98 Civ. 5444 (RLC) (RLE)
2000 U.S. Dist. LEXIS 13548
COUNSEL:
For Plaintiffs: Sally Schneider, Proskauer Rose LLP, New York, NY.
For Defendants: Leed's Construction, Corp., Maspeth, NY.
JUDGES: Honorable Ronald L. Ellis, United States
Magistrate Judge. HONORABLE ROBERT L. CARTER, U.S.D.J.
OPINIONBY: Ronald L. Ellis
OPINION: REPORT AND RECOMMENDATION
To the HONORABLE ROBERT L. CARTER, U.S.D.J.:
I.
INTRODUCTION This matter was referred to the undersigned for
determination of whether judgment by default should be entered against defendant
Leed's Construction Group ("Leed's"), and for determination of inquest damages,
on February 15, 2000. Plaintiff
Mason Tenders District Council
of Greater New York ("Union"), to which plaintiff
Mason Tenders
District Council Welfare Fund, Pension Fund, Annuity Fund and Training Program
Fund ("Funds") are third-party beneficiaries, filed this action under
29
U.S.C. § 1132, and pursuant to a collective bargaining agreement, on July
30, 1998, for recovery of fringe benefit contributions due plaintiff Funds from
defendant Leed's. For the following reasons, the Court recommends that default
[*2] judgment be entered against Leed's, and an award of
$
1,912 be entered in favor of plaintiffs, which includes: an audit
penalty of $ 400; costs of $ 190, pursuant to
29
U.S.C. § 1332(g)(2)(D); and attorney's fees of $ 1322, pursuant to
29
U.S.C. § 1132(g)(2)(D). Additionally, the Court recommends that an audit of
Leed's books and records be ordered by the district judge for determination of
the amount of recovery of fringe benefit contributions due plaintiff Funds,
together with interest, and liquidated damages.
II.
BACKGROUND The Funds provide various fringe benefits to
eligible employees on whose behalf employers contribute to the Funds, pursuant
to collective bargaining agreements between employers, the construction
industry, and the Union.
See Compl. P 3. n1 The Union
is a labor organization who represents its constituent locals, each local being
a labor organization operating as a labor union with more than seven members.
See id. Defendant Leed's is a for-profit domestic
corporation and a member of the Environmental Contractors Association
("Association"), which is the exclusive bargaining agent [*3] for
all of its members.
See id. The Association executed a
collective bargaining agreement ("Agreement") with the Union, thereby obligating
Leed's to pay and/or submit the required monetary contributions and/or reports
to the Funds.
See id. Also, the Agreement required
Leed's to remit dues checkoffs deducted from the wages paid to employees who had
authorized deductions in writing to the Union, for all work performed by Leed's
employees within certain trade and geographical jurisdictions of the Union.
See id. at 4. Further, the Agreement permits the Funds
to conduct an audit of the books and records of Leed's.
See
id. - - - - - - - - - - - - - - - - - -Footnotes- - - -
- - - - - - - - - - - - - -
n1 "Compl." refers to plaintiffs' Complaint,
filed July 30, 1998.
- - - - - - - - - - - - - - - - -End
Footnotes- - - - - - - - - - - - - - - - -
In their complaint,
plaintiffs allege that Leed's failed to pay and/or submit the required monetary
contributions and/or reports to the Funds and remit dues checkoff to the Union
when scheduled.
See id. at 1. Plaintiff are seeking:
(1) recovery of fringe benefit [*4] contributions due the Funds,
together with interest, liquidated damages, attorney's fees, costs and
disbursements provided for by
29
U.S.C. § 1132; (2) recovery of unremitted dues checkoffs deducted from the
wages paid to employees who had authorized such deduction in writing due
plaintiff Union, with interest, pursuant to New York C.P.L.R. § 5001; (3)
recovery of the audit penalty, in the amount of $ 400, due as a result of Leed's
failure to produce the books and records necessary for an audit; (4) $ 1,322 for
attorney's fees, pursuant to
29
U.S.C. § 1132(g)(2)(D); (5) $ 190 for costs, pursuant to
29
U.S.C. § 1132(g)(2)(D); and (6) an order directing Leed's to post and
maintain a bond to guarantee payment of all fringe benefit contributions to the
Funds and remittance of all dues checkoffs to the Union that became due and
owing during the term of the Agreement.
See Schneider
Aff. at 2-3, 5. n2
- - - - - - - - - - - - - - - - - -Footnotes-
- - - - - - - - - - - - - - - - -
n2 "Schneider Aff." refers to the
affidavit of Sally L. Schneider, signed January 25, 2000.
- - - -
- - - - - - - - - - - - -End Footnotes- - - - - - - - - - - - - - - - -
[*5]
III. ANALYSIS
A. Default
Judgment Plaintiffs filed this action under
29
U.S.C. § 1132 on July 30, 1998, and served Leed's with a copy of the summons
and complaint on August 4, 1998.
See Aff. of Service.
n3 Leed's did not file an answer, appear or otherwise defend in this action.
- - - - - - - - - - - - - - - - - -Footnotes- - - - - - - - - - -
- - - - - - -
n3 "Aff. of Service" refers to the affidavit of service by
Deborah Winn, signed August 4, 1998.
- - - - - - - - - - - - - -
- - -End Footnotes- - - - - - - - - - - - - - - - -
Because defendant
Leed's has failed to file an answer to the complaint or otherwise defend the
action, the Court recommends that judgment by default be entered against Leed's.
B. Audit of Defendant's Books and Records
Section 515 of ERISA,
29
U.S.C. § 1145, mandates employers "to make contributions to a multiemployer
plan . . . under the terms of a collectively bargained agreement . . . in
accordance with the terms . . . of such . . . agreement."
Section 502(g)(2) of ERISA,
29
U.S.C. § 1132(g)(2), mandates that:
In any action under [*6] this subchapter by a
fiduciary for or on behalf of a plan to enforce section 1145 of this title in
which a judgment in favor of the plan is awarded, the court shall award the
plan--
(A) the unpaid contributions,
(B) interest on the unpaid
contributions [and]
. . . .
(D) reasonable attorney's fees and costs
of the action, to be paid by the defendant.
Here, defendant has
failed to meet both its contractual and statutory obligations. Because
plaintiffs have not been given an opportunity to examine and audit Leed's books
and records to establish the amount of fringe benefit contributions due the
Funds and dues checkoffs due the Union, the Court recommends that an audit be
ORDERED to determine the amount of recovery, interest, and
liquidated damages owed to plaintiffs.
C. Attorney's Fees
and Costs Plaintiffs also seek attorney's fees and costs.
Pursuant to
29
U.S.C. § 1132(g)(2)(D), plaintiffs are entitled to an award of reasonable
attorney's fees and costs.
For ERISA claims such as this, reasonable attorney's fees can be
calculated using the "lodestar" method: the hours expended multiplied by a
reasonable hourly rate.
See LeBlanc-Sternberg
v. Fletcher, 143 F.3d 748, 763-64 (2d Cir. 1998) [*7]
(quoting
Hensley
v. Eckerhart, 461 U.S. 424, 433, 76 L. Ed. 2d 40, 103 S. Ct. 1933
(1983)). The lodestar figure is to be based upon current, prevailing market
rates.
See 143
F.3d at 764 (quoting
Blum
v. Stenson, 465 U.S. 886, 895, 79 L. Ed. 2d 891, 104 S. Ct. 1541
(1984)).
Here, there were two sets of attorneys for plaintiffs. The
plaintiffs were first represented by Gorlick, Kravitz & Listhaus, PC. A
principal of the firm, Lawrence A. Kravitz, submitted an affidavit requesting
4.3 hours of work for preparation of the complaint. He requested 0.5 hours, at
an hourly charge of $ 200, for himself, and 3.8 hours, at an hourly charge or $
140, for an associate, Roger B. Greenberg. The Court finds that the amount of
time spent in preparing a complaint is reasonable, as are the corresponding
hourly rates. Therefore, the Court recommends that Gorlick, Kravitz &
Listhaus, PC, be awarded $ 632 in attorney's fees.
The plaintiffs were
subsequently represented by Sally L. Schneider from Proskauer Rose, LLP, who
submitted an affidavit requesting 2.3 hours of work, at an hourly charge of $
300. The Court finds that 2.3 hours to prosecute the [*8] case is
reasonable, given the services provided (preparation of default judgment
documents). The Court also finds that, based on its knowledge of rates
customarily charged in this community for equivalent work by law firms of
comparable size and sophistication as Proskauer Rose, LLP, the hourly rate
charged by counsel is reasonable. Therefore, the Court recommends that attorney
Schneider be awarded $ 690.
Finally, the requested costs of $ 190,
pursuant to
29
U.S.C. § 1132(g)(2)(D), are also reasonable in light of the circumstances of
the case. Therefore, the Court recommends that plaintiffs be awarded $ 190 for
costs.
IV. CONCLUSION For the aforementioned
reasons, the Court recommends that default judgment be entered against Leed's,
and plaintiffs be awarded
$ 1,912, which includes: an audit
penalty of $ 400; costs pursuant to
29
U.S.C. § 1332(g)(2)(D) of $ 190; and attorney's fees pursuant to
29
U.S.C. § 1132(g)(2)(D) of $ 1322. Additionally, the Court recommends that an
audit of Leed's books and records be ordered by the district judge for
determination of the amount of recovery of fringe benefit [*9]
contributions due the Funds, together with interest, and liquidated damages.
Pursuant to Rule 72, Federal Rules of Civil Procedure, the parties shall
have ten (10) days after being served with a copy of the recommended disposition
to file written objections to this Report and Recommendation. Such objections
shall be filed with the Clerk of the Court and served on all adversaries, with
extra copies delivered to the chambers of the Honorable Robert L. Carter, 500
Pearl Street, Room 2220, and to the chambers of the undersigned, Room 1970.
Failure to file timely objections shall constitute a waiver of those objections
both in the District Court and on later appeal to the United States Court of
Appeals.
See Thomas
v. Arn, 474 U.S. 140, 150, 88 L. Ed. 2d 435, 106 S. Ct. 466 (1985);
Small
v. Secretary of Health and Human Services, 892 F.2d 15, 16 (2d Cir.
1989) (
per curiam);
28
U.S.C. § 636(b)(1) (West Supp. 1995); Fed. R. Civ. P. 72, 6(a), 6(e).
DATED: August 10, 2000
New York, New York
Respectfully Submitted,
The Honorable Ronald L. Ellis
United States Magistrate Judge
Labor
& Employment Law : Collective Bargaining & Labor Relations : Subjects of
Bargaining 