970 F. Supp. 2d 108
E.D.N.Y2013Background
- Plaintiff Dr. Gerald Finkel, as Chairman of the Joint Industry Board (the Joint Board), sued Universal Electric Corp. under ERISA and the LMRA for failing to remit employer and employee contributions and payroll reports required by two collective bargaining agreements (2007 CBA and 2010 CBA).
- Universal Electric was properly served but never answered; the Clerk entered default and plaintiff moved for a default judgment. Magistrate Judge Cheryl L. Pollak conducted an inquest and prepared a Report & Recommendation adopted by Judge Margo K. Brodie.
- Plaintiff sought recovery of unpaid "Required Contributions" (JIB and DSP contributions), audit-identified deficiencies from a 2011 payroll audit, interest (on unpaid and late-paid contributions), liquidated damages, and attorneys’ fees and costs.
- Plaintiff’s filings contained inconsistent time periods and some duplicative claims (some periods had been litigated or awarded in other cases), requiring the court to solicit and rely on a clarifying July 8, 2013 letter from plaintiff.
- The Magistrate recommended denying the audit-deficiency award for lack of precise supporting documentation, but found liability established by the complaint and supporting exhibits and recommended awarding unpaid contributions, interest (through report date and continuing to judgment), liquidated damages (limited to amounts tied to unpaid contributions), and reduced attorney’s fees and costs due to imprecise submissions.
- District Judge Brodie adopted the Report & Recommendation and entered judgment for plaintiff in the total amount of $14,914.34 (unpaid contributions, interest, liquidated damages, and fees/costs), plus any additional interest accruing before judgment and post-judgment interest.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability under ERISA §515 and LMRA §301 for failing to remit contributions and payroll reports | Finkel alleged Universal failed to remit JIB and DSP contributions and required payroll reports in violation of the CBAs and ERISA fiduciary duties | No answer or opposition (default) | Liability established by admitted well-pleaded allegations; default judgment appropriate on liability |
| Scope and timing of damages sought (some requested periods post-date complaint or overlap other cases) | Seeks unpaid contributions (including amounts that became due after filing), interest (pre- and post-filing), audit deficiency, liquidated damages, and fees/costs | No opposition; court scrutinized notice and pleadings for adequacy | Complaint provided sufficient notice for amounts accruing through entry of judgment; court adjusted awards to conform to pleading and clarified submissions |
| Audit deficiency (2011 payroll audit) — sufficiency of proof to award audited amount | Seeks $10,147.03 from Audit Report for unreported wages | No response; court required clear documentation tying audit deficits to unpaid amounts not already paid or previously awarded | Denied at this time for lack of specific supporting documentation linking audit periods to unpaid amounts |
| Attorney’s fees reasonableness | Requested $2,929.50 based on contemporaneous billing; seeks customary rates | No opposition; court evaluated lodestar and billing entries | Awarded fees but reduced by 25% to $2,197.13 for imprecise/confusing/partly inaccurate submissions; costs of $433.06 awarded |
Key Cases Cited
- Enron Oil Corp. v. Diakuhara, 10 F.3d 90 (2d Cir. 1993) (two-step entry of default judgment; caution in granting defaults)
- Meehan v. Snow, 652 F.2d 274 (2d Cir. 1981) (default judgment is an extreme remedy)
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (defendant deemed to admit well-pleaded allegations upon default)
- Iron Workers Dist. Council v. Hudson Steel Fabricators & Erectors, Inc., 68 F.3d 1502 (2d Cir. 1995) (ERISA §1132(g)(2) damages components explained)
- Perdue v. Kenny A., 559 U.S. 542 (U.S. 2010) (lodestar is the starting point for attorney’s fees)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (burden to justify hours; exclude excessive or redundant time)