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

Background

Carolina Trim LLC signed an agreement with the New York City District Council of Carpenters requiring it to make contributions to related pension, welfare, annuity, apprenticeship, retraining, educational, and industry funds when performing covered work. The agreement also required Carolina Trim to submit to audits to determine whether it had paid all required contributions.

Carolina Trim did not submit to an audit. The Funds initially estimated that Carolina Trim owed $1,735,020.65 in delinquent contributions for work performed between May 11, 2011, and June 19, 2016. After Carolina Trim failed to appear at a scheduled arbitration hearing and did not provide records needed for the audit, the arbitrator issued a default award totaling $2,345,212.55, including interest, liquidated damages, costs, attorney’s fees, and arbitration fees.

Petitioners filed this action in 2017 to confirm that first award. After a later audit found a much smaller deficiency, the court remanded the matter to the arbitrator on February 26, 2020. Following additional arbitration proceedings, the arbitrator issued an amended award on May 13, 2021. The amended award was based on a principal deficiency of $73,284.64 and awarded Petitioners $133,221.80 in total.

Arguments and Legal Standard

Petitioners sought confirmation of the amended award under the Employee Retirement Income Security Act, the Labor Management Relations Act, and the Federal Arbitration Act. They also sought $38,984 in attorney’s fees and $194.40 in costs incurred in the court proceedings.

Carolina Trim opposed the amended petition and sought to limit the recoverable attorney’s fees. It did not dispute the accuracy of the audit’s $73,284.64 principal-deficiency finding. It objected to the arbitrator’s statement that Carolina Trim had acted in bad faith and argued that Petitioners’ fees should be limited to work performed after the February 2020 remand.

The court explained that a petition to confirm an arbitration award is treated similarly to a motion for summary judgment. Review of an arbitration award is very limited, and a court generally confirms the award if the arbitrator’s decision has even a minimally reasonable basis that can be inferred from the record.

Ruling

The court confirmed the Second Award. It noted that the award was based on the results of the revised 2019 audit and that Carolina Trim did not contest the audit’s accuracy. The court did not further address the arbitrator’s bad-faith observation because it had no effect on the award’s calculation.

The court also granted Petitioners’ request for attorney’s fees and costs. The collective bargaining agreement required an employer to pay reasonable attorney’s fees and costs when a court entered judgment for the Funds in an action to collect delinquent contributions. The court rejected Carolina Trim’s proposed limitation because Petitioners’ original effort to confirm the First Award was not frivolous or unreasonable, and the fees incurred since 2017 resulted directly from Carolina Trim’s delays in complying with the audit and arbitration process.

Judge Denise Cote granted the amended petition, awarded Petitioners judgment of $133,221.80, and ordered interest at an annual rate of 5.25% beginning May 13, 2021. The court also awarded statutory post-judgment interest and $39,178.40 in attorney’s fees and costs for the confirmation proceedings. The Clerk of Court was directed to enter judgment and close the case.