Local Union No. 40 of the Int'l Ass'n of Bridge v. Car-Win Constr. Inc.

• Decision Date: 18 February 2015
• Docket Number: No. 12CV4854–LTS–MHD.,12CV4854–LTS–MHD.
• Citation: 88 F.Supp.3d 250
• Parties: LOCAL UNION NO. 40 OF THE INTERNATIONAL ASSOCIATION OF BRIDGE, Structural and Ornamental Iron Workers et al., Plaintiffs, v. CAR–WIN CONSTRUCTION Inc. et al., Defendants.
• Court: U.S. District Court — Southern District of New York

88 F.Supp.3d 250

LOCAL UNION NO. 40 OF THE INTERNATIONAL ASSOCIATION OF BRIDGE, Structural and Ornamental Iron Workers et al., Plaintiffs

v.CAR–WIN CONSTRUCTION Inc. et al., Defendants.

No. 12CV4854–LTS–MHD.

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

Signed Feb. 18, 2015.

Alicia Margaret Shotwell, William Richard Reinken, Colleran, O'Hara & Mills LLP, Woodbury, NY, John Stackpole Groarke, Robin Young Tyrrell, Colleran, O'Hara & Mills LLP, Garden City, NY, for Plaintiffs.

George Christopoulos, Dreifuss Bonacci & Parker, LLP, Florham Park, NJ, for Defendants.

Order Adopting Report and Recommendation

LAURA TAYLOR SWAIN, District Judge.

The Plaintiffs in this action—several local unions and related benefit funds—filed suit in June 2012 against Defendants Car–Win Construction, Inc. (“Car–Win”) and CRV Precast Construction, LLC (“CRV” and, collectively, “Defendants”). In their Complaint, Plaintiffs asserted numerous violations of a collective bargaining agreement between the parties, and claimed that they are owed the balance of a judgment entered against Car–Win in New York and New Jersey state courts. After lengthy delays in the litigation of this case precipitated by Defendant's failure to accede to the discovery orders of Magistrate Judge Michael H. Dolinger, Plaintiffs have moved for the entry of a default judgment pursuant to Federal Rule of Civil Procedure 37(b)(2)(A)(vi). Plaintiffs also request injunctive relief in the form of an order requiring defendants to submit to an audit of their financial records from January 1, 2008, through the present, and an award of fees associated with an earlier motion for default judgment. Before the Court is the Report and Recommendation (the “Report”) of Magistrate Judge Dolinger, recommending that Plaintiff's motion for a default judgment be granted, that a post-default inquest be conducted, and that Plaintiffs' request for an audit be granted subject to temporal qualifications described within the Report. No objections to the Report have been filed.

When reviewing a report and recommendation, the Court “may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.” 28 U.S.C.A. § 636(b)(1)(C) (LexisNexis 2012). “To accept the report and recommendation of a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record.” Wilds v. United Parcel Service, Inc., 262 F.Supp.2d 163, 169 (S.D.N.Y.2003) (internal citations and quotation marks omitted).

Having reviewed Magistrate Judge Dolinger's thorough and well-reasoned Report, to which no objection was made, the Court finds no clear error. Therefore, the Court adopts the Report in its entirety. Accordingly, Defendant CRV is hereby ordered to submit to an audit of its financial books and records for the period from January 1, 2008, to the present;

Defendant Car–Win is hereby ordered to submit to an audit of its financial books and records for the periods from May 24, 2010, through May 31, 2011, and from June 21, 2012, through the present; and

Plaintiffs' default judgment motion is granted as against each Defendant as to liability.

This matter is referred to Magistrate Judge Dolinger for the conduct of an inquest as to damages. This Order resolves Docket Entry Number 49.

SO ORDERED.

REPORT & RECOMMENDATION

MICHAEL H. DOLINGER, United States Magistrate Judge.

On June 21, 2012, plaintiffs—which consist of a number of local unions and related benefit funds—filed an action in this court against two allegedly related construction companies, Car–Win Construction, Inc. (“Car–Win”) and CRV Precast Construction, LLC (“CRV”). Plaintiffs allege, inter alia, that defendants violated provisions of the governing collective bargaining agreement (“CBA”) that mandate contributions to the funds, payment of certain wages, and access to records necessary to ensure compliance with the CBA, and that plaintiffs are owed the balance due under a judgment entered against Car–Win in both New York and New Jersey state courts.

Plaintiffs now seek a default judgment against defendants for failing to comply with discovery obligations and related orders by this court. They also seek injunctive relief in the form of an order requiring defendants to submit to an audit of their financial records from January 1, 2008 through the present. Separately, plaintiffs seek an award of fees associated with an earlier motion for a default judgment.

For the reasons that follow, we recommend that plaintiffs' motion for a default judgment be granted, that a post-default inquest be conducted, and that plaintiffs' request for an audit be granted subject to the temporal qualifications that will be described. We also recommend that plaintiffs' application for fees be granted in its entirety.

PROCEDURAL HISTORY

I. Plaintiffs' Complaint

We begin by detailing plaintiffs' allegations and the relief they seek. Plaintiffs include Local Union Nos. 40 and 361 of the International Association of Bridge, Structural and Ornamental Iron Workers, both of which represent “individuals who perform structural iron work.” (Compl. ¶¶ 4–5). Local Union No. 40 represents workers in a “geographical jurisdiction, including but not limited to the Counties of New York and the Bronx.” (Id. at ¶ 4). Local Union No. 361 represents a “geographical jurisdiction, including but not limited to the County of Brooklyn.” (Id. at ¶ 5). The remaining plaintiffs are benefit funds related to these two unions, which include, inter alia, a health fund, a pension fund, a vacation fund, and an annuity fund (the “Funds”). (Id. at ¶ 6).

Car–Win entered into a CBA with the unions beginning on July 1, 1996. (Compl. ¶ 10; see also Ex. 2 to Decl. of Alicia M. Shotwell dated Feb. 14, 2014 (hereinafter “4th Shotwell Decl.”) [docket no. 51] ). Among Car–Win's obligations under the CBA, it agreed to make various contributions to the plaintiff benefit funds. (Compl. ¶ 10). The precise terms of those arrangements are delineated in the CBA and various Agreements and Declarations of Trusts incorporated into the CBA by reference. (Compl. ¶¶ 11–12; see also Ex. 2 to 4th Shotwell Decl. at §§ 16–24 of the attached CBA).¹

Broadly, Car–Win committed itself to contributing to these funds based on the hours worked by its employees and hourly rates set by the CBA. (Compl. ¶ 12; see, e.g., CBA § 16(a)). Additionally, while these sections of the CBA frame the requirement of benefit contributions in terms of hours worked by union employees, the agreement elsewhere states as follows:

The Employer agrees not to sell or assign, subcontract or sublet any work covered by this Agreement to any person, firm or corporation which is not in contractual relationship with the Union. Any Employer who violates this section shall be liable to the Joint Funds for the fringe benefit contributions due on work performed by his subcontractor.

(CBA § 39; see also Compl. ¶ 12).

As will be discussed later, see infra pp. 279–80, defendants assert that Car–Win ceased operations in September 2009. (See, e.g., Ex. 6 at ¶ 3(1) to 4th Shotwell Decl.). Plaintiffs allege, however, that CRV is merely an alter-ego of Car–Win, that CRV and Car–Win are a single employer, and that CRV is a “disguised continuance” of Car–Win, an arrangement designed to “avoid [ ] [Car–Win's] contractual and Trust Fund obligations.” (Compl. ¶¶ 13–17).² Plaintiffs ultimately assert that CRV was and is as bound by the CBA as Car–Win (id. at ¶ 17) and that Car–Win and CRV are “jointly and severally liable for each other's debts and obligations.” (See, e.g., id. at ¶ 56).

Plaintiffs go on to allege that CRV engaged in covered work in the craft and geographic jurisdiction of Local Union No. 361 and failed to comply with the requirements of the CBA. (Id. at ¶ 25). Specifically, plaintiffs allege that CRV did not pay the required wages for this work, in the sum of $263,250.00. (Id. ). Plaintiffs further allege that CRV neglected to make the related contributions to the benefit funds, in the sum of $357,223.00. (Id. at ¶ 26). Plaintiffs also seek additional damages pursuant to the CBA, including interest ($28,242.00), attorneys' fees ($89,305.75), and liquidated damages ($71,44.60). (Id. at ¶ 27).³

With respect to Local Union No. 40, plaintiffs allege that CRV failed to pay $65,710.00 in required wages. (Id. at ¶ 31). Plaintiffs also assert that CRV neglected to make $87,722.40 in benefit contributions, and they seek additional damages for this violation as well, including interest ($8,610.91), attorneys' fees ($21,930.60), and liquidated damages ($17,544.48). (Id. at ¶¶ 32–33).⁴

Turning from CRV's violations of the CBA—as an alleged alter-ego of Car–Win—the complaint then delineates several allegations against Car–Win itself. (See id. at ¶¶ 34–48). First, plaintiffs explain that “[p]ursuant to the terms and conditions of the applicable C.B.A. and Trust Agreements, CARWIN, is required to provide access to the records necessary for the Trust Funds to determine whether CARWIN complied with the obligation to contribute to the Trust Funds.” (Id. at ¶ 35; see also CBA § 24(a), (d)). According to plaintiffs, Car–Win “fail[ed] to allow Plaintiffs to schedule and complete an audit of CARWIN's books and records for the period May 24, 2010 through May 31, 2011 after demand for an audit was made upon CARWIN.” (Compl. ¶ 36).

Plaintiffs thus seek access to Car–Win's financial records for this period for purposes of an audit, on the basis of which they will seek whatever benefit contributions the audit reveals to be due. (Id. at ¶ 40). Plaintiffs are also asking for a slew of related remedies, including attorney and auditor fees, court costs, interest, and liquidated damages. (Id. at ¶¶ 37–40).⁵

Finally, plaintiffs explain, based on an audit that they did perform of Car–Win's financial records, that defendant failed to make benefit contributions for the period of August 1, 2008 through July 26, 2009, in...