Trustees of the New York City District Council Of Carpenters Pension Fund v…

Background

The plaintiffs were the trustees of several New York City District Council of Carpenters funds, the New York City Carpenters Relief and Charity Fund, and the New York City and Vicinity Carpenters Labor-Management Corporation. The opinion collectively calls them the “Funds.” Shorecon signed a project labor agreement for the “Build It Back Queens” Project. That agreement bound Shorecon to a collective bargaining agreement and the Funds’ Collection Policy.

Under those documents, Shorecon had to make contributions for covered work and permit audits of its books and records. The agreements also allowed the Funds to seek interest, liquidated damages, attorney fees, and costs when collecting unpaid contributions.

The Funds sued Shorecon and Washington International Insurance Company, the surety that issued a payment bond for the project. Shorecon was served but did not appear. An audit found $25,646.99 in audit-related delinquencies, including principal, interest, promotional-fund contributions, audit costs, and liquidated damages. A review of certified payroll records found an additional $13,633 in contributions due. Washington International Insurance Company paid the principal, interest, and promotional-fund contributions for the audit and non-audit delinquencies, and the Funds dismissed their claims against that company. The Funds continued pursuing Shorecon for unpaid audit costs, liquidated damages, and attorney fees and costs.

The Clerk issued a certificate of default against Shorecon. The court gave Shorecon additional opportunities to respond to the default-judgment motion and warned that judgment would be entered if Shorecon did not respond or request an extension. Shorecon did not respond.

Service and Liability

Before entering default judgment, the court had to determine whether Shorecon had been properly served. The Funds personally served the summons and complaint at the office of the New York State Secretary of State by leaving the papers with an authorized person. The court held that this complied with Federal Rule of Civil Procedure 4 and New York law. The Funds also properly served the default-judgment motion and supporting papers there, and properly served later court orders by first-class mail under Rule 5.

The Funds pursued liability under section 515 of the Employee Retirement Income Security Act, which requires an employer bound to contribute to a multiemployer plan to make those contributions according to the plan or collective bargaining agreement. The court accepted the well-pleaded factual allegations as true because Shorecon defaulted. It found that Shorecon agreed to the collective bargaining agreement and had failed to remit required contributions. The court therefore granted the Funds’ motion for default judgment.

Damages

The Funds requested $53,737.64, consisting of liquidated damages, audit costs, attorney fees, litigation costs, and post-judgment interest. The court determined damages from the written submissions without holding an evidentiary hearing.

Liquidated damages. The collective bargaining agreement and Collection Policy required liquidated damages equal to 20 percent of delinquent contributions. The court awarded $3,329.86 for the audit deficiencies and $2,701.97 for the non-audit deficiencies, totaling $6,031.83.

Audit costs. The Collection Policy required Shorecon to pay audit costs when the Funds pursued collection through litigation. The court awarded the requested $3,400 in audit costs.

Attorney fees. The court held that the Employee Retirement Income Security Act and the governing agreements entitled the Funds to reasonable attorney fees and costs. Counsel requested $43,608.50 for 181 hours of work. The court found the hours reasonable but reduced several hourly rates: Todd Dickerson’s rate for work beginning January 1, 2018 was reduced to $300 per hour; Nicole Marimon’s rate was set at $275 per hour before January 1, 2020 and $300 per hour afterward; and Marlie Blaise’s and Julie Dabrowski’s rates were set at $225 per hour. The court granted attorney fees in principle but required the Funds to submit a revised fee request based on those rates. The opinion did not state the final revised fee amount.

Litigation costs and interest. The court’s conclusion granted $697.30 for litigation costs, including filing, service, and subpoena fees. Earlier in the opinion, the requested cost amount is stated as $697.31. The court also granted post-judgment interest calculated from the date judgment is entered.

Disposition

Judge Ronnie Abrams granted the motion for default judgment. She granted the specified liquidated damages, audit costs, litigation costs, and post-judgment interest; modified the attorney-fee request through reduced rates; and ordered the Funds to submit a revised fee request and proposed default judgment order by July 27, 2020. After reviewing those papers, the court said it would direct the Clerk to enter judgment and close the case.