Gesualdi v. Seacoast Petroleum Prods., Inc.

97 F.Supp.3d 87

Thomas GESUALDI, Louis Bisignano, Anthony D'Aquila, Michael O'Toole, Benny Umbra, Frank H. Finkel, Joseph A. Ferrara, Sr., Marc Herbst, Denise Richardson, and Thomas Corbett as Trustees and Fiduciaries of the Local 282 Welfare Trust Fund, the Local 282 Pension Trust Fund, the Local 282 Annuity Trust Fund, the Local 282 Job Training Trust Fund, and the Local 282 Vacation and Sick Leave Trust Fund, Plaintiffs

v.SEACOAST PETROLEUM PRODUCTS, INC., Defendant.

No. 14–cv–1938 ADSSIL.

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

Signed March 28, 2015.

Filed March 30, 2015.

Trivella & Forte LLP, by: Jael Dumornay, Esq., James Robert Grisi, Esq., of Counsel, White Plains, NY, for the Plaintiffs.

No Appearance for the Defendant.

ADOPTION ORDER

SPATT, District Judge.

On March 26, 2014, the Plaintiffs the Trustees and Fiduciaries of the Local 282 Welfare Trust Fund, Pension Trust Fund, Annuity Trust Fund, Job Training Trust Fund, and Vacation and Sick Leave Trust Fund (the “Funds”) commenced this action to collect unpaid liabilities and contributions determined to be due and owing to the Funds as a result of two audits of the Defendant Seacoast Petroleum Products, Inc. (the “Defendant”) conducted by the Funds.

On June 25, 2014, the Clerk of the Court noted the default of the Defendant. On October 3, 2014, the Funds moved for a default judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). On October 6, 2014, this Court referred the matter to United States Magistrate Judge Steven I. Locke for a recommendation as to whether the motion for a default judgment should be granted, and if so, whether damages should be awarded, including reasonable attorneys' fees and costs.

On March 3, 2015, Judge Locke issued a 39–page Report recommending that the motion for a default judgment be granted and that damages be awarded as follows:

Unpaid Contributions		$41,347.41
Interest on Unpaid Contributions
Calculated Through 10/03/14		$38,856.51
Liquidated Damages on Unpaid Contributions
Calculated Through 10/03/14		$38,856.51
Audit Fees		$2,642.00
Outstanding Withdrawal Liability		$19,711.00
Interest on Outstanding Withdrawal Liability
Calculated Through		$4,160.16
Liquidated Damages on Withdrawal Liability
Calculated Through		$4,160.16
Attorneys' Fees		$6,577.65
Costs	+	$587.34

		$156,898.74
Daily Interest on Unpaid Contributions From 10/03/14
Through Entry of Judgment	+	$20.39/day
Continued Accrual of Liquidated Damages on Unpaid
Contributions From 10/03/14 Through Entry of Judgment	+	$20.39/day
Daily Interest on Outstanding Withdrawal Liability From
10/03/14 Through Entry of Judgment	+	$9.72/day
Continued Accrual of Liquidated Damages on
Outstanding Withdrawal Liability From 10/03/14	+	$9.72/day
Through Entry of Judgment

More than fourteen days have elapsed since service of the Report and Recommendation on the Defendant, which has failed to file an objection.

Pursuant to 28 U.S.C. § 636(b) and Federal Rule of Civil Procedure 72, this Court has reviewed the March 3, 2015 Report and Recommendation for clear error, and finding none, now concurs in both its reasoning and its result.

Accordingly, the March 3, 2015 Report and Recommendation is adopted in its entirety, and the Fund's motion for a default judgment is granted. The Clerk of the Court is respectfully directed to enter judgment in favor of the Funds as follows and to close the case:

Unpaid Contributions		$41,347.41
Interest on Unpaid Contributions	$38,856.51
Calculated Through 10/03/14
Liquidated Damages on Unpaid Contributions
Calculated Through 10/03/14		$38,856.51
Audit Fees		$2,642.00
Outstanding Withdrawal Liability		$19,711.00
Interest on Outstanding Withdrawal Liability
Calculated Through		$4,160.16
Liquidated Damages on Withdrawal Liability
Calculated Through		$4,160.16
Attorneys' Fees		$6,577.65
Costs	+	$587.34

		$156,898.74
Daily Interest on Unpaid Contributions From 10/03/14
Through Entry of Judgment	+	$20.39/day
Continued Accrual of Liquidated Damages on Unpaid
Contributions From 10/03/14 Through Entry of Judgment	+	$20.39/day
Daily Interest on Outstanding Withdrawal Liability From
10/03/14 Through Entry of Judgment	+	$9.72/day
Continued Accrual of Liquidated Damages on
Outstanding Withdrawal Liability From 10/03/14	+	$9.72/day
Through Entry of Judgment

SO ORDERED.

REPORT AND RECOMMENDATION

LOCKE, United States Magistrate Judge.

Before the Court on referral from the Honorable Arthur D. Spatt for Report and Recommendation in this action brought pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1001 et seq., is Plaintiffs' motion for a default judgment. By Complaint filed on March 26, 2014 (“Compl.”), DE [1], Plaintiffs Thomas Gesualdi, Louis Bisignano, Anthony D'Aquila, Michael O'Toole, Benny Umbra, Frank H. Finkel, Joseph A. Ferrara, Sr., Marc Herbst, Denise Richardson and Thomas Corbett, as Trustees and fiduciaries of the Local 282 Welfare Trust Fund, Pension Trust Fund, Annuity Trust Fund, Job Training Fund, and Vacation and Sick Leave Trust Fund (collectively, the “Plaintiffs” or “Funds”) commenced this action against Defendant Seacoast Petroleum Products, Inc. (“Defendant” or “Seacoast”) to recover unpaid benefit contributions, withdrawal liability, and related relief. Seacoast failed to answer or otherwise respond, and on October 3, 2014 Plaintiffs filed their motion for a default judgment, DE [11], seeking a total amount of $183,582.90 for: unpaid withdrawal liability; unpaid benefit contributions; accrued prejudgment interest on both sums, plus daily interest through the date of judgment; additional liquidated damages on both sums, plus daily liquidated damages through the date of judgment; audit fees; attorneys' fees; and costs of the action. See Declaration of Jael Dumornay, dated September 30, 2014 (“Dumornay Decl.”) at ¶ 32. By Order dated October 6, 2014, Judge Spatt, DE [18], referred the motion to the undersigned for a Report and Recommendation “as to whether the motion for a default judgment should be granted and, if so, whether damages should be awarded, including reasonable attorney's fees and costs.”

For the reasons set forth below, my recommendation is that the motion be granted and that total damages of $156,898.74 be awarded.

I. Background

Unless otherwise noted, the following facts are drawn from the Complaint and accepted as true for the purposes of this motion. Plaintiffs are jointly administered “employee benefit plans” and “multiemployer plans,” within the meaning of Sections 3(3) and 3(37) of ERISA, 29 U.S.C. § 1002(3) & (7), and formed pursuant to the terms of various collective bargaining agreements. See Compl. ¶ 4. Plaintiffs and Seacoast were both parties to the Nassau/Suffolk Heavy Construction & Excavating and Asphalt Industry Contract effective through June 30, 2008 (the “2008 CBA”). “[B]y its course of conduct in continuing to submit remittance reports and to pay contributions at the rates then in effect, as well as continuing to submit its pertinent books and records to the Funds' auditors upon request, Seacoast evidenced its intent to continue to be bound by the” CBA for the period July 1, 2008 to June 30, 2011 (the “2011 CBA”, together with the 2008 CBA, the “CBAs”). See id. ¶ 8; see also Declaration of Theresa Cody, sworn to on September 30, 2014 (the “Cody Decl.”) at Ex. B & C (CBAs). The CBAs incorporated by reference an Amended and Restated Agreement and Declaration of Trust (the “Trust Agreement”). See Cody Decl. Ex. A (Trust Agreement).

Pursuant to the terms of the CBAs, Seacoast was obligated to submit timely remittance reports stating which employees performed covered work and for how many hours, and make timely contributions to the Funds on behalf of its covered employees. See Compl. ¶¶ 11–12; see generally Trust Agmt. Art. IX. The CBAs also require Seacoast to periodically submit its books and records to an audit “in order to verify that all contributions required under the CBAs have been remitted to the Funds, that such contributions have been made solely on behalf of individuals eligible to participate in the Funds, and that covered workers are receiving the required benefits and/or credits.” Compl. ¶ 16; see Trust Agmt. Art. IX § 1(d) (providing that “The Trustees may at any time audit the pertinent books and records of any Employer in connection with” the collection of benefit contributions).

A. Seacoast's Unpaid Benefit Contributions

Plaintiffs performed an audit of Seacoast's books and records for the period April 26, 2008 through June 21, 2009 (“Audit 10–0357”). See id. ¶ 32. Plaintiffs provide an affidavit from Ken Jones, an accounting supervisor at Wagner & Zwerman LLP (“W & Z”), the accounting firm engaged to perform Audit 10–0357, who “examined the documents related to Seacoast, supervised the work of the other W & Z accountants on [the audit], and oversaw the preparation of the examination report of [their] findings,” which is submitted as Exhibit A thereto. See Jones Decl. ¶¶ 2, 10–11. That audit revealed delinquent contributions totaling $12,950.83, plus interest. See Compl. ¶ 33; see also Jones Decl. ¶ 15. Consequently, the Funds sent Seacoast a letter on or about December 2, 2009, notifying Seacoast of its delinquent contributions for that period, and demanding payment thereof, together with the cost of the audit. See id.; see also Cody Decl. Ex. E (Dec. 2, 2009 Letter). The Funds sent additional letters demanding payment on December 6, 2010 and March 7, 2011. See Compl. ¶ 33; see also Cody Decl. Ex. F (Dec. 6, 2010 Letter) & Ex. G (Mar. 7, 2011 Letter). To date, the amounts revealed by Audit 10–0357 remain outstanding. See Compl. ¶ 33; Cody Decl. ¶ 31.

It appears that prior to the dates covered by Audit 10–0357, when Seacoast was still contributing to the Funds, it overpaid its contribution obligations by $670.49. See Compl. ¶ 34. Consequently, a credit for that amount was originally reflected in Audit 10–0357. See id. However, Plaintiffs' “Amended Policy for the Return to Employers of Overpaid Contributions,” provides, in...