Int'l Painters & Allied Trades Indus. Pension Fund v. Executive Painting Inc.

• Decision Date: 29 June 2010
• Docket Number: Civil Action No.: 09-0882 (RMU).
• Court: U.S. District Court — District of Columbia
• Parties: INTERNATIONAL PAINTERS & ALLIED TRADES INDUSTRY PENSION FUND et al., Plaintiffs, v. EXECUTIVE PAINTING, INC., Defendant.

719 F.Supp.2d 45

INTERNATIONAL PAINTERS & ALLIED TRADES INDUSTRY PENSION FUND et al., Plaintiffs,

v.EXECUTIVE PAINTING, INC., Defendant.

Civil Action No.: 09-0882 (RMU).

United States District Court,District of Columbia.

June 29, 2010.

COPYRIGHT MATERIAL OMITTED.

Kent G. Cprek, Jennings Sigmond, P.C., Philadelphia, PA, for Plaintiffs.

MEMORANDUM OPINION

Granting in Part and Denying Without Prejudice in Part the Plaintiffs' Motion for Default Judgment

RICARDO M. URBINA, District Judge.

I. INTRODUCTION

This matter comes before the court on the plaintiffs' motion for entry of default judgment. The plaintiffs, the International Painters and Allied Trades Industry Pension Fund (“the Pension Fund”) and Gary J. Meyers, the fund's fiduciary, allege that the defendant failed to make monthly contributions to employee benefit funds in violation of collective bargaining agreements (“CBAs”) and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1145. The defendant, though properly served, has not responded to the lawsuit; accordingly, the plaintiffs now seek entry of default judgment and request monetary damages and injunctive relief. For the reasons discussed below, the court concludes that the defendant is liable to the plaintiffs and grants the plaintiffs' request for injunctive relief and attorney's fees and costs, but denies without prejudice the plaintiffs' remaining requests for damages.

II. FACTUAL & PROCEDURAL BACKGROUND

In June 2008, the defendant entered into a series of CBAs, consisting of a Labor Contract, an Agreement and Declaration of Trust of the Fund (“the Trust Agreement”) and the International Painters and Allied Trades Industry Pension Plan (“the Pension Plan”), with local labor unions or district councils affiliated with the International Union of Painters and Allied Trades. Compl. ¶¶ 15-16. The CBAs require the defendant to (1) remit monthly contributions to employee benefit funds, (2) submit remittance reports each month detailing the employees or work for which contributions were required pursuant to the CBAs, (3) produce all books and records for an audit at the plaintiffs' request and (4) pay liquidated damages, late fees, interest, audit costs and other costs incurred by the plaintiffs in collecting delinquent contributions. Id. ¶ 17. The plaintiffs commenced this action on behalf of the Trustees of the Pension Fund in May 2009, alleging that the defendant violated the CBAs by failing to contribute to the employee benefit funds from October 2008 through April 2009. Id. ¶ 7, 20. The plaintiffs seek to recover all delinquent contributions owed by the defendant, including such relief as prescribed by ERISA. Id. ¶¶ 20-21. In addition, the plaintiffs ask the court to order the defendant to participate in an audit and award them all contributions found owing during the audit. Id. ¶¶ 29, 32.

The plaintiffs served the defendant with the complaint and summons on September 1, 2009. Pls.' Mot. at 2. The Clerk of the Court entered default on November 19, 2009. See Entry of Default. On the same day, pursuant to Federal Rule of Civil Procedure 55(b), the plaintiffs filed this motion. ¹ Despite being served with both the plaintiffs' request for entry of default ² and the instant motion, the defendant has failed to answer the complaint, respond to the plaintiffs' motion for default judgment or otherwise defend itself in this action. The court turns now to the applicable legal standard and the plaintiffs' requests for relief.

III. ANALYSIS

A. Legal Standard for Entry of Default Judgment Under Rule 55(b)(2)

A court has the power to enter default judgment when a defendant fails to defend its case appropriately or otherwise engages in dilatory tactics. Keegel v. Key W. & Caribbean Trading Co., 627 F.2d 372, 375 n. 5 (D.C.Cir.1980). Rule 55(a) of the Federal Rules of Civil Procedure provides for entry of default “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules.” Fed.R.Civ.P. 55(a). Upon request of the party entitled to default, Rule 55(b)(2) authorizes the court to enter against the defendant a default judgment for the amount claimed and costs. Id. 55(b)(2). Because courts strongly favor resolution of disputes on their merits, and because “it seems inherently unfair” to use the court's power to enter judgment as a penalty for filing delays, modern courts do not favor default judgments. Jackson v. Beech, 636 F.2d 831, 835 (D.C.Cir.1980). Accordingly, default judgment usually is available “only when the adversary process has been halted because of an essentially unresponsive party ... [as] the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights.” Id. at 836 (quoting H.F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d 689, 691 (D.C.Cir.1970)).

Default establishes the defaulting party's liability for the well-pleaded allegations of the complaint. Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C.2001); Avianca, Inc. v. Corriea, 1992 WL 102999, at *1 (D.D.C. Apr. 13, 1992); see also Brock v. Unique Racquetball & Health Clubs, Inc., 786 F.2d 61, 65 (2d Cir.1986) (noting that “default concludes the liability phase of the trial”). Default does not, however, establish liability for the amount of damage that the plaintiff claims. Shepherd v. Am. Broad. Cos., Inc., 862 F.Supp. 486, 491 (D.D.C.1994), vacated on other grounds, 62 F.3d 1469 (D.C.Cir.1995). Instead, “unless the amount of damages is certain, the court is required to make an independent determination of the sum to be awarded.” Adkins, 180 F.Supp.2d at 17; see also Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir.1999) (stating that the court must conduct an inquiry to ascertain the amount of damages with reasonable certainty). The court has considerable latitude in determining the amount of damages. Jones v. Winnepesaukee Realty, 990 F.2d 1, 4 (1st Cir.1993). To fix the amount, the court may conduct a hearing. Fed.R.Civ.P. 55(b)(2). The court is not required to do so, however, “as long as it ensure[s] that there [is] a basis for the damages specified in the default judgment.” Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., Div. of Ace Young Inc., 109 F.3d 105, 111 (2d Cir.1997).

B. The Court Grants in Part and Denies Without Prejudice in Part the Plaintiffs' Motion for Default Judgment

The plaintiffs assert that they are entitled to default judgment because the defendant has failed to answer the complaint or otherwise defend itself in this action. Pls.' Mot. at 2. Given the defendant's failure to respond, the plaintiffs contend that all factual allegations in the complaint are deemed admitted. Id. Accordingly, the plaintiffs seek an order (1) holding the defendant liable, (2) awarding them, pursuant to ERISA and § 10 of the Pension Plan, $46,354.50 in unpaid benefit contributions for the period of October 2008 through September 2009, $1,169.11 in interest through October 15, 2009, $14,780 in liquidated damages and $5,676.20 in attorney's fees and costs and (3) requiring the defendant to provide all outstanding remittance reports, submit to an audit and remit any additional outstanding contributions discovered in the reports or audit. Id. at 5-6, 9. The court addresses each of the plaintiffs' requests in turn.

1. The Defendant is Liable to the Plaintiffs

Default judgment is appropriate when “the adversary process has been halted because of an essentially unresponsive party.” H.F. Livermore Corp., 432 F.2d at 691. As noted above, the plaintiffs served the defendant with the complaint on September 1, 2009. Pls.' Mot. at 2. Since that date, the defendant has failed to plead or otherwise defend itself in this action. Moreover, the defendant has not responded to the plaintiffs' request for entry of default or to the instant motion. Given the defendant's unresponsiveness, the court concludes that default judgment is appropriate. See Fanning v. Permanent Solution Indus., Inc., 257 F.R.D. 4, 7 (D.D.C.2009) (concluding that the defendant was liable to the plaintiff because the defendant had failed to respond to the complaint or otherwise defend itself); Int'l Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F.Supp.2d 56, 57 (D.D.C.2008) (granting default judgment because the defendant had failed to request to set aside the default or suggest that it had a meritorious defense).

As a result of the entry of default, the court construes all well-pleaded allegations in the complaint as admitted. Int'l Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., 239 F.Supp.2d 26, 30 (D.D.C.2002) (citing Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 63 (2d Cir.1971), rev'd on other grounds, 409 U.S. 363, 93 S.Ct. 647, 34 L.Ed.2d 577 (1973)); accord Black v. Lane, 22 F.3d 1395, 1399 (7th Cir.1994). The plaintiffs assert that the defendant violated the CBAs and ERISA by failing to make monthly contributions to the plaintiffs from October 2008 through April 2009 and by failing to submit monthly remittance reports. Compl. ¶¶ 20, 24. The court accepts these well-pleaded allegations as admissions of the defendant's liability. Adkins, 180 F.Supp.2d at 17; see also Fanning, 257 F.R.D. at 7 (concluding that the plaintiffs sufficiently alleged facts to support their claims and accepting the well-pleaded allegations as true). The court must now determine the appropriate relief.

2. The Court Grants in Part and Denies Without Prejudice in Part the Plaintiffs' Request for Money Damages

a. The Court Denies Without Prejudice the Plaintiffs' Request for Unpaid Benefit Contributions, Interest, Liquidated Damages and Penalties

The plaintiffs contend that the defendant failed to remit contributions from October 2008 through September 2009 and estimate that the defendant owes them $46,354.50 in unpaid...