International Painters v. R.W. Amrine Drywall Co.

• Decision Date: 28 December 2002
• Docket Number: No. 02-00472(RMU).,02-00472(RMU).
• Citation: 239 F.Supp.2d 26
• Parties: INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, Plaintiff, v. R.W. AMRINE DRYWALL COMPANY, INC. et al., Defendants.
• Court: U.S. District Court — District of Columbia

239 F.Supp.2d 26

INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, Plaintiff, v. R.W. AMRINE DRYWALL COMPANY, INC. et al., Defendants.

Civil Action No. 02-00472(RMU).

United States District Court, District of Columbia.

December 28, 2002.

COPYRIGHT MATERIAL OMITTED

Richard B. Sigmond, Sanford G. Rosenthal, Marc L. Gelman, Jennings Sigmond, Philadelphia, PA, for Plaintiff.

MEMORANDUM OPINION

URBINA, District Judge.

GRANTING IN PART AND DENYING IN PART THE PLAINTIFF'S MOTION FOR DEFAULT JUDGMENT

I. INTRODUCTION

This case is currently before the court on the plaintiffs motion for a default judgment in accordance with the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. The plaintiff, the International Painters and Allied Trades Industry Pension Fund ("the Pension Fund"), is a multi-employer employee pension plan governed by ERISA. The defendants are R.W. Amrine Drywall Company and Robert Amrine, the owner of that company (collectively, "the defendants" or "the Company"). This action began after the Company entered into collective bargaining agreements with a labor union organization, the International Brotherhood of Painters and Allied Trades ("the Brotherhood"). Claiming that the defendants failed to comply with the collective bargaining agreements, the plaintiff initiated this action to enforce the terms of the agreements. For the following reasons, the court grants in part and denies in part the plaintiffs motion for default judgment.

II. BACKGROUND

As noted, the Pension Fund is a multi-employer employee pension plan governed by ERISA. Montemore Decl. 112. The collective bargaining agreements between the Company and the Brotherhood authorize the Pension Fund to provide retirement income to the Company's employees who are represented by the Brotherhood ("Company employees"). Id. ¶ 4. Toward that end, the collective bargaining agreements require the defendants to submit monthly remittance reports to the Pension Fund describing the work performed by Company employees. Id. 115. The agreement further requires the Company to submit monthly contributions to the Pension Fund on behalf of the Company employees. Id. 114. If the Company fails to comply with the collective bargaining agreements, the Company must (1) submit to an audit of all records related to its obligations to the Pension Fund and (2) pay liquidated damages, late charges, interest audit costs, and attorney's fees and costs. Compl. at 3.

The defendants incurred a contribution delinquency to the Pension Fund when it failed to make the required contributions for the period from October 2000 through March 2001. Montemore Decl. 116. The defendants settled this delinquency by entering into a Promissory Note and Personal Guaranty, notarized on July 3, 2001, for the principal sum of $18,928.14. Id. Despite this settlement agreement, the company failed to submit timely all of the payments as required by the settlement. Id.

According to the plaintiff, the defendants continued to violate the collective bargaining agreements by failing to make Pension Fund contributions and failing to file remittance reports. Id. 1112. On March 12, 2002, the plaintiff filed a complaint alleging these violations. In the complaint, the plaintiff alleges that the defendants failed to pay to the Pension Fund contributions "in at least the sum of $14,738.25." Compl. at 4. The plaintiff explains that it also seeks a judgment for any Pension Fund contributions the Company fails to make after the filing of the complaint. Id. at 4. The plaintiff, in the complaint, does not specify the timeframe for the already-delinquent payments, but states that the time period is "in a period not barred by any applicable statute of limitations." Id. at 7. In sum, the plaintiff requests monetary damages and injunctive relief, pursuant to ERISA, for violations of the collective bargaining agreements.

On April 5, 2002, counsel for the plaintiff executed service of the summons and complaint on the defendants. Return of Serv. filed on Apr. 18, 2002. The record reflects that the defendants have not filed an answer to the plaintiffs complaint. Consequently, the clerk of the court entered default for the plaintiff on July 17, 2002. Default.

On September 13, 2002, the plaintiff filed a motion for entry of default judgment in the amount of $18,900.23 and for injunctive relief. The damages requested in the motion are slightly different from those requested in the complaint because the Company continues to fail to contribute to the Pension Fund as required by the collective bargaining agreements.

Regarding monetary damages, the plaintiff first requests $10,854.86 for the "principal balance" (including unpaid contributions of $9,461.20) owed to the plaintiff pursuant to the July 3, 2001 settlement regarding the defendants' contribution delinquency for October 2000 through March 2001. Montemore Decl. ¶ 6. Second, the plaintiff argues for $1,919.30 for unpaid Pension Fund contributions for November 2001 through April 2002.¹ Id. ¶¶ 7-8. Third, the plaintiff moves for $258.29 in interest on the unpaid contributions set out in items (1) and (2), calculated in accordance with the Internal Revenue Service rate for delinquent taxes and pursuant to the Pension Fund's Rules and Regulations. Id. 119. Fourth, the plaintiff requests $2,554.83 in liquidated damages. Id. 1110. Fifth, the plaintiff asks for $349.96 in late charges, in the form of interest on contributions that the defendants paid prior to this litigation and more than twenty days after the due date. Id. ¶ 11; Mot. for Default J. 115. Sixth, the plaintiff requests $2,962.99 in attorney's fees and costs. Sigmond Decl. dated Sept. 12, 2002; Mot. for Default J. Ex. 5.

The plaintiff also requests equitable and injunctive relief. Specifically, the plaintiff asks the court to order the defendants to cease their refusal to file complete and timely remittance reports in the future. Mot. for Default J. ¶¶ 7-8. The plaintiff also asks the court to order the defendants to file remittance reports for February through April 2002 and produce their payroll books and records from June 1999 to the present to allow the plaintiff to conduct an audit of these documents. Id. This audit is intended to determine whether the defendants owe further contributions to the Pension Fund. Id. The plaintiff argues that this injunctive relief is needed to prevent further irreparable harm to the Pension Fund. Id.

On October 16, 2002, the court issued an order instructing the defendants to show cause by October 31, 2002 as to why the court should not enter default judgment. The court instructed the defendants that "failure to respond to this order may result in the entry of default judgment in favor of the plaintiff." The deadline having come and gone, the defendants still have not responded to the court's show cause order.

III. ANALYSIS

A. Legal Standard for Default Judgment Pursuant to ERISA

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." FED R. Civ. P. 55(a). Upon request of the plaintiff and an affidavit regarding the amount due, Rule 55(b) authorizes the clerk or court (depending on the circumstances) to enter against the defendant a default judgment for the amount claimed and costs. FED R. CIV. P. 55(b). Just as a court can dismiss a case when faced with dilatory tactics by the plaintiff, a district court has the discretion to enter default judgment when a defendant fails to defend its case appropriately. Keegel v. Key West & Caribbean Trading Co., 627 F.2d 372, 375 n. 5 (D.C.Cir.1980).

A defaulting defendant is deemed to admit every well-pleaded allegation in the complaint. 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). Although the default establishes a defendant's liability, the court is required to make an independent determination of the sum to be awarded unless the amount of damages is certain. Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C.2001); Chudasama v. Mazda Motor Corp., 123 F.3d 1353, 1364 n. 27 (11th Cir.1997); SEC v. Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir.1975). Moving for a default judgment, the plaintiff must prove its entitlement to the requested damages. Oberstar v. FDIC, 987 F.2d 494, 505 n. 9 (8th Cir. 1993). In ruling on such a motion, the court may rely on detailed affidavits or documentary evidence to determine the appropriate sum for the default judgment. United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir.1979). When the damages cannot be calculated with relative simplicity, however, the court may order an evidentiary hearing. Cablevision Sys. New York City Corp. v. Lokshin, 980 F.Supp. 107, 111-12 (E.D.N.Y.1997). Finally, the movant is entitled to all reasonable inferences from the evidence offered. Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir.1981).

ERISA provides additional rules for default judgments. 29 U.S.C. § 1132(g)(2). By enacting Section 1132(g)(2), Congress intended to preserve the private multi-employer pension plan system by ensuring that employers make the required contributions to the pension plans. Iron Workers Dist. Council of West. New York, Vicinity Welfare & Pension Funds v. Hudson Steel Fabricators & Erectors, Inc., 68 F.3d 1502, 1506 (2d Cir.1995). "The intent of this section is to promote the prompt payment of contributions and assist plans in recovering the costs incurred in connection with delinquencies." Cent. States, Southeast & Southwest Areas Pension Fund v. Alco Express Co., 522 F.Supp. 919, 928 (E.D.Mich.1981) (citing to Senate legislative history).

When a court awards a default judgment against a defendant for contributions owed under a collective bargaining agreement, ERISA provides that the...