Pierre v. Nassau County

District Court, E.D. New York·Decided October 13, 2022·No. 2:17-cv-06629·Unknown

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK _____________________

No 22-CV-1935 (ENV) (RER) _____________________

THE ANNUITY, WELFARE AND APPRENTICESHIP SKILL IMPROVEMENT & SAFETY FUNDS OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 15, 15A, 15C & 15D, AFL-CIO, ET AL.

VERSUS

TRAC CONSTRUCTION GROUP, INC.

___________________

REPORT & RECOMMENDATION

October 4, 2022 ___________________

TO THE HONORABLE ERIC N. VITALIANO SENIOR UNITED STATES DISTRICT JUDGE

RAMON E. REYES, JR., U.S.M.J.: The Annuity, Welfare and Apprenticeship Skill Improvement & Safety Funds of the International Union of Operating Engineers, Local 15, 15A, 15C & 15D, AFL-CIO (the “Funds”), by their Trustees James T. Callahan, Thomas A. Callahan, Michael Salgo and William Tyson, the Central Pension Fund of the International Union of Operating Engineers (“CPF”), by its Chief Executive Officer Michael A. Crabtree, and the International Union of Operating Engineers Local 15, 15A, 15C, & 15 D, AFL-CIO (“Local 15” or the “Union”), by its President and Business Manager Thomas A. Callahan, (collectively, “Plaintiffs”) bring this action against Trac Construction Group, Inc. (“Trac” or “Defendant”), to enforce provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”) and a collective bargaining agreement under the Labor-Management Relations Act of 1947 (“LMRA”). (ECF No. 1 (“Compl.”)). Following proper service of the Complaint (ECF No. 5), and Defendant’s failure to answer or appear, Plaintiffs requested that the Clerk of the Court enter default on May 31, 2022. (ECF No. 6). The Clerk of the Court entered default on June 17, 2022 (ECF No. 7), and Plaintiffs moved for a default judgment on June 21, 2022 (ECF No. 8). Your Honor referred the Motion to me for a

Report and Recommendation the following day. (Order dated 06/22/2022). After carefully reviewing the record, for the reasons set forth herein, I respectfully recommend that Plaintiffs’ Motion for Default Judgment be granted. BACKGROUND The facts below are derived primarily from Plaintiffs’ Complaint and are accepted as true for

the purposes of liability. Local 15 is a labor organization as defined in Section 2 of the LMRA. (Compl. ¶ 13). The Funds and CPF are “multi-employer/employee benefit plans” within the meaning of ERISA, are “joint trustee funds” under the LMRA, and were established to provide certain retirement income and employee welfare benefits to eligible plan participants. (Compl. ¶¶ 4, 6–9, 11–12). The Trustees of the Funds and the Chief Executive Officer of CPF are “fiduciaries” within the meaning of ERISA. (Compl. ¶¶ 5, 10). Trac is a construction company licensed to do business in the state of New York, with a principal place of business in Brooklyn, New York, and is an employer within the meaning of ERISA and the LMRA. (Id. ¶¶ 15–18). At all relevant times, Local 15 and Trac were parties to a collective bargaining agreement

(“CBA”). (Compl. ¶ 19; see also ECF No. 10-2 (“Local 15/Trac Agreement”)). Under the CBA, Trac agreed to be bound to a series of association collective bargaining agreements negotiated by Local 15 with the General Contractors Association of New York, Inc. (See ECF No. 10-3 (“Local 15/GCA CBA”); ECF No. 10-4 (“Local 15/GCA CBA II”)), and to the Agreements and Declarations of Trust (“Trust Agreements”) governing each Fund. (Compl. ¶ 24; ECF Nos. 10-5 through 10-8 (“Exs. D–G”)). Pursuant to those agreements, Trac was obligated: (1) to remit certain benefit contributions to the Funds and CPF; (2) to remit union dues and political action committee payments to Local 15 at specified rates based on work performed by covered employees; and (3)

to make its books and records available to the Plaintiffs to ensure that the proper amounts had been remitted. (Compl. ¶¶ 20–22). Plaintiffs allege that Trac “may have underreported the number of employees, the amount of employee hours[,] and wages paid to its employees,” which in turn may have resulted in the underreporting of the remittances due to Plaintiffs. (Id. ¶ 29). Plaintiffs claim that they formally requested Trac’s books and records to conduct an audit, but Trac refused to produce them as required by the CBA. (Id. ¶ 30). Accordingly, Plaintiffs allege that Trac has violated ERISA and the CBA by failing to pay contributions, union dues, and other required payments totaling approximately $100,000 for the period July 1, 2017 through March 31, 2022, and seek an order requiring that Trac submit to an audit as required by the CBA to confirm the amount owed. (Id.

¶¶ 23–40). Plaintiffs commenced this action on April 5, 2022. (Compl.). Trac was properly served via the Secretary of State on May 3, 2022 (ECF No. 5), but failed to answer or otherwise respond. Plaintiffs therefore requested that the Clerk of the Court enter a notation of default on May 31, 2022 (ECF No. 6), which was subsequently entered on June 17, 2022 (ECF No. 7). Plaintiffs then filed the instant Motion for Default Judgment, seeking an order directing Trac to cooperate with an audit of its books and records and an award of attorney’s fees and costs. (ECF No. 8 (“Pl’s Mot.”)). In support of the Motion, Plaintiffs filed a statement of damages (ECF No. 8-1); a proposed order (ECF No. 8-2); the affidavit of the Funds Administrator, Catherine Chase (ECF No. 9 (“Chase Aff.”)); its counsel’s affidavit and accompanying exhibits (ECF No. 10 (“Steinberg Aff.”)); and a Memorandum of Law (ECF No. 11 (“Pl’s Mem.”)). Your Honor referred the Motion to me for a Report and Recommendation. (Order dated 06/22/2022).

STANDARD OF REVIEW Rule 55 establishes a two-step process for a plaintiff to obtain a default judgment. First, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” Fed R. Civ. P. 55(a). A plaintiff may then move for a default judgment against the defaulting defendant. Fed. R. Civ. P. 55(b)(2). “A default judgment is ordinarily justified where

a defendant fails to respond to the complaint.” J & J Sports Prods., Inc. v. Ahuachapan Corp., 422 F. Supp. 3d 652, 662 (E.D.N.Y. 2019) (quoting SEC v. Anticevic, No. 05-CV-6991 (KMW), 2009 WL 4250508, at *2 (S.D.N.Y. Nov. 30, 2009)); see also Bricklayers Ins. & Welfare Fund v. David & Allen Contracting, Inc., No. 05 CV 4778 (SJ) (VVP), 2007 WL 3046359, at *2 (E.D.N.Y. Oct. 16, 2007) (citing Bermudez v. Reid, 733 F.2d 18, 21 (2d Cir.1984)) (“In civil actions, when a party fails to appear after given notice, the court normally has justification for entering default.”). Before entering a default judgment, a court must first determine whether the allegations of the complaint establish the defaulting party’s liability on each cause of action as a matter of law. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011). In making that determination, a court must accept the well-pleaded factual allegations as true and draw all

reasonable inferences in the plaintiff’s favor. Finkel v. Romanowicz, 577 F.3d 79, 84 (2d. Cir. 2009) (citing Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981)). If the unchallenged facts establish defendant’s liability as a matter of law, the Court then determines the amount of damages due.

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