ALLYNE R. ROSS, District Judge.
The court has received the Report and Recommendation on the instant case dated May, 24, 2013, from the Honorable Lois Bloom, United States Magistrate Judge. No objections have been filed. Accordingly, the court has reviewed the Report and Recommendation for clear error on the face of the record. See Advisory Comm. Notes to Fed. R. Civ. P. 72(b);
SO ORDERED.
Plaintiffs bring this action against defendant Brookman Construction Co., Inc. for violations of their collective bargaining agreement (CBA) and the Employment Retirement Income Security Act (ERISA), 29 U.S.C. §1001, et seq. Defendant, through its counsel, has repeatedly failed to comply with the Federal Rules of Civil Procedure and the Court's orders. Therefore, I respectfully recommend that the Court should enter a default judgment against defendant.
Plaintiffs commenced this action on May 3, 2012. Defendant was served with the summons and complaint in this action on May 16, 2012, and its answer was due June 6, 2012. (ECF No. 3.) On June 13 and 15, 2012, defendant's counsel sought leave to appear pro hac vice. (ECF No. 4-5.) The Court granted counsel's request on June 15, 2013. On August 29, 2012, more than two months after the time to respond had expired, defendant answered the complaint. (ECF No. 7.)
On September 6, 2012, the parties filed their Rule 26(f) Report informing the Court that an audit was scheduled for September 14, 2012. (ECF No. 8.) The Court held an initial conference by telephone on September 24, 2012, and learned that the audit had been canceled because defendant's counsel failed to confirm the date with his client. The Court scheduled the matter for another status conference on October 3, 2012, to set a date for the audit. (Sept. 25, 2012 Scheduling Order.) On October 3, 2012, the parties informed the Court that the audit had been scheduled, and the matter was adjourned to a November 28, 2012. (Oct. 4, 2012 Scheduling Order.)
At the November 28, 2012 conference, the Court ordered the parties to review the audit and "[i]f, after careful review of the audit and records, any discrepancy remains unsettled, the parties shall electronically file a statement with the Court by December 14, 2012 setting forth what the discrepancy is as well as the legal and factual basis for their respective positions." (Nov. 28, 2012 Scheduling Order.) Plaintiffs timely filed a statement (ECF No. 13), but no statement was filed by defendant. The Court held a status conference on December 21, 2012. Despite the clear language of the November 28, 2012 Order, defendant's counsel stated that he believed he complied with the Order when he sent a letter regarding his concerns to plaintiffs' counsel. During the conference, defendant's counsel also represented that his client was having financial difficulties fulfilling its obligations pursuant to the CBA because Brookman had not been paid for several of the jobs. To address this issue, plaintiffs' counsel suggested that plaintiffs could amend the complaint to sue on the contractors' surety bonds and the parties agreed to work together to exchange the necessary information regarding the suretors.
The Court held another conference on February 6, 2013, and learned that defendant had not produced the necessary information to allow plaintiffs to amend their complaint to sue on the bonds. Accordingly, the Court ordered defendant's counsel to produce the surety bonds and contracts for the Cruz, Prismatic, and Commodore jobs to plaintiffs' counsel by February 13, 2013. (Feb. 6, 2013 Scheduling Order.) The Order explicitly warned defendant that a failure to comply would result in sanctions pursuant to Rule 37(b)(2). (
On February 28, 2013, defendant's counsel, citing health issues, requested a sixty-day stay. (ECF No. 16.) The Court expressed its sympathies, but denied counsel's request as "unreasonable" since plaintiff is entitled to proceed and defendant's counsel is appearing pro hac vice to represent Brookman Construction, a New York corporation. (ECF No. 17.) The Court ordered defendant to obtain substitute counsel. (
On March 7, 2013, instead of producing the bonds and contracts, defendant wrote to plaintiffs' counsel and stated "that after a lengthy and careful review of my contracts with Prismatic Construction, Commodore Construction, and EE Cruz Construction, I am not able to provide you with Bonding information. Bonding information is proprietary to the individual contractors and their Bonding service." (ECF No. 22.) Plaintiffs filed a copy of this letter with the Court on March 11, 2013. (
At the conference, defendant's counsel argued that since defendant did not possess the bonding information, defendant's letter to plaintiffs complied with the Court's Order. (ECF No. 26, Tr. at 5, 8.) The Court disagreed; "[i]f it was unable to providing the bonding information, it was incumbent upon you as the attorney of record to prepare something to respond to the Court's order saying why it was impossible. That was not done, sir." (
Rule 37(b)(2)(A) authorizes the Court to impose sanctions on a party who fails to obey discovery orders. Specifically, "[i]f a party ... fails to obey an order to provide or permit discovery . . . the court where the action is pending may issue further just order. They may include ... (vi) rendering a default judgment against the disobedient party...." Fed. R. Civ. P. 37(b)(2)(A). Rule 16(1) further provides that "the court may issue any just orders, including those authorized by Rule 37(b)(2)(A)(ii)-(vii), if a party or its attorney . . . (C) fails to obey a scheduling or other pretrial order." Fed. R. Civ, P. 16(f). Although the entry of a default judgment is an extreme measure, the Second Circuit "has consistently affirmed" the sanction of default judgment against parties that "repeatedly refuse to comply with their discovery obligations despite court orders and warnings of impending sanctions."
Each of these factors supports entering a default judgment against defendant in this action. First, defendant's noncompliance has been willful. Throughout this litigation, the Court has afforded defendant numerous opportunities to comply with the Court's orders. However defendant's counsel, citing various excuses, has repeatedly shirked his obligations. Noncompliance is willful where the party has received notice of the Court's orders and repeatedly fails to comply.
Any lesser sanction than entry of a default judgment would not be efficacious in this case. The CBA between the parties requires defendant to make monetary contributions to plaintiffs. As defendant admits entering into a CBA with plaintiffs (ECF No, 7), the only point of contention which was the focus of discovery is to determine what monies are owed. At every turn, defendant has sought to avoid and delay this litigation. Thus, any lesser sanction such as prohibiting defendant from entering certain matters into evidence or staying the proceeding until defendant complies, would not be effective in this case. Moreover, the contributions at issue in this case accrue interest and penalties if unpaid. Therefore, plaintiffs will be owed more the longer these proceedings go on. Defendant has repeatedly refused to comply with the Court's orders and has completely failed to engage in discovery with plaintiffs' counsel as required by the Federal Rules of Civil Procedure. "[G]iven Defendant's deliberate refusal to cooperate in this litigation," "it is this Court's view that any lesser sanction here would be an exercise in futility."
Defendant has failed to comply with various court orders over the span of several months. The Court specifically imposes sanctions here for defendant's willful failure to turn over the bonds and contracts to plaintiffs' counsel by March 8, 2013. Defendant was originally required to provide these documents by February 13, 2013. Thus, although the period of noncompliance since the Court's last extension has only been two and half months, defendant has failed to satisfy its discovery obligations for more than three months. This "qualifies as an amount of time sufficient to warrant an entry of a default judgment."
Furthermore, defendant was explicitly warned of the consequences of noncompliance. As early as February 6, 2013, the Court put defendant on notice that sanctions would be imposed pursuant to Fed. R. Civ. P. 37(b)(2) if counsel failed to produce the bonds and contracts. The Court reiterated this warning on March 4, 2013, when it afforded defendant "one more opportunity to avoid sanctions," and on April 10, 2013, when the Court ordered defendant to show cause why sanctions pursuant to Rule 37(b)(2) should not be imposed. (ECF Nos. 19, 23.) Thereafter, on April 23, 2013, the Court afforded defendant a final opportunity to retain new counsel and proceed with this action. (ECF No. 27.) In doing so, it again advised defendant that noncompliance would result in sanctions including an entry of default judgment pursuant to Rule 37(b)(2)(A).
Finally, defendant's failure to obtain new counsel provides an independent ground for entering a default judgment.
Accordingly, it is respectfully recommended that a default judgment should be entered against defendant Brookman Construction Co., Inc. and that plaintiffs should be afforded an opportunity to prove their damages with a "reasonable certainty" either through the submission of affidavits or at an inquest on damages.
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b)(2) of the Federal Rules of Civil Procedure, the parties shall have fourteen (14) days from service of this Report to file written objections.
SO ORDERED.
