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

Background

The Trustees of the New York City District Council of Carpenters Pension Fund sued Expo Advantage USA, Inc. under the Employee Retirement Income Security Act (ERISA). According to the complaint, Expo was subject to a collective bargaining agreement and a collection policy requiring benefit contributions to the Fund.

The Fund alleged that Expo’s contribution declines in 2018, 2019, and 2020 caused partial withdrawals from the Fund, and that the decline in 2021 caused a complete withdrawal. The Fund’s assessments calculated withdrawal liability of $79,768 under a 2021 assessment and additional amounts of $51,233 and $14,053 under a 2022 assessment. The complaint sought $145,054, plus interest and liquidated damages.

Default and Expo’s submissions

The action was filed on September 9, 2022. The Fund served Expo through the Corporate Division of the New York State Department of State on September 12, 2022. Expo did not answer or appear through counsel, and the Clerk issued a Certificate of Default on October 17, 2022.

John Clancy, who stated that he was Expo’s president, asked the court to help appoint free counsel for Expo. The court denied that request and advised Expo that, as a corporation, it could appear only through an attorney admitted to practice before the court. The court also advised Expo to fix its default. Clancy later sent a letter discussing lost business revenue during the COVID-19 pandemic and alleged discrepancies in the Fund’s withdrawal-liability calculations. The court concluded that Clancy was not a lawyer and could not represent Expo, so his submissions did not fix Expo’s default or constitute a formal appearance for Expo.

Court’s analysis

The court explained that a default admits all well-pleaded allegations against the party in default. In support of its motion, the Fund submitted four letters notifying Expo of the amounts demanded and four actuarial reports calculating the amounts owed. The court found that the Fund had provided the notice and demand required by ERISA and had demonstrated Expo’s liability.

The court also noted that Expo did not ask the Fund to review its liability determination or seek arbitration of the withdrawal liability, although ERISA provided those rights. The court found that Expo owed $145,054 for three partial withdrawals and the later complete withdrawal.

Under the Fund’s collection policy, interest on delinquent withdrawal-liability payments was calculated at the Citibank prime rate plus 2%. The Fund showed that interest accrued at $11.47 per day for the liability identified in the 2021 notice and demand and at $12.07 per day for the liability identified in the 2022 notice and demand. As of January 3, 2023, the court found that Expo owed $7,941.38 in interest.

The court also found that the Fund was entitled to liquidated damages equal to 20% of the $145,054 withdrawal liability, or $29,010.80. Separately, it found that the Fund was entitled to $11,310.31 in attorneys’ fees and costs. That amount consisted of $10,832.50 for 40.8 hours of attorney and paralegal time and $477.81 in costs, including the filing fee, service of process, and postage. The court concluded that the fees and expenses were reasonable.

Ruling

Judge P. Castel granted the Fund’s motion for default judgment. The Clerk was directed to terminate the motion and close the case. The court stated that final judgment for the Fund would be entered separately.