Upstate N.Y. Eng'rs Health Fund v. S. Buffalo Elec., Inc.

UPSTATE NEW YORK ENGINEERS HEALTH FUND, et al., Plaintiffs, v. SOUTH BUFFALO ELECTRIC, INC., et al., Defendants.

5:15-CV-903 (LEK/TWD)

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK

October 6, 2017

DECISION AND ORDER

I. INTRODUCTION

This matter returns to the Court on a motion for reconsideration filed by plaintiffs Upstate New York Engineers Health Fund, Upstate New York Engineers Pension Fund, Upstate New York Engineers S.U.B. Fund, Upstate New York Engineers Training Fund, Operating Engineers Local 17 Training Fund, Central Pension Fund of the International Union of Operating Engineers and Participating Employers, and the International Union of Operating Engineers, Local Union No. 17. Dkt. Nos. 29 ("Motion"), 29-1 ("Clark Affidavit"), 29-2 ("Memorandum"). Plaintiffs request reconsideration of the Court's March 29, 2017 memorandum-decision and order partially granting Plaintiffs' motions for default judgment. Dkt. No. 27 ("March Order"); see also Dkt. Nos. 20 ("Default Motion"), 24 ("Second Default Motion"). For the following reasons, Plaintiffs' Motion is granted in part and denied in part.

II. BACKGROUND

The Court assumes the parties' familiarity with the facts and history of this case and recites only those facts necessary to the resolution of Plaintiff's Motion. For further background, reference is made to the March Order.

Defendant South Buffalo Electric, Inc. is a New York corporation, and defendants Arnold A. and Arnold J. Paolini are officers and shareholders of South Buffalo. Plaintiffs commenced this action on July 23, 2015, Dkt. No. 1 ("Complaint"), and Defendants did not answer or otherwise move in response to the Complaint, Docket. The Complaint sought monetary and injunctive relief 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. Compl. On October 6, 2015, Plaintiffs requested entry of default as to all Defendants, Dkt. No. 7, which the Clerk of the Court granted on October 7, 2015, Dkt. No. 9. Plaintiffs filed a motion for default judgment under Rule 55 of the Federal Rules of Civil Procedure on August 26, 2016. First Default Mot.; see also Dkt. No. 20-1 ("First Memorandum").

Plaintiffs' First Default Motion was filed against the Paolinis and not against South Buffalo, but Plaintiffs submitted a second motion for default judgment as to South Buffalo on November 1, 2016. Second Default Mot.; see also Dkt. No. 24-1 ("Second Memorandum"). Defendants did not oppose either motion for default judgment or otherwise appear in this action. On March 29, 2017, the Court granted in part and denied in part Plaintiffs' motions. Mar. Order at 15-16.

Plaintiffs offer four grounds for reconsideration. Mem. at 4-5. First, Plaintiffs claim the Court mistakenly reduced their damages from unpaid contributions and deductions by $28,716.87. Id. at 10-12. Second, Plaintiffs assert that the Court erred in its calculation of interest and liquidated damages as a result of the reduction in unpaid contributions anddeductions. Id. at 4; see also Clark Aff. ¶¶ 7-9. Third, Plaintiffs argue that the Court erred in denying their request for an injunction to obtain an audit from South Buffalo. Mem. at 13-16. Finally, Plaintiffs assert that the Court's fee award was unreasonably low compared to awards given by other courts in the Northern District of New York. Id. at 17-22.

III. LEGAL STANDARD

A motion for reconsideration may be granted where there is "an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent a manifest injustice." Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand, LLP, 322 F.3d 147, 167 (2d Cir. 2003) (quoting Virgin Atl. Airways, Ltd. v. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)). "The standard for granting a motion for reconsideration 'is strict and reconsideration will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court.'" Advanced Fiber Techs. Tr. v. J&L Fiber Servs., Inc., 751 F. Supp. 2d 348, 382-83 (N.D.N.Y. 2010) (Kahn, J.) (quoting Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995)). "[R]econsideration 'should not be granted where the moving party seeks solely to relitigate an issue already decided.'" Id. at 383 (quoting Shrader, 70 F.3d at 257).

IV. DISCUSSION

A. Unpaid Contributions and Deductions

Plaintiffs first argue that the Court erred in declining to award $200,176.07 in contributions and deductions for the period of January 1, 2012 through September 30, 2016. Mem. at 8-13. In its March Order, the Court limited Plaintiffs "to the $141,988.49 in unpaidcontributions and deductions for the period of July 2014 through March 2015 that they alleged in the Complaint." Mar. Order at 6. The Court explained that Plaintiffs were limited to the damages pleaded in their Complaint and "may not now demand $170,709.35 in contributions and deductions for the period of January 1, 2012, through December 31, 2015." Id. The Court also stated that the Plaintiffs could not "seek additional damages for the time period before this action was filed." Id. The Court agrees with Plaintiffs that these conclusions were error.

It is well established in the Second Circuit that "plan trustees may collect the unpaid contributions and the actual costs incurred in collecting unpaid contributions . . . [because] ERISA's purpose is to secure guaranteed pension payments to participants by insuring the honest administration of financing sound plans." Eng'rs Joint Welfare, Pension, Supplemental Unemployment Benefit & Training Funds v. B.B.L. Constructors, Inc., 825 F. Supp. 13, 17 (N.D.N.Y. 1993). Generally, plaintiffs "may not recover an amount greater than that sought in their [complaint or] amended complaint." Bricklayers Ins. & Welfare Fund v. Golden Vale Constr., Inc., No. 06-CV-1028, 2007 WL 3232244, at *7 (E.D.N.Y. Oct. 31, 2007); see also Bd. of Trs. of United Union Roofers v. Best Roofing of N.J., Inc., No. 12-CV-1655, 2014 WL 1311809, at *6 (E.D.N.Y. Mar. 31, 2014) ("Plaintiff may not now seek higher amounts for the periods that were already outstanding at the time the complaint was filed."). But there is an important exception to this general rule. Courts have awarded sums greater than the total requested in a complaint when the complaint provides notice to defendants that the amount of damages sought is subject to increase. E.g., Mason Tenders Dist. Council Welfare Fund v. I.M.I. Const. Corp., No. 99-CV-12105, 2004 WL 1700615, at *2 (S.D.N.Y. July 30, 2004) ("Plaintiffs here should not be limited to the dollar figures in the complaint because . . . the complaint . . .specifically refers to other (unquantified) amounts to be determined by subsequent audit [of the defendant's records]."); B.B.L. Constructors, 825 F. Supp. at 16 (finding that plaintiff provided adequate notice where defendant had "timely received a copy of the reply affidavit which claimed the additional monies at variance with plaintiffs' complaint and also clearly explained the reasons for the variance"). Cf. Silge v. Merz, 510 F.3d 157, 160 (2d Cir. 2007) ("By limiting damages to what is specified in the 'demand for judgment,' the rule ensures that a defendant who is considering default can look at the damages clause, satisfy himself that he is willing to suffer judgment in that amount, and then default without the need to hire a lawyer."); Best Roofing, 2014 WL 1311809, at *6 (denying a request for unpaid benefits contributions because "[n]othing in the complaint nor in plaintiffs' submissions requesting entry of default judgment suggest that plaintiffs would seek damages that would be so many times higher" than those alleged in the complaint). Thus, notice is a key factor to determining whether a plaintiff may seek damage above those pleaded in its complaint. If defendants have adequate notice that actual damages may differ from those originally sought, ERISA plaintiffs can obtain more money than they initially request in their complaint.

In the March Order, the Court followed the general rule, holding that "Plaintiffs may not, however, seek additional damages for the time period before this action was filed." Mar. Order at 6. On reconsideration, the Court concludes that Plaintiffs need not be limited to the $141,988.49 explicitly requested in the Complaint, Compl. ¶¶ 32, 42, 43, because the Complaint itself put Defendants on notice of the possibility of a larger damages figure. Plaintiffs based their $141,988.49 request on South Buffalo's remittance reports, id. ¶ 30, but explicitly requested an audit of Defendants' records to assess the accuracy of those reports, id. ¶¶ 38-43. "In the event[that the audit revealed that Defendants] ha[d] not properly submitted accurate reports," Plaintiffs alleged that they were entitled to "any and all contributions that are determined to be due." Id. ¶ 43. Because the Complaint "specifically refers to other (unquantified) amounts to be determined by subsequent audit," Mason Tenders, 2004 WL 1700615, at *2, Defendants were on notice that they faced potential damages above $141,988.49, and thus Plaintiffs are not limited to this amount. Additionally, Defendants "clearly had notice of the varying amount in [P]laintiffs' [Second Default Motion]," B.B.L. Constructors, 825 F. Supp. at 17, which sought $200,176.07 in contributions and deductions after two audits had been conducted to cover the period from January 1, 2012 through May 31, 2016, Second Mem. at 8-9. "Therefore, 'the amended [motion for] default judgment in the case at hand satisfies the notice principles Rule 54(c) seeks to protect.'" B.B.L. Constructors, 825 F. Supp. at 18 (quoting Fustok v. Conticommodity Services, Inc., 122 F.R.D. 151, 157 (S.D.N.Y. 1...