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

Background

The plaintiffs were the employer and employee trustees of multiemployer labor-management trust funds organized and operated under the Employee Retirement Income Security Act (ERISA), along with the New York City and Vicinity Carpenters Labor-Management Corporation. The court collectively called these plaintiffs the “Funds.” Duncan Partners, LLC was a member of an association and, through that membership, agreed to be bound by collective bargaining agreements between the association and the New York City District Council of Carpenters.

The collective bargaining agreement required Duncan to make contributions to the Funds for covered work and allowed the Funds to audit Duncan’s books and payroll records. An audit concerning Duncan’s work on the “Drywall/Carpentry/Ceiling @ MMC Core & Shell” project found that Duncan had not paid contributions for 4,591 employee work hours. The Funds sought unpaid contributions, interest, promotional fund contributions, liquidated damages, audit costs, attorney’s fees, litigation costs, and post-judgment interest.

The Funds originally sued Duncan and Travelers Casualty & Surety Company of America. Travelers had issued a bond guaranteeing wages and benefits owed by Duncan for work on the project. The Funds settled with Travelers for $134,210.33 toward the principal deficiency, and Travelers also paid $10,079.79 in vacation benefits. The Funds then continued their claims against Duncan.

The Clerk issued a certificate of default against Duncan. The court ordered the Funds to serve Duncan with the default-judgment motion and gave Duncan a deadline to respond. The Funds served Duncan, but Duncan did not respond or request more time.

Default judgment and liability

Under Federal Rule of Civil Procedure 55, a court may enter a default judgment when a defendant fails to plead or otherwise defend. The court first determined that Duncan had been properly served with the summons and complaint through an authorized person in the New York Department of State’s Corporation Division. The Funds also properly served the default-judgment motion and the court’s order on Duncan’s managing agent.

The Funds asserted liability under Section 515 of ERISA, which requires an employer obligated to contribute to a multiemployer plan under a plan document or collective bargaining agreement to make those contributions. Because Duncan was bound by the collective bargaining agreement and collection policy, and because it failed to appear, the court found that the Funds had established Duncan’s liability for failing to remit required contributions.

Damages and other relief

The court found that the damages could be calculated from the written submissions without an evidentiary hearing. It awarded the following amounts:

- Remaining principal contributions: $57,884.39, after accounting for payments obtained from Travelers. - Interest: $13,721.79, calculated under the collective bargaining agreement’s interest provisions. - Promotional fund contributions: $1,147.75. - Liquidated damages: $40,434.88, representing 20 percent of the unpaid contributions because that amount exceeded the alternative interest-based calculation. - Audit costs: $3,825, based on 45 hours of audit work at $85 per hour. - Litigation costs: $575.39 for costs including filing, service, and subpoena fees. - Post-judgment interest: interest at the statutory rate, calculated from the date judgment is entered.

The court also held that the Funds were entitled to reasonable attorney’s fees under ERISA and the collective bargaining agreement. Counsel had submitted records showing 58 hours of work and requested $16,080.50 in attorney’s fees, plus costs. The court found the hours reasonable but reduced the hourly rates. It approved $275 per hour for the partner’s work before January 1, 2020, and $300 per hour for that partner’s work beginning January 1, 2020. It set the rate for the three associates at $225 per hour. The court granted the request for attorney’s fees subject to these rates but did not set a final fee amount in the opinion.

Disposition

Judge Ronnie Abrams granted the Funds’ motion for default judgment. The court granted the specified requests for principal, interest, promotional fund contributions, liquidated damages, audit costs, litigation costs, and post-judgment interest. It also granted attorney’s fees at the reduced rates and ordered the Funds to submit a revised fee request and proposed default-judgment order by August 5, 2020. After reviewing those submissions, the court stated that it would direct the Clerk to enter the default judgment and close the case.