Opinion
No. 03 Civ. 3246 (TPG).
January 5, 2005
OPINION
Plaintiffs are employee welfare and benefit trust funds established and maintained pursuant to various collective bargaining agreements by Local 32B-32J, Service Employees International Union, AFL-CIO ("the Union"). The purpose of the funds is to receive contributions from employers of union members. Defendant Gates-Patchen Housing Development Fund Co., Inc. ("Gates-Patchen") is a not-for-profit domestic corporation that has operated a low — or moderate-income housing project located at 940-950 Gates Avenue, Brooklyn, New York. Gates-Patchen has employed members of the Union. Defendant United States Department of Housing and Urban Development ("HUD") is an agency of the United States Government that has received rent payments pursuant to a regulatory agreement with Gates-Patchen that governs Gates-Patchen's receipt of Section 8 rental assistance funds.
Plaintiff has brought this action pursuant to Sections 502(a)(3) and 515 of the Employee Retirement Income Security Act ("ERISA"), as amended, 29 U.S.C. §§ 1132(a) and 1145, and Section 301 of the Labor-Management Relations Act of 1947 ("Taft-Hartley Act"), 29 U.S.C. § 185, for breach of contract to secure the payment of employer contributions, mandated by statute and owed by contractual obligation, to the funds, and for injunctive and other equitable relief under ERISA.
On May 15, 2004, the Union filed a motion for partial summary judgment against defendant Gates-Patchen only. Gates-Patchen has not filed an opposition to the motion, nor is it expected to do so. The Union's motion for summary judgment is therefore granted.
Upon application of Kip Lenoir, Esq., counsel to Gates-Patchen, this court has issued an order to show cause why Lenoir should not be relieved as counsel to Gates-Patchen. As Lenoir is inactive, Ira Sturm, the counsel to the Union agreed to circulate a stipulation and order granting Lenoir's motion to be relieved as counsel. Apparently, HUD has now taken over the building and has leased it to another party and Gates-Patchen no longer is operational.
In the complaint, the Union seeks to recover $49,394.57 in fringe benefit contributions due for the period of July 1, 2000 through April 1, 2003, plus such other amounts found due pursuant to an audit of Gates-Patchen's books and records for the period of July 1, 2000 to the present. The Union seeks an injunction requiring Gates-Patchen and its employees to cooperate in the conduct of audits of books and records of Gates-Patchen. Under Sections 502 and 515 of ERISA, 29 U.S.C. §§ 1132 and 1145, the Union further claims statutory damages and interest on the unpaid fringe benefits as well as reasonable attorney fees and costs. In addition to the amounts sued for in this action, the Union seeks an order enjoining Gates-Patchen and its officers, agents, servants, and employees from refusing or neglecting to pay the balance of an unsatisfied judgment in the amount of $92,989.56 awarded to the Union in a prior law suit. Finally, the Union, alleging continued violation of ERISA and the agreement between Gates-Patchen and the Union, seeks an order enjoining Gates-Patchen, its officers, agents, servants, employees, and all persons in active concert or participation with Gates-Patchen who receive actual notice of the order from violating ERISA by failing, refusing or neglecting to pay and/or submit the required contributions and/or reports to the funds and requiring them to permit and cooperate in the conduct of audits for the term of the agreement.
In its motion for summary judgment the Union seeks a total of $95,060.48 in payments of fringe benefits, liquidated damages, and interest on missed payments. This amount is composed of $61,547.04 in unpaid contributions from July 1, 2000 through the April 2003 quarter, plus interest, as calculated through April 1, 2004 of $7,722.00, and liquidated damages, as calculated through May 1, 2004 of $25,791.44. The Union claims that Gates-Patchen has made no quarterly contributions since the first contributions were due on July 1, 2000, except for a single payment received in or around May 2001 which sum was properly credited. The agreements governing the fund contributions provide monthly liquidated damages of 2.5% per month or 30% per annum, commencing from the date contributions become due. But ERISA's limit is 20%, which figure thus governs interest on liquidated damages. The Union claims a current statutory rate of interest of 6% per annum on unpaid fringe benefits.
The Union's motion for summary judgment against defendant Gates-Patchen is granted. The Union shall submit a form of judgment, including interest and liquidated damages calculated as of the date of the judgment.
SO ORDERED.