Bricklayers and Allied Craftworkers Local 2, Albany, New York Pension Fund v. Mainstream Specialties Inc.
1:20-cv-00463
N.D.N.Y.Nov 18, 2020Background
- Plaintiffs are a union and multiple multiemployer benefit funds that allege Mainstream Specialties Inc. failed to submit required contributions and deductions under collective-bargaining agreements and trust agreements; Peter Stevens was the company president/officer.
- Plaintiffs sued under ERISA and the LMRA and served Mainstream Specialties and Stevens; neither appeared and the clerk entered defaults.
- Plaintiffs sought a default judgment for unpaid contributions, interest, liquidated damages, audit fees, and attorneys' fees/costs.
- The Court treated well‑pleaded allegations as admitted by default, reviewed plaintiffs' supporting audits/invoices/time records, and exercised its duty to verify damages.
- The Court found Mainstream Specialties liable for unpaid contributions and Stevens personally liable as a fiduciary under ERISA, awarded specified contributions, interest, liquidated damages, audit fees, and reduced attorneys' fees to district‑customary rates.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability of Mainstream Specialties for unpaid ERISA contributions | Mainstream bound by CBA/trusts and failed to remit required contributions and dues | Default/no opposing argument | Default admitted well‑pleaded allegations; Mainstream liable for unpaid contributions |
| Quantum of unpaid contributions owed by Mainstream | Audits/remittance reports show $73,866.41 unpaid | Default/no opposition | Court awarded $73,866.41 in unpaid contributions and deductions |
| Personal fiduciary liability of Peter Stevens | Stevens controlled company payments; trusts treat withheld amounts as plan assets, so Stevens is a fiduciary liable for plan losses | Default/no opposition | Court found Halpin factors satisfied; Stevens personally liable and liable for $58,904.01 in unpaid contributions |
| Remedies: interest, liquidated damages, audit fees, attorneys' fees/costs | Requested specific amounts (interest $32,500.76; liquidated damages $26,681.94; audit $7,810; attorneys $13,490.30 at higher hourly rates) | Default/no opposition | Court awarded prejudgment interest, 20% liquidated damages, audit fees, and attorneys' fees but reduced hourly rates to $240 for attorneys and $95 for paralegals; total fee/cost awards reflected those rates |
Key Cases Cited
- Bravado Int'l Grp. Merch. Servs., Inc. v. Ninna, Inc., 655 F. Supp. 2d 177 (E.D.N.Y. 2009) (default admits well‑pleaded factual allegations on liability)
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (default judgment principles)
- Flaks v. Koegel, 504 F.2d 702 (2d Cir. 1974) (damages must be established even after default)
- Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (court must ensure basis for damages in default judgment)
- Diduck v. Kaszycki & Sons Contractors, Inc., 974 F.2d 270 (2d Cir. 1992) (prejudgment interest principles and compensating plan for lost use of funds)
- Bricklayers & Allied Craftworkers Local 2 v. Moulton Masonry & Const., LLC, 779 F.3d 182 (2d Cir. 2015) (fiduciary liability for unlawfully withholding plan assets)
- In re Halpin, 566 F.3d 286 (2d Cir. 2009) (two‑part test for individual fiduciary liability over unpaid contributions)
- Toussaint v. JJ Weiser, Inc., 648 F.3d 108 (2d Cir. 2011) (attorney's fees under ERISA §1132(g)(1) require some success on the merits)
- Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) (clarifying the standard for awarding attorney's fees)
- Arbor Hill Concerned Citizens Neighborhood Ass'n v. County of Albany, 522 F.3d 182 (2d Cir. 2008) (lodestar/hourly‑rate reasonableness factors)
