Eng'rs Joint Welfare Fund v. C. Destro Dev. Co.

178 F.Supp.3d 27

Engineers Joint Welfare Fund, et al., Plaintiffs,

v.C. Destro Development Co., Inc., et al., Defendants.

5:10-cv-0474 (LEK/ATB)

United States District Court, N.D. New York.

Signed March 31, 2016

Jennifer A. Clark, Blitman, King Law Firm–Syracuse Office, Syracuse, NY, for Plaintiffs.

Brian P. Fitzgerald, Office of Brian P. Fitzgerald, Buffalo, NY, for Defendants.

C. Destro Development Co., Inc., pro se.

Carmen Destro, Jr., Elma, NY, pro se.

MEMORANDUM-DECISION and ORDER

Lawrence E. Kahn, United States District Judge

I. INTRODUCTION

On April 22, 2010, Plaintiffs Engineers Joint Welfare Fund (“Welfare Fund”), Engineers Joint Pension Fund (“Pension Fund”), Engineers Joint Supplemental Unemployment Benefit Fund (“S.U.B. Fund”), Engineers Joint Training Fund (“Training Fund”), Operating Engineers Local 17 Training Fund (“Local 17 Training Fund”), Central Pension Fund of the International Union of Operating Engineers and Participating Employers (“Central Pension Fund”) (together, the “Plans”), International Union of Operating Engineers, Local Union No. 17 (“Union”) (collectively, “Plaintiffs”) commenced this action to recover contributions, interest, liquidated damages, audits fees, and attorneys' fees and costs under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq . and the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185. Dkt. No. 1 (“Complaint”). On April 30, 2015, Plaintiffs moved for summary judgment. Dkt. Nos. 65 (“Motion”); 65-11 (“Memorandum”). Defendants C. Destro Development Co., Inc. (“Destro Development”) and Carmen Destro, Jr. (“Destro”) (collectively, “Defendants”) did not oppose the Motion. For the following reasons, Plaintiffs' Motion is granted in part and denied in part.

II. BACKGROUND

Under Local Rule 7.1(a)(3), “[t]he Court shall deem admitted any properly supported facts set forth in the Statement of Material Facts that the opposing party does not specifically controvert.” L.R. 7.1(a)(3). Therefore, Plaintiffs' Statement of Material Facts is deemed admitted to the extent that it is supported by proper citations to the record. Dkt. No. 65–1 (“Statement of Material Facts”); see also Vt. Teddy Bear Co. v. 1 – 800 Beargram Co., 373 F.3d 241, 244 (2d Cir.2004).

As alleged in the Complaint, the Plans are multi-employer benefit plans within the meaning of §§ 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3), (37). Compl. ¶ 13. From September 1, 2006 through February 23, 2013, Destro Development was party to collective bargaining agreements (“CBAs”) with the Union. SMF ¶ 1. The CBAs obligated Destro Development to remit contributions to the Plans for each hour paid to each employee covered by the CBAs and to deduct sums from certain employees' wages and pay those sums to the Union as union dues, voluntary political action fund, political action fund, and defense fund money. Id.¶¶ 5-6. Destro was the officer and manager of Destro Development and ran the day-to-day operations of the company. Id.¶ 2. Plaintiffs allege that Defendants are employers within the meaning of ERISA § 3(5), 29 U.S.C. § 1002(5). Compl. ¶ 19.

The CBAs bound Destro Development to the terms and conditions of the Plans' Agreements and Declarations of Trust (“Trusts”). SMF ¶ 7. The Trusts provide that unpaid contributions are trust assets. Id.¶ 8. The Plans adopted a Collections Policy, by which Destro Development is bound. Id.¶ 10. The Collections Policy obligates Destro Development to submit contributions to the Plans and deductions to the Union no later than the fifteenth day of the month following the month for which the contributions and deductions are due. Id.¶ 11. If Destro Development fails to submits the contributions and deductions by the thirtieth day of the month, its remittances for the month are considered delinquent. Id.¶ 12. Destro Development is liable for delinquent contributions and deductions, plus interest, liquidated damages, and any audit fees and costs and attorneys' fees and costs incurred in collecting such delinquent contributions. Id.¶ 13.

From September 1, 2006 through October 2008, Destro Development untimely remitted $96,187.29 in contributions and deductions. Id.¶ 18. Defendants have not paid the interest and liquidated damages due in connection with these untimely contributions and deductions. Id.¶ 19. According to audits conducted by Plaintiffs, from September 1, 2006 through December 2012, Destro Development did not remit $249,853.68¹ in contributions and deductions. Id.¶ 20. After crediting $26,821.80 in mistaken payments, Destro Development owes $223,031.88 in contributions and deductions, plus interest and liquidated damages. Id.¶¶ 21-22. Defendants have also not paid Plaintiffs' audits fees or attorneys' fees and costs. Id.¶¶ 23-24.

Plaintiffs' Complaint seeks all contributions and deductions determined to be due by audit of Defendants' records, plus applicable interest, liquidated damages, audit fees, and attorneys' fees and costs. Compl. ¶ 41. Plaintiffs move for summary judgment against Destro Development in the amount of $762,296.23 and summary judgment against Destro in the amount of $467,447.82. Mem.

III. LEGAL STANDARD

Federal Rule of Civil Procedure 56 instructs a court to grant summary judgment if “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56. The movant bears the burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A court must resolve all ambiguities and draw all reasonable inferences in favor of the nonmoving party. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000) ; Nora Beverages, Inc. v. Perrier Grp. of Am., Inc., 164 F.3d 736, 742 (2d Cir.1998).

Where a motion for summary judgment is unopposed, the court must nonetheless determine that the movant has meet their burden of showing that there is no genuine issue of material fact.² Vt. Teddy Bear, 373 F.3d at 244. “If the evidence submitted in support of the summary judgment does not meet the movant' burden of production, then ‘summary judgment must be denied even if no opposing evidentiary matter is presented .’ ” Id.(quoting Giano v. City of New York, 322 F.3d 139, 141 (2d Cir.2003) ). “An unopposed summary judgment motion may also fail where the undisputed facts fail to ‘show that the moving party is entitled to judgment as a matter of law.’ ” Id.(quoting Champion v. Artuz, 76 F.3d 483, 486 (2d Cir.1996) (per curiam)).

IV. DISCUSSION

A. Destro Development

1. Unpaid Contributions and Deductions

Plaintiffs assert violations for unpaid plan contributions under ERISA § 515, which requires “[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. Plaintiffs also assert violations of § 301(a) of the LMRA for unpaid union deductions. 29 U.S.C. § 185(a) (authorizing “[s]uits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce”). The undisputed facts establish that the CBAs required Destro Development to remit contributions and deductions to Plaintiffs for each hour paid to employees who performed operating engineers work. SMF ¶¶ 5–6; Dkt. No. 65–8 (“Noon Affidavit”) ¶¶ 18-20; Harrigan Aff. ¶ 18; see also Noon Aff., Ex. A-1 at 23-26, 34-38; Noon Aff., Ex. B-1 at 23-26, 34-38; Noon Aff., Ex. B-2 at 23-26, 34-38.

Plaintiffs' audits demonstrate that Destro Development failed to remit $223,031.88 in contributions and deductions to Plaintiffs for the period from September 1, 2006 through December 2012. Dkt. No. 65–2 (“McCarthy Affidavit”) ¶¶ 10-12; McCarthy Aff., Exs. A and B; see also Dkt. No. 65–3 (“DeMacy Affidavit”) ¶ 8; DeMacy Aff., Ex. B. Plaintiffs' submissions are sufficient to meet their burden of proving that Destro Development violated § 515 of ERISA and § 301(a) of LMRA and owes Plaintiffs $223,031.88 in delinquent contributions and deductions. See Cement & Concrete Workers Dist. Council Welfare Fund v. Angel Constr. Grp., LLC, No. 08 CV 1672, 2010 WL 3463181, at *4 (E.D.N.Y. June 15, 2010) (finding audit report and spreadsheet listing unreported employee hours sufficient to establish violation of § 515).

In addition to the $223,031.88 in unpaid contributions and deductions, under ERISA § 502(g)(2), Plaintiffs are entitled to

(B) interest on the unpaid contributions,

(C) an amount equal to the greater of—

(i) interest on the unpaid contributions, or

(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),

29 U.S.C. § 1132(g)(2).

a. Interest

Plaintiffs are entitled to receive interest on all unpaid contributions. 29 U.S.C. § 1132(g)(2)(B). “[I]nterest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of title 26.” Id.§ 1132(g)(2).

Under the Collections Policy for the Welfare, Pension, S.U.B., and Training Funds, “the employer will be assessed interest on the amount of delinquent contributions at the rate of two percent (2%) month.” Harrigan Aff., Ex. F at 3.³ Plaintiffs' documentation demonstrates that Destro Development owes interest, calculated through June 5, 2015, in the amount of $60,758.11 for unpaid contributions to the Pension Fund, $112,723.42 to the Welfare Fund, $18,132.23 to the S.U.B. Fund, and $68.80 to the Training Fund. DeMacy Aff., Ex. B at 21-24.⁴ The Collections Policy for the Central Pension Fund provides that interest is “to be calculated...