Upstate N.Y. Eng'rs Health Fund v. Pumpcrete Corp.

UPSTATE NEW YORK ENGINEERS HEALTH FUND, by Deborah Spaulding, as Administrator; UPSTATE NEW YORK ENGINEERS PENSION FUND, by Deborah Spaulding, as Administrator; UPSTATE NEW YORK ENGINEERS S.U.B. FUND, by Deborah Spaulding, as Administrator; UPSTATE NEW YORK ENGINEERS TRAINING FUND, by Theron Hogle and Eugene Hallock, as Trustees; LOCAL 106 TRAINING AND APPRENTICESHIP FUND, by Daniel J. McGraw and Eugene Hallock, as Trustees; OPERATING ENGINEERS LOCAL 17 TRAINING FUND, by James Smolinski, as Administrative Manager; CENTRAL PENSION FUND OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS AND PARTICIPATING EMPLOYERS, by its Board of Trustees; INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 17, by Gary Swain, as Business Manager; UPSTATE NEW YORK OPERATING ENGINEERS, LOCAL 158, by Daniel McGraw, as Business Manager, Plaintiffs, v. PUMPCRETE CORPORATION and GEORGE CULP, Individually and as an Officer of Pumpcrete Corporation, Defendants.

No. 5:21-cv-00344 (BKS/ML)

United States District Court, N.D. New York

February 28, 2022

Appearances:

For Plaintiffs:

Jennifer A. Clark

Blitman & King LLP

MEMORANDUM-DECISION AND ORDER

Hon Brenda K. Sannes, United States District Judge:

I. INTRODUCTION

On March 25, 2021, 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; Local 106 Training and Apprenticeship Fund; Operating Engineers Local 17 Training Fund; Central Pension Fund of the International Union of Operating Engineers and Participating Employers (collectively, the “Funds”); International Union of Operating Engineers, Local Union No. 17 (“Local 17”); and Upstate New York Operating Engineers, Local 158 (“Local 158”), by their administrators, trustees, and managers, filed this action against, among others, Defendant Pumpcrete Corporation. (Dkt. No. 1). Plaintiffs allege that Defendant violated the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, and the Labor-Management Relations Act of 1947 (“LMRA”), as amended, 29 U.S.C. § 185(a), by failing to remit fringe benefit contributions and deductions. (Id.). Defendant has not answered the Complaint or otherwise appeared in this action.^[1]

Presently before the Court is Plaintiffs' motion under Rule 55(b) of the Federal Rules of Civil Procedure for default judgment. (Dkt. No. 11). Plaintiffs seek: (1) entry of judgment against Defendant on the First and Second Causes of Action in the amount of $409, 630.12 plus interest; (2) an order compelling an audit of Defendant from October 1, 2019 to date; and (3) permission to file a supplemental affidavit in support of their application to recover any debt uncovered by the audit, as well as interest, liquidated damages, audit fees, and attorneys' fees and costs incurred since May 27, 2021. (Dkt. No. 11, 2).

II. DISCUSSION

A. Standard of Review

“Rule 55 of the Federal Rules of Civil Procedure provides a two-step process for obtaining default judgment.” Priestly v. Headminder, Inc., 647 F.3d 497, 504 (2d Cir. 2011). First, under Rule 55(a), the plaintiff must obtain a clerk's entry of default. Fed.R.Civ.P. 55(a) (“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default”); see also Local Rule 55.1 (requiring a party seeking a clerk's entry of default to “submit an affidavit showing that (1) the party against whom it seeks a judgment… is not an infant, in the military, or an incompetent person (2) a party against whom it seeks a judgment for affirmative relief has failed to plead or otherwise defend the action… and (3) it has properly served the pleading to which the opposing party has not responded”). Second, under Rule 55(b)(2), the plaintiff must “apply to the court for entry of a default judgment.” Priestly, 647 F.3d at 505; see also Local Rule 55.2(b) (“A party shall accompany a motion to the Court for the entry of a default judgment, pursuant to Fed.R.Civ.P. 55(b)(2), with a clerk's certificate of entry of default… a proposed form of default judgment, and a copy of the pleading to which no response has been made”).

On April 2, 2021, Plaintiffs served Defendant with a Summons and Complaint. (Dkt. No. 6-1, ¶ 4). On April 29, Plaintiffs requested a clerk's entry of default under Rule 55(a) for Defendant's “failure to plead or otherwise defend” this action. (Dkt. No. 6). As required by Local Rule 55.1, Plaintiffs submitted an affidavit showing that: Defendant is a corporation and thus is not an infant, in the military, or incompetent; Defendant failed to file an answer or otherwise defend this action; and that Plaintiffs properly served the complaint. (Dkt. No. 6-1, ¶¶ 3-6). On April 30, 2021, Plaintiffs received a clerk's entry of default. (Dkt. No. 8). On June 2, 2021, Plaintiffs filed a motion for default judgment under Rules 54(b) and 55(b). (Dkt. No. 11). Although Plaintiffs served the motion on Defendant, (see Dkt. No. 12 (certificate of service)), Defendant filed no response. Therefore, Plaintiffs have met the procedural requirements and are entitled to an order of default under Rule 55(b)(2) of the Federal Rules of Civil Procedure and Local Rule 55.2(b). Accordingly, the Court will address liability.

B. Liability

By failing to appear in this action or oppose this motion, Defendant is deemed to have admitted the factual allegations in the Complaint. City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“It is an ‘ancient common law axiom' that a defendant who defaults thereby admits all ‘well-pleaded' factual allegations contained in the complaint” (citation omitted)); Rolex Watch, U.S.A., Inc. v. Pharel, No. 09-cv-4810, 2011 WL 1131401, at *2, 2011 U.S. Dist. LEXIS 32249, at *5-6 (E.D.N.Y. Mar. 11, 2011) (“In considering a motion for default judgment, the court will treat the well-pleaded factual allegations of the complaint as true, and the court will then analyze those facts for their sufficiency to state a claim”), report and recommendation adopted, 2011 WL 1130457, 2011 U.S. Dist. LEXIS 32246 (E.D.N.Y. Mar. 28, 2011). But before entering default judgment, the Court must review the allegations to determine whether Plaintiffs have stated a valid claim for relief. Finkel v. Romanowicz, 577 F.3d 79, 84 (2d Cir. 2009); Telequip Corp. v. Change Exch., No. 01-cv-1748, 2004 WL 1739545, at *1, 2004 U.S. Dist. LEXIS 14892, at *3 (N.D.N.Y. Aug. 3, 2004).

1. First and Second Causes of Action

a. ERISA § 515, 29 U.S.C. § 1145

Under § 515 of ERISA:

[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.

According to the First Cause of Action, Defendant is liable under ERISA for failing to remit fringe benefit contributions and deductions. (Dkt. No. 1, ¶¶ 36-38). Plaintiffs allege Defendant is an “employer[] in an industry affecting commerce, all as defined in ERISA [§§] 3(5)(11) and (12), ” (Id. at ¶ 19), and that the Funds are both multiemployer funds and employee benefit plans as defined under ERISA §§ 3(37) and (3), respectively. (Id. at ¶ 16).

Additionally, Plaintiffs allege that, at all times relevant to this case, Defendant was bound to seven collective bargaining agreements: (1) the April 2009-March 2012 Agreement between International Union of Operating Engineers Local No. 463^[2] AFL-CIO and the Building Industry Employers Association of Niagara County, New York, Inc., executed by Defendant on June 10, 2009; (2) the 2014-2017 Agreement between Pumpcrete Corp. Residential Contract/Shop and the International Union of Operating Engineers Locals 17, 17A, 17B, 17C, 17RA, and 17S, executed by Defendant on September 4, 2014; (3) the June 1, 2016-May 31, 2019 Agreement between Independent Building Contractors of WNY and the International Union of Operating Engineers Local 17, 17A, 17B, and 17RA, executed by Defendant on September 27, 2018; (4) the 2015-2018 Agreement between the Independent Heavy and Highway Contractors of WNY and the International Union of Operating Engineers Local No. 17, executed by Defendant on May 12, 2015; (5) the 2018-2021 Agreement between the Independent Heavy and Highway Contractors of WNY and the International Union of Operating Engineers Local No. 17, executed by Defendant on September 27, 2018; (6) the 2015-2019 Agreement between Labor Relations Divisions of Albany Region Rochester Region Central New York Region Associated General Contractors of New York State, LLC and International Union of Operating Engineers Local Union No. 158, executed by Defendant on February 13, 2017; and (7) the June 1, 2015-February 28, 2019 Building Agreement between “The Associations” and Local No. 158 of the International Union of Operating Engineers, executed by Defendant on February 13, 2017 (collectively, the “CBAs”). (Id. at ¶ 25).

Pursuant to the CBAs, Plaintiffs allege that Defendant is:

bound by the terms and conditions, rules and regulations of the Agreement and Declaration of Trust of the Upstate New York Engineers Health Fund, the Agreement and Declaration of Trust of the Upstate New York Engineers Pension Fund, the Agreement and Declaration of Trust of the Upstate New York Engineers S.U.B. Fund, the Agreement and Declaration of Upstate New York Engineers Training Fund, the Agreement and Declaration of Trust of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers, the

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