Opinion
18-CV-5824 (VSB) (BCM)
12-09-2021
TRUSTEES FOR THE MASON TENDERS DISTRICT COUNCIL WELFARE FUND, PENSION FUND, ANNUITY FUND, AND TRAINING PROGRAM FUND, et al., Petitioners, v. SEAGULL SERVICE CORP., doing business as SEAGULL CONSTRUCTION SERVICES, Respondent.
REPORT AND RECOMMENDATION TO THE HONORABLE VERNON S. BRODERICK
BARBARA MOSES, UNITED STATES MAGISTRATE JUDGE.
The Trustees for the Mason Tenders District Council Welfare Funds, Pension Fund, Annuity Fund and Training Program Fund (the Funds), John J. Virga, in his capacity of Director, and Robert Bonanza, as Business Manager of the Mason Tenders District Council of Greater New York (the Union) (collectively Petitioners) seek a judgment pursuant to § 301 of the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185, confirming an arbitration award in the amount of $66,570.26 against respondent Seagull Service Corp., doing business as Seagull Construction Services (Seagull).
On February 25, 2019, the Petition (Pet.) (Dkt. No. 1) was referred to me for report and recommendation. (Dkt. No. 13.) Seagull, which failed to appear for the arbitration hearing, has likewise failed to respond to the Petition. For the reasons set forth below, I recommend that the award be confirmed.
I. BACKGROUND
A. The Parties
The Funds are multiemployer labor-management trust funds organized and operating in accordance with the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001, et seq. Pet. ¶ 1. The Union is a labor organization representing employees in an industry affecting commerce within the meaning of § 501 of the LMRA, 29 U.S.C. § 152. Pet. ¶ 2. Seagull is a New York corporation with its principal place of business in the Bronx, New York, and is an employer in an industry affecting commerce within the meaning of § 501 of the LMRA. Pet. ¶ 3.
B. The Project Labor Agreement
On February 13, 2015, in connection with work performed at LaGuardia Community College, Seagull, through its president Vicole Martinez, executed a letter of assent agreeing to be bound by the terms and conditions of the Project Labor Agreement Covering Specified Construction and Renovation Work (PLA). Pet. ¶ 10; Savci Decl. (Dkt. No. 15) ¶ 7; id. Ex. 2 at ECF page 13 (letter of assent); id. Ex. 2 at ECF pages 16-63 (PLA). The PLA incorporates "each trade's respective collective bargaining agreement," which is "appended to the PLA as schedule A and incorporated by reference into the PLA." Savci Decl. ¶ 10. See also id. Ex. 2a at ECF pages 65-99 (Mason Tenders' Independent Collective Bargaining Agreement). It also incorporates the Trust Agreements, which establish and maintain the Funds. Pet. ¶¶ 1, 7; Savci Decl. ¶¶ 3, 8, 12; PLA, Art. 11 § 2(B) ("The Contractors agree to be bound by the written terms of the legally established jointly trusteed Trust Agreements specifying the detailed basis on which payments are to be paid into, and benefits paid out of, such Trust Funds[.]"). See also Savci Decl. Ex. 3 (excerpts of the Trust Agreements).
Petitioners originally filed the Savci Declaration on August 16, 2018 (Dkt. No. 10), with incorrect exhibits, apparently due to an error in the electronic filing process. See Savci Letter dated May 6, 2020 (Savci Ltr.) (Dkt. No. 16) at 1. They refiled the Savci Declaration with the correct exhibits on May 6, 2020, and represented that "the original mailing and service of our papers on Respondent Seagull Services Corp. contained the correct copy" of the relevant exhibits. Savci Ltr. at 1.
The PLA and the Trust Agreements require contractors covered under the PLA to pay contributions to the Funds for "all employees covered by the PLA at the rates set forth therein." Pet. ¶ 7; see also PLA, Art. 11; Trust Agreements, Art. IX § 9.1. To ensure employers' compliance with these contribution requirements, the PLA and the Trust Agreements grant the Trustees "the power to demand, collect and receive Employer contributions" and "to take steps, including the institution of legal or administrative proceedings, to collect delinquent contributions including [by] initiating arbitration proceedings against delinquent employers." Savci Decl. ¶ 13; see also id. Ex. 4 (Arbitration Procedures and Rules Governing Employer Audits and Delinquency Disputes adopted by the Funds) (Arb Proc.); PLA, Art. 9; Trust Agreements, Art. IX §§ 9.5-9.9. In those legal or administrative proceedings, the Funds may seek "all unpaid contributions due and payable, interest on such unpaid contributions, interest on the unpaid contributions as and for liquidated damages and all attorneys' fees and costs of the action." Savci Decl. ¶ 15; see also PLA, Art. 9; Trust Agreements, Art. IX § 9.9; Arb. Proc. § VII (if a neutral arbitrator "finds for the Fund with respect to any portion of the claim, the Employer shall be liable for the Neutral Arbitrator's fees").
C. The Arbitration Proceeding and Decision
After an audit of Seagull's books and records, a dispute arose "concerning Seagull's failure to meet obligations to make fringe benefit and other contributions to the Trust Funds pursuant to its PLA and the relevant Trust Agreements for the period February 13, 2015 through March 29, 2016." Pet. ¶ 15; see also Savci Decl. ¶ 8. On December 16, 2016, the Funds served a Notice of Intention to Arbitrate on arbitrator Joseph A. Harris, Ph.D, and Seagull. Savci Decl. ¶ 18 & Ex. 7 at ECF page 126. On May 26, 2017 - after Seagull contacted arbitrator Harris to ask that the hearing be rescheduled - they served an Amended Notice of Intention to Arbitrate. Id. ¶ 18 & Ex. 7 at ECF page 129. On June 2, 2017, arbitrator Harris scheduled a hearing for June 26, 2017, and emailed notice of that hearing to petitioners and Seagull. Id. ¶ 18 & Ex. 7 at ECF page 128.
On June 26, 2017, arbitrator Harris held a hearing. Pet. ¶17; see also Default Opinion and Award dated June 28, 2017 (Award) (Pet. Ex. 1), at 1. Despite having received notice of the hearing, Seagull did not appear or request a further adjournment. Id. at 1-2. During the hearing, arbitrator Harris received a "Deficiency Report" into evidence that showed an estimated $46,284.87 in delinquent contributions. Id. at 2. This figure represented petitioners' estimate of unpaid contributions for the period February 13, 2015 to March 29, 2016. Pet. ¶ 17. Arbitrator Harris found Seagull in default, and - relying in part on the deficiency report - determined that petitioners' "substantial and credible" evidence established that Seagull "owes delinquent fringe benefits and associated items" to the petitioners. Award at 2. Arbitrator Harris then awarded all of the damages sought, for a total award of $66,570.26, including: (1) $46.284.87 for the estimated unpaid contributions; (2) $2,511.26 in "Dues and PAC"; (3) $3,418.07 in "current interest"; (4) $4,319.92 for the costs of the audit; (5) $6,836.14 in liquidated damages (double the interest owed, pursuant to 29 U.S.C. § 1132(g)(2)); (6) $500.00 for attorneys' fees; and (7) $1,700.00 for the arbitrator's fee. Id.
D. Procedural History
Petitioners filed this action on June 27, 2018, seeking confirmation of the Award. Pet. ¶¶ 16-18. Since the Award was issued, Seagull has made "no payments . . . against the Award." Pet. ¶ 19; see also Savci Decl. ¶ 22 ("Upon receipt [of the Award], Petitioners made a further demand for payment. Respondent submitted no payments nor did it . . . [move] to vacate, modify or correct the Award."). The Petition, together with a summons and related materials, was served on Seagull through the Secretary of State on July 24, 2018. (Dkt. No. 7.) The Savci declaration and petitioners' memorandum of law (Dkt. No. 11) were served on Seagull by certified mail, at its last known address, on August 7, 2018. (Dkt. No. 12.) Seagull did not appear or answer.
Petitioners seek judgment in the amount of $66,570.26, with "statutory interest to accrue from the date of the entry of judgment." Pet. ¶ 20. They do not seek additional prejudgment interest.
II. ANALYSIS
A. Legal Standards
The LMRA provides federal courts with jurisdiction over petitions brought to confirm labor arbitration awards. 29 U.S.C. § 185(c); Local 802, Associated Musicians of Greater N.Y. v. Parker Meridien Hotel, 145 F.3d 85, 88 (2d Cir. 1998). In New York, the applicable statute of limitations for such a proceeding is one year from the delivery of the arbitration award. See Local 802, 145 F.3d at 88 (because Congress did not provide a statute of limitations for suits brought under § 301, a court should "determine[] the statute of limitations for the federal cause of action by looking to the most appropriate state statute of limitations."); Trustees of the New York City Dist. Council of Carpenters Pension Fund v. High Performance Floors Inc., 2016 WL 3194370, at *3 (S.D.N.Y. June 6, 2016) (same), reconsideration denied, 2016 WL 3911978 (S.D.N.Y. July 15, 2016); see also C.P.L.R. § 7510 ("The court shall confirm an award upon application of a party made within one year after its delivery to him[.]."). Petitioners filed on June 27, 2018, within one year of arbitrator Harris's June 28, 2017 Award. See Pet. at 7; Award at 2.
A court's review of a final arbitration award under the LMRA is "very limited." Nat'l Football League Mgmt. Council v. Nat'l Football League Players Ass'n, 820 F.3d 527, 536 (2d Cir. 2016) (quoting Major League Baseball Players Ass'n v. Garvey, 532 U.S. 504, 509 (2001)). Courts are "not authorized to review the arbitrator's decision on the merits . . . but inquire only as to whether the arbitrator acted within the scope of his authority as defined by the collective bargaining agreement." Id.
It is not this Court's task to "decide how [it] would have conducted the arbitration proceedings, or how [it] would have resolved the dispute." Nat'l Football League Mgmt. Council, 820 F.3d at 537. Instead, the Court's obligation is "simply to ensure that the arbitrator was 'even arguably construing or applying the contract and acting within the scope of his authority' and did not 'ignore the plain language of the contract.'" Id. (quoting United Paperworks Int'l Union v. Misco, Inc., 484 U.S. 29, 38 (1987)); see also Local 97, Int'l Bhd. of Elect. Workers v. Niagara Mohawk Power Corp., 196 F.3d 117, 124 (2d Cir. 1999) ("Because [t]he federal policy of settling labor disputes by arbitration would be undermined if courts had the final say on the merits of [arbitration] awards, an arbitrator's award resolving a labor dispute is legitimate and enforceable as long as it draws its essence from the collective bargaining agreement and is not merely an exercise of the arbitrator's own brand of industrial justice.") (citation and internal quotation marks omitted); Harry Hoffman Printing, Inc. v. Graphic Commc'ns Int'l Union, Local 261, 950 F.2d 95, 97 (2d Cir. 1991) ("[A]s long as the arbitrator is even arguably construing or applying the contract and acting within the scope of his authority, that a court is convinced he committed serious error does not suffice to overturn his decision.") (citation and internal quotation marks omitted).
Courts in this Circuit generally treat an unopposed petition to confirm an arbitration award, with its accompanying record, as "akin to a motion for summary judgment." D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 109 (2d Cir. 2006); see also Trustees of the New York City Dist. Council of Carpenters Pension Fund v. Formula 1 Builders, LLC, 2017 WL 1483369, at *4 (S.D.N.Y. Apr. 25, 2017) (same). Summary judgment is appropriate where there is "no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law," Fed.R.Civ.P. 56(a), and when, "after drawing all reasonable inferences in favor of a nonmovant, no reasonable juror could find in favor of that party." Trustees of New York City Dist. Council of Carpenters Pension Fund v. AMP&G Constr., LLC, 2018 WL 1883450, at *3 (S.D.N.Y. Mar. 29, 2018). "The party seeking summary judgment has the burden of demonstrating that no genuine issue of material fact exists." Trustees for Mason Tenders Dist. Council Welfare Fund v. Golden Dev. & Constr. Corp., 2018 WL 2316632, at *2 (S.D.N.Y. May 7, 2018) (citing Marvel Characters, Inc. v. Simon, 310 F.3d 280, 286 (2d Cir. 2002)). That is so even where summary judgment is unopposed. Vermont Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d 241, 242 (2d Cir. 2004) ("Even when a motion for summary judgment is unopposed, the district court is not relieved of its duty to decide whether the movant is entitled to judgment as a matter of law.").
B. The Petition Should Be Granted
As noted above, Seagull has neither challenged the Award nor otherwise appeared in this action, leaving the Petition unopposed. Petitioners have submitted undisputed evidence showing that the arbitrator acted within the scope of his authority. The amount of the award is also uncontested. Consequently, the Award should be confirmed. See Trustees for Mason Tenders Dist. Council Welfare Fund, Pension Fund, Annuity Fund, & Training Program Fund v. Decent Gen. Constr. Corp., 2019 WL 1434300, at *3 (S.D.N.Y. Mar. 31, 2019) (Broderick, J.) (confirming arbitration award brought under the LMRA where respondent did not oppose the petition and the record supported the arbitrator's findings).
As petitioners' submission shows, the PLA permits them to seek arbitration of "[a]ny question, dispute, or claim arising out of, or involving the interpretation or application of" the PLA. PLA, Art. 9 § 1. Because Petitioners sought delinquent contributions from Seagull, the dispute is "plainly within the scope" of the parties' agreement to arbitrate. Trustees of the New York City Dist. Council of Carpenters Pension Fund v. Jessica Rose Enterprises Corp., 2016 WL 6952345, at *3 (S.D.N.Y. Nov. 28, 2016).
Arbitrator Harris had authority to decide the parties' dispute, see PLA, Art. 9; Trust Agreements, Art. IX § 9.8, and to award Petitioners the unpaid contributions to the Funds. PLA, Art. 9; Trust Agreements, Art. IX § 9.9. He also had authority to grant petitioners interest on those unpaid contributions, interest on the unpaid contributions "as and for liquidated damages," attorneys' fees and costs, "reasonable expenses attributable to any audit of the Employer's records with respect to Unpaid Contributions or payments," and "any other related expenses," Trust Agreements, Art. IX § 9.9, as well as the arbitrator's fee. Savci Decl. Ex. 4. The Award was therefore "'plausibly grounded in the parties' agreement,' which is all the law requires.'" Nat'l Football League Mgmt. Council, 820 F.3d at 539 (quoting Wackenhut Corp. v. Amalgamated Local 515, 126 F.3d 29, 32 (2d Cir. 1997)).
Moreover, arbitrator Harris reviewed what he found to be "substantial and credible evidence," including petitioners' deficiency report, from which he determined that the delinquency totaled $46,284.87 (before interest, liquidated damages, costs, attorneys' fees and expenses, and the arbitrator's fee). Award at 2. "No evidence suggests that this amount is incorrect. Nor is there any evidence suggesting that the auditor's accounting methods are not sound." Jessica Rose, 2016 WL 6952345, at *3. I conclude that arbitrator Harris had more than the "barely colorable justification for the outcome reached" that is necessary to confirm the Award, see D.H. Blair & Co., 462 F.3d at 110, and that no material fact remains for trial. I therefore recommend that the Award be confirmed.
C. Petitioners Are Entitled to Post-Judgment Interest
I also recommend that petitioners' request for post-judgment interest at the federal rate be granted. Indeed, "[t]he award of post-judgment interest is mandatory on awards in civil cases as of the date judgment is entered." Lewis v. Whelan, 99 F.3d 542, 545 (2d Cir. 1996) (citing 28 U.S.C. § 1961(a)). Accord Decent Gen. Constr. Corp., 2019 WL 1434300, at *3 ("Petitioners are entitled to post-judgment interest from the date of entry of the Court's judgment, at the rate provided for by 28 U.S.C. § 1961.").
III. CONCLUSION
For the foregoing reasons, I respectfully recommend that the Award be CONFIRMED and that the Clerk of Court be directed to enter judgment against Seagull in the amount of the Award, which was $66,570.26, plus post-judgment interest, at the rate provided for by 28 U.S.C. § 1961, from the date of the entry of judgment until it is paid.
Petitioners shall serve a copy of this Report and Recommendation on Seagull by mail, at its last known address, and promptly file proof of such service on the docket.
NOTICE OF PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen days from this date to file written objections to the portion of this Opinion constituting a report and recommendation pursuant to 28 U.S.C. § 636(b)(1)(B) and Fed.R.Civ.P. 72(b). See also Fed.R.Civ.P. 6(a) and (d). Any such objections shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Hon. Vernon S. Broderick at 40 Foley Square, New York, New York 10007, and to the chambers of the Hon. Barbara Moses. Any request for an extension of time to file objections must be directed to Judge Broderick. Failure to file timely objections will result in a waiver of such objections and will preclude appellate review. See Thomas v. Arn, 474 U.S. 140, 155 (1985); Frydman v. Experian Info. Sols., Inc., 743 Fed.Appx. 486, 487 (2d Cir. 2018) (summary order); Wagner & Wagner, LLP v. Atkinson, Haskins, Nellis, Brittingham, Gladd & Carwile, P.C., 596 F.3d 84, 92 (2d Cir. 2010).