Trustees of the Operating Engineers Local 137, 137A, 137B, 137C & 137R Annuity, Pension, Welfare and Apprenticeship Skill Improvement & Safety Funds of the International Union of Operating Engineers, et al v. WJL Equities Corp.

Filing 46

OPINION AND ORDER re: 39 MOTION for Summary Judgment filed by Trustees of the Operating Engineers Local 137, 137A, 137B, 137C & 137R Annuity, Pension, Welfare and Apprenticeship Skill Improvement & Safety Funds of the International Union of Operating Engineers. Plaintiffs' motion for summary judgment is GRANTED. By April 26, 2016, plaintiffs shall submit (i) affidavits of attorney's fees and auditor fees reflecting the final fee amounts; and (ii) a proposed judgment stating a total amount owed by defendants, which shall include the monetary relief as itemized above plus the final amount of attorney's fees and auditor fees requested. The Clerk is directed to terminate the motion. (Doc. #39). SO ORDERED. (Signed by Judge Vincent L. Briccetti on 4/5/2016) (mml)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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TRUSTEES OF THE OPERATING
:
ENGINEERS LOCAL 137, 137A, 137B, 137C,
:
& 137R ANNUITY, PENSION, WELFARE
:
AND APPRENTICESHIP SKILL
:
IMPROVEMENT & SAFETY FUNDS OF THE
:
INTERNATIONAL UNION OF OPERATING
:
ENGINEERS, LOCAL 137, 137A, 137B, 137C & :
137R; and THE INTERNATIONAL UNION OF
:
OPERATING ENGINEERS LOCAL 137, 137A,
:
137B, 137C & 137R,
:
Plaintiffs,
:
:
v.
:
:
WJL EQUITIES CORP.,
:
Defendant.
:
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OPINION AND ORDER
14 CV 2640 (VB)

Briccetti, J.:
Plaintiffs, the Trustees of the Operating Engineers Local 137, 137A, 137B, 137C & 137R
Annuity, Pension, Welfare and Apprenticeship Skill Improvement & Safety Funds of the
International Union of Operating Engineers, Local 137, 137A, 137B, 137C & 137R (the
“Funds”), and the International Union of Operating Engineers Local 137, 137A, 137B, 137C &
137R (the “Union”) bring this action against defendant WJL Equities Corp. pursuant to the
Labor Management Relations Act of 1947 (“LMRA”) and the Employee Retirement Income
Security Act (“ERISA”). Plaintiffs seek to enforce the collective bargaining agreements between
the Union and defendant and collect unpaid contributions owed to the Funds.
Before the Court is plaintiffs’ unopposed 1 motion for summary judgment. (Doc. #39).
For the reasons set forth below, the motion is GRANTED.
1

On July 23, 2015, the Court ordered defendant to file its opposition by October 21, 2015.
(Doc. #31). Defendant failed to do so. The Court sua sponte extended defendant’s time to
oppose the motion to November 24, 2015, and warned defendant it would deem the motion fully
1

The Court has subject matter jurisdiction under 28 U.S.C. § 1331.
BACKGROUND
I.

Factual Background
The following facts are taken from plaintiffs’ brief, affidavits, supporting exhibits, and

statement of undisputed material facts pursuant to Local Rule 56.1.
The Funds are (i) jointly administered labor-management trust funds established under
the LMRA; (ii) “employee benefit plans” within the meaning of ERISA, 29 U.S.C. §§ 1002(3)
and 1132(d)(1); and (iii) “multiemployer plans” within the meaning of 29 U.S.C. §§ 1002(37)
and 1145. Plaintiffs are the trustees of the Funds and “plan sponsor[s]” within the meaning of 29
U.S.C. § 1002(16)(B)(iii). Plaintiffs are fiduciaries of the Funds empowered to bring this action.
See id. §§ 1002(21)(A) and 1132(a)(3).
Defendant is a for-profit corporation and an employer within the meaning of ERISA, 29
U.S.C. §§ 1002(5) and 1145. Since March 2, 2009, defendant has been a party to collective
bargaining agreements (“CBAs”) with the Union.
Each CBA obligates defendant to make fringe benefit contributions to the Funds for work
performed by defendant’s employees falling under the jurisdiction of the Union’s Local 137.
The amount defendant is required to contribute is based on the number of hours worked
multiplied by rates set forth in the CBAs’ fringe benefit schedules. Under the CBAs, in the event
defendant’s contributions are delinquent, the Funds are entitled to recover (i) the full value of the
outstanding contributions; (ii) 10% annual interest on delinquent contributions; (iii) liquidated
damages in the amount of 10% of the total unpaid contributions; (iv) audit fees; and (v)
attorney’s fees and costs. The CBAs also require defendant to submit to audits by the Funds.
submitted and unopposed if no opposition was received. (Doc. #45). Defendant still has not
opposed the motion.
2

With the help of an accounting firm, the Funds audited defendant’s payroll to determine
whether defendant had made the required fringe benefit contributions during the period from
October 1, 2012, through February 28, 2015 (the “Audited Period”). The audit report, dated
April 29, 2015, indicated defendant’s contributions were deficient by $117,136.22 during the
Audited Period. Additionally, calculated at 10% per year for delinquent contributions,
$12,164.82 in interest had accrued during the Audited Period. The audit cost plaintiffs
$1,912.50.
Since the audit, defendant has paid the Funds $44,199.73 toward the unpaid
contributions. Therefore, $72,936.49 remains outstanding, not including interest.
II.

Relief Sought
Plaintiffs seek to recover the following:
1. $72,936.49 in outstanding contributions;
2. The $12,164.82 in interest that accrued during the Audited Period;
3. $2,431.22 in additional interest, which accrued at a rate of 10% per year on the
outstanding contributions between the audit report on April 29, 2015, and August 29,
2015, shortly before this motion was filed;
4. Statutory damages of $7,293.64, or 10% of the outstanding contributions;
5. $6,463.00 in attorney’s fees; 2
6. $480.00 in court costs, including filing and process server fees;
7. $1,912.50 in auditor fees, plus as-yet unknown additional auditor fees in conjunction with
this motion.

2

Curiously, the invoice attached as Exhibit F to the Affidavit of Giacchino J. Russo in
Support of Motion for Summary Judgment indicates $13,513.00 in attorney’s fees were incurred,
yet both plaintiffs’ memorandum of law and the statement of damages request only $6,463.00.
The affidavit itself refers to additional costs incurred “of an as yet undetermined sum” in
connection with the preparation of this motion. (Russo Aff. ¶ 13).
3

DISCUSSION
I.

Legal Standards
A.

Summary Judgment

The Court must grant a motion for summary judgment if the pleadings, discovery
materials before the Court, and any affidavits show there is no genuine issue as to any material
fact and it is clear the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material when it “might affect the outcome of the suit under the governing law
. . . . Factual disputes that are irrelevant or unnecessary” are not material and thus cannot
preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A
dispute about a material fact is genuine if there is sufficient evidence upon which a reasonable
jury could return a verdict for the non-moving party. See id. The Court “is not to resolve
disputed issues of fact but to assess whether there are any factual issues to be tried.” Wilson v.
Nw. Mut. Ins. Co., 625 F.3d 54, 60 (2d Cir. 2010) (citation omitted). It is the moving party’s
burden to establish the absence of any genuine issue of material fact. Zalaski v. City of
Bridgeport Police Dep’t, 613 F.3d 336, 340 (2d Cir. 2010).
If the non-moving party has failed to make a sufficient showing on an essential element
of his case on which he has the burden of proof, then summary judgment is appropriate. Celotex
Corp. v. Catrett, 477 U.S. at 323. If the non-moving party submits “merely colorable” evidence,
summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. at 249-50. The
non-moving party “must do more than simply show that there is some metaphysical doubt as to
the material facts, and may not rely on conclusory allegations or unsubstantiated speculation.”
Brown v. Eli Lilly & Co., 654 F.3d 347, 358 (2d Cir. 2011) (internal quotation marks and
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citations omitted). The mere existence of a scintilla of evidence in support of the non-moving
party’s position is likewise insufficient; there must be evidence on which the jury could
reasonably find for him. Dawson v. Cty. of Westchester, 373 F.3d 265, 272 (2d Cir. 2004).
On summary judgment, the Court construes the facts, resolves all ambiguities, and draws
all permissible factual inferences in favor of the non-moving party. Dallas Aerospace, Inc.
v. CIS Air Corp., 352 F.3d 775, 780 (2d Cir. 2003). If there is any evidence from which a
reasonable inference could be drawn in favor of the non-moving party on the issue on which
summary judgment is sought, summary judgment is improper. See Sec. Ins. Co. of Hartford
v. Old Dominion Freight Line Inc., 391 F.3d 77, 83 (2d Cir. 2004).
When the non-moving party fails to address an assertion of fact that is established by
supporting materials, the Court may “consider the fact undisputed for purposes of the motion”
and grant summary judgment for the moving party. Fed. R. Civ. P. 56(e)(2)-(3); see S.D.N.Y.
Local Civil Rule 56.1(c). Nevertheless, when, as here, the non-moving party “chooses the
perilous path of failing to submit a response to a summary judgment motion, the district court
may not grant the 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.” Vt. Teddy
Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004) (internal quotation marks
omitted).
When moving for summary judgment on an affirmative defense, a plaintiff “may satisfy
its [] burden by showing ‘that there is an absence of evidence to support [an essential element of]
the [non-moving party’s] case.” Fed. Deposit Ins. Corp. v. Giammettei, 34 F.3d 51, 54 (2d Cir.
1994) (quoting DiCola v. SwissRe Holding (N. Am.), Inc., 996 F.2d 30 (2d Cir. 1993)). The

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plaintiff need not “support its motion with affidavits or other similar materials negating” the
affirmative defense. Id. (quoting Celotex Corp. v. Catrett, 477 U.S. at 323).
B.

ERISA

Section 515 of ERISA provides that “[e]very 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. Private civil actions may be brought by unions, employees, beneficiaries, or the
trustees who administer the plan against employers who are delinquent in making contributions.
See id. § 1132(a); Demolition Workers Union v. Mackroyce Contracting Corp., 2000 WL
297244, at *2 (S.D.N.Y. Mar. 22, 2000).
In addition to the unpaid contributions, plaintiffs in Section 515 cases may recover (i)
interest on the unpaid contributions; (ii) liquidated damages; and (iii) reasonable attorney’s fees
and costs. 29 U.S.C. § 1132(g)(2)(A)-(D). The applicable interest rate is provided by the CBA.
Id. § 1132(g)(2). The statute permits liquidated damages up to the greater of (i) the interest on
the total unpaid contribution or (ii) a percentage of the unpaid contribution set forth in the CBA
not to exceed 20%. Id. § 1132(g)(2)(C). “Costs” include auditor fees if provided for in the
CBA. Trs. of Four Joint Bds. Health & Welfare & Pension Funds v. Penn Plastics, Inc., 864 F.
Supp. 342, 350-51 (S.D.N.Y. 1994).
Courts in the Second Circuit have recognized that an employer’s affirmative defenses to a
Section 515 action are very limited. See Demolition Workers Union v. Mackroyce Contracting
Corp., 2000 WL 297244, at *3. “The Second Circuit has stated that only two defenses are
available: (1) that the contributions themselves are illegal, and (2) that the collective bargaining
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agreement is void (not merely voidable).” Id. (citing Benson v. Brower’s Moving & Storage,
Inc., 907 F.2d 310, 314 (2d Cir. 1990)).
II.

Plaintiffs’ Motion
Based on the undisputed facts set forth above, summary judgment is warranted, because

there is no genuine dispute as to any of the following:
As the Union and the trustees of the Funds, plaintiffs are empowered to bring this action
to enforce the CBAs under ERISA and the LMRA. Defendant is an employer bound by ERISA
to make fringe benefit contributions according to the terms in the CBAs. Defendants failed to
remit $117,136.22 in contributions during the Audited Period, $72,936.49 of which remains
outstanding. Under the CBAs’ terms, plaintiffs are entitled to recover: (i) $72,936.49 in
outstanding contributions; (ii) $12,164.82 in interest that accrued during the Audited Period; (iii)
$2,431.22 in interest that accrued between April 29, 2015, and August 29, 2015; (iv) $480.00 in
court costs and as-yet unknown attorney’s fees and auditor fees; and (v) $7,293.64 in statutory
damages, or 10% of the outstanding contributions. So long as the attorney’s fees are
reasonable—which the Court will decide at a later date—the relief provided for in the CBAs
does not exceed what is permitted by 29 U.S.C. § 1132(g).
Therefore, plaintiffs are entitled to recover $95,306.17 plus reasonable attorney’s fees
and auditor fees to compensate for defendant’s unpaid contributions to the Funds. 3

3

Defendant did not plead either of the two available affirmative defenses in its answer, and
as it has not opposed this motion at all, has not offered any evidence either that defendant’s owed
contributions were illegal or the CBAs were void. Plaintiff asserts there is no such evidence. To
the extent either defense has been raised at all, this assertion is sufficient to meet plaintiff’s
burden to show an absence of evidence that either defense applies. See Fed. Deposit Ins. Corp.
v. Giammettei, 34 F.3d at 54.
7

CONCLUSION
Plaintiffs’ motion for summary judgment is GRANTED.
By April 26, 2016, plaintiffs shall submit (i) affidavits of attorney’s fees and auditor fees
reflecting the final fee amounts; and (ii) a proposed judgment stating a total amount owed by
defendants, which shall include the monetary relief as itemized above plus the final amount of
attorney’s fees and auditor fees requested.
The Clerk is directed to terminate the motion. (Doc. #39).
Dated: April 5, 2016
White Plains, NY
SO ORDERED:

____________________________
Vincent L. Briccetti
United States District Judge

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