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recommending fee award for 8.6 hours billed by two attorneys and a law clerk
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1:17-cv-4630 (VSB) (SDA)
12-27-2017
Trustees of the New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educational and Industry Fund et al., Petitioners, v. Windham Construction Corp., Respondent.
REPORT AND RECOMMENDATION STEWART D. AARON, UNITED STATES MAGISTRATE JUDGE.
TO THE HONORABLE VERNON S. BRODERICK, UNITED STATES DISTRICT JUDGE:
On June 20, 2017, Petitioners, Trustees of the New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educational and Industry Fund; Trustees of the New York City District Council of Carpenters Relief and Charity Fund; the New York City and Vicinity Carpenters Labor-Management Corporation; and New York City District Council of Carpenters ("Petitioners"), filed a petition to confirm an arbitration award (the "Petition"). Respondent Windham Construction Corp. ("Respondent") has not opposed the petition or otherwise appeared in this action. On December 8, 2017, the Petition was referred to me for a Report and Recommendation.
For the reasons set forth below, I recommend that the District Court confirm the arbitration award and, as modified, grant Petitioners' application for attorneys' fees and costs.
BACKGROUND
There are four Petitioners in this action. First is Trustees of the New York City District Council of Carpenters Pension, Welfare, Annuity, Apprenticeship, Journeyman Retraining and Educational and Industry Funds (the "ERISA Funds"), who are employer and employee trustees of multiemployer labor-management trust funds organized and operated in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"). (Pet. to Confirm an Arbitration Award ["Pet."], ECF No. 1, ¶ 4.) Second is Trustees of the New York City District Council of Carpenters Relief and Charity Fund (the "Charity Fund"), who are Trustees of a charitable organization established under section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3). (Id. ¶ 5.) Third is the New York City and Vicinity Carpenters Labor-Management Corporation, which is a New York not-for-profit corporation that, together with the ERISA Funds and the Charity Fund make up the "Funds." (Id. ¶ 6.) Fourth is the New York City District Council of Carpenters (the "Union"), which is a labor organization that represents employees in an industry affecting commerce within the meaning of Section 501 of the Labor Management Relations Act ("L.M.R.A."). (Id. ¶ 7.) Respondent is a limited liability company and also was an employer within the meaning of section 3(5) of ERISA, 29 U.S.C. § 1002(5), and an employer in an industry affecting commerce within the meaning of section 501 of the L.M.R.A., 29 U.S.C. § 142. (Id. ¶ 8.)
This dispute stems from a collective bargaining agreement ("CBA") covering the period from July 1, 2011 through June 30, 2016. (Pet. ¶ 10.) Under the CBA, Respondent was required to remit contributions to the Funds for every hour worked by its employees within the trade and geographical jurisdiction of the Union, and submit itself to audits by the Funds to determine whether the Respondent remitted the necessary contributions to the Funds. (See id. ¶¶ 12-13.) The Petitioners conducted an audit of Respondent for the period of December 23, 2012 through December 31, 2014, which revealed that the Respondent failed to remit all required contributions to the Funds. (Id. ¶ 16.)
Pursuant to the CBA's arbitration clause, the Petitioners submitted the matter to arbitration. (Pet. ¶¶ 14-15, 17.) A Notice of Hearing was sent to the Respondent on March 5, 2016. (Ex. B to Pet.), and the arbitration hearing was held on May 4, 2016. (See Ex. C to Pet., at 1.) Neither the Respondent nor any representative of the Respondent appeared at the hearing. (See id.) The arbitrator, Roger E. Maher, examined the evidence presented by the Petitioners and issued an Award finding that the Respondent violated the CBA when it failed to remit all required contributions to the Funds. (Pet. ¶ 19 & Ex. C.) Specifically, the arbitrator ordered the Respondent to pay the Funds the sum of $38,535.16, consisting of principal contributions of $24,994.46, interest of $3,058.20, liquidated damages of $4,998.89, promotional funds of $17.61, court costs of $400.00, attorneys' fees of $1,500.00, arbitrator's fee of $500.00 and audit costs of $3,066.00. (Id.) The arbitrator also found that interest of 5.5% will accrue on the Award from the date of the issuance of the Award. (Id. ¶ 20 & Ex. C.)
Petitioners report that Respondent has failed to pay any portion of the Award. (Pet. ¶ 21.) Consequently, the Petitioners initiated this action on June 20, 2017. The Petitioners seek to confirm the Award pursuant to Section 301 of the L.M.R.A. Although the Respondent was served with the petition, it did not respond. Accordingly, the District Court directed the Respondent to answer the petition by July 13, 2017, or its failure to contest the petition would "weigh against it." (Order, dated Aug. 1, 2017 (citing D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 109 (2d Cir. 2006)), ECF No. 8.) As of the date of this Report, the Respondent has not responded to the Petition or appeared in this action.
DISCUSSION
I. Confirmation of Arbitration Award
"Section 301 of the [L.M.R.A.], 29 U.S.C. § 185 (1994), provides federal courts with jurisdiction over petitions brought to confirm labor arbitration awards." Local 802, Associated Musicians of Greater N.Y. v. Parker Meridien Hotel, 145 F.3d 85, 88 (2d Cir. 1998). An award should be confirmed so long as the arbitrator "acted within the scope of his authority" and "the award draws its essence from the agreement." Local 1199, Drug, Hosp. & Health Care Emps. Union, RWDSU, AFL-CIO v. Brooks Drug Co., 956 F.2d 22, 25 (2d Cir. 1992). Even if a court were to disagree with the arbitrator's findings of fact, or had a difference of opinion about the correct interpretation of the contract, an arbitration award would still be subject to confirmation. See, e.g., United Paperworkers Int'l Union, AFL-CIO v. Misco, Inc., 484 U.S. 29, 38 (1987) ("[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 a serious error does not suffice to overturn his decision.").
When a petition to confirm an arbitration award is unanswered, 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. v. Gottdiener, 462 F.3d 95, 109 (2d Cir. 2006). The moving party bears the burden of showing the court "that 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). Thus, as with a motion for summary judgment, "[e]ven unopposed motions ... must 'fail where the undisputed facts fail to show that the moving party is entitled to judgment as a matter of law.'" D.H. Blair, 462 F.3d at 110 (quoting Vt. Teddy Bear Co. u. 1-800 Beargram Co., 373 F.3d 241, 244 (2d Cir. 2004)).
After the Petition was referred to this Court for a Report and Recommendation, this Court had issued an Order, dated December 11, 2017, directing the Petitioners to obtain a certificate of default from the Clerk of Court, and to follow default judgment procedures set forth in the District Court's individual rules. (ECF No. 11.) On December 20, Petitioners' counsel requested by letter that their Petition be deemed as an unopposed motion for summary judgment, citing D.H. Blair. (ECF No. 12.) Although some courts in the Second Circuit "have held that default judgments are appropriate in the context of a petition for confirming an arbitration award as 'the distinction between moving for default judgment and moving for summary judgment is somewhat academic' when [as here] the defendant failed to contest the claims at the arbitration hearing as well, Application of Trustees of Bldg. Trades Annuity Fund v. Professional Plumbing of Staten Island Corp., 09-CV-3812 (ADS) (AKT), 2010 WL 6230530, at *2 (E.D.N.Y. Nov. 17, 2010) (citation omitted), this Court vacated its prior Order and has deemed the Petition as an unopposed motion for summary judgment. (See ECF No. 13.)
Petitioners have sufficiently shown that there is no question of material fact. Petitioners have submitted undisputed evidence to the Court that arbitration was appropriate in this case and that the arbitrator acted within the scope of his authority. The CBA provides that in the event that a "dispute or disagreement arise between the parties hereto ... concerning any claim arising from payments to the Fund of principal and/or interest which is allegedly due, either party may seek arbitration of the dispute before the impartial arbitrator...." (Pet., Ex. A, Article IX, Section 7.) Respondent has not challenged the Award or otherwise appeared in this action, and so the Petition to confirm the Award is unopposed. The amount of the Award is uncontested. Further, the categories of monetary damages awarded to Petitioners by the arbitrator generally correspond to categories described by the CBA. Both include unpaid contributions, interest on those contributions, liquidated damages, and attorney's fees and costs associated with the action. (Compare CBA at 25-26 (Ex. A to Pet.) with Award at 3 (Ex. C to Pet.).) Accordingly, the Court recommends that the Award be confirmed. See, e.g., Trust e es of the N.Y .C. Dist. Council of Carpenters Pension Fund v. Jessica Rose En te r. Corp., No. 15-CV-9040 (RA), 2016 WL 6952345, at *3-4 (S.D.N.Y. Nov. 28, 2016).
II. Attorneys' Fees and Costs
Petitioners seek attorneys' fees and costs incurred in bringing this petition. Pursuant to the CBA (Pet., Ex. A, Article IX, Section 6), Petitioners are entitled to the reasonable attorneys' fees and costs expended in this matter. "Section 301 of the [L.M.R.A.] does not provide for attorney's fees in actions to confirm and enforce an arbitrator's award." Int'l Chem. Workers Union (AFL-CIO), Local No. 227 v. BASF Wyandotte Corp., 774 F.2d 43, 47 (2d Cir. 1985). However, in actions to confirm arbitration awards, the "guiding principle" is that "when a challenger refuses to abide by an arbitrator's decision without justification, attorney's fees and costs may properly be awarded." Id. (quoting Bell Production Engineers Ass'n v. Bell Helicopter Textron, 688 F.2d 997, 999 (5th Cir. 1982)). In the present case, Respondent has neither complied with the Award nor offered any justification for its failure to do so. Accordingly, an award of attorneys' fees and costs is appropriate here. Trustees of the N.Y.C. Dist. Council of Carpenters Pension Fund, 2016 WL 6952345, at *5.
"The party seeking fees bears the burden of demonstrating that its requested fees are reasonable." 11991SEIU United Healthcare Workers E. v. S. Bronx Mental Health Council Inc., No. 13-CV-2608 (JGK), 2014 WL 840965, at *10 (S.D.N.Y. Mar. 4, 2014) (citing Blum v. Stenson, 465 U.S. 886, 897 (1984)). The starting point in analyzing whether claimed attorneys' fees are reasonable is "the lodestar—the product of a reasonable hourly rate and the reasonable number of hours required by the case." Millea v. Metro-N. R. Co., 658 F.3d 154, 166 (2d Cir. 2011). In order to support their request for attorney's fees, Petitioners must submit "contemporaneous time records ... specify[ing], for each attorney, the date, the hours expended, and the nature of the work done." N.Y.S. Ass'n for Retarded Children, Inc. v. Carey, 711 F.2d 1136, 1148 (2d Cir. 1983).
Petitioners were represented by Virginia and Ambinder, LLP ("V & A") and have submitted copies of V & A's contemporaneous billing records. Petitioners seek $240.00 for 0.8 hours billed by Todd Dickerson, who is Of Counsel at V & A, at a rate of $300.00 per hour. (Pet. ¶ 27; Pet. Ex. E.) They also seek $1,755.00 for 5.5 hours billed by Joseph J. Indelicato and 2.3 hours billed by Jesse Isleman, who both are 2016 graduates of The George Washington University Law School, at a rate of $225 per hour, during the period January through June 2017. (Pet. ¶¶ 28-29; Pet. Ex. E.) Although the Petition states that V & A billed legal assistants' time at a rate of $100 per hour, the contemporaneous records filed with the Court do not reflect any legal assistant time billed. (See Ex. E to Pet.)
Records of the New York Unified Court System reflect that Mr. Indelicato was admitted to practice law in the State of New York on January 19, 2017. He was admitted to practice in this Court on April 14, 2017.
Records of the New York Unified Court System reflect that Mr. Isleman was admitted to practice law in the State of New York on September 13, 2017. He is not admitted to practice in this Court.
Mr. Isleman billed 2.3 hours of time in January 2017 to drafting the Petition. (See Ex. E to Pet., at 1 (entries for "JI").) This work was done at a time when Mr. Isleman was not a licensed attorney. Further, this work was duplicated in May 2017 by Mr. Indelicato when he billed 1.7 hours for "drafting" the Petition, and additional time for "preparing" to draft and file it (id., at 2 (entries for "JJI").), in circumstances where the actual Petition, which was filed in June 2017, is only seven pages in length. Thus, this Court recommends that attorney's fees not be awarded for the time billed by Mr. Isleman.
Mr. Indelicato billed 5.5 hours during the period February through May 2017 on various tasks relating to the Petition, including, as described above, drafting the Petition. (Ex. E to Pet., at 1-2 (entries for "JJI").). This Court recommends that the hourly rate for Mr. Indelicato, who was a very junior associate at the time the work was done (having been admitted to practice law only months before), be reduced to $100 per hour. See Trustees of the Pavers and Rd. Builders Dist. Council Welfare v. M.C. Landscape Group, Inc., 12-CV-00834 (CBA) (VMS), 2016 WL 6998640, at *6 (E.D.N.Y. Aug. 25, 2016), report and recommendation adopted, 12-CV-0834 (CBA) (VMS), 2016 WL 7017336 (E.D.N.Y. Nov. 30, 2016) (reducing hourly rate for more recently graduated V & A associates to $100).
In addition, the Court notes that certain of the time entries for Mr. Indelicato reflect work that is ministerial in nature that would have more appropriately been done by a legal assistant at a reduced hourly rate (i.e., the V & A $100 hourly rate for legal assistant time). See, e.g., Ex. E to Pet. (3/14/17 entry: "Attn to files, download and categorize agreements as sent from fund office in support of petition to confirm arbitration award"; "Attn. to file, attempting to locate employer's current address for service of process").
With respect to the fees for Todd Dickerson's time, other courts in this District have found that a $300.00 hourly rate for Mr. Dickerson, an attorney who has been practicing for four years, is unreasonable and that an "Of Counsel" title does not warrant an increase from $225.00 per hour to $300.00 per hour. See Trustees of the New York City District Council of Carpenters Pension Fund v. Golden Development and Construction Corp., 17-CV-1051 (VSB) (JLC), 2017 WL 2876644, at *5 (S.D.N.Y. July 6, 2017) (awarding a $225.00 rate to Mr. Dickerson in July 2017). Accordingly, the Court finds that the 0.8 hours billed by Mr. Dickerson was reasonable, but recommends to reduce his rate to $225.00 per hour.
The Court thus recommends that a total of $730.00 be awarded to Petitioners as reasonable attorneys' fees, consisting of $550.00 for Mr. Indelicato's time and $180.00 for Mr. Dickerson's time.
Petitioners also seek to recover $75.00 in service fees in connection with this case. (Pet. ¶ 33.) "Recovery of such costs is routinely permitted." N.Y.C. & Vicinity Dist. Council of Carpenters v. Plaza Constr. Grp., Inc., No. 1:16-CV-1115-GHW, 2016 WL 3951187, at *2 (S.D.N.Y. July 19, 2016) (collecting cases). The Court thus recommends awarding $75.00 to Petitioners for costs incurred.
III. Post-Judgment Interest
The Petitioners request post-judgment interest as part of the judgment in this case. "The award of post-judgment interest is mandatory on awards in civil cases as of the date judgment is entered," including orders that confirm arbitration awards. Lewis v. Whelan, 99 F.3d 542, 545 (2d Cir. 1996) (citing 28 U.S.C. § 1961(a)). Thus, the Petitioners are entitled to post-judgment interest, plus accrued interest through the date of entry of the Court's judgment, at the rate provided for by 28 U.S.C. § 1961, from the date of entry of judgment until it is paid.
CONCLUSION
For the foregoing reasons, I recommend that the District Court: (1) confirm the October 27, 2016 Award requiring Respondent to pay Petitioners $38,535.16, plus interest from the date of the Award through the date of judgment at a rate of 5.5%, pursuant to the Award; (2) grant Petitioners' application for attorneys' fees, in the amount of $730.00; (3) grant Petitioners' application for costs in the amount of $75.00; and (4) grant Petitioners' application for post-judgment interest. DATED: New York, New York
December 27, 2017
/s/ _________
STEWART D. AARON
United States Magistrate Judge
* * *
NOTICE OF PROCEDURE FOR FILING OBJECTIONS
TO THIS REPORT AND RECOMMENDATION
The parties shall have fourteen (14) days (including weekends and holidays) from service of this Report and Recommendation to file written objections pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. See also Fed. R. Civ. P. 6(a), (d) (adding three additional days when service is made under Fed. R. Civ. P. 5(b)(2)(C), (D) or (F)). A party may respond to another party's objections within fourteen days after being served with a copy. Fed. R. Civ. P. 72(b)(2). Such objections, and any response to objections, shall be filed with the Clerk of the Court, with courtesy copies delivered to the chambers of the Honorable Vernon S. Broderick and the undersigned at the United States Courthouse, 500 Pearl Street, New York, New York 10007, and to any opposing parties. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(d), 72(b). Any requests for an extension of time for filing objections must be addressed to Judge Broderick.
THE FAILURE TO FILE THESE TIMELY OBJECTIONS WILL RESULT IN A WAIVER OF THOSE OBJECTIONS FOR PURPOSES OF APPEAL. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 6(a), 6(d), 72(b); Thomas v. Arn, 474 U.S. 140 (1985).
A copy of this Report and Recommendation has been mailed to:
Windham Construction Corp. c/o New York Secretary of State 99 Washington Ave., 6th floor Albany, New York 12231 and Windham Construction Corp. 39 French Park Drive Windham, New York 12496