Opinion
23 Civ. 8403 (AT) (GWG)
05-24-2024
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 32BJ Plaintiff, v. ALLIED CLEANING AND MAINTENANCE CORP. et al., Defendants.
REPORT & RECOMMENDATION
GABRIEL W. GORENSTEIN, United States Magistrate Judge
Plaintiff Service Employees International Union, Local 32BJ (“SEIU”) brings this suit under section 301 of the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and Section 9 of the Federal Arbitration Act, 9 U.S.C. § 9, to enforce arbitration awards rendered against defendant Allied Cleaning and Maintenance Corp. (“ACMC”) pursuant to a collective bargaining agreement (“CBA”). See Complaint to Enforce Arbitration Award, filed Sept. 22, 2023 (Docket # 1) (“Compl.”). In addition to seeking a judgment against ACMC, SEIU seeks confirmation of the award against several other entities and an individual named John Kiely, alleging that these other defendants are liable for the arbitration award as “alter egos” of ACMC. See Compl. ¶¶ 29, 30. Defendants failed to answer the complaint and plaintiff subsequently filed a motion for summary judgment.
See Plaintiff's Notice of Motion and Motion for Summary Judgment, filed Dec. 19, 2023 (Docket # 31) (“Mot.”); Plaintiff SEIU's Memorandum of Law, filed Dec. 19, 2023 (Docket # 32) (“Mem.”); Statement of Undisputed Material Facts in Support of Plaintiff's Motion for Summary Judgment, filed Dec. 19, 2023 (Docket # 33) (“R. 56.1 Statement”); Declaration of Charles Du, filed Dec. 19, 2023 (Docket # 34) (“Du Decl.”); Declaration of Bertolain Elysee, filed Dec. 19, 2023 (Docket # 35) (“Elysee Decl.”); Opinion and Award (Default Judgment), annexed as Ex. D to Elysee Decl. (Docket # 35-4) (“Arb. Award”); Letter, filed Apr. 19, 2024 (Docket # 50).
For the following reasons, SEIU should be awarded a judgment of $22,335.60 plus prejudgment interest against all defendants except John Kiely.
I. BACKGROUND
This action arises out of a CBA governing the relationship between SEIU and ACMC. See Arb. Award at 1; 2016 Contractors Agreement, annexed as Ex. A to Elysee Decl. (Docket # 35-1) (“CBA”). On November 4, 2019, ACMC terminated three employees - Incoronata Christenson, Maria Lokhart, and Maria Jose - when ACMC lost a contract that applied to the building where the three employees worked as cleaners. Arb. Award at 2-3. SEIU contended that these three employees were entitled to termination pay under Article XVI, Section 26 of the CBA, which provides that “[i]n case of termination of employment . . . from reduction in force occurring for reasons other than technological advances, . . . the employee shall receive . . . termination pay . . . .” CBA at 109-10; see Arb. Award at 3. On November 11, 2019, SEIU sent ACMC and John Kiely a “grievance initiation letter” protesting, among other things, ACMC's failure to provide termination pay. See Grievance Initiation Letter, annexed as Ex. B to Elysee Decl. (Docket # 35-2).
On January 6, 2020, pursuant to the CBA, SEIU submitted the grievance to arbitration. Arb. Award at 1. A hearing was held before an arbitrator on November 28, 2022. Id. at 1-2; see Arbitration Request Letter, annexed as Ex. C to Elysee Decl. (Docket # 35-3). Prior to the hearing, the arbitrator received an email from ACMC's counsel advising her that the employer was “shut down,” that the “former principal” was not in the country, and that the employer would not be participating in the arbitration. Arb. Award at 2. Because the employer had notice of the hearing and declined to participate or seek an adjournment, the arbitrator preceded to hold the hearing and addressed the issue of whether ACMC violated the CBA. Id.
On December 7, 2022, the arbitrator found that ACMC violated the CBA and ordered it to pay $9,306.50 to Christenson, $7,445.20 to Lokhart, and $5,583.90 to Perez. Id. at 4. The arbitration award also included an award of arbitration fees. Id. at 5. ACMC has failed to pay the arbitration award. See Elysee Decl. ¶ 19.
On September 22, 2023, SEIU filed the instant action. See Compl. In addition to naming ACMC as a defendant, SEIU named several other entities it alleges “are part of a single integrated enterprise with interrelated operations, common management, centralized control of labor relations, common ownership, and common office facilities.” Compl. ¶ 30. These other defendants - none of whom were parties to the arbitration - are Allied Cleaning and Maintenance Services, Inc. (“ACMS”), Allied Cleaning Services, Inc. (“ACS”), and Guardian Building Services, LLC (“Guardian”). In addition to including the entity defendants, SEIU named John Kiely as a defendant, alleging that he “exercises complete domination” over all these entities. Id. ¶ 27. The complaint, labelled as a “complaint to enforce arbitration award,” id. at 1 (capitalization omitted), requests the following relief: (1) an order “confirming and enforcing the labor arbitration award;” (2) an order “requiring Defendants to pay prejudgment interest” on the arbitration award; and (3) reasonable attorney's fees, id. at 6.
After serving all the defendants, SEIU filed the instant motion for summary judgment. Because none of the defendants had appeared, the Court held a conference to discuss whether SEIU should obtain a certificate of default as an appropriate next step to obtain relief. See Docket Entry dated Feb. 21, 2024. Following the proceeding, SEIU obtained a Clerk's Certificate of Default as to all the defendants. See Clerk's Certificate of Default, filed Mar. 6, 2024 (Docket # 46).
II. LEGAL STANDARD
Where a petition to confirm an arbitration award is unopposed, the Second Circuit has held that “the petition and accompanying record should [be] treated as akin to a motion for summary judgment based on the movant's submissions.” D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 109 (2d Cir. 2006); accord Trs. of N.Y.C. Dist. Council of Carpenters Pension Fund v. Offsite Constr. Sols. LLC, 2022 WL 174514, at *2 (S.D.N.Y. Jan. 18, 2022), adopted by 2022 WL 445800 (S.D.N.Y. Feb. 14, 2022); Trs. of N.Y.C. Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educ. and Indus. Fund v. Eclipse Constr. Servs. Inc., 2021 WL 5567752, at *4 (S.D.N.Y. Nov. 26, 2021); Rotunno v. Laidlaw & Co. (UK) Ltd., 2021 WL 5450369, at *2 (S.D.N.Y. Nov. 19, 2021); Trs. for Mason Tenders Dist. Council Welfare Fund v. Super, LLC, 2017 WL 2703572, at *2 (S.D.N.Y. June 22, 2017). We therefore treat the petition as an unopposed motion for summary judgment to confirm an arbitration award. See Trs. of Ne. Carpenters Health, Pension, Annuity, Apprenticeship, & Lab. Mgmt. Cooperation Funds v. Excel Installations, LLC, 2020 WL 429135, at *2 (E.D.N.Y. Jan. 27, 2020) (treating petition as unopposed motion for summary judgment where defendants defaulted and failed to appear at the arbitration).
Rule 56(a) of the Federal Rules of Civil Procedure states that summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact.” See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). A genuine issue of material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In determining whether a genuine issue of material fact exists, “[t]he evidence of the non-movant is to be believed” and the court must draw “all justifiable inferences” in favor of the nonmoving party. Id. at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)).
III. DISCUSSION
In its complaint, SEIU requests confirmation of the arbitration award, that a judgment be entered against defendants who were not parties to the arbitration, and that the judgment include prejudgment interest on the award amount. See Compl. at 6. We discuss each request separately.
SEIU also requests “costs and reasonable attorneys' fees as a result of Defendants' unjustified and bad faith refusal to comply with the labor arbitration award.” Compl. at 6. However, SEIU does not provide evidence or argument to support such an award. While no award can be made now, SEIU is free to make a future application following entry of judgment as permitted by Fed.R.Civ.P. 54(d).
A. Confirmation of the Arbitration Award
“[C]onfirmation of an arbitration award is a summary proceeding that merely makes what is already a final arbitration award a judgment of the court, and the court must grant the award unless the award is vacated, modified, or corrected.” D.H. Blair, 462 F.3d at 110 (citations and internal quotation marks omitted). However, even where the motion is unopposed, a court ruling on a summary judgment motion to confirm an arbitration award “may not grant the motion without first examining the moving party's submission to determine if it has met its burden of demonstrating that no material issue of fact remains for trial.” Id. (quoting Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004)). Thus, “the court ‘cannot base the entry of summary judgment on the mere fact that the motion was unopposed, but, rather, must consider the merits of the motion.'” Trs. of the UNITE HERE Nat'l Health Fund v. JY Apparels, Inc., 535 F.Supp.2d 426, 428-29 (S.D.N.Y. 2008) (quoting United States v. 5800 SW 74th Ave., 363 F.3d 1099, 1101 (11th Cir. 2004)); accord Trs. of the N.Y.C. Dist. Counsel of Carpenters v. Exec. Millwork Corp., 2013 WL 265084, at *2-3 (S.D.N.Y. Jan. 22, 2013).
“[T]he court's function in confirming or vacating an arbitration award is severely limited.” Willemijn Houdstermaatschappij, BV v. Standard Microsystems Corp., 103 F.3d 9, 12 (2d Cir. 1997) (alteration in original) (citation and internal quotation marks omitted); see also Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001) (noting that “[j]udicial review of a labor-arbitration decision pursuant to [a CBA under the LMRA] is very limited”). A court need only find “a barely colorable justification for the outcome reached” by the arbitrator to confirm an award. D.H. Blair, 462 F.3d at 110 (internal citation and quotation marks omitted). In a case involving a CBA, “the Court evaluates whether the arbitrator ‘acted within the scope of his authority,'” Trs. of the N.Y.C. Dist. Counsel of Carpenters, 2013 WL 265084, at *3 (quoting Local 1199 v. Brooks Drug Co., 956 F.2d 22, 25 (2d Cir. 1992)), and an award will be confirmed as long as it “draws its essence from the collective bargaining agreement,” United Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 597 (1960); accord Trs. of the Unite Here Nat'l Health Fund v. Am. Leather Prods., L.L.C., 2009 WL 5178004, at *5 (S.D.N.Y. Dec. 31, 2009); Supreme Oil Co. v. Abondolo, 568 F.Supp.2d 401, 405-06 (S.D.N.Y. 2008).
While SEIU has not provided to this Court copies of all the evidentiary matter submitted to the arbitrator, such as the hearing transcripts, SEIU has provided a copy of the arbitrator's decision and there is no indication in that decision that the arbitrator misinterpreted the materials before her or acted arbitrarily, in excess of her power, or contrary to law. See, e.g., Trs. of the N.Y.C. Dist. Council of Carpenters v. Dejil Sys., Inc., 2012 WL 3744802, at *3 (S.D.N.Y. Aug. 29, 2012) (confirming award where plaintiff had not submitted all materials relied on by the arbitrator); accord Trs. of N.Y.C. Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, & Apprenticeship, Journeyman Retraining, Educ. & Indus. Fund v. Northe Grp., Inc., 2022 WL 2125482, at *3 (S.D.N.Y. June 13, 2022), adopted by 2022 WL 3159303 (S.D.N.Y. Aug. 8, 2022). The arbitrator's decision reflects that it was based on her assessment of the witnesses' credibility and an analysis of the “clear contract language” provided in the CBA. See Arb. Award at 3-4. Because nothing in the record suggests the contrary, the arbitration decision should be confirmed. See Northe Grp., Inc., 2022 WL 2125482, at *3; Dejil Sys., Inc., 2012 WL 3744802, at *3 (“Where, as here, there is no indication that the arbitration decision was made arbitrarily, exceeded the arbitrator's jurisdiction, or otherwise was contrary to law, a court must confirm the award upon the timely application of any party.”).
Accordingly, the Court confirms the arbitration award in favor of SEIU, for a total amount of $22,335.60.
B. Whether All Defendants Should Be the Subject of a Judgment Confirming the Award
“When applicable, the alter ego doctrine binds a non-signatory to the terms of a collective bargaining agreement signed by another party.” Dist. Council No. 9 v. APC Painting, Inc., 272 F.Supp.2d 229, 237 (S.D.N.Y. 2003). Moreover, “an alter ego to a participant in an arbitration or a party to an arbitration agreement can also be required to satisfy an arbitral award ....” Eletson Holdings, Inc. et al. v. Levona Holdings Ltd., 2024 WL 1724592, at *34 (S.D.N.Y. Apr. 19, 2024). While examination of alter ego liability is inappropriate in the context of a motion to confirm a commercial arbitration award, see Orion Shipping & Trading Co. v. E. States Petroleum Corp. of Panama, S.A., 312 F.2d 299, 301 (2d Cir. 1963), that rule does not apply to the labor arbitration context, see Gvozdenovic v. United Air Lines, Inc., 933 F.2d 1100, 1105 (2d Cir. 1991); Trs. of Empire State Carpenters Annuity v. John J. Pausley, Inc., 2014 WL 2711914, at *7 (E.D.N.Y. June 16, 2014) (“[W]here the arbitration arose out of a collective bargaining relationship, consideration of an alter ego theory is appropriate.”); accord Dist. Council No. 9, 272 F.Supp.2d at 237 (“Other courts have made clear that Orion Shipping does not preclude a finding of alter ego on a motion to confirm.”).
SEIU dedicates a portion of its briefing to the issue of whether the defendants are a “single employer.” See Mem. at 8-9. It is not necessary to address this doctrine as SEIU has not asserted that it would afford SEIU any further relief beyond what the “alter ego” doctrine supplies.
“The Second Circuit has addressed enforcement of an arbitration agreement against an alter ego, holding that ‘veil-piercing/alter ego' is a doctrine ‘aris[ing] out of common law principles of contract and agency law.'” Glob. Gaming Philippines, LLC v. Razon, 2023 WL 5935640, at *9 (S.D.N.Y. Sept. 12, 2023) (alterations in original) (quoting Thomson-CSF, S.A. v. Am. Arb. Ass'n, 64 F.3d 773, 776 (2d Cir. 1995)). The test for alter ego liability is “flexible” and the Second Circuit has identified the following factors as important: “whether the two enterprises have substantially identical management, business purpose, operation, equipment, customers, supervision, and ownership.” Ret. Plan of UNITE HERE Nat. Ret. Fund v. Kombassan Holding A.S., 629 F.3d 282, 288 (2d Cir. 2010) (citation and quotation marks omitted); see Trs. of the New City Dist. Council of Carpenters Pension Fund v. Integrated Structures Corp., 595 Fed.Appx. 15, 17 (2d Cir. 2014) (“In considering whether one company is the alter ego of another, this Court has held that the .... analysis ‘focuses on commonality of (i) management, (ii) business purpose, (iii) operations, (iv) equipment, (v) customers, and (vi) supervision and ownership.'”) (quoting N.Y. State Teamsters Conference Pens. & Ret. Fund v. Express Servs., Inc., 426 F.3d 640, 649 (2d Cir. 2005)). “The focus of the alter ego doctrine . . . is on the existence of a disguised continuance or an [employer's] attempt to avoid the obligations of a collective bargaining agreement through a sham transaction or technical change in operations.” Newspaper Guild of New York, Loc. No. 3 of Newspaper Guild, AFL-CIO v. N.L.R.B., 261 F.3d 291, 298 (2d Cir. 2001) (quoting Lihli Fashions Corp. v. NLRB, 80 F.3d 743, 748 (2d Cir. 1996)) (alterations in original). “Although some courts [ ] have cited the use of the corporation to commit a wrongful act as one of a number of factors that may be considered in an alter-ego analysis,” “a showing of fraud in an alter-ego analysis is not necessary” to a finding of liability. CesFin Ventures LLC v. Al Ghaith Holding Co. PJSC, 2022 WL 18859076, at *5 n.8 (S.D.N.Y. Dec. 10, 2022) (citation and quotation marks omitted). Indeed, the Second Circuit has indicated that a finding of “anti-union animus or an intent to evade union obligations” is merely “germane” to the analysis but not required. Goodman Piping Prod., Inc. v. N.L.R.B., 741 F.2d 10, 12 (2d Cir. 1984); see Kombassan Holding A.S., 629 F.3d at 288; accord APC Painting, Inc., 272 F.Supp.2d at 237. Finally, “[a]lthough the alter ego doctrine is primarily applied in situations involving successor companies, where the successor is merely a disguised continuance of the old employer, it also applies to situations where the companies are parallel companies.” Kombassan Holding A.S., 629 F.3d at 288 (citation and quotation marks omitted); accord Gesualdi v. Quadrozzi Equip. Leasing Corp., 2016 WL 7322333, at *4 (E.D.N.Y. Dec. 15, 2016), aff'd, 707 Fed.Appx. 59 (2d Cir. 2017).
As it relates to individual liability, the Court must consider whether “piercing the corporate veil” is appropriate. “Courts have utilized state law standards for piercing the corporate veil after confirmation of a labor arbitration award.” APC Painting, Inc., 272 F.Supp.2d at 241; see Trs. of Loc. 7 Tile Indus. Welfare Fund, Loc. 7 Tile Indus. Annuity Fund, & Tile Layers Loc. Union 52 Pension Fund v. Samfet Marble, Inc., 2023 WL 5979175, at *10 (E.D.N.Y. May 8, 2023) (applying New York law standards in the context of ERISA and LMRA claims). New York courts “disregard corporate form reluctantly” and “do so only when the form has been used to achieve fraud, or when the corporation has been so dominated by an individual . . . that it primarily transacted the dominator's business rather than its own and can be called the other's alter ego.” Griggs v. Weiner, 2021 WL 4268095, at *17 (E.D.N.Y. Aug. 10, 2021) (quoting Wm. Passalacqua Builders, Inc. v. Resnick Devs. S., Inc., 933 F.2d 131, 138 (2d Cir. 1991)), adopted by 2021 WL 3857678 (E.D.N.Y. Aug. 30, 2021); see Goldblatt v. Englander Commc'ns, L.L.C., 2007 WL 148699, at *6 (S.D.N.Y. Jan. 22, 2007) (“New York courts are generally reluctant to rely on a claim that a corporation is the alter ego of its principals as a basis for piercing the corporate veil.”) (citation and quotation marks omitted).
Because the workers were employed in New York, we assume that New York law applies, as does SEIU.
We address the liability for the defendant entities and the individual defendant, John Kiely, separately.
1. Entity Defendants
As to the entity defendants, SEIU argues that the four entities - ACMC, ACMS, ACS, and Guardian - “are different names for a single enterprise wholly owned and operated by John Kiely,” Mem. at 9, and provides evidence to support this claim. First, SEIU provides evidence that Kiely is either the owner/president/managing member/incorporator of each entity or he filed the entities' certificate of incorporation. See Affidavit in Opposition, annexed as Ex. J to Elysee Decl. (Docket # 35-10) (“Kiely Aff.”), ¶ 1 (stating that he is the president of ACS and managing member of Guardian); Letter, annexed as Ex. O to Elysee Decl. (Docket # 35-15) (Kiely stating that he is the owner and president of Guardian and “Allied Cleaning”); ACMC Certificate of Incorporation, annexed as Ex. E to Elysee Decl. (Docket # 35-5) (“ACMC Certificate of Incorporation”), at *5 (ACMC Certificate of Incorporation filed by Kiely); ACMS Certificate of Incorporation, annexed as Ex. F to Elysee Decl. (Docket # 35-6) (“ACMS Certificate of Incorporation”), at *3 (ACMS Certificate of Incorporation showing Kiely as Incorporator); New York Department of State Entity Information, annexed as Ex. G to Elysee Decl. (Docket # 35-7) (listing Kiely as CEO of ACS). Second, SEIU provides records showing the entities operate under each other's names. See Kiely Aff. ¶ 1 (stating Guardian does business as ACS); New York Department of State Entity Assumed Name History, annexed as Ex. I to Elysee Decl. (Docket # 35-9) (New York Department of State record reflecting ACMC has an “assumed name” of ACS). Third, SEIU provides evidence that all the entities operate out of the same address, 280 Madison Avenue. See R. 56.1 Statement ¶¶ 2, 8-9, 11, 16; Arb. Award at 1; ACMS Certificate of Incorporation; New York Department of State Entity Information, annexed as Ex. H to Elysee Decl. (Docket # 35-8); ACS Website, annexed as Ex. L to Elysee Decl. (Docket # 35-12), at *3. Fourth, SEIU highlights an instance of intermingling of funds, see Rule 56.1 ¶ 15, where counsel for ACS confirmed in a separate case before the National Labor Relations Board that Guardian did not retain documentation for a $162,000 loan Guardian made to ACS, see Email, annexed as Ex. N to Elysee Decl. (Docket # 35-14), at *2. Fifth, SEIU notes that the entity names reflect that all the entities perform “cleaning,” “maintenance,” and “building” services. See Opp. at 10. Finally, SEIU provides evidence - such as pictures from ACS's website and a holiday email sent to one of its former employees, see ACS Website, annexed as Ex. L to Elysee Decl. (Docket # 35-12); Email, annexed as Ex. M to Elysee Decl. (Docket # 3513) - suggesting ACS, the “assumed name” of ACMC, continues to operate despite ACMC's counsel's representation to the arbitrator that ACMC had “shut down,” see Arb. Award at 2.
“*__” refers to the pagination provided by the Court's ECF system.
This uncontroverted evidence is sufficient to establish that the defendant entities are alter egos of one another. Indeed, courts have granted judgment for plaintiffs in similar circumstances. See Cement & Concrete Workers Dist. Council Welfare Fund v. Manny P Concrete Co., 2023 WL 3948751, at *9 (E.D.N.Y. June 12, 2023) (defendants had the same ownership and management, and shared a business purpose and employees); Rochester Laborers' Welfare-S.U.B. Fund v. Akwesasne Constr., Inc., 2019 WL 4673431, at *4-5 (W.D.N.Y. Sept. 25, 2019) (defendants exhibited the “‘hallmark' traits of alter ego liability,” including performing the same work, using the same office, transferring money between the entities, and having similar ownership and management); see also Trs. of N.Y.C. Dist. Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund v. B&L Moving & Installation, Inc., 2017 WL 4277175, at *4 (S.D.N.Y. Sept. 26, 2017) (defendants engaged in the same type of work, operated out of the same office, were owned and operated by the same individual, used the same equipment and employees interchangeably, and did not maintain ordinary corporate formalities), adopted by 2018 WL 705316 (S.D.N.Y. Feb. 5, 2018). Accordingly, the entity defendants should be found to be alter egos of ACMC and thus liable for the arbitration award.
2. John Kiely
“To prove that the corporate veil should be pierced, a plaintiff must show ‘(1) that the owner exercised complete domination over the corporation with respect to the transaction at issue; and (2) that such domination was used to commit a fraud or wrong that injured the party seeking to pierce the veil.'” Remcoda, LLC v. Ridge Hill Trading (Pty) Ltd., 2023 WL 2647854, at *17 (S.D.N.Y. Mar. 27, 2023) (quoting Thrift Drug, Inc. v. Universal Prescription Adm'rs, 131 F.3d 95, 97 (2d Cir. 1997)); see also Trs. of Loc. 813 Ins. Tr. Fund v. Rogan Bros. Sanitation Inc., 2018 WL 1587058, at *14 (S.D.N.Y. Mar. 28, 2018) (applying test in ERISA context); CBF Industria de Gusa S/A v. AMCI Holdings, Inc., 316 F.Supp.3d 635, 646 (S.D.N.Y. 2018) (applying test in commercial arbitration context); accord Steadfast Ins. Co. v. T.F. Nugent Inc., 513 F.Supp.3d 419, 424 (S.D.N.Y. 2021). “Factors to be considered in determining whether the owner has abused the privilege of doing business in the corporate form include whether there was a failure to adhere to corporate formalities, inadequate capitalization, commingling of assets, and use of corporate funds for personal use.” E. Hampton Union Free Sch. Dist. v. Sandpebble Builders, Inc., 66 A.D.3d 122, 127 (2d Dep't 2009) (citation and quotation marks omitted), affd, 16 N.Y.3d 775 (N.Y. 2011). In Wm. Passalacqua Builders, Inc. v. Resnick Devs. S., Inc., 933 F.2d 131 (2d Cir. 1991), the Second Circuit summarized the factors to consider with respect to a corporation's domination of another corporation. The following factors listed in that case apply to domination by an individual as well:
(1) the absence of the formalities and paraphernalia that are part and parcel of the corporate existence, i.e., issuance of stock, election of directors, keeping of corporate records and the like, (2) inadequate capitalization, [and] (3) whether funds are put in and taken out of the corporation for personal rather than corporate purposes.Id. at 139.
Here, SEIU provides no evidence that Kiely abused the corporate form other than pointing to the fact Kiely owns these entities. See Mem. at 1. Of course, as case law has repeatedly noted, the corporate form may not be disregarded merely because an individual controls a corporation. See Network Enterprises, Inc. v. Reality Racing, Inc., 2010 WL 3529237, at *4 (S.D.N.Y. Aug. 24, 2010) (“[O]wners are normally not liable for the debts of the corporation.”) (citation and quotation marks omitted); Scalercio-Isenberg v. Citizens Fin. Grp., Inc., 2019 WL 7187247, at *3 (S.D.N.Y. Dec. 26, 2019) (“Under New York law, a corporation's officers and directors are not ‘generally liable for their corporation's debts or its breach of a contract.'”) (quoting Cohen v. Koenig, 25 F.3d 1168, 1173 (2d Cir. 1994)); In re Adler, 467 B.R. 279, 286 (Bankr. E.D.N.Y. 2012) (“As a general rule, a corporation exists independently of its owners as a separate legal entity and a corporation's owners are not liable for the debts of the corporation.”), appeal denied, judgment affd, 518 B.R. 228 (E.D.N.Y. 2014). If control were enough, “virtually every cause of action brought against a corporation either wholly or principally owned by an individual who conducts corporate affairs could also be asserted against that owner personally, rendering the principle of limited liability largely illusory.” E. Hampton Union Free Sch. Dist., 66 A.D.3d at 126. SEIU's reference to the $162,000 loan made to ACS by Guardian, see R. 56.1 Statement ¶ 15, may provide some evidence that corporate formalities were not observed but by itself is insufficient to satisfy SEIU's burden.
SEIU argues that “Kiely has used the various defendant entities to attempt to avoid obligations” under the CBA by “shut[ting] down” ACMC prior to the arbitration. See Mem. at 11. Although this allegation speaks to the second factor - i.e., that ACMC or the entities may have committed “a fraud or wrong” - it does not provide insight into whether the privilege to use the corporate form was abused. Absent evidence that the corporate form was abused, piercing the corporate veil is not permitted. Thus, SEIU's motion should be denied as to defendant John Kiely.
B. Prejudgment Interest
SEIU requests prejudgment interest of nine percent. See Mem. at 12-13. “The Second Circuit recognizes a presumption in favor of pre-judgment interest for arbitration awards.” Constr. Council 175, Util. Workers of Am., AFL-CIO v. New York Paving, Inc., 2023 WL 8826771, at *8 (E.D.N.Y. Dec. 21, 2023); see Waterside Ocean Nav. Co. v. Int'l Nav. Ltd., 737 F.2d 150, 153-54 (2d Cir. 1984). Courts typically award pre-judgment interest where the collective bargaining agreement indicates that an arbitration would be “final and binding.” See New York Paving, Inc., 2023 WL 8826771, at *8. Such is the case here. See CBA, Art. VI, § 4 (stating the arbitration award is “final and binding”). Because the LMRA does not specify a prejudgment interest rate, courts look to state law to determine the appropriate rate. See N.Y. City Dist. Council of Carpenters v. Tried N True Interiors LLC, 2020 WL 1809323, at *4 (S.D.N.Y. Apr. 9, 2020); accord New York Paving, Inc., 2023 WL 8826771, at *8. New York law provides a prejudgment interest rate of nine percent, see N.Y. C.P.L.R. §§ 5001-04, and it is “common practice within this circuit” to use this rate in confirming an arbitration award, New York Paving, Inc., 2023 WL 8826771, at *8; accord Tried N True Interiors LLC, 2020 WL 1809323, at *4 (“While the LMRA is silent with respect to interest rate, the common practice among courts within the Second Circuit is to grant interest at a rate of nine percent per annum . . . from the time of the award to the date of the judgment confirming the award.”) (citation and internal quotation marks omitted). Because the date of the award is December 7, 2022, see Arb. Award, prejudgment interest should run from that date. See New York City Dist. Council of Carpenters v. Metro Furniture Servs. LLC, 2012 WL 4492384, at *3 (S.D.N.Y. Sept. 28, 2012) (“Courts typically award prejudgment interest for the period of time between the issuance of an arbitrator's award and its confirmation in court.”).
Accordingly, SEIU is entitled to prejudgment interest on the arbitration award of $22,335.60 from December 7, 2022, until the date judgment is entered. This amounts to $5.51 per day ([$22,335.60 * .09] / 365 days).
Conclusion
For the foregoing reasons, SEIU's motion for summary judgment (Docket # 31) should be granted in part and denied in part. SEIU's motion should be denied as to defendant John Kiely. Instead, SEIU should be awarded a judgment of $22,335.60 against defendants Allied Cleaning and Maintenance Corp., Allied Cleaning and Maintenance Services, Inc., Allied Cleaning Services, Inc., and Guardian Building Services, LLC. In addition to this amount, the Clerk of Court should calculate and award interest against these defendants in the amount of $5.51 per day from December 7, 2022, until the date judgment is entered.
PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file any objections. See also Fed.R.Civ.P. 6(a), (b), (d). A party may respond to any objections within 14 days after being served. Any objections and responses shall be filed with the Clerk of the Court. Any request for an extension of time to file objections or responses must be directed to Judge Torres. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140 (1985); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).
SO ORDERED.