The Annuity, Welfare and Apprenticeship Skill Improvement & Safety Funds of the International Union of Operating Engineers, Local 15, 15A, 15C & 15D, AFL-CIO v. Allstate Mapping and Layout, LLC
1:23-cv-07345
E.D.N.YJul 22, 2024Background
- Plaintiffs are employee benefit and pension funds, and a labor union, representing construction workers under a collective bargaining agreement (CBA) with Allstate Mapping and Layout, LLC.
- The CBA obligates Allstate to make contributions to union-associated funds and to provide access to its payroll and employment records for auditing purposes.
- Plaintiffs allege Allstate underreported employees and hours, leading to underpaid benefit contributions, and failed to comply with audit demands for records from July 1, 2021 to June 30, 2023.
- Plaintiffs sued under ERISA and the LMRA for breach of the CBA, breach of ERISA obligations, and to compel an audit and recover any delinquent contributions.
- Allstate did not appear or respond in the lawsuit; default was entered against it, and plaintiffs moved for a default judgment.
- Magistrate Judge Peggy Kuo issued a report recommending the motion be granted, compelling an audit, and awarding attorneys' fees and costs, while allowing further relief if deficiencies are found in the audit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Right to audit | Funds are contractually and statutorily entitled to audit Defendant's books for benefit calculation | No appearance, no argument made | Plaintiffs have right to audit under ERISA, CBA, and trust agreements |
| Proper service | Summons and complaint were properly served via NY Secretary of State and mail | No appearance, no argument made | Court finds service proper and has personal jurisdiction |
| Attorneys’ fees and costs | ERISA and agreements mandate recovery of reasonable fees and litigation costs | No appearance, no argument made | Plaintiffs awarded $2,835.00 in fees and $524.00 in costs |
| Further monetary relief | If audit reveals deficiencies, plaintiffs should be allowed to seek further monetary relief | No appearance, no argument made | Plaintiffs granted right to seek such relief pending audit outcome |
Key Cases Cited
- Finkel v. Romanowicz, 577 F.3d 79 (2d Cir. 2009) (default is deemed a concession of well-pleaded allegations of liability)
- Central States, Southeast and Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985) (ERISA plans may compel audits to determine contributions)
- Jaspan v. Glover Bottled Gas Corp., 80 F.3d 38 (2d Cir. 1996) (trust funds have a duty to audit employers for fund property oversight)
- Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155 (2d Cir. 1992) (default admissions do not admit damages; plaintiffs must prove those by evidence)