Cement & Concrete Workers District Council Welfare Fund, Pension Fund, Annuity Fund, Education & Training Fund & Other Funds v. Metro Foundation Contractors Inc.
699 F.3d 230
| 2d Cir. | 2012Background
- Funds sued Metro for unpaid ERISA contributions, seeking damages, interest, and costs after Metro refused to provide records for audit.
- Because Metro failed to appear, a default judgment was entered and damages referred to a magistrate for calculation.
- With books unobtainable, the Funds relied on an alternate damages method in the CBA for when records are not provided, using the higher of monthly hours from prior months.
- The magistrate calculated delinquent contributions for May–June 2008 and added interest at 18% and liquidated damages of 20%.
- District Court, accepting the auditor’s affidavit, awarded damages but struck the requested attorneys’ fees for lack of contemporaneous time records.
- Metro appealed the damages award; the Funds did not challenge the attorneys’ fees denial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| May the CBA's alternate damages method stand? | Funds: alternate method valid per CBA when records are unavailable. | Metro: method yields speculative damages and violates certainty. | Alternate method permitted; damages not speculative. |
| Damages proven with reasonable certainty? | Funds: detailed affidavit based on reported hours suffices. | Metro: insufficient basis for damages. | Damages properly supported by the CBA-based calculation and affidavit. |
| Was the district court's discretion abused in calculating damages without a live hearing? | Optional inquest allowed under Rule 55(b)(2). | Hearing needed to confirm figures. | No abuse; court did not err in relying on affidavits under Rule 55(b)(2). |
Key Cases Cited
- Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999) (supports alternate damages calculation not disturbing reasonable certainty)
- La Barbera v. J.D. Collyer Equip. Corp., 337 F.3d 132 (2d Cir. 2003) (affirms CBA may set alternate calculation when records unavailable)
- Tamarin v. Adam Caterers, Inc., 13 F.3d 52 (2d Cir. 1993) (discusses need for reliable basis; remand when insufficient evidence)
- Fustok v. ContiCommodity Servs., Inc., 873 F.2d 38 (2d Cir. 1989) (damages in default judgments require evidentiary basis)
- Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504 (2d Cir. 1991) (discretion in determining inquest on damages)
- In re Sims, 534 F.3d 117 (2d Cir. 2008) (affirms district court discretion in Rule 55(b)(2))