgment to the Benefits Funds for the delinquent
contributions, interest, liquidated damages, and audit fees and costs associated with the 2009 and
2011 CBAs. Accordingly, the Court directs the Benefits Funds to submit revised calculations
reflecting the damages due under these CBAs.
Reasonable Attorneys’ Fees and Costs
Plaintiffs also seek reasonable attorneys’ fees and costs, to which they are entitled under
the CBAs and ERISA § 502(g)(2). See, e.g., Evans, 2014 WL 2600095, at *8; 29 U.S.C.
§ 1132(g)(2) (“In any action under this subchapter by a fiduciary for or on behalf of a plan to
enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court
shall award the plan— . . . (D) reasonable attorney’s fees and costs of the action, to be paid by
the defendant . . . .”).
The party seeking attorneys’ fees “bears the burden of . . . documenting the appropriate
hours expended and hourly rates.” Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). The starting
point for calculating a “presumptively reasonable fee” is “the lodestar—the product of a
reasonable hourly rate and the reasonable number of hours required by the case.” Millea v.
The calculations of outstanding contributions are based on the audit report of Calibre CPA
Group and on reports submitted by the defendants. See generally Shaw Decl.
Metro-North R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011); see generally Perdue v. Kenny A. ex
rel. Winn, 559 U.S. 542 (2010). “The presumptively reasonable fee boils down to ‘what a
reasonable, paying client would be willing to pay,’ given that such a party wishes ‘to spend the
minimum necessary to litigate the case effectively.’” Simmons v. N.Y.C. Transit Auth., 575 F.3d
170, 174 (2d Cir. 2009) (quoting Arbor Hill Concerned Citizens Neighborhood Ass’n v. County
of Albany, 493 F.3d 110, 112, 118 (2d Cir. 2007), amended on other grounds by 522 F.3d 182
(2d Cir. 2008)). Courts are obligated to exclude hours that are “excessive, redundant, or
otherwise unnecessary.” Kirsch v. Fleet St., Ltd., 148 F.3d 149, 173 (2d Cir. 1998) (quoting
Hensley, 461 U.S. at 434). The reasonableness of hourly rates are guided by the market rate
“[p]revailing in the community for similar services by lawyers of reasonably comparable skill,
experience and reputation.” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984). The relevant
community is this District. Arbor Hill Concerned Citizens, 522 F.3d at 190–91.
Here, to support their request for attorneys’ fees, plaintiffs’ counsel submitted a
declaration containing invoices that detailed the tasks performed and the hours worked. See
Dubin Decl. Ex. M. This declaration reflects that one attorney, Jeffrey S. Dubin, Esq. (the
principal of the firm representing plaintiffs, Jeffrey S. Dubin, P.C.), has 42 years of experience in
labor relations law and employee benefits law; he billed at a rate of $300 per hour. Dubin Decl.
¶¶ 36, 38. His associate, Amy E. Strang, Esq., who has five years of experience litigating, billed
at a rate of $225 per hour. Id. ¶ 39.
“In the Southern District of New York, fee rates for experienced attorneys in small firms
generally range from $250 to $450 in civil cases.” Watkins v. Smith, No. 12 Civ. 4635 (DLC),
2015 WL 476867, at *3 (S.D.N.Y. Feb. 5, 2015) (citing, inter alia, K.L. v. Warwick Valley Cent.
Sch. Dist., 12 Civ. 6313 (DLC), 2013 WL 4766339, at *7 (S.D.N.Y. Sept. 5, 2013), aff’d, 584 F.
App’x 17 (2d Cir. 2014) (summary order)); see also Shihan Chen v. Arts Nail Putnam Valley,
Inc., No. 14 Civ. 3037 (ALC) (JCF), 2015 WL 2381033, at *1 (S.D.N.Y. May 13, 2015) (“The
rate of $350.00 per hour charged by plaintiffs’ counsel Jian Hang is reasonable for the principal
of a small firm in this district.”) (citing Tucker v. City of New York, 704 F. Supp. 2d 347, 361
(S.D.N.Y. 2010) (awarding hourly rate of $350 to sole practitioner in civil rights case); Shaw
Family Archives, Ltd. v. CMG Worldwide, Inc., 589 F. Supp. 2d 331, 339–40 (S.D.N.Y. 2008)
(awarding hourly rate of $400 to sole practitioner in intellectual property case)). Accordingly,
the Court approves a rate of $300 per hour for Dubin. Accord Evans, 2014 WL 2600095, at *10
(“For a partner of [Jeffrey] Dubin’s experience level, in a pro se case involving uncomplicated
issues, $300.00 is a reasonable rate.”).
As to Strang, courts in this District have found rates of $125–$300 per hour reasonable
for associates, depending on, inter alia, their experience. Specifically, “[c]ourts in this district
have awarded a rate of $300 per hour for senior associates with at least eight years of
experience,” while they “typically award rates in the range of $125–215 to associates with three
years of experience or less.” Apolinario v. Luis Angie Deli Grocery Inc., No. 14 Civ. 2328
(GHW), 2015 WL 4522984, at *3 (S.D.N.Y. July 27, 2015) (collecting cases). Courts have
awarded up to $300 per hour for associates in ERISA cases. See, e.g., N.Y.C. Dist. Council of
Carpenters v. Rock-It Contracting, Inc., No. 09 Civ. 9479 (JGK) (AJP), 2010 WL 1140720, at
*4 (S.D.N.Y. Mar. 26, 2010), report and recommendation adopted, 2010 WL 1558568
(S.D.N.Y. Apr. 19, 2010) (collecting cases); N.Y. Dist. Council of Carpenters Pension Fund v.
Perimeter Interiors, Inc., 657 F. Supp. 2d 410, 424 (S.D.N.Y. 2009). For associates, courts have
also awarded the precise rate, $225, sought for Strang. See, e.g., Reith v. Allied Interstate, Inc.,
No. 12 Civ. 4278 (PKC), 2012 WL 5458007, at *3 (S.D.N.Y. Nov. 8, 2012). And this rate is
reasonable in light of Strang’s experience. Cf. Apolinario, 2015 WL 4522984, at *3.
Accordingly the Court approves a rate of $225 per hour for Strang.
“As for the number of hours expended, courts uphold fee requests in ERISA cases when
they determine that such fees are ‘reasonable.’” Finkel v. Jones Lang LaSalle Am., Inc., No. 08
Civ. 2333 (RRM) (RML), 2009 WL 5172869, at *5 (E.D.N.Y. Dec. 30, 2009) (citation omitted);
see also McDonald v. Pension Plan of the NYSA-ILA Pension Trust Fund, 450 F.3d 91, 96 (2d
Cir. 2006). The Court has reviewed the detailed invoices provided by plaintiffs’ counsel, and
they reflect sound billing practices: thorough, detailed, relevant, easy to understand, containing
limited block-billing, 6 with no evident duplication of effort. However, recognizing that some
amount of counsel’s work appears to have included making calculations specific to the 2005
CBA—for example, two billing entries refer generally to “calculat[ing] monthly payment
amounts” and “discuss[ing] amounts owed”—which falls outside the scope of the relief entered
here, the Court will reduce the attorneys’ fees by 5% of the request. So reduced, the Court finds
the hours that counsel expended reasonable. The Court accordingly grants plaintiffs’ counsel
attorneys’ fees in the amount of $24,217.88 (rather than $25,492.50, as requested).
To support their request for reasonable costs, plaintiffs’ counsel included an itemization
of the costs incurred over the course of this action. See Dubin Decl. Ex. N. Plaintiffs seek to
recover $940.68 in “filing fees, process server fees and postal charges.” Dubin Decl. ¶¶ 40–41.
Courts in this Circuit will generally grant “those reasonable out-of-pocket expenses incurred by
Block-billing is the practice of “grouping multiple tasks into a single billing entry, so as to
leave unclear how much time was devoted to each constituent task.” Doe v. Delta Airlines, Inc.,
No. 13 Civ. 6287 (PAE), 2015 WL 1840264, at *3 (S.D.N.Y. Apr. 21, 2015) (quoting Themis
Capital v. Democratic Republic of Congo, No. 09 Civ. 1652 (PAE), 2014 WL 4379100, at *6
(S.D.N.Y. Sept. 4, 2014)).
attorneys and ordinarily charged to their clients.” LeBlanc-Sternberg v. Fletcher, 143 F.3d 748,
763 (2d Cir. 1998) (quoting United States Football League v. National Football League, 887
F.2d 408, 416 (2d Cir. 1989)). “[U]nder Local Civil Rule 54.1, ‘the party must include as part of
the request an affidavit that the costs claimed are allowable by law, are correctly stated and were
necessarily incurred, and [b]ills for the costs claimed must be attached as exhibits.’” Evans,
2014 WL 2600095, at *11 (quoting D.J. ex rel. Roberts v. City of New York, No. 11 Civ. 5458
(JGK) (DF), 2012 WL 5431034, at *9 (S.D.N.Y. Oct. 16, 2012), report and recommendation
adopted sub nom. Roberts v. City of New York, 2012 WL 5429521 (S.D.N.Y. Nov.7, 2012)).
Because plaintiffs’ counsel did so in this case, the Court finds costs in the amount of $940.68
Accordingly, the Court grants the Benefits Funds’ requests for reasonable attorneys’ fees
(as modified above) and for costs.
Next Steps as to Plaintiffs’ Claims Under the 2005 CBA
Because no application to compel arbitration of plaintiffs’ claims under the 2005 CBA
has been made, the Court does not grant that relief. The Court stands ready to do so, on an
appropriate application. The Court directs plaintiffs, within two weeks of this decision, i.e., by
Tuesday, September 1, 2015, either to (1) make such a motion or (2) move anew for summary
judgment as to the 2005 CBA claim, this time explaining, with reference to on-point case
authority, the basis for any claim that the arbitration clause in that CBA does not mandate
arbitration. In the event that no such filing is received, the Court expects to dismiss, sua sponte,
plaintiffs’ claims based on the 2005 CBA, on the grounds that this Court is not a proper forum to
resolve these claims, and that if plaintiffs are to pursue such claims, they must do so in
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