Bd. of Trs. v. Aks, LLC
| Decision Date | 07 August 2014 |
| Docket Number | Civil Action No. 1-14-cv-00097-LMB-TRJ |
| Parties | BOARD OF TRUSTEES, NAT'L STABILIZATION AGREEMENT OF THE SHEET METAL INDUSTRY TRUST FUND, et al., Plaintiffs, v. AKS, LLC, et al., Defendants. |
| Court | U.S. District Court — Eastern District of Virginia |
This matter comes before the court on plaintiffs' Motion (no. 11) for Default Judgment against defendants AKS, LLC, Cheryl Ann Olsen,1 and Ashley Kacsmar2 for failing to make contributions pursuant to a collective bargaining agreement in violation of 29 U.S.C. § 185(a) and the Employment Retirement Income Security Act ("ERISA"), 29 U.S.C. §§1145, 1132(g)(2)(A)-(D). To date, defendants have not filed a responsive pleading to the complaint and the Clerk entered default as to all the defendants on May 12, 2014. Pursuant to 28 U.S.C. § 636(b)(1)(C), the action has been referred to the undersigned magistrate judge. Based on plaintiffs' memorandum in support and exhibits attached thereto, the magistrate judge recommends that default judgment be entered against defendants in the total amount of $14,805.74.
On January 29, 2014, plaintiffs filed this action against defendants for breach of contract and an ERISA violation. No. 1. Process was served upon the corporate defendant AKS, LLC via a private process server on its registered agent. No. 4. A complaint and summons were served with a person of suitable age at the residences of Olsen and Kacsmar on March 18, 2014 and March 29, 2014, respectively. Nos. 5-6. Service on defendants was proper under Fed. R. Civ. Pro. 4(e) and 4(h) and 29 U.S.C. §1132(e)(2), which provides that process may be served in any district where defendant resides or may be found.
Defendants have not appeared, answered, or otherwise filed any responsive pleadings in this case. On May 12, 2014, the Clerk entered default against defendants pursuant to Fed. R. Civ. Pro. 55(a). No. 10. Plaintiffs filed their Motion for Default Judgment on June 6, 2014. No. 11. On June 19, 2014, counsel for plaintiffs appeared at the hearing on the motion for default judgment and no one appeared on behalf of defendants.
Jurisdiction and venue are conferred upon this court by 29 U.S.C. §§ 1132 and 1451. Where an action is brought under Sections 502 and 515 of ERISA in a district court of the United States, it may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found. 29 U.S.C. § 1132(e)(2). Moreover, a suit for breach of contract between an employer and a labor organization representing employees in an industry affecting commerce may be brought in federal district court, regardless of the amount in controversy or citizenship of the parties. 29 U.S.C. §§ 185(a).
This court has personal jurisdiction over defendant pursuant to the decision in Bd. of Trs., Sheet Metal Workers Nat'l Pens. Fund v. McD Metals, Inc., 964 F. Supp. 1040, 1045 (E.D. Va. 1997). Venue is proper in this court under 29 U.S.C. §§ 1132(e)(2), 29 U.S.C. § 185(a) and 28 U.S.C. § 1391(b) as the Funds in question, are administered within the Eastern District of Virginia and a substantial part of the events or omissions giving rise to the cause of action occurred in this district.
As defendants have not answered or otherwise responded in any manner to the complaint and the Clerk has entered default against them, it is appropriate for the court to enter default judgment against defendants. Default judgment is appropriate if the well-pled allegations of the complaint establish plaintiff's entitlement to relief, and defendant has failed to plead or defend within the time frames contained in the rules. Music City Music v. Alfa Foods, Ltd., 616 F. Supp.1001, 1002 (E.D. Va. 1985); Fed. R. Civ. P. 55.
By defaulting, a defendant admits plaintiff's well-pled allegations of fact, which then provide the basis for judgment. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (citing Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir.1975)). See also DIRECTV, Inc. v. Rawlins, 523 F.3d 318, 322 n.2 (4th Cir. 2008) (citing Ryan); Partington v. Am. Int'l Specialty Lines Ins. Co., 443 F.3d 334, 341 (4th Cir. 2006) (); Marion County Court v. Ridge, 13 F.2d 969, 971 (4th Cir. 1926) (). Accordingly, defendants have admitted the well-pled allegations of fact contained in the complaint.
Based on the complaint, plaintiffs' Motion for Default Judgment and the supporting memorandum and exhibits, the undersigned makes the following findings of fact.
Plaintiffs are composed of separate and individual Boards of Trustees of the National Stabilization Agreement of the Sheet Metal Industry Trust Fund ("SASMI"),3 Sheet Metal Workers' National Pension Fund ("NPF"), International Training Institute for the Sheet Metal and Air Conditioning Industry ("ITI"), National Energy Management Institute Committee ("NEMIC"),4 and Sheet Metal Occupational Health Institute Trust Fund ("SMOHIT").5 The plaintiff trustees are the named fiduciaries and plan administrators within the meaning of 29 U.S.C. §§1102(a) and 1002(16). Compl. ¶¶ 4-6. Each plaintiff is an individual "fiduciary," within the meaning of 29 U.S.C. §1002(21) of a multi-employer plan.6 Compl. ¶¶ 4-6.
The plaintiffs are employee benefit plans and trust funds administered from offices located in Fairfax, Virginia. Compl. ¶ 8. Defendant, AKS, LLC, is an unincorporated business located in New Jersey and operated by the individual defendants Cheryl Ann Olsen and Ashley Kacsmar who are general partners and/or owners of the defendant company. Compl. ¶¶ 14-16. Defendants are employers in an industry affecting commerce and therefore are employers within the meaning of 29 U.S.C. § 152(2). Compl. ¶ 14.
Defendants signed a collective bargaining agreement ("Labor Contract") with LocalUnion 28 of the International Association of Sheet Metal, Air, Rail and Transportation Workers f/k/a Sheet Metal Workers' International Association ("Union") which represent employees employed by defendants. See Compl. ¶¶ 17-18; No. 11, Ex. 1, Shaw ¶ 4; Ex.7 10. Defendants agreed to abide by the terms of the agreements and declarations of trust of the ERISA Funds ("Trust Agreements"). Compl. ¶ 19. Under the terms and conditions of the Labor Contract, Trust Agreements and adopted rules and regulations, defendants were obligated to make full and timely payments to the funds and file monthly remittance reports and corresponding fringe benefit contributions to the Funds. Compl. ¶¶ 20-25; No. 11, Shaw ¶ 4; Ex. 10, pgs. 43-45.
The Labor Contract and Funds' documents which are incorporated into the Labor Contract, including the Sheet Metal Workers' National Pension Fund Trust Document ("Pension Fund Trust Document"), and the National Stabilization Agreement of the Sheet Metal Industry Trust Fund Amended Rules and Regulations ("SASMI Rules") provide express contractual rules on payment and remedies for a delinquency including liquidation damages and interest. See Compl. ¶20-23; No. 11, Shaw ¶ 4; Pension Fund Trust Document, Article V, Section 2; Ex. 4, SASMI Rules, Articles II—IV.
During the period of May 2013 through July 2013, defendants employed persons on whose wages and hours worked they were required to submit remittance reports and contributions to the ERISA Funds. Compl. ¶ 28. Defendants failed to make payment of contributions, interest and liquidated damages to the Funds in violation of ERISA and the Labor Contract and Trust Agreement. Compl. ¶¶ 28-29.
Plaintiffs bring two counts against defendants for an ERISA violation and breach ofcontract. The magistrate judge finds that the well-pled facts of the complaint and plaintiffs' memorandum in support of default judgment and exhibits establish that defendants failed to make contributions to the Funds in accordance with the Labor Contract and Trust Agreements both in violation of their contractual obligations and Section 515 of ERISA, 29 U.S.C. § 1145 and are therefore entitled to default judgment in the total amount of $14,805.74.
First, the magistrate judge finds that the individual defendants are jointly and severally liable with the defendant company for all amounts owed to the plaintiffs. Plaintiffs have represented that based upon a certification from the New Jersey Secretary of State website defendant company's limited liability corporation status has been dissolved. Mem. for Mot. Def. J. at pg. 5. Defendant Cheryl Ann Olsen and Ashley Kacsmar have carried on the business of the company and are general partners of unincorporated defendant company AKS, LLC. Compl. ¶¶ 15-16. Accordingly, the magistrate judge finds that since the individual defendants are sole proprietors of the business, they are personally liable for the business debts including all contributions, damages, and costs owed by defendant company to the Funds.
Second, the magistrate judge finds that plaintiffs are entitled to judgment for the amounts due under the collective bargaining agreement pursuant to 29 U.S.C. §185 and ERISA which provide for separate and overlapping relief. The collective bargaining agreement for the defendants incorporates the trust agreements which contain express contractual rules on payment and remedies for collection and delinquency that apply to all of the plaintiffs. See No. 11, Ex. 10, Labor Contract, Sections 21-28, pgs. 43-48.
The magistrate judge finds that defendants have breached the relevant labor contracts and therefore the Funds are entitled to relief for that breach. Defendants were bound to a series of Labor Contracts with Local 28 and the terms and conditions of the trust agreements and rulesestablished by the Funds. See Compl.¶¶ 21-2; No. 11, Shaw ¶ 4; Exs. 2, 3, 4...
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