Int'l Painters and Allied Trades Indus. Pension Fund v. Rose City Glass Co., Inc.

• Decision Date: 09 August 2010
• Docket Number: Civil Action No.: 09-1503 (RMU)
• Citation: 729 F.Supp.2d 336
• Parties: INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND et al., Plaintiffs, v. ROSE CITY GLASS CO., INC., Defendant.
• Court: U.S. District Court — District of Columbia

729 F.Supp.2d 336

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

v.ROSE CITY GLASS CO., INC., Defendant.

Civil Action No.: 09-1503 (RMU).

United States District Court,

District of Columbia.

Aug. 9, 2010.

Philip A. Lozano, Jennings Sigmond, PC, Philadelphia, PA, for Plaintiffs.

MEMORANDUM OPINION

Granting 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, authorized collection fiduciaries and agents for a group of employee funds ("the Funds"), allege that the defendant failed to make contributions to the Funds as required by collective bargaining agreements ("CBAs") and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001 et seq. The plaintiffs commenced this action on August 7, 2009, and served the defendant with the complaint on September 10, 2009. To date, the defendant has not responded to the complaint. Upon consideration of the plaintiffs' submissions, the court grants the plaintiffs' motion for default judgment and awards them $26,354.76 in damages.

II. FACTUAL & PROCEDURAL BACKGROUND

On August 7, 2009, the plaintiffs commenced this action to recover delinquent contributions to the Funds. Compl. ¶¶ 21-22, 26-27.¹ They claim that the defendant entered into a series of CBAs with the plaintiffs,² which they violated by failing to file remittance reports and make monthly payments. Id. ¶¶ 18, 21-22, 26-27. As alleged in the declaration of Thomas Montemore, Assistant to the Fund Administrator, an audit revealed a consistent pattern of underpayment from January 2004 through July 2008. Pls.' Mot., Ex. 1 ("Montemore Decl.") ¶ 8. Additionally, the plaintiffs allege that the defendant failed to submit remittance reports or make monthly payments for the months of May, June, August and September 2009. Id. ¶ 12. The plaintiffs assert that the defendant'sdelinquency entitles them to interest, liquidated damages, audit costs and attorney's fees and costs. Compl. ¶¶ 18, 23, 28. Finally, the plaintiffs assert that the defendant's failure to comply with the CBAs also violates ERISA. Id. ¶¶ 1, 21, 26.

The plaintiffs served the complaint on the defendant on September 10, 2009. See Pls.' Aff. for Entry of Default, Ex. 1 (Decl. of Philip Lozano ("Lozano Decl. I")) ¶ 2. Pursuant to Federal Rule of Civil Procedure 55(a), the plaintiffs requested that the Clerk of the Court enter default against the defendant for failure to plead or otherwise defend itself in this action. See Pls.' Aff. for Entry of Default. The Clerk of the Court entered default on October 2, 2009, see Entry of Default, and the plaintiffs filed this motion on November 12, 2009, see generally Pls.' Mot.³ To date, the defendant has not responded to the complaint or otherwise defended itself in this action.

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 alsoBrock 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., 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 the Plaintiffs' Motion for Default Judgment

1. The Defendant Is Liable to the Plaintiffs

The plaintiffs allege that they are entitled to default judgment because of the defendant's failure to appear or otherwise defend itself against the plaintiffs' claims. Pls.' Mot. at 1. Further, the plaintiffs assert that as a result of the defendant's default, the court should treat all of the plaintiffs' factual allegations as admitted. Id. at 1-2.

As previously discussed, the defendant was served with the complaint on September 10, 2009. Lozano Decl. I ¶ 2. After the defendant failed to respond to the complaint, it was served with the affidavit for default on October 1, 2009. See Pls.' Aff. for Entry of Default. Finally, the defendant was served with this motion on November 12, 2009. See Pls.' Mot. Given that the defendant has failed to plead or otherwise defend itself, the entry of default judgment is appropriate. See, e.g., Jackson, 636 F.2d at 836 (holding that default judgment is appropriate when "the adversary process has been halted because of an essentially unresponsive party" (quoting H.F. Livermore Corp., 432 F.2d at 691)).

As a consequence of the defendant's default, the defendant is deemed to have admitted all of the well-pleaded allegations in the complaint. See Avianca, Inc., 1992 WL 102999, at *1. ERISA requires that "[e]very employer who is obligated to make contributions to a multiemployer plan ... under the terms of a collectively bargained agreement shall ... make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145. The plaintiffs allege that the CBAs and ERISA require the defendant to make monthly contributions to the Funds, which the defendant has failed to do to the detriment of the Funds. Compl. ¶¶ 1, 16-17, 21-22, 26; Pls.' Mot. at 2. Finally, the plaintiffs allege that the defendant agreed to pay the cost of an audit if found to be delinquent or in violation of the CBAs. Compl. ¶ 18; see also id. Ex. 2 ("Trust Agreement"), Art. VI, § 6; Compl., Ex. 3 ("Pension Plan"), §§ 10.07, 10.12. The court accepts these well-pleaded allegations as admitted, see Avianca, Inc., 1992 WL 102999, at *1, and must now determine the appropriate relief.

2. The Plaintiffs Are Entitled to $26,354.76 in Damages

The plaintiffs contend that the defendant owes them a total of $26,354.76 in damages as a result of its failure to makethe necessary contributions to the Funds. Pls.' Mot. at 1-2. The plaintiffs itemize their damages as follows: (1) $14,032.20 in unpaid contributions, calculated as $4,523.38 in unpaid contributions discovered after an audit of records for the period from January 2004 to July 2008 and $9,508.82 in unpaid contributions for May, June, August and September 2009; ⁴ (2) $921.61 in interest on the unpaid contributions, calculated in accordance with the fluctuating IRS interest rate; (3) $2,806.44 in liquidated damages, calculated as twenty percent of the unpaid contributions; (4) $3,340.00 in audit costs; and (5) $5,254.51 in attorney's fees and costs. Montemore Decl. ¶¶ 8-12; Pls.' Mot., Ex. 5 ("Lozano Decl. II") ¶ 2.

ERISA states that when a fiduciary of an employee benefit plan is awarded judgment, the court must also award the plan all of the following:

(A) the unpaid contributions,

(B) interest on the unpaid contributions,

(C) an amount equal to the greater of-

(i) interest on the unpaid contributions, or

(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court in subparagraph (A),

(D) reasonable attorney's fees and costs of the action, to be paid by the defendant, and

(E) such other legal or equitable relief as the court deems appropriate. For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of Title 26.

29 U.S.C. § 1132(g)(2).

Addressing each of these provisions in order, ERISA first entitles the plaintiffs to the defendant's unpaid contributions. Id. § 1132(g)(2)(A). The plaintiffs' entitlement to unpaid...