Trustees of the North Atlantic States Carpenters Health, Pension, Annuity, Apprenticeship, and Labor Management Cooperation Funds v. WND Construction LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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TRUSTEES OF THE NORTH ATLANTIC STATES

CARPENTERS HEALTH, PENSION, ANNUITY,

APPRENTICESHIP, and LABOR MANAGEMENT

COOPERATION FUNDS, and the NORTH ATLANTIC

STATES REGIONAL COUNCIL OF CARPENTERS,

Plaintiffs, REPORT AND

RECOMMENDATION

-against- CV 23-4166 (PKC)(AYS)

WND CONSTRUCTION LLC and ARCH INSURANCE

COMPANY,

Defendants.

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ANNE Y. SHIELDS, United States Magistrate Judge:

Plaintiffs, The Trustees of the North Atlantic States Carpenters Health, Pension, Annuity,

Apprenticeship, and Labor Management Cooperation Funds (the “Funds”) and the North Atlantic

States Regional Council of Carpenters (the “Union”) (collectively, “Plaintiffs”), commenced this

action on June 6, 2023 against Defendants WND Construction LLC (“WND”) and Arch

Insurance Company (“Arch”), pursuant to Sections 502 and 515 of the Employee Retirement

Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132 and 1145, as amended, Section 301

of the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185, and Section 220-g

of the New York Labor Law (“NYLL”) for delinquent contributions that WND failed to pay

under the parties’ collective bargaining agreement (“CBA”). (See generally Compl., Docket

Entry (“DE”) [1]).

Plaintiffs filed an Amended Complaint on December 8, 2023. (DE [18].) While Arch

appeared herein, WND failed to answer either the Complaint or the Amended Complaint or

otherwise appear in this action. By stipulation dated August 29, 2024, Plaintiffs voluntarily

dismissed Arch from this action.

On July 31, 2024, Plaintiffs filed a request for a certificate of default with the Clerk of the

Court for WND, (DE [33]), which was granted on August 8, 2024. (DE [34.) On November 15,

2024, Plaintiffs filed the within motion for default judgment (DE [36]), which was referred to the

undersigned by Judge Chen on November 18, 2024, for a recommendation as to whether the

motion should be granted and what, if any, damages should be awarded. For the following

reasons, this Court respectfully recommends that Plaintiffs’ motion be granted in its entirety.

BACKGROUND

The Plaintiff Funds are employer and employee trustees of multiemployer labor-

management trust funds organized and operated in accordance with ERISA and the LMRA.

(Am. Compl. ¶¶ 4-5.) The Plaintiff Union is a labor organization that represents employees in an

industry affecting commerce within the meaning of the LMRA. (Id. ¶ 6.) Defendant WND is a

domestic limited liability company incorporated under the laws of New York and who, at all

relevant times, was a party to a CBA with the Union dated August 4, 2022, covering the period

May 1, 2022 through April 30, 2027. (Id. ¶¶ 7, 10; Banfield Decl. ¶ 6 and Ex. A, annexed

thereto.)

Pursuant to the parties’ CBA, WND agreed to be bound to the documents and

instruments governing the Funds, including the Funds’ policy for the collection of employer

contributions (the “Collection Policy”). (Id. ¶ 12; Banfield Decl. Ex. A; Tompuri Decl., Ex. C.)

The CBA requires WND to make contributions to the Funds for all work performed by its

employees within the trade and geographical jurisdiction of the Union (“Covered Work”). (Id. ¶

14.)

Pursuant to the CBA, WND was required to pay wages to Union members in its employ

at the rates prescribed therein, which, in Ulster County between October 2022 and March 2023,

was in an amount no less than $34.68 per hour for up to forty hours per week, as part of a

combined wage-and-benefit package. (Id. ¶ 18.) WND was further required, pursuant to Section

220 of the NYLL, to pay wages at the prescribed prevailing rate to all workers in its employ

performing public work, as part of a combined wage-and-benefit package. (Id. ¶ 19.) Under both

the CBA and the NYLL, WND was required to pay wages at a rate of one and one-half times its

workers’ standard hourly rate for all hours worked in a given week that exceeded forty, in an

amount no less than $52.02 per hour. (Id. ¶ 20.)

WND contracted to perform Covered Work on the Town of Marlborough

Community/Recreation Center, Phase 2 Alteration Project (the “Project”), located in

Marlborough, New York. (Id. ¶ 22.) WND failed to remit contributions owed to the Funds for

Covered Work performed on the Project for the period October 2022 through March 2023 in the

principal amount of $87,706.65. (Id. ¶ 23.) Former Defendant Arch Insurance Company issued a

payment bond guaranteeing payment of all wages and benefits owed by WND in connection with

its work on the Project. (¶ 26.)

Pursuant to ERISA, the CBA, and the Collection Policy, WND is liable for interest on the

delinquent contributions, as well as liquidated damages. (Id. ¶ 24.) The Collection Policy

provides that interest on delinquent contributions is to be calculated at a rate of 0.75% per month,

compounded monthly, and that the amount of liquidated damages shall be twenty percent of the

delinquent contributions. (Id. ¶¶ 15-16.) Finally, the Collection Policy provides that the employer

shall be liable for all costs incurred in collecting delinquent contributions, including, without

limitation, audit costs and arbitration fees. (Id. ¶ 17.)

As stated above, at the time this action was commenced, WND owed contributions to the

Funds in the amount of $87,706.56. In July 2024, during the pendency of this action, former

Defendant Arch settled with the Funds and agreed to resolve certain delinquent employee benefit

contributions owed by WND in the amount of $75,217.60 (the “Paid Delinquency”). (Tompuri

Decl. ¶ 12.) Accordingly, as of the date of the filing of the motion for default judgment, the

amount due and owing by WND, which covers the period November 19, 2022 through March 3,

2023, is $12,205.12 (the “Remaining Delinquency”). (Id. ¶ 13.)

As set forth in Plaintiffs’ motion for default judgment, Plaintiffs seek the following

damages: (1) the Remaining Delinquency in the amount of $12,205.12; (2) interest on the

Remaining Delinquency, as of October 31, 2024, in the amount of $1,938.12, with interest

continuing to accrue; (3) liquidated damages on the Remaining Delinquency in the amount of

$2,441.02; (4) late payment interest on the Paid Delinquency in the amount of $11,957.89, as of

September 13, 2024, with interest continuing to accrue; and, (5) liquidated damages on the Paid

Delinquency in the amount of $15,043.52, for a total monetary award of $43,585.67, plus

additional interest. Plaintiffs also seek attorney’s fees and costs in the amount of $10,152.43, as

well as post-judgment interest.

DISCUSSION

I. Legal Standard

Motions for default judgment are governed by Rule 55 of the Federal Rules of Civil

Procedure, which provides for a two-step process. See Fed. R. Civ. P. 55; Priestley v.

Headminder, Inc., 647 F.3d 497, 504-05 (2d. Cir. 2011). Initially, the moving party must obtain a

certificate of default from the Clerk of the Court. See Fed. R. Civ. P. 55(a). Once the certificate

of default is issued, the moving party may apply for entry of a default judgment. See id.

Where a default occurs, the well-pleaded factual allegations set forth in the Complaint are

deemed to be true. See Greyhound Exhibitgroup, Inc. v. E.L.U.L Realty Corp., 973 F.2d 155,

158 (2d Cir. 1992); see also Fed. R. Civ. P. 8(b)(6) (“An allegation – other than one relating to

the amount of damages – is admitted if a responsive pleading is required and the allegation is not

denied”). However, “[i]t is well established that a party is not entitled to a default judgment as a

matter of right; rather the entry of a default judgment is entrusted to the sound discretion of the

court.” Allstate Ins. Co. v. Howell, No. 09-cv-4660, 2013 WL 5447152, at *1 (E.D.N.Y. Sept.

30, 2013).

A plaintiff seeking a default judgment must demonstrate that its “uncontroverted

allegations, without more, establish the defendant’s liability on each asserted cause of action.”

Gunawan v. Sake Sushi Rest., 897 F. Supp. 2d 76, 83 (E.D.N.Y. 2012). In determining whether

to grant a default judgment, the court has the “responsibility to ensure that the factual allegations,

accepted as true, provide a proper basis for liability and relief.” Ferrara v. Tire Shop Ctr., No. 14-

cv-4657, 2015 WL 3562624, at *2 (E.D.N.Y. Apr. 6, 2015). Accordingly, the court must

determine whether a plaintiff’s allegations establish liability as a matter of law. See City of New

York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011) (“[P]rior to entering default

judgment, a district court is required to determine whether the [plaintiff’s] allegations establish

the [defendant’s] liability as a matter of law.”) (internal quotation omitted).

II. Liability

Pursuant to Section 515 of ERISA, “[e]very employer who is obligated to make

contributions to a multiemployer plan under the terms of the plan or under the terms of a

collectively bargained agreement shall . . . make such contributions in accordance with the terms

and conditions of such plan or such agreement.” 29 U.S.C. § 1145; see also LaBarbera v. J.D.

Collyer Equip. Corp., 337 F.3d 132, 134 (2d Cir. 2003). In addition, Section 301 of the LMRA

provides a federal cause of action for “violation of contracts between an employer and a labor

organization representing employees . . . .” 29 U.S.C. § 185(a). Here, Article XVII of the CBA

obligates WND to remit benefit contributions to the Funds in accordance with the terms of the

CBA for every hour of work performed by its employees within the trade and geographical

jurisdiction of the Union. (Banfield Decl. ¶ 10 and Ex. A, Art. XVII.)

Plaintiffs allege in the Amended Complaint that WND failed to remit $87,706.56 in

employee benefit contributions. (Am. Compl. ¶ 23.) While a portion of the outstanding

contributions have been satisfied by Arch’s payment of the Paid Delinquency, $12,205.12

remains due and owing. (Tompuri Decl. ¶ 12.) Based on these allegations, as well as the

Declarations of William Banfield, a member of the Executive Committee of the Union, and Kim

Tompuri (“Tompuri”), the New York Collections Manager for the Funds, which substantiate

these allegations, the Court concludes that there is a basis for liability for violations of ERISA

and the LMRA based on WND’s breach of the CBA. Accordingly, the Court respectfully

recommends that Plaintiffs’ motion for default judgment be granted.

III. Damages

Although a default judgment entered on the well-pleaded allegations in a complaint

establishes a defendant’s liability, a plaintiff must still prove damages. See Cement & Concrete

Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc., 699 F.3d 230, 234 (2d

Cir. 2012); Credit Lyonnai Sec., Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999). Plaintiffs

herein seek unpaid contributions, interest, and liquidated damages, as specified in ERISA and the

CBA, as well as attorney’s fees and costs.

A. Delinquent Contributions

As stated above, while Plaintiffs initially alleged that WND failed to pay

contributions in the amount of $87,706.56, taking into account the Paid Delinquency of

$75,217.60, the Remaining Delinquency is $12,205.12 for the period November 19, 2022

through March 3, 2023. (Am. Compl. ¶ 23; Tompuri Decl. ¶ 13.) Accordingly, this Court

recommends that Plaintiffs be awarded $12,205.12 in damages representing WND’s delinquent

contributions.

B. Interest

Section 502(g)(2)(B) of ERISA mandates an award of interest on unpaid

contributions. See 29 U.S.C. § 1132(g)(2)(B). Pursuant to the Funds’ Collection Policy, interest

is also due on late-paid contributions. (Tompuri Decl., Ex. C, Art. II, § 2.1(D).) The rate of

interest on delinquent and late-paid contributions is calculated at a rate of 0.75% per month (9%

per annum), compounded monthly. (Tompuri Decl. ¶ 16 and Ex. C.) Applying the foregoing

interest rates, Plaintiffs calculated the interest due and owing on the Remaining Delinquency to

be $1,938.12 as of October 31, 2024, with interest continuing to accrue at a rate of 9% per

annum through the date of judgment herein. (Tompuri Decl. ¶ 16 and Ex. D, annexed thereto.)

Plaintiffs further calculated late payment interest on the Paid Delinquency, in accordance with

the foregoing rates, to be $11,957.89 as of September 13, 2024, with interest continuing to

accrue at a rate of 9% per annum. (Tompuri Decl. ¶ 18 and Ex. G, annexed thereto.)

Based on the foregoing, this Court respectfully recommends that Plaintiffs be awarded

$1,938.12 in interest on the Remaining Delinquency as of October 31, 2024, as well as additional

interest to be calculated at a rate 0.75% per month (9% per annum), compounded monthly,

through the date of judgment herein. The Court further recommends that Plaintiffs be awarded

late payment interest on the Paid Delinquency in the amount of $11,957.89 as of September 13,

2024, as well as additional interest to be calculated at a rate 0.75% per month (9% per annum),

compounded monthly, through the date of judgment herein

C. Liquidated Damages

Both the CBA and Section 502(g)(2)(C) of ERISA provide for an award of

liquidated damages. See 29 U.S.C. § 1132(g)(2)(C). Here, the CBA specifies that “liquidated

damages shall be 20% of the delinquent contributions.” (Tompuri Decl., Ex. C, Art. VI § 6.1.) As

demonstrated by the allegations of the Complaint and Tompuri’s declaration, Plaintiffs

calculated WND’s liquidated damages, in accordance with the provisions of the CBA, to be

$2,441.02 on the Remaining Delinquency and $15,043.52 on the Paid Delinquency. (Tompuri

Decl. ¶¶ 17, 19 and Ex. G, annexed thereto.) WND has taken no action to challenge this

assessment. As Plaintiffs have demonstrated their right to recover liquidated damages, this Court

respectfully recommends that liquidated damages be awarded in the amount of $2,441.02 on the

Remaining Delinquency and $15,043.52 on the Paid Delinquency.

D. Post-Judgment Interest

Plaintiffs should also be awarded post-judgment interest, pursuant to 28 U.S.C. §

1961, which must be applied to “any money judgment in a civil case recovered in a district

court.” 28 U.S.C. § 1961; see also Khurana, 2017 WL 1251102, at *17. Accordingly, this Court

recommends awarding post-judgment interest, to be calculated based on the weekly average one-

year constant maturity Treasury yield for the week preceding the date on which judgment is

entered. See 28 U.S.C. § 1961(a) (“[I]nterest shall be calculated from the date of the entry of the

judgment, at a rate equal to the weekly average 1-year constant maturity Treasury yield, as

published by the Board of Governors of the Federal Reserve System, for the calendar week

preceding.”); see also Schipani v.McLeod, 541 F.3d 158, 165 (2d Cir. 2008) (holding that post-

judgment interest is mandatory and calculated pursuant to federal statute).

V. Attorney’s Fees and Costs

Both the CBA and ERISA entitle Plaintiffs to recover reasonable attorney’s fees and

costs. Plaintiffs seek $9,471.50 in attorney’s fees and $680.93 in costs.

A. Attorney’s Fees

As a general matter when determining attorney’s fees, the “starting point” for

calculating a “presumptively reasonable fee,” is “the lodestar – the product of a reasonable

hourly rate and the reasonable number of hours required by the case.” Millea v. Metro-North

R.R. Co., 658 F.3d 154, 166 (2d Cir. 2011) (“Both this Court and the Supreme Court have held

that the lodestar – the product of a reasonable hourly rate and the reasonable number of hours

required by the case – creates a ‘presumptively reasonable fee.’”) (quoting Arbor Hill Concerned

Citizens Neighborhood Assoc. v. County of Albany, 522 F.3d 182, 183 (2d Cir. 2008)). The

Supreme Court has held that “the lodestar method produces an award that roughly approximates

the fee that the prevailing attorney would have received if he or she had been representing a

paying client who was billed by the hour in a comparable case.” Perdue v. Kenny A., 559 U.S.

542, 551 (2010) (emphasis in original). “[T]he lodestar figure includes most, if not all, of the

relevant factors constituting a ‘reasonable attorney’s fee.’” Id. at 553 (citation omitted); see also

Arbor Hill, 522 F.3d at 190-91 (holding that a court determines a “presumptively reasonable fee”

by considering case specific factors in order to establish a reasonable hourly rate that a

“reasonable, paying client would be willing to pay,” and then multiplying that rate by the number

of reasonable hours). This assessment is undertaken “bear[ing] in mind that a reasonable, paying

client wishes to spend the minimum necessary to litigate the case effectively.” Arbor Hill, 522

F.3d at 190.

The reasonableness of hourly rates is guided by the market rate “[p]revailing in the

community for similar services by lawyers of reasonably comparable skill, experience and

reputation,” Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984), and the relevant community is

generally the “district in which the court sits.” Polk v. New York State Dep’t of Corr. Servs., 722

F.2d 23, 25 (2d Cir. 1983). Moreover, “[t]he burden is on the party seeking attorney’s fees to

submit sufficient evidence to support the hours worked and the rates claimed,” Hugee v. Kimso

Apartments, LLC, 852 F. Supp. 2d 281, 291 (E.D.N.Y. 2012), and this Circuit requires

contemporaneous billing records for each attorney who worked on the action. See Scott v. City

of New York, 643 F.3d 56, 57 (2d Cir. 2011). Finally, there is a “strong presumption” that the

lodestar represents the appropriate award, though “enhancements may be awarded in rare and

exceptional circumstances.” Perdue, 559 U.S. at 552.

Here, Plaintiffs seek to recover $9,417.50 in attorney’s fees and have submitted the

Declaration of Maura Moosnick, dated November 15, 2024 (“Moosnick Decl.”), and

contemporaneous billing records in support of their application. (Moosnick Decl. and Ex. M,

annexed thereto.) Plaintiffs seek reimbursement for services rendered by the following

individuals: (1) Maura Moosnick, a partner in Plaintiffs’ law firm, at a rate of $275.00 per hour

for work performed prior to July 1, 2024 and at a rate of $350.00 per hour for work performed

after July 1, 2024; (2) Jayden Peters, an associate, at a rate of $275.00 per hour; (3) Matthew

Vani, a law clerk, at a rate of $275.00 per hour; (4) Eva Keating, a paralegal, at a rate of $120.00

per hour; and, (5) Abigail Frankel, a paralegal, at a rate of $120.00 per hour. (Moosnick Decl. ¶¶

12-16, Ex. M.) The time spent on this action by counsel and its staff totals 46.25 hours.

(Moosnick Decl. ¶ 18, Ex. M.)

Plaintiffs’ submission adequately sets forth the background and experience of the

attorneys and paralegals who billed time on this action. Moreover, as stated above, Plaintiffs’

application is supported by contemporaneous time records that detail the tasks the attorneys and

paralegals performed in connection with this action, as well as the time expended on each task.

(Moosnick Decl., Ex. M.) Having reviewed the documents submitted, this Court finds both the

number of hours expended and the hourly rates to be reasonable. See Trustees of Pavers and

Road Builders Dist. Council Welfare, Pension, and Annuity Funds v. Rici Corp., No. 23-CV-

5856, 2024 WL 4314958, at *8 (E.D.N.Y. Aug. 19, 2024) (“In ERISA matters, courts in the

Eastern District of New York have approved hourly rates of $200 to $450 per hour for partners,

$100 to $300 per hour for associates, and $70 to $100 per hour for paralegals.”). Accordingly,

the Court respectfully recommends that Plaintiffs be awarded $9,471.50 in attorney’s fees.

B. Costs and Disbursements

Plaintiffs also seek a total of $680.93 in costs and disbursements in connection

with the instant action. (Moosnick Decl. ¶ 19 and Ex. N, annexed thereto.) These costs are

comprised of: (1) $402.00 for the court filing fee; (2) $64.28 in postage fees; (3) $18.65 in

research fees; and (4) $196.00 for process server fees. (Moosnick Decl. ¶ 19, Ex. N.)

Reasonable and identifiable out-of-pocket disbursements ordinarily charged to clients are

recoverable. See LeBlanc-Sternberg v. Fletcher, 143 F.3d 748, 763 (2d Cir. 1998). However, the

party seeking to recover costs “bears the burden of adequately documenting and itemizing the

costs requested.” Ganci v. U.S. Limousine Serv. Ltd., No. 10-cv-3027, 2015 WL 1529772, at *8

(E.D.N.Y. Apr. 2, 2015) (quoting Pennacchio v. Powers, No. 05-cv-985, 2011 WL 2945825, at

*2 (E.D.N.Y. July 21, 2011)). The costs for which Plaintiffs seek to recover are those ordinarily

associated with litigation and this Court finds them to be reasonable. Accordingly, the Court

respectfully recommends that Plaintiffs be awarded $680.93 in costs and disbursements.

RECOMMENDATION

For the foregoing reasons, it is respectfully recommended that Plaintiffs’ motion for

default judgment be granted, and that Plaintiffs be awarded the following: (1) the Remaining

Delinquency of $12,205.12, covering the period November 19, 2022 through March 3, 2023; (2)

interest on the Remaining Delinquency in the amount of $1,938.12 as of October 31, 2024, with

additional interest to be calculated at a rate of 0.75% per month (9% per year), compounded

monthly, through the date of judgment herein; (3) late payment interest on the Paid Delinquency

in the amount of $11,957.89 as of September 13, 2024, with additional interest to be calculated at

a rate of 0.75% per month (9% per year), compounded monthly, through the date of judgment

herein; (4) $2,441.02 in liquidated damages on the Remaining Delinquency; (5) $15,043.52 in

liquidated damages on the Paid Delinquency; (6) attorney’s fees in the amount of $9,471.50; and,

(7) $680.93 in costs.

OBJECTIONS

A copy of this Report and Recommendation is being electronically served on counsel for

Plaintiffs. Further, the Court is directing Plaintiffs to serve a copy of this Report and

Recommendation by overnight mail and first-class mail to Defendant WND Construction LLC at

its last known address(es) and to file proof of service on ECF by February 7, 2025. Any written

objections to the Report and Recommendation must be filed with the Clerk of the Court within

fourteen (14) days of service of this report. 28 U.S.C. § 636(b)(1) (2006 & Supp. V 2011); Fed.

R. Civ. P. 6(a), 72(b). Any requests for an extension of time for filing objections must be

directed to the district judge assigned to this action prior to the expiration of the fourteen (14)

day period for filing objections. Failure to file objections within fourteen (14) days will preclude

further review of this report and recommendation either by the District Court of Court of

Appeals. Thomas v. Arn, 474 U.S. 140, 145 (1985) (“[A] party shall file objections with the

district court or else waive right to appeal.”); Caidor v. Onondaga Cnty., 517 F.3d 601, 604 (2d

Cir. 2008) (“[F]ailure to object timely to a magistrate’s report operates as a waiver of any further

judicial review of the magistrate’s decision.”).

SO ORDERED:

Dated: Central Islip, New York

February 4, 2025 /s/ Anne. Y. Shields

ANNE Y. SHIELDS

United States Magistrate Judge