Demopoulos v. Dr. Sameh H. Aknouk Dental Servs

• Decision Date: 27 August 2021
• Docket Number: CV 18-4813 (JMA) (AKT)
• Court: U.S. District Court — Eastern District of New York
• Parties: DEMOS P. DEMOPOULOS, DANIEL J. GATTO, KENNETH BARRETT, WILLIAM CASSESE, and JOHN A. CURCIO, as Trustees and Fiduciaries of the LOCAL 854 HEALTH & WELFARE BENEFITS PLAN, Plaintiffs, v. DR. SAMEH H. AKNOUK DENTAL SERVICES, PC, Defendant.

DEMOS P. DEMOPOULOS, DANIEL J. GATTO, KENNETH BARRETT, WILLIAM CASSESE, and JOHN A. CURCIO, as Trustees and Fiduciaries of the LOCAL 854 HEALTH & WELFARE BENEFITS PLAN, Plaintiffs, v. DR. SAMEH H. AKNOUK DENTAL SERVICES, PC, Defendant.

No. CV 18-4813 (JMA) (AKT)

United States District Court, E.D. New York

August 27, 2021

REPORT AND RECOMMENDATION

A KATHLEEN TOMLINSON, U.S. Magistrate Judge

I. Preliminary Statement

Plaintiff Trustees and Fiduciaries of the Local 854 Health and Welfare Benefits Fund (“Health Fund”) and Local 854 Pension Fund (“Pension Fund”) (collectively, “Plaintiffs” or the “Funds”) “commenced this action against Defendant Dr. Sameh H. Aknouk Dental Services (“Aknouk Dental”), pursuant to Sections 502(a)(3) and 515 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1132(a)(3), 1145 (“ERISA”). See generally Amended Complaint (“Am. Compl.”) [DE 14]. The Trustees seek to recover delinquent contributions owed to the Funds under the terms of a collective bargaining agreement, din addition to interest and reasonable attorney's fees and costs. Id.

Aknouk Dental has moved for summary judgment, pursuant to Rule 56 of the Federal Rules of Civil Procedure (“Fed. R. Civ. P.”), arguing chiefly that it is not obligated to make contributions to the Funds for part-time employees under the terms of the collective bargaining agreement. See generally Defendant's Memorandum of Law in Support of Motion for Summary Judgment (“Def.'s Mem.”) [DE 45-4]; Plaintiffs' Memorandum in Opposition to Defendant's Motion for Summary Judgment (“Pls.' Opp'n”) [DE 46]; Defendant's Reply Memorandum of Law in Further Support of Motion for Summary Judgment (“Defs.' Reply”) [DE 47]. The Trustees cross-move for summary judgment arguing that the terms of the collective bargaining agreement require contributions to the Funds for all employees, without regard to their part-time or full-time status. On that basis, the Funds seek judgment as a matter law on their claim for delinquent contributions for part-time employees. See generally Plaintiffs' Memorandum of Law in Support of Motion for Summary Judgment (“Pls.' Mem.”) [DE 48-3]; Defendant's Memorandum in Opposition to Plaintiffs' Motion for Summary Judgment (“Def.'s Opp'n) [DE 49]; Plaintiffs' Reply Memorandum of Law in Further Support of Motion for Summary Judgment (“Pls.' Reply”) [DE 50]. Judge Azrack referred the cross-motions for summary judgment to this Court for a Report and Recommendation as to whether the motions should be granted. See May 15, 2021 Electronic Order.

For the reasons which follow, this Court respectfully recommends to Judge Azrack that the parties' cross-motions for summary judgment be DENIED.

II. Background

A. The Undisputed Material Facts

Plaintiffs are Trustees and Fiduciaries of the Health Fund and of the Pension Fund. Plaintiffs' 56.1 Statement of Material Facts (“Pls.' SOMF”) [DE 48-1] ¶ 1.^[1]The Funds are “employee benefit plans” and “multiemployer plans, ” as defined in Sections 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3) and 1002(37). They are also fiduciaries pursuant to the Agreement and Declaration of Trust of Health and Welfare Benefits Fund, Local Union 854, I.B.T. (the “Health Trust Agreement”) and the Agreement and Declaration of Trust of Local 854 Pension Fund (the “Pension Trust Agreement”) (collectively, the “Trust Agreements”). Id. ¶¶ 3-4; see Health Trust Agreement, attached to the Affidavit of Patricia Egidio, Administrator of the Funds (“Egidio Aff.”) as Ex. A [DE 48-5]; Pension Trust Agreement, attached to Egidio Aff. as Ex. B [DE 48-6]. The Funds are governed by the Trust Agreements. Id. ¶ 4.

Defendant Aknouk Dental is a professional corporation operating a dental practice in Bronx County, New York. Defendant's Rule 56.1 Statement of Material Facts (“Def.'s SOMF”) [DE 45-1] ¶ 1. From 2014 to 2017, Aknouk Dental was party to a series of collective bargaining agreements with Local 553, I.B.T. (the “Union”). Pls.' SOMF ¶ 6. In 2014, Aknouk Dental entered into a collective bargaining agreement (the “2014 CBA”) with the Union which covered the period from April 17, 2014 through April 18, 2017. Id. ¶ 7; see 2014 CBA, attached to Egidio Aff. as Ex. C [DE 48-7]. In 2017, Aknouk Dental entered into a memorandum of agreement (the “2017 MOA”) with the Union which renewed the 2014 CBA, with certain modifications, covering the period from April 17, 2017 through April 17, 2020. Id. ¶ 8; see 2017 MOA, attached to Egidio Aff. as Ex. D [DE 48-8]. In accord with the 2014 CBA, Aknouk Dental was required to make certain contributions to the Funds for covered employees. Id. ¶¶ 7-8.

Article 1 of the 2014 CBA defines the “bargaining unit” and provides:

The Employer recognizes the Union as the sole and exclusive bargaining agent for all of its employees, excluding supervisor, guards and procession employees as defined in the Labor Management Relations Act of 1947.”

Id. ¶ 10; 2014 CBA, Art. 1, Egidio Aff., Ex. C. With respect to the Health Fund, Article 25 of the 2014 CBA provides, in pertinent part, as follows:

Effective May 15, 2015, the Employer will contribute $751.00 per month per eligible employee, Plan 5, to Health & Welfare Benefits Plan, Local 854, I.B. of T.

Employees shall become eligible to participate in the Plan 5 medical benefits of the Health & Welfare Benefits Plant [sic], Local Union 854, International Brotherhood of Teamsters, following the receipt by the Trustees of two (2) consecutive monthly contributions from the Employer on the employee's behalf.

Id. ¶ 11; 2014 CBA, Art. 24, Egidio Aff., Ex. C. As to the Pension Fund, Article 26 of the 2014 CBA provides that

Effective May 1, 2015, the Employer agrees to contribute monthly to the Trustees of the Local 854 Pension Fund, without any deductions from employees' pay, 6% of the gross weekly salary, for the remainder of this agreement, for all employees covered by this Agreement who have completed their initial thirty (30) day trial period in accordance with the Trust Agreement establishing the Trust as amended and as may hereafter be amended.

Id. ¶ 14; 2014 CBA, Art. 25, Egidio Aff., Ex. C. The 2017 MOA increased the contributions Aknouk Dental was required to make to the Pension Fund. Id. ¶ 15. The MOA provides that

[e]ffective May 1, 2017 the Employer will contribute 7% of the employee's weekly gross salary to the Local 854 Pension Fund.

Id.; 2017 MOA, Egidio Aff., Ex. D.

In 2018, the firm of Buchbinder Tunick & Company LLP performed an audit of Aknouk Dental's payroll compliance and discovered that Aknouk Dental did not submit contributions in the amount of $72, 847 to the Health Fund and $8, 065 to the Pension Fund for the period of January 1, 2017 through June 30, 2018 for various employees (the “2018 Audit”). Id. ¶¶ 17-18. The Funds provided Aknouk Dental with a copy of the 2018 Audit and requested that Aknouk Dental pay the unpaid amounts discovered by audit, plus interest. Id. ¶ 19. To date, Aknouk Dental has not made the payments identified as unpaid in the 2018 Audit. Id. ¶ 20.

According to Dr. Sameh H. Aknouk, the President of Aknouk Dental, the 2018 Audit identifies unpaid contributions for part-time employees. See Affidavit of Dr. Sameh H. Aknouk, (“Aknouk Aff.”) [DE 45-2; DE 49-4], ¶¶ 9, 11, 14. It is undisputed that that contributions have otherwise been paid for full-time employees for the period from January 1, 2017 through June 30, 2018. Def.'s SOMF ¶ 6. In his Reply Affidavit, Dr. Aknouk further attests that Ramon Teron (“Teron”), an individual for whom contributions are shown to be owed in the 2018 Audit, was never employed by Aknouk Dental. See Reply Affidavit of Dr. Sameh H. Aknouk (“Aknouk Reply Aff.”), ¶ 22. According to Dr. Aknouk, Aknouk Dental made a payment to Teron for certain office cleaning services but did not employ Ramon Teron. Id. Rather, Dr. Aknouk asserts that the landlord of the building leased by Aknouk Dental employed Teron. Aknouk Aff. ¶ 23.

Although outside the timeframe of the 2018 Audit, it is further undisputed that Aknouk Dental did not pay contributions in the amount of $2, 254 to the Health Fund on behalf of its employee Dayana Tavares (“Tavares”) for the period of July 2018 through September 2018. Pls.' SOMF ¶ 21; Def.'s SOMF ¶¶ 28-29. Tavares declined health benefits through the Union's health plan during her employment. She is also among the employees for whom the 2018 Audit identifies unpaid contributions to the Health Fund. Def.'s SOMF ¶¶ 28-29; 2018 Audit, attached to Egidio Aff. as Ex. E [DE 48-9].

The 2014 CBA also provides that “[t]he Employer further agrees to execute the Trust Agreement and become a party thereto, or agrees to be bound by the terms, obligations and conditions of the said Trust Agreement as amended and as may hereafter be amended.” 2014 CBA, Art. 24, 25, Egidio Aff., Ex. C. Pursuant to Article 7, Section 8 of the Trust Agreements, in the event that Aknounk Dental does not pay contributions owed to the Funds, it is required to pay:

(a) the unpaid Contributions;

(b) interest on the unpaid Contributions at such rates as the Trustees may fix from time to time or in particular cases;

(c) an amount equal to the greater of -

(1) interest on the unpaid Contributions at the rate specified above; or

(2) liquidated damages of twenty percent (20%) of the amount of the unpaid contributions; [and]

(d) reasonable attorney's fees and costs of any action necessary to recover any of the amount described in (a) through (c).

Health Trust Agreement, Art. 7, Sec. 8, Egidio Aff., Ex. B; Pension Trust Agreement, Art. 7, Sec. 8, Egidio Aff., Ex. B The Trustees adopted a Policy for Collection of Delinquent Contributions, Audits and Mistaken Contributions (the “Collection Policy”), pursuant to their authority...