Gesualdi v. Reid
198 F. Supp. 3d 211
E.D.N.Y2016Background
- Plaintiffs (trustees of five Local 282 multiemployer benefit funds) sued J.H. Reid to collect delinquent contributions under a CBA and the Funds’ Trust Agreement, invoking ERISA § 515, LMRA § 301, and ERISA § 502(a)(3).
- Plaintiffs alleged unpaid contributions identified by an audit (Audit 13-0192) and an estimated audit (Audit 14-0490-El), missed remittance reports, and refusal to submit books for audit; letters demanding compliance went unanswered.
- Defendant defaulted; amended complaint service initially found defective but the district court extended service time nunc pro tunc, the Clerk’s default remained, and plaintiffs renewed their motion for default judgment.
- Magistrate Judge Brown recommended granting default judgment and awarding $1,030,265.28 (unpaid contributions, interest, liquidated damages, audit fees, attorneys’ fees and costs) plus per diem post‑judgment interest; injunctive relief was recommended denied.
- District Judge Spatt adopted the R&R in full, denied a late extension to object by defendant’s counsel, and directed entry of judgment consistent with the recommendation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper service / default | Amended complaint was properly served on NY Secretary of State; default valid and judgment warranted. | No timely opposition or answer; late counsel appearance but no timely objections. | Service validated nunc pro tunc; default stands; procedural prerequisites for default judgment satisfied. |
| Liability under ERISA §515 and LMRA §301 | CBA and Trust Agreement require contributions; audits show delinquencies; trustees are fiduciaries entitled to relief. | No substantive defense presented (default). | Default admits well‑pleaded facts; liability established under ERISA §515, LMRA §301, and ERISA §502(a)(3). |
| Damages (unpaid contributions, interest, liquidated damages, fees) | Recover unpaid contributions from audit and estimated audit, interest per plan (18%), liquidated damages (greater of interest or 20%), audit costs, and attorneys’ fees/costs. | No contest due to default. | Court awarded $1,030,265.28 composed of unpaid contributions, interest ($197,863.72 through 9/30/2014 plus $291.74/day thereafter), liquidated damages ($216,718.05), audit fees ($3,019.30), and attorneys’ fees and costs ($7,340.25 + $675.26). |
| Injunctive relief (compel audit/remittance reports) | Seek order compelling audit for 4/30/2012 onward and submission of remittance reports. | No opposition on the merits. | Denied: equitable relief unnecessary where plaintiffs sought and obtained estimated monetary relief for the same period and failed to show irreparable harm or inadequacy of legal remedies. |
Key Cases Cited
- Iron Workers Dist. Council v. Hudson Steel Fabricators & Erectors, 68 F.3d 1502 (2d Cir.) (approving 18% interest rate in ERISA contribution context)
- Millea v. Metro-North R.R. Co., 658 F.3d 154 (2d Cir.) (endorsing lodestar as presumptively reasonable fee)
- Arbor Hill Concerned Citizens Ass’n v. County of Albany, 522 F.3d 182 (2d Cir.) (lodestar and market rate framework for attorney’s fees)
- Simmons v. N.Y. City Transit Auth., 575 F.3d 170 (2d Cir.) (description of reasonable paying‑client standard)
- Blum v. Stenson, 465 U.S. 886 (U.S.) (market rate standard for fee awards)
- Polk v. N.Y. State Dep’t of Corr. Servs., 722 F.2d 23 (2d Cir.) (forum/community for assessing prevailing market rates)
- Transatl. Marine Claims Agency v. Ace Shipping Corp., 109 F.3d 105 (2d Cir.) (no evidentiary hearing required if documentary basis for damages exists)
- Fustok v. Conticommodity Servs., Inc., 873 F.2d 38 (2d Cir.) (courts may rely on detailed affidavits/documentary evidence to evaluate damages)
- Thomas v. Arn, 474 U.S. 140 (U.S.) (procedural rule that failure to object to magistrate report waives appellate review)
- Caidor v. Onondaga Cnty., 517 F.3d 601 (2d Cir.) (failure to timely object to magistrate judge’s report waives further review)