Annuity v. Coastal Envtl. Grp.

• Decision Date: 05 September 2019
• Docket Number: 18 Civ. 5773 (AMD) (ST)
• Parties: THE ANNUITY, PENSION, WELFARE, TRAINING AND LABOR MANAGEMENT COOPERATION TRUST FUNDS OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 14-14B, AFL-CIO, BY THEIR TRUSTEES EDWIN L. CHRISTIAN, CHRISTOPHER T. CONFREY, JOHN CRONIN, DON DENARDO, KENNETH KLEMENS, JR., JOHN F. O'HARE, DENISE M. RICHARDSON and ERNESTO TERSIGNI, and INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 14-14B, AFL-CIO, BY ITS BUSINESS MANAGER EDWIN L. CHRISTIAN, Plaintiffs, v. COASTAL ENVIRONMENTAL GROUP INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

THE ANNUITY, PENSION, WELFARE, TRAINING AND LABOR MANAGEMENT COOPERATION

TRUST FUNDS OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS,

LOCAL 14-14B, AFL-CIO, BY THEIR TRUSTEES EDWIN L. CHRISTIAN,

CHRISTOPHER T. CONFREY, JOHN CRONIN, DON DENARDO,

KENNETH KLEMENS, JR., JOHN F. O'HARE,DENISE M. RICHARDSON and ERNESTO TERSIGNI,and INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL 14-14B,AFL-CIO, BY ITS BUSINESS MANAGER EDWIN L. CHRISTIAN, Plaintiffs, v. COASTAL ENVIRONMENTAL GROUP INC., Defendant.

18 Civ. 5773 (AMD) (ST)

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

September 5, 2019

REPORT AND RECOMMENDATION

TISCIONE, United States Magistrate Judge:

INTRODUCTORY STATEMENT

The Annuity, Pension, Welfare, Training and Labor Management Cooperation Trust Funds of the International Union of Operating Engineers, Local 14-14B, AFL-CIO ("Local 14 Trust Funds"), represented by their trustees Edwin L. Christian, Christopher T. Confrey, John Cronin, Don DeNardo, Kenneth Klemens, Jr., John F. O'Hare, Denise M. Richardson and Ernesto Tersigni (the "Trustees"), together with the International Union of Operating Engineers Local 14-14B ("Local 14") represented by its business manager Edwin L. Christian (collectively, "Plaintiffs"), commenced this action on October 16, 2018, against Coastal Environmental Group, Inc. ("Coastal Environmental" or "Defendant") pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 141 et seq. See generally Complaint ("Compl."), Dkt. No. 1. Plaintiffs allege that Defendant failed to make required annuity, voluntary annuity, pension, welfare, and training benefit contribution payments owed to Plaintiffs under the terms of a collective bargaining agreement in violation of Section 515 of ERISA, 29 U.S.C. § 1145, and further allege that Defendant failed to make additional required fringe benefit contribution payments owed to Plaintiffs under the terms of the same collective bargaining agreement in violation of Section 301 of the LMRA, 29 U.S.C. § 185 et seq. Compl. ¶¶ 1, 27-28, 30; see also Memorandum of Law in Support of Plaintiffs' Motion for Default Judgment Against Defendant Coastal Environmental Group ("Memorandum in Support of Default Judgment" or "Memo. Supp. Mot. Def. J."), Dkt. No. 13, at 6-8. The Honorable Ann M. Donnelly has referred Plaintiffs' motion to this Court for a report and recommendation.

Based on a review of the well-pleaded allegations and evidence presented in Plaintiffs' filings, this Court respectfully recommends that Plaintiffs' motion for default judgment be granted in part and denied in part as explained below.

BACKGROUND

A. Factual Background

The following undisputed facts are drawn from the Complaint, Dkt. No. 1, as well as additional documents incorporated by reference thereto. These additional documents include the collective bargaining agreement between Plaintiffs and Defendant ("CBA"), annexed to the affidavit of Plaintiffs' counsel James M. Steinberg ("Steinberg Aff."), Dkt. No. 9, as Exhibit B, Dkt. No. 9-2; the trust agreements establishing the Local 14 Trust funds ("Trust Agreements"), Steinberg Aff., Exhs. C-G, Dkt. Nos. 9-3, 9-4, 9-5, 9-6, 9-7; and the audit report of Defendant's books and records identifying the contributions claimed by Plaintiffs to be due ("Audit Report"), Steinberg Aff., Exh. I, Dkt. No. 9-9.

Plaintiff Local 14 constitutes a labor organization pursuant to Section 2 of the LMRA, 29 U.S.C. § 152, of which Edwin L. Christian serves as Business Manager and Chief Executive Officer. Compl. ¶¶ 11-12. Plaintiffs Local 14 Trust Funds constitute joint trustee funds created by trust indentures in accordance with Section 302 of the LMRA, 29 U.S.C. § 186. Id. ¶ 4. The Local 14 Welfare and Training Funds constitute "employee welfare benefit plans" pursuant to Section 3(1) of ERISA, 29 U.S.C. § 1002(1), while the Local 14 Annuity and Pension Funds constitute "employee pension benefit plans" pursuant to Section 3(2) of ERISA, 29 U.S.C. § 1002(2). Id. ¶¶ 7-8. Additionally, each of the Local 14 Annuity, Pension, Welfare and Training Funds (collectively, the "ERISA Funds") constitutes a "multiemployer/employee benefit plan" pursuant to Sections 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3) and (37). Id. ¶ 9. By contrast, the Local 14 Labor Management Cooperation Trust Fund ("LMCT Fund") is a non-ERISA entity and constitutes a "labor management cooperation trust fund" pursuant to the Labor-Management Cooperation Act of 1978, 29 U.S.C. 186(c)(9) and under Section 501(c)(5) of the Internal Revenue Code. Id. ¶ 10. Edwin L. Christian, Christopher T. Confrey, John Cronin, Don DeNardo, Kenneth Klemens, Jr., John F. O'Hare, Denise M. Richardson and Ernesto Tersigni (collectively, "the Trustees") all serve as trustees of each of the Local 14 Trust Funds. Id. ¶¶ 5-6. With respect to the ERISA Funds, the Trustees constitute "fiduciaries" pursuant to Section 3(21) of ERISA, 29 U.S.C. § 1002(21). Id. ¶ 5. With respect to the LCMT Fund, the Trustees constitute "fiduciaries" pursuant to Section 501 of the Labor-Management Reporting and Disclosure Act ("LMRDA"), 29 U.S.C. § 501, as well as the common law of trusts. Id. ¶ 6.

Plaintiffs allege upon information and belief that Defendant constitutes an employer under Section 3(5) of ERISA, 29 U.S.C. § 1002(5), and Section 301 of the LMRA, 29 U.S.C. § 185, and that Defendant was and remains a New York corporation maintaining a principal location ofbusiness in East Patchogue, New York.¹ Id. ¶¶ 13, 16. At all times relevant to the present action, Defendant was party to and agreed to be bound by the CBA between Local 14 and the General Contractors Association of New York, Inc. ("GCA"), effective from July 1, 2014 through June 30, 2018, by virtue of Defendant's membership with the GCA. Compl. ¶ 17; see also CBA at 1, art. IV. Defendant was obligated under the terms of the CBA to make contributions to both the aforementioned ERISA Funds and a deferred-income trust called the "Annuity Voluntary Fund"² (collectively, the "ERISA Contributions") at specified rates corresponding to the hours of work performed by employees covered under the CBA. Compl. ¶ 18; CBA art. XI-A §§ 1-6; see also Monterroso Affidavit ("Monterroso Aff.") ¶ 7, Dkt. No. 11. Defendant was also required under the terms of the CBA to remit additional payments to Plaintiff Local 14 in the form of general dues assessments ("Union Dues") and mandatory union defense fund contributions ("Defense Fund Contributions"), along with a mandatory contribution to the LMCT Fund later adopted as of February 10, 2017 ("LMCTF Dues"; collectively with Union Dues and Defense Fund Contributions, the "non-ERISA Contributions"). Compl. ¶¶ 18, 22, 24; CBA art. XI-A §§ 7-8; seealso Steinberg Aff., Exh. H ("Notification of Labor Management Cooperation Trust Fund Allocation," or "LMCTF Allocation Notice"), Dkt. No. 9-8; Monterroso Aff. ¶ 7. In keeping with its obligations under the CBA, Defendant consented to an audit of its records conducted by Plaintiffs' auditor for the period of July 1, 2014, to February 28, 2018. Compl. ¶ 21; see also CBA art. XI-B § 11; Steinberg Aff., Exh. C (the "Annuity Fund Trust Agreement") art. 4 § 12; Steinberg Aff., Exh. D (the "Pension Fund Trust Agreement") art. VII § 3; Steinberg Aff., Exh. E (the "Welfare Fund Trust Agreement") art. VII § 3; Steinberg Aff., Exh. F (the "Training Fund Trust Agreement") art. 4 § 12. The report from this audit concluded that Defendant failed to pay a portion of the dues it owed in ERISA and non-ERISA Contributions during a delinquency period spanning from November 1, 2014, to October 31, 2016. Compl. ¶ 22; see also Audit Report at 2. As of yet, Defendant has failed to pay any of the outstanding dues identified by the audit. Compl. ¶¶ 23-25.

B. Procedural History

Plaintiffs filed this action against Defendant in a timely fashion on October 16, 2018, see Compl., and then filed proof of service of the Summons and Complaint upon Defendant on November 5, 2018, see Summons Returned Executed, Dkt. No. 5. When Defendant failed to appear or otherwise defend in response to Plaintiffs' action, Plaintiff requested the entry of a Certificate of Default against Defendant, Dkt. No. 6, which was duly issued by the Clerk of Court on December 3, 2018, Dkt. No. 7. That same day, Plaintiffs moved for default judgment against Defendant and certified service of Plaintiffs' request for certificate of default, Clerk's entry of default, notice of Plaintiffs' motion for default judgment, supporting affidavits and exhibits, and supporting memorandum of law upon Defendant at Defendant's address on file. See Dkt. Nos. 8-14. The District Court then referred Plaintiffs' motion for default judgment to this Court for areport and recommendation. Order dated December 4, 2018. To date, Defendant has responded neither to the Complaint nor to Plaintiffs' motion.

DISCUSSION

A. Liability Under Default Judgment

The Federal Rules of Civil Procedure establish the procedure by which a default judgment may be obtained. See Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95-96 (2d Cir. 1993) (explaining the process for entry of default and entry of default judgment prescribed by Fed. R. Civ. P. 55). First, if "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," then "the clerk must enter the party's default." Fed. R. Civ. P. 55(a). Second, provided that the movant's claim is not "for a sum certain or a sum that can be made certain by computation," the movant then "must apply to the court for a default judgment." Fed. R. Civ. P. 55(b). Finally, if the defaulting party still fails to appear or move to set aside the default under Rule 55(c), the Court may then enter a default judgment in favor of the movant. Fed. R. Civ. P. 55(b)(2).

A party in default is deemed...