Finkel v. Universal Elec. Corp.

• Decision Date: 27 August 2013
• Docket Number: No. 12–CV–2154 (MKB).,12–CV–2154 (MKB).
• Parties: Dr. Gerald FINKEL, as Chairman of the Joint Industry Board of the Electrical Industry, Plaintiff, v. UNIVERSAL ELECTRIC CORP., Defendant.
• Court: U.S. District Court — Eastern District of New York

970 F.Supp.2d 108

Dr. Gerald FINKEL, as Chairman of the Joint Industry Board of the Electrical Industry, Plaintiff,

v.UNIVERSAL ELECTRIC CORP., Defendant.

No. 12–CV–2154 (MKB).

United States District Court, E.D. New York.

Aug. 27, 2013.

Parisis G. Filippatos, Flushing, NY, for Plaintiff.

ORDER

MARGO K. BRODIE, District Judge.

The Report and Recommendation of Magistrate Judge Cheryl L. Pollak dated August 9, 2013, to which no objections have been filed, is adopted in its entirety. The Court grants Plaintiff's motion for a default judgment and directs the Clerk of the Court to enter judgment in the amount of $14,914.34, consisting of: (1) $4,378.63 in unpaid Required Contributions, (2) $7,035.29 in interest, (3) $870.23 in liquidated damages, and (4) $2,630.19 in attorney's fees and costs. Plaintiff is also awarded any additional interest that accrues after the date of the Report and Recommendation until the entry of judgment, together with post-judgment interest. See28 U.S.C. § 1961.

SO ORDERED.

REPORT AND RECOMMENDATION

CHERYL L. POLLAK, United States Magistrate Judge.

On May 2, 2012, plaintiff Dr. Gerald Finkel (“plaintiff”), in his capacity as Chairman of the Joint Industry Board of the Electrical Industry (the “Joint Board”), commenced this action against defendant Universal Electric Corp. (“defendant” or “Universal Electric”), pursuant to Sections 404, 409, 502, and 515 of the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. §§ 1104, 1109, 1132, and 1145 (“ERISA”), and pursuant to the Labor Management Relations Act, 29 U.S.C. § 185 (“LMRA”), alleging that defendant failed to make required contributions to various employee benefit funds as required by two collective bargaining agreements, which were in effect from May 10, 2007 through May 13, 2010 (“2007 CBA”) and from May 12, 2010 through May 8, 2013 (“2010 CBA”) (collectively, “the CBAs”). (Compl.¹ ¶¶ 1, 11, 37, 40, 43, 45).

Despite proper service on May 4, 2012, defendant failed to answer or otherwise respond to the Complaint. On August 31, 2012, plaintiff requested a Certificate of Default. On that same day, the Clerk of the Court entered a notation of default against defendant, and on September 28, 2012, plaintiff filed a Motion for Default Judgment. (Mot. for Default J.², Ex. C).

On December 7, 2012, the Motion for Default Judgment was referred to the undersigned to conduct an inquest and to prepare a Report and Recommendation. For the reasons set forth below, the Court respectfully recommends that plaintiff's motion for default judgment be granted and that damages be awarded in the amount of $14,914.34.

BACKGROUND

Plaintiff is the Chairman of the Joint Board, which is a fiduciary and administrator of various employee benefit plans within the meaning of Sections 3(16)(A)(i) and 3(21)(A) of ERISA, 29 U.S.C. §§ 1002(16)(A)(i), 1002(21)(A). (Compl. ¶¶ 4, 5). These benefit plans were established pursuant to the CBAs between Local Union No. 3 of the International Brotherhood of Electrical Workers, AFL–CIO (the “Union”), and various employer associations and independent or unaffiliated employers in the electrical, elevator, sign, television, burglar alarm, and related industries. ( Id. 14). The Joint Board has its principal place of business at 158–11 Harry Van Arsdale Jr., Ave., Flushing, N.Y. 11365. ( Id.)

Defendant Universal Electric is a New York corporation engaged in the electrical contracting business, with its principal facility located at 99 Lafayette Ave., North White Plains, N.Y. ( Id. ¶ 10). According to the Complaint, Universal Electric is an employer within the meaning of Section 3(5) of ERISA, 29 U.S.C. § 1002(5), and Section 301(a) of the LMRA, 29 U.S.C. § 185(a). ( Id.) Universal Electric is a member of the Association of Electrical Contractors, Inc. (“AEC”), which bargains on its behalf. ( Id. ¶ 11). Defendant agreed to be bound by the terms of the 2007 and 2010 CBAs between the New York Electrical Contractors Association, Inc., the AEC, and the Union. ( Id. ¶¶ 10, 12–14).

Pursuant to the CBAs, Universal Electric is obligated to remit contributions to the Joint Board for the following employee benefit funds, each of which is an employee benefit plan within the meaning of Section 3(3) of ERISA, 29 U.S.C. § 1002(3): the Pension, Hospitalization and Benefit Plan (“PHB”); the Dental Benefit Fund (“DEN”); the Educational and Cultural Trust Fund (“E & C”); the Annuity Plan (“ANN”); the Vacation–Holiday Unemployment Plan (“VHUI”); the Health Reimbursement Account Plan (“HRAP”); and the National Employees Benefit Fund (“NEBF”). Together, these funds are called the “ERISA Funds.” ( Id. ¶ 6; Sessa Decl.³ ¶ 6).

Along with contributions to the ERISA Funds, the Joint Board collects assessments on behalf of employees who authorize employers to deduct Union dues and loan repayments owed to the Union (“Union Amounts”). (Compl. ¶ 7). Under the CBAs, employers are also obligated to pay contributions to three non-ERISA plans: the Electrical Employers Self Insurance Safety Plan (“EESISP”), the Benefit and Wage Delinquency Fund (“BWDF”), and the COPE Fund (collectively, the “Non–ERISA Plans”). ( Id.) The Union Amounts and the amounts owed to the Non–ERISA Plans are referred to as the “Non–ERISA Contributions.” ( Id.) Taken together, all contributions to the ERISA Funds and all Non–ERISA Contributions are referred to as “JIB Contributions.” ( Id.)

In addition to JIB Contributions, employers are required to remit contributions to the Deferred Salary Plan (“DSP”), which is a tax-qualified profit-sharing plan with a cash or deferred arrangement within the meaning of Section 401(k) of the Internal Revenue Code. ( Id. ¶ 6). Pursuant to the CBAs, employers must deduct a specified percentage of the weekly wage of each eligible employee and remit that amount, plus additional salary deferrals made by the employee, to the DSP. ( Id.) The amount that is remitted is termed an “Employee Contribution.” ( Id.) Employers also must submit employer contributions on behalf of all employees, independent of any elections made by employees. ( Id.) This amount is called “Employer Contributions.” ( Id.) The total amounts of the Employee Contributions and the Employer Contributions are called the “DSP Contributions;” the DSP Contributions are sent to a third party investment manager and records keeper, Mercer Trust Company (“Mercer”). ( Id.)

In addition to the obligation to remit JIB Contributions, the CBAs require the Company to submit payroll reports (“Payroll Reports”) to the Joint Board that indicate the name, gross wages, and hours worked for each employee of Universal Electric on whose behalf JIB Contributions are made. ( Id. ¶ 15). Employers must also submit payroll reports setting forth the amounts being deducted from employees' wages (“DSP Reports”) to Mercer. ( Id. ¶¶ 6, 16).

For purposes of this Report and Recommendation, “Required Contributions” consist of DSP Contributions and JIB Contributions. ( Id. ¶ 7).

ALLEGATIONS

Following the referral to this Court, the parties were Ordered to submit documents in connection with the Motion for Default by January 11, 2013. Upon reviewing plaintiff's papers submitted in support of his Motion for Default Judgment, the Court determined that the periods of weeks for which plaintiff sought damages in the Motion for Default Judgment conflicted with the periods of weeks set forth in plaintiff's Complaint. Since no explanation of the conflicting requests had been included by plaintiff in his supporting papers, the Court issued an Order on February 22, 2013 directing plaintiff to provide certain clarifying information. Having received nothing from plaintiff, the Court issued a follow-up Order on June 7, 2013, directing plaintiff to supply the requested information. On July 8, 2013, plaintiff provided the Court with a letter containing the clarifying information.

After considering plaintiff's Complaint, together with the papers filed in support of the Motion for Default Judgment and the July 8, 2013 letter, it appears that plaintiff now seeks the following in this action.

I. Required ContributionsA. JIB Contributions

In the Complaint, plaintiff alleges that defendant failed to pay JIB Contributions for the period of weeks ending March 14, 2012 through April 18, 2012. ( Id. ¶ 22). However, the papers submitted in support of plaintiff's Motion for Default Judgment seek JIB Contributions for a different period of time: the period of weeks ending May 2, 2012 through May 23, 2012. ( See Pl.'s Mem.⁴ at 9).⁵ Plaintiff alleges that the amount owed for this later period of time is $3,570.38. ( See id. at 10). Plaintiff fails to explain why he seeks damages for this later period, which was not included in the Complaint,⁶ but plaintiff does explain that the JIB Contributions owed for the period of weeks ending March 14, 2012 through March 28, 2012 were paid after the filing of the Complaint. ( See id. at 13). Plaintiff provides additional information in his July 8, 2013 letter, explaining that on May 7, 2012 and May 10, 2012, respectively, JIB Contributions were paid for the remaining weeks, ending March 29, 2012 through April 18, 2012. (See Pl.'s 7/8 Ltr.⁷ at 1). As such, it appears that at this point, plaintiff seeks JIB Contributions only for the period of weeks between May 2, 2012 and May 23, 2012. ( See id.)

B. DSP Contributions

The Complaint alleges that defendant failed to remit DSP Contributions for the period of weeks ending January 18, 2012 through February 22, 2012, as well as for the period of weeks ending March 14, 2012 through April 18, 2012. (Compl. ¶ 23). However, here again, the papers submitted in support of plaintiff's Motion for Default Judgment seek DSP Contributions for different period of time than that listed in the Complaint; the papers filed in support of plaintiff's Motion for Default Judgment seek unpaid DSP Contributions for the weeks ending May 9, 2012 through May 23, 2012. (Pl.'s Mem....