Mason Tenders District Council Welfare Fund v. Gibraltar

Background

The plaintiffs were five jointly administered, multi-employer labor-management trust funds and Dominick Giammona, acting as the Funds’ contributions and deficiency manager. They sued Gibraltar Contracting, Inc. and Christian Varela under, among other authorities, the Employee Retirement Income Security Act and the Taft-Hartley Act. The plaintiffs alleged that the defendants violated a collective bargaining agreement by failing to pay required fringe-benefit contributions, dues checkoffs, and political-action-committee contributions.

The agreement required Gibraltar to make contributions for covered work and allowed the Funds or their representatives to inspect and audit Gibraltar’s books and records. An accounting firm conducted several revised audits for the period from May 27, 2015, through December 27, 2016. The final April 2, 2019 report found unpaid contributions, dues checkoffs, and political-action-committee contributions totaling $566,555.67, plus imputed audit costs of $70,292.87. The defendants later stipulated to liability and admitted that they were jointly and severally liable for the delinquent amounts and related contractual and statutory damages.

Legal standard

The court applied the summary-judgment standard under Federal Rule of Civil Procedure 56. Summary judgment is proper when the evidence shows no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. The court viewed the evidence in the light most favorable to the defendants, who were opposing the motion.

Ruling

The court held that liability was not contested. It granted the plaintiffs’ motion for summary judgment on their claims for delinquent contributions in the principal amount of $527,196.41 and for dues checkoffs and political-action-committee contributions in the amount of $39,359.13.

The court also granted the plaintiffs’ motion for summary judgment on damages. It concluded that the agreement and the Employee Retirement Income Security Act required interest, liquidated damages, and reasonable attorney’s fees and costs after judgment for the Funds. The court rejected the defendants’ arguments that the revisions to the audit undermined the audit’s reliability or justified reducing the imputed audit costs. It explained that the revisions resulted from additional documents and information supplied by the defendants, not an identified flaw in the audit process, and that similar collective bargaining agreement formulas had been used to award imputed audit costs.

The order specifically awarded:

- $82,409.97 in interest, plus additional interest accruing from June 27, 2019, through entry of judgment; - $82,409.97 in liquidated damages, plus the additional interest described in the order; - $70,292.87 in imputed audit costs; and - $11,597.57 in interest on unpaid dues checkoffs and political-action-committee contributions for the period from May 27, 2015, through June 26, 2019.

The court also granted the plaintiffs’ motion for summary judgment on their claim for an audit of Gibraltar’s books and records for the period from December 28, 2016, to the present. The court directed the plaintiffs to file their motion for attorney’s fees by January 31, 2020, and directed the Clerk of Court to terminate the summary-judgment motion.