1 The Honorable J. Clifford Walla ce, of the United S tates Court of Appeals for the Ninth * 2 Cir cui t, s it ti ng b y de s ign ati on . T he H on or abl e So ni a So to may or , o r igi nally a m emb er

of this pan el, 3 was elev ate d t o the S up r eme Cou r t o n Augus t 8 , 20 09. T he t wo r emaining m emb er s of th e pan el, 4 who ar e inagr eem ent , h ave d et er mi nedth e ma tt er . See 28 U .S. C. § 4 6( d) ; L ocal

Rul e 0. 14(

2) ; United 5 St ate s v . De si mo ne , 14 0 F .3d457 (2 d Ci r . 19 98)
. 1 07- 2558- cv Fi nkel v. W hi ff

en El ect r i c C o. UN ITED STA TES CO URT OF AP P EALS F OR TH E S ECO N D CI RCU IT Aug us t T er m, 200 8 (A rgue d: M ay 8, 200 9 Dec id ed: Aug us t 1 1, 2 009 ) Do cket No . 07 -2 558 -c v G ER A L D F I NKEL , as Chai r manof th e J oi nt I nd us tr y B oar d o f the El ect r

ical I nd us tr y, Pl aint iff -A ppe lla nt ,
v. J OS EP H R O M ANO W I CZ ,

Defenda nt-App ellee , W HI F F EN E LECT RI C C O ., I NC .

De fe ndant
. B ef or e: C AB R ANES and W ALL ACE , Circuit Jud

ges . * App eal f r om a ju dgm ent

of th e Unit ed S tat es Di s tr

ict Cou r t f or th e Eas te r n D is tr

ict of New Yor k ( J oh n G lees on , Judge

). Plaintiff Finkel challe nges the Distr ict Court’s dismis sal of its clai ms
a ga in st de fe nd a nt R om a no wi cz a fte r R om a no wi cz fa il ed to p le a d o r ot he rw ise de fe nd a ga in st pl ain ti ff ’s com pl ain t an d p lai nt

if f m ov ed f or a def aul t j ud gm ent . Acc or di ng t o p lai nt if f, th e Di s tr

ict Cou r t e r r ed i n ( 1) ho ld in g that Rom ano wicz , anof

fi cer of a com pan y that

br each ed i ts du ty

to r emi t1 No attorney has entered an a ppearanc e on beha lf of defendant-appelle e Joseph ** 2 Rom ano wicz , an d h e has no t f ile d a b r ief inthis cas e. 2 contributions t o various ERISA pla ns of which plaintiff was an admini str ator, was not liable for breach of fiducia ry duty where pla intiff f aile d to establish defendant’s s tatus as an ERISA fiduci ary within the mea ning of 29 U.S.C . § 1002(21)(A); (2) not conducting a hearing prior to dismis sing pl ain ti ff ’s br each -o f- fi du ciar

y- du ty clai m; and(3 ) h ol di ng that , u nd er s ect io n 3 -4 03(

2) (b ) o f N ew York’s Uniform Commercia l Code , defendant w as not pers onally liable for checks he signed on behalf of the compa ny that we re dishonor ed due to insufficient funds in the compa ny’s checking

acc ount. We hold tha t (1) plaintiff f aile d to establish defendant’s s tatus as an ERISA fiduci ary beca use he did not alle ge or introduce evide nce de monstr ating that defenda nt exercised authority or control over the manage ment of ERISA pla n assets ; (2) plaintiff was not entitled to a hea ring prior
to th e di s mi s s al o f i ts br each -o f- fi du ciar y- du ty clai m ag ain s t d ef

end ant , as th e r eco r d d emo ns tr ate s th at n o h ear

in g was nec es s ary andpl ain ti ff di d n ot r equ es t o ne; and(3 ) the D is tr ict Cou r t e r r ed i n ho ld in g that

def end ant was no t p er s on ally li abl e f or cer tai n dis ho no r ed c hec ks un der New Yor k’s Unif or m Co mm er cial

Cod e, wh er e pl ain ti ff

es tab lis hedth at the c hec ks di d n ot in di cat e that def end ant s ign ed them ina r epr es ent ati ve ca paci ty

anddef end ant pr es ent ed n o ev

id enc e of an
un der s tan di ng b et

weenth e par ti es th at h e hads ign ed them ina r epr es ent ati ve ca paci ty . Affirmed insof

ar as the Distr

ict Court held that defenda nt was not an ER ISA fiduciary, a nd insofar as the District Court did not conduct a hearing be fore dism iss ing the breac h of fiduciary clai m; reversed insof

ar as the Distr

ict Court held that defenda nt was not personally liable for the di sho no re d c he ck s. J AM E S R. G RIS I (J aniK. Rache ls on , Ro bi n H . G is e, of counsel , andM olly A. B r oo ks , on the brief ), Cohen, W eiss and Sim onLLP, fo r A

ppella nt G er

ald F ink el
. **Rom ano wicz faile d t o o pp os e the J oi nt B oar d’ s s ui t an d i s th er ef

or e de eme d t o h ave 1 adm it te d all well- pl eade d alleg ati on s inth e co mp lai nt per tai ni ng t o l

iab ili ty . Se e G re

y ho und Exh ibi tg ro up, I nc. v. E. L.U. L. Re alt

y Co rp. , 973 F.2d 155, 15 8 (2d Cir. 1992). Our “bac kground” s ect io n i s , acc or di ngl

y, d r awn f r om th e J oi nt

B oar d’ s all egat

io ns ands ub mi s s io ns to th e Di s tr ict Cou r t. 3 J OS É A. C AB R ANES , Circuit Jud ge : Pl ain ti ff -a pp ell ant Ger aldFi nk el, as Chai r manof th e J oi nt I nd us tr y B oar d o f E lectr

ical I nd us tr y (th e “J oi nt

B oar d”) , ch all eng es a M ay 14 , 20 07 d ef aul t j ud gm ent

ent er ed b y the U ni te d States Distr

ict Court for the Eastern Dis trict of New York (John Gleeson, Judge ) ag ain s t Whif

fe n Elec tric Co., Inc, (“W hiffen”) purs uant to sections 502 and 515 of the Employ ee R etirement Income Security A ct of 1974 (“ER ISA”), 29 U.S.C . §§ 11 32 and 114 5, for delinquent contributions of employee benefits but dis miss ing the Joint Board’s clai ms against defendant-appell ee Joseph Rom ano wicz , a p r

in cip al o f Whif

fe n. See Finkel v

. Wh iffen Elec. C

o. , N o. 06- 126 9, 2 007 WL 1 395 562 , a t * 2 ( E .D .N .Y . Ma y 1 4, 20 07 ). In t hi s a pp ea l, we co nsi de r w he the r (1 ) R om a no wi cz wa s a “fiduciary” of an ER ISA benefits plan within the mea ning of 29 U.S.C . § 1002(21)(A), so that he may be h eldjo in tly ands ever ally li abl e f or th e de lin qu ent

paym ent s ; (

2) th e Di s tr

ict Cou r t e r r ed i n
no t c on du ct

in g a h ear in g be fo r e di s mi s s in g the J oi nt B oar d’ s br each -o f- fi du ciar y- du ty clai m; and(3 ) Rom ano wicz is , u nd er

s ect io n 3 -4 03(

2) (b ) o f N ew Yo r k’s Unif

or m Co mm er cial

Cod e ( “N .Y. U.C.C .”), personally lia ble for dishonor ed che cks tendered to the Joint B oard by Roma nowicz to
mee t a p or ti onof

Whi ff en’ s ob lig ati on s fo r

emp lo yee b ene fi t c on tr

ib ut io ns . BAC KGROUND 1 The Joint B oard is an administrator and fiduciary of several ER ISA employe e-benefit funds

es tab lis hedby c ollect

ive bar gainin g agr eem ent s bet

weenLo cal U ni onNo . 3 o f the I nt er nat io nal B r otherho odof

Elec tr ical Wor ker s , AF L- CI O ( “the U ni on ”) andemp lo yer s s up plyin g el ect r icalT it le 2 9 U. S.C. § 11 45 p r ov

id es : 2 Ever y em pl oye r

who is ob lig ate d t o m ake c on tr ib ut io ns to a mult

iem pl oye r pl an under the terms of the plan or under the terms of a colle ctively bargaine d agreeme nt s hall, t o the e xt ent

no t i nco ns is te nt

with l aw, m ake s uchcon tr ib ut io ns inacco r dan ce with the t er ms andcon di ti on s of s uchpl an o r

s uchagr eem ent . 4 services. Whiffen was one such employ er at all points releva nt to this litigation. Pursuant to one of these collec tive barga ining ag reements with the Union (the “CBA”), W hiffen was obligate d to withhold specified portions of employees’ wag es and, on a monthly ba sis , remit them to the Joint Board for deposit in several ER ISA funds, including a multi-employe r cash or deferr ed arrangeme nt within the mea ning of Internal Reve nue Code § 401(k), 26 U.S .C. § 401(k) (“the 401(k) Plan”). In September 2004 the Joint Board r ece ived two c hecks from Whiffen bearing Rom ano wicz ’s s ign atu r e, o ne i n the am ou nt of $19 ,04 8.4 8 an d the o th er

fo r $7, 383 .47 , co nv eyedin

acc ordance with the CBA’s terms . Howeve r, each w as dishonor ed and returned to the Joint Board due to insuff

icient funds. In August 2005, the Joint B oard receive d another chec k from Whiffen,

a ga in sig ne d b y R om a no wi cz , t hi s ti me in the a mo un t of $9 ,5 72 .9 8. As wit h th e p re vi ou s ch ec ks, the August 2005 che ck wa s dis honored. Fr om Aug us t 3 , 20 05 thr ough O ct ob er 12, 200 5, Whif

fe n failed to make payme nts r equired under the CBA to va rious ERISA funds administ ered by the Joint Board. Sim ila rly, fr om J uly 6, 200 5 thr ough O ct ob er 12, 200 5, Whif

fe n f ail ed t o r emi t r equ

ir ed contributions t o the 401(k) Plan. I n M ar ch 2 006 , the J oi nt

B oar d f ile d s ui t ag ain s t Whif

fe n an d Ram on owi cz, alle gin g that , in violation of 29 U.S. C. § 1145, ea ch had fai led to remit timely contributions to the 401(k) Plan and other ERISA pla ns administered by the Joint B oard. The Joint B oard sought to r ecove r fr om 2 W hi ffe n a ll fun ds wit hh el d fro m th e 4 01 (k ) Pl a n a nd oth erfun ds o we d fo r th e p erio d fro m A ug ustT he J oi nt B oar d s uedWhi ff

en u nd er 29 U .S. C. § 1 132 , whichpr ov id es th at a n ERI SA 3 fi du ciar y, s uchas th e J oi nt

B oar d, may

br in g a ci vil act io n t o r eco ver

con tr ib ut io ns withh eldfr om an ER ISA plan. Title 29 U.S .C. § 1132 states, in relevant pa rt: (a) Pe r s on s emp owe r ed t o b r in g a ci vil act io n[ .] A civ

il a ct io n m ay be br ought

. . . (3 ) by [an E RISA pla n] participant, bene ficiary, or fiduciary (A) to enjoi n any a ct or practice w hich viola tes any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redr ess s uch viola tions or (ii) to enf or ce an y pr ov

is io ns of this s ub chap te r

or th e t er ms of

th e pl an . . . . Un der 29 U .S. C. § 1 109 , a f

id uci ary of

an ERI SA p lanmay

be p er s on ally li abl e f

or a br each 4 of a duty owed to the pla n. That section provides, in relevant part:

(a) Any pe rs on who is a fiducia ry with respect to a plan w ho breache s any of th e r es po ns ib ili ti es , o bl

igat io ns , o r du ti es im po s ed u po n f

id uci ar ies by thi s s ub chap te r

s hall b e pe r s on ally li abl e t o m ake g oo d t o s uchpl an any lo s s es to th e pl an r es ul ti ng f r om each s uchbr each , an d t o r es to r e t o s uchpl an any pr of it s of s uch fi du ciar y wh ichhav e be en m ade thr ough u s e of as s et s of th e pl an b y the f

id uci ary, ands hall b e s ub ject

to s uchother

equ it abl e or r eme di al r eli ef

as th e co ur t m ay de em app r op r iat e, i ncl udin g r emo val

of s uchfi du ciar

y. 29 U .S. C. § 1 109 (a)
. N. Y . U .C .C . § 3-4 03 pro vi de s: 5 (1 ) As ign atu r e may be mad e by an ag ent or other r epr es ent ati

ve, andhi s autho r

it y t o m ake i t may be e s tab lis hedas inother

cas es of r epr es ent ati on . N o p ar ti cul ar fo r m o f a pp oi nt men t i s nec es s ary t o es tab lis h s uchautho r it y. (2) An authorized representative w ho signs his own name to an instrum ent (a) is per s on ally ob lig ate d i f the i ns trum ent nei th er nam es th e pe r s onr epr es ent ed n or s ho ws th at the r epr es ent ati

ve s ign ed i n a r epr es ent ati ve ca paci ty ; (b ) e xcep t as other

wis e es tab lis hedbet

weenth e im mediat e par ti es , is per s on ally ob lig ate d i f 5 3, 2005 to October 12, 200 5. It also s ought to impose joint and several lia bility ag ainst Whiffen and 3 Rom ano wicz fo r

del in qu ent con tr ib ut io ns to th e 40 1(k) Pl an u nd er th e theo ry that

Rom ano wicz had withh eldcon tr

ib ut io ns inbr each of

a f id uci ary du ty . Fu r th er , the J oi nt B oar d av er r ed that , u nd er 4

s ect io n 3 -4 03(

2) (b ) o f the N .Y. U.C. C., Ro man owi cz was per s on ally li abl e f or th e di s ho no r ed ch ec ks. 5th e in s trum ent nam es th e pe r s onr epr es ent ed b ut do es no t s ho w that

th e r epr es ent ati

ve s ign ed i n a r epr es ent ati

ve ca paci ty , o r

if th e in s trum ent

do es no t n ame th e pe r s onr epr es ent ed bu t d oes s ho w t hat

th e r epr es ent ati

ve s ign ed i n a r epr es ent ati ve ca paci ty . (3) Except a s otherwis e established, the na me of an organiz ation precede d or followed by the nam e andof

fi ce o f a n au th or

izedin di vid ual is a s ign atu r e ma de i n a r epr es ent ati ve ca paci ty . Although a c ourt accepts as true all wel l plea ded all ega tions against a defaulting de fendant 6 for purposes of

determining lia bility, a default is not an admission of damages, which must be es tab lis hedina s epar ate evi den ti ary pr oce edi ng. Greyhound Exhib itgroup, Inc. , 97 3 F .2dat 1 58. Even whe r e a pa r ty

has def aul te d, it may s till c on te s t the am ou nt

of dam ages awar dedto a pl ain ti ff
. Id
. In this case, no evidentia ry hearing wa s necessary to est ablish damag es because the Joint Board did not ask for one but ins tead submitted documentary evidence of damage s. Neither Whiffen nor Rom ano wicz s ub mi tt ed any r es po ns e inop po s it io n. 6 Neither Whiffen nor Romanowicz responded to the compla int or otherwis e appe ared before the Distr ict Court to defend the law suit br ought by the Joint Board. On J une 9, 2006 , the Joint Board r equested that the Cl erk of the Court enter defendants’ default pursuant to Rule 55 of the Fe der al Rules of

Civil P r oce du r e. See

Fed. R. C iv. P. 55(a) (“Whe n a party a gainst whom a judg ment for aff irmative relief is sought has f aile d to plead or otherwise defend, a nd that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.”). On the same day, the Joint B oard moved for a default judgment a gainst both defendants, arguing that further br iefing wa s not
nece ss ary to establish defendants’ liability beca use entry of judgment in their favor would “require[]
no fi ndin gs of

fa ct andth er e ar e no di s pu te d ques ti on s of law. ” J .A. 7 (

mo ti onfo r

def aul t ju dgm ent ); see also Fed. R. C iv. P. 55(b)(2) (noting that a distr ict court “may c onduct hearings or mak e r ef er r als
. . . to ent er

or ef fe ct uat e [adef

aul t] ju dgm ent ”)
. T he D is tr ict Cou r t n ot ed d ef

end ant s ’ d ef

aul t an d r ef

er r ed the m att er

to M agis tr ate J ud ge Steven M. Gold to recommend an a ward of damag es. Whiffen and R omanowic z ag ain faile d to
r es po ndto th e J oi nt

B oar d’ s all egat

io ns . Af te r r evi ewing the c om pl ain t an d d ocu men ts s ub mi tt ed 6 by the J oi nt

B oar d, th e M agis tr ate J ud ge co ncl ud ed that th e J oi nt B oar d h ad es tab lis hedWhi ff en’ s7

lia bi lit y f or un pai d co nt r

ib ut io ns to th e 40 1(k) Pl an an d o th er ben ef it fu nd s andr eco mm end ed an
awar d o f $ 12, 341 .58 fo r

un pai d co nt r

ib ut io ns to th e 40 1(k) Pl an an d $1 06, 102 .34fo r un pai d
con tr ib ut io ns to other

fu nd s . M agis tr ate J ud ge G ol d al s o r eco mm end ed anawar d o f $ 8,4 93. 95 i n in te r es t, $8, 493 .95 inliq

ui dat ed d amag es , an d $7 ,67 0.2 8 inatt or ney s ’ f ees andcos ts . See 29 U .S. C. § 1132(g)(2) (authorizing aw ards of unpaid contributions , interest, attorney’s f ees and costs, and “other lega l or equitable relie f”). Ma gi stra te Jud ge Go ld re co mme nd ed di smi ssa l o f th e J oi nt Bo a rd’ s cl a im s a ga in st Romanowicz. First, the Magistr ate Judge c oncluded tha t the Joint B oard had faile d to make out a pri ma fac ie cas e f or br each of fi du ciar y du ty agai ns t Ro man owi cz b ecau s e it hadno t e s tab lis hedth at he w as a f id uci ary of

th e 40 1(k) Pl an. Seco nd , M agis tr ate J ud ge G ol d r eas on ed that Rom ano wicz was not personally lia ble under the N.Y. U.C.C . for the dis honored check s because, in the Magistrate Judge’s view, the parties “like ly” unde rs tood that Romanowicz signed the m in a
r epr es ent ati

ve ca paci ty , J .A. 228 (Re po r t an d Rec om men dat io n) , an d that

th e J oi nt B oar d h ad “of fe r ed n o ev

id enc e, n or

mad e any as s er ti on s of

fa ct , s ugg es ti ng ther e was no t s uch[an
un der s tan di ng] ,” id. at 2 29. Ov er th e J oi nt B oar d’ s ti mel

y ob ject io n, th e Di s tr

ict Cou r t ad op te d M agis tr ate J ud ge G ol d’ s Repo r t an d Rec om men dat io n, ho ld in g that

th e J oi nt B oar d h ad f

ail ed t o es tab lis h Ro man owi cz’s alle ged fiducia ry status beca use the Board did not demons trate Romanowicz’s exe rcise of authority
ov er 401 (k ) P lanas s et s . See Finkel

, 2007 WL 1395562 at * 1. After noting that the Joint B oard charac terized Magistrate Judge Gold’s second conclusion as “cle arly erroneous,” the Distr ict Court agr eed with the M agis tr ate J ud ge’ s fi ndin g that th e par ti es un der s to odRom ano wicz to hav e s ign ed th e di s ho no r ed c hec ks ina r epr es ent ati ve ca paci ty . See id. at * 2. T hi s ti mel y app eal f ollo wed
.In a footnote, the Joint B oard argues that remand is appropriate beca use, acc ording to the 7 J oi nt B oar d, th e Di s tr

ict Cou r t f ail ed t o r evi ew de novo the Magistrate Judge’s Report and Reco mm end ati on . See

Appella nt’s B r. 20 n.4. The Joint B oard’s argument is grounded in the Di s tr ict Cou r t’ s r epe ate d u s e of

th e ph r as e “cl early err on eou s .” See Finkel , 20 07 WL

139 556 2 at

*2 (“Plaintiff objects that [the Magistr ate Judge’s] inference of the pa rties’ likely past course of dealing was cle arly erroneous. But the inference of the ex istence of past payments fromWhiffen to the union was not clea rly erroneous . . . . The fur ther inference that those weekly pay ments us ually took the form of

chec ks s igned by

Romanowicz w as not clearly e rroneous either . . . .” (internal c itations omitted)). T he Joint Board is correct insofar as it observes that it was entitled to de novo review of th e M agis tr ate J ud ge’ s Repo r t an d Rec om men dat io n. See 28 U.S.C . § 636(b)(1) (providing that, exce pt with r es pec t t o ce r tai n p r et r ial mat te r s , “[a] j ud ge o f the c ou r t s hall m ake a d e no vo

8 DISCUSSI ON Onapp eal, th e J oi nt

B oar d ar gue s th at the D is tr

ict Cou r t e r r ed i n ( 1) ho ld in g that Romanowicz w as not a fiduciary of the 401(k) Plan, (2) failing to conduct a he aring prior to di s mi s s in g the b r each -o f- fi du ciar y- du ty clai m, and(3 ) h ol di ng that , u nd er th e N. Y. U .C.C. , Romanowicz w as not pers onally liable for the dishonored checks bec ause he signed them in a
r epr es ent ati

ve ca paci ty . I n l igh t o f Ro man owi cz’s def aul t, a cou r t i s r equ

ir ed t o acc ept

all of th e J oi nt B oar d’ s fa ct ual all egat io ns as true an d d r aw all

r eas on abl e in fe r enc es init s fa vo r , see Au Bon Pain C

orp. v. Artec

t, Inc. , 653 F. 2d 61, 65 (

2d Cir . 19 81) (n ot

in g that , wh er e a pa r ty

mo ves fo r

a def aul t j ud gm ent

af te r
ano th er par ty ’s def

aul t, th e mo vin g pa r ty

is “en ti tl ed t o all r eas on abl e in fe r enc es fr om th e evi den ce off er ed ”) , b ut i t i s a lso re qu ire d to de te rmi ne wh et he r th e J oi nt Bo a rd’ s a ll eg a ti on s est a bl ish Rom ano wicz ’s lia bi lit

y as a mat te r

of law, se e i d. (“ [A] di s tr

ict cou r t r et ain s di s cr et

io n u nd er [F ede r al Rule of Civil Procedure] 55(b)(2) once a de fault is determined to require proof of necessary facts andnee d n ot

agr ee that

th e all egedfa ct s con s ti tu te a val id caus e of

act io n . . . . ”)
. We r evi ew de novo a di s tr

ict cou r t’ s app lic ati onof

law t o u ndis pu te d f

act s , see, e.g

. , In re New Times Sec. Serv

s., Inc. , 46 3 F .3d125 , 12 7 ( 2d Cir . 20 06) , whichinthis cas e wer e es tab lis hedth r ough the Joint B oard’s pleadings, submiss ions to the Dis trict Court, and Romanowicz’s default. See 7determination of those port ions of a [magistr ate judge ’s] r eport or s pecified proposed findings or recommendations to which obje ction is made”). Howe ver, even i f we assume for the sake of argument that the District Court applied the wrong standard of review, our own de novo review of the r eco r d an d the D is tr

ict Cou r t’ s app lic ati onof

law t o the f

act s of this cas e, whichar e un di s pu te d i n lig ht of Rom ano wicz ’s def

aul t, ob via te s th e ne ed f

or a r ema nd
. 9 LoPresti v . Terwillige r , 126 F.3d 34, 39 (2d C ir. 1997) (“[W]here the fac ts are not in quest ion, whethe r a par ty is an ERI SA f

id uci ary is ‘p ur ely aqu es ti onof law. ’” (qu ot

in g Kayes v . Pac. Lumb er Co. , 51 F. 3d 144 9, 1 458 (9 thCir . 19 95) ). Fidu ciary Duty Pu r s uan t t o 2 9 U. S.C. § 11 45, see no te 2, ante , wh er e an e mp lo yer has ent er ed i nt o a co lle ct

ive bargaining

agreeme nt requiring him to r emit funds t o an ER ISA plan, the e mployer is obligated to “m ake s uchcon tr

ib ut io ns inacco r dan ce wi thth e t er ms andcon di ti on s of [the c ollect

ive bar gainin g] agreeme nt.” If an employer fails to make required contributions, a fiduciary of the pla n may sue the employe r, or another f

iducia ry of the plan, as that term is defined under ERISA, to recove r the
un pai d co nt r

ib ut io ns . See 29 U .S. C. §§ 1 132 , 11 09; no te s 3 & 4 , ante . I n tur n, ERI SA p r ov id es alternative definitions of “fiduciary.” For example, E RISA provides that a fiducia ry is s omeone who “ex er cis es any dis cr et

io nar y autho r it y or di s cr et io nar y co nt r ol r es pec ti ng m anag eme nt

of [anERI SA benefit] plan or exercises any a uthority or contr ol respecting mana gement or disposit ion of its

as s et s .” 2 9 U. S.C. § 10 02( 21) (A )( i) (e mp has is add ed)
. I n thi s cas e, the J oi nt

B oar d alleg ed that

emp lo yees ’ el ect

ive con tr ib ut io ns to th e 40 1(k) Pl an “were withheld from employees’ wa ges and . . . ma intained by [Romanowicz a nd Whiffen] as part of [Whif fe n’ s ] g ene r al as s et s fo r

th e be nef it of Rom ano wicz and[Whif

fe n] , r ath er

th an b ein g r emi tt ed to the [401(k)] Plan.” J.A. 15 (Compla int at ¶ 32). With respect to his role in withholding a nd faili ng t o r emi t w ages , the J oi nt B oar d alleg ed that

“Rom ano wicz , by virtue of his positio n as a n officer of [ Whi ffen ], exer cis ed c on tr ol

ov er [Whif fe n] as s et s , in clu di ng the g ene r al as s et s with whichwithh eldAltho ughWhi ff en f ail ed t o r emi t w

ithh eldemp lo yee wages to th e J oi nt B oar d f or dep os it 8 in the 40 1( k) Pla n, the Di stri ctC ou rt c orre ctly co nc lu de d th ose fun ds n ev er the le ss be ca me “a sset s” of t he pl a n wit hi n th e m ea ni ng of § 10 02 (2 1) (A

)(i ). Pursu a nt t o D ep a rtme nt o f La bo r re gu la ti on s, “the as s et s of

[anERI SA] pl an i ncl ud e am ou nt s . . . th at apar ti cip ant has withh eldfr om hi s wages by anemp lo yer [ ] fo r

con tr ib ut io n t o the p lanas of

th e ear lie s t d ate onwhi ch s uchcon tr ib ut io ns can r eas on ably be s egr egat ed f r om th e em pl oye r ’s gen er al as s et s .” 2 9 C.F .R. § 251 0.3 -1 02. T he D is tr ict Court’s conclusion in this case was consistent with our recent dec ision in In

re Hal pin , 56 6 F .3d286 (2d Cir. 2009). In Hal

pin , we he ld that an empl

o y er ’s con tr ib ut io ns to an ERI SA p lanbec om e pl an as s et s on ly af

te r th ey ar e pai d t o the p lan
. Id
. at 290. He re, we c onsider an empl o y ee ’s contributions to an ERI SA p lan , whichbec ame pl an as s et s whe n m on ey was withh eldfr om th e em pl oye e’s wages . Se e H alpi n , 566 F.3d at 289 (“A lthough the Department of Labor . . . has officially issued a regula tion that specifies when employee contributions become assets , . . . it has not iss ued formal rule governing when employer

contributions become plan a ss ets.” (internal citations omitted)). 10 con tr ib ut io ns [we r e] c om mi ngl ed, faile d t o advis e par ti cip ant s or emp lo yees of

[Whif fe n] th at [Whiffen and R omanowic z] had fail ed and refused to remit the withheld contributions to the [401(k)] Plan.” J.A. 15 (C omplaint at ¶ 35 ) (emphasis added). Based on these allega tions, the Joint Boa rd c on cl ud ed tha t “ R om a no wi cz ex er ci sed a uth ori ty or c on tro l o ve r Pl a n a sset s. Th us, Rom ano wicz [wa s a] f

id uci ar [y] of

th e P lanwithi n the m eani ng o f § 100 2( 21) (A )( i) .” J .A. 16 (Complaint a t ¶ 36). Similarly, in its objection to the Magistrate Judge’s r ecommenda tion that its breach-of-fiduciary-duty clai m be dismiss ed, the Joint Board allege d that “[a]s the principal of Whiffen, R omanowic z withhel d Employe e Ele ctive C ontributions from employee pay chec ks” and di d n ot mak e r equ

ir ed c on tr ib ut io ns to th e 40 1(k) Pl an. J .A. 234
. In dism iss ing the ac tion aga inst Romanowic z, the District Court r easoned that, unde r § 1145, W hiffen was obligate d to remit withheld employe e wa ges to the Joint B oard for depos it in the 401(k) Plan and that the funds withheld from the 401(k) Plan were “a ss ets” within the meani ng of § 100 2( 21) (A )( i)
. Ho weve r , the D is tr

ict Cou r t c on clu dedth at the J oi nt B oar d f ail ed t o alleg e that

“( 1) 8 [Romanowicz] ha d the authority to determine whic h company bills to pay and w hen; or (2) he ‘exercise[d]’ that a uthority by using the money from the unpaid contributions f or company paym ent s .” Finkel

, 20 07 WL

139 556 2 at

*2 (qu ot in g 29 U.S .C. § 100 2(

21) (A )( i) ).11

On appea l, the Joint Board pr esses the viewthat § 1002(21)(A)(i)’s description of a fiducia ry
as on e wh o “e xer cis es any a utho r it y or con tr ol r es pec ti ng m anag eme nt

or di s po s it io n o f [ ERI SA pl an] as s et s ” accu r ate ly ch ar act er izes Rom ano wicz ’s r ol e inadm inis te r in g the 4 01(

k) Pl an as s et s in this case. The Joint B oard contends that, in omitting “discretionary” from this definition of fid uc ia ry un de r § 10 02 (2 1) (A

)(i ), C on gre ss in te nd ed to e sta bl ish tha t a n i nd iv id ua l n ee d o nl y e xe rc ise mi ni mal con tr ol ov er pl an as s et s inor der

to be r egar dedas an ERI SA f id uci ary. I n the J oi nt

B oar d’ s view, the Distr

ict Court erred in holding that under § 100 2(21)(A)(i) an ERISA fiduc iary must enjoy
s om e di s cr et

io nar y autho r it y ov er th e di s po s it

io n o f c om pan y as s et s . Although we have rec ognize d that “Cong ress intended E RISA’s definition of fiduciary to be br oad ly co ns trued ,” LoPresti , 1 26 F.3 d a t 4 0 (

in te rna l q uo ta ti on ma rks o mi tte d), we ha ve a lso conclude d that “‘mana gement or disposit ion’ . . . [of ER ISA plan a ss ets] r efers to the common transactions in dealing with a pool of assets : selecting inv estments , excha nging one i nstrument or
as s et fo r ano th er , an d s o o n, ” Harris Trust & Sav. Bank v. Jo hn Ha ncock Mut. Life Ins. Co. , 30 2 F .3d18, 28 ( 2d Cir . 20 02) (i nt er nal

qu ot ati onmar ks om it te d) ); cf
. Webster’s Third New International Dictiona ry (unabridged) 1372 (1976) (defining “ manag ement” to include “the ac t of co nduc ti ng o r s upe rv is ing
s om et hi ng (as a bu s in es s ); esp : the e xecu ti ve f un ct io n o f p lan ni ng, or

ganizi ng, coo r di nat

in g, di re ctin g, a nd sup ervi sin g a ny in du stri a l o r bu sin ess p roj ec t ora ctiv ity wit h re spo nsi bi li ty

for r esu lt s” (e mp has is add ed) ). Con tr ary t o the J oi nt

B oar d’ s as s er ti on s , the D is tr ict Cou r t w as no t f

r ee t o co ncl ud e that Rom ano wicz ’s s tatus as an o ff icer of Whi ff en m ade him a f

id uci ary of

th e 40 1(k) Pl an. Cf. L oPre sti , 126 F.3d at 40 (“Unli ke the common law definition under whic h fiduciary status is determined by vir tu e of th e po s it io n a p er s onho ld s , ERI SA’ s def init io n i s fu nct

io nal .” ( in te r nal qu ot ati onmar ks
om it te d) ). We hav e he ld th at e venwhe r e an i ndivi du al ( 1) was an o ff icer of a com pan y, (

2) was “au th or izedto s ignche cks onth e Com pany’s acco un t, ” an d ( 3) “ha d s om e gen er al kno wled ge that12

ded uct io ns wer e ma de f

r om emp lo yees ’ wag es ,” h e s till w as no t anERI SA f id uci ary be caus e he had “no r es po ns ib ili ty

fo r det er mi ni ng whi ch o f the c om pan y’s cr edi to r s would be p aidor inwhat
or der .” LoPresti

, 126 F.3d at 40 (internal quota tion marks omitt ed). Accep ti ng all o f the J oi nt

B oar d’ s all egat

io ns inthis cas e as true an d d r awin g all in fe r enc es in its f avor, we c onclude tha t Romanowicz w as simply an officer of Whiffen, that he signed che cks on the company ’s behalf, and that he and W hiffen “maintaine d” plan a ss ets “for the benefit of [Ro man owi cz an d Wh if

fe n] ,” J .A. 15 ( Com pl ain t at ¶ 32). T he J oi nt

B oar d h as no t alleg ed that Rom ano wicz “s elec t[ed] inves tm ent s ” or “ex chan g[ ed] on e in s trum ent fo r ano th er .” Harris Trust & Sav . B ank , 302 F.3d at 28. Nor has it alle ged that he w as “respons ibil[e] for determining which of th e co mp any’ s cr edi to r s would be p aidor inwhat or der ,” LoPresti

, 126 F.3d at 40 (internal quota tion
mar ks om it te d) , o r

other wis e en jo yed autho r

it y or con tr ol ov er th e manag eme nt of 401 (k ) P lanas s et s . In s hort, the Joint

Board has not alleged that R omanowic z enga ged in, or had the a uthority to eng age i n, any a ct

ivi ti es th at w ould mak e hi m a f id uci ary un der

§ 10 02( 21) (A )( i) ’s def init io n o f that
te r m. In su m, the Joi nt Bo a rd’ s a ll eg a ti on s a re no t suf fic ie nt t o e sta bl ish R om a no wi cz ’s st a tus a s a fi du ciar y. H earin g P r io r

to Di sm iss al T he J oi nt B oar d’ s con te nt

io n that th e Di s tr ict Cou r t e r r ed i n f

ail in g t o co nd uct

an evi den ti ary he ar

in g pr io r to di s mi s s in g it s br each -o f- fi du ciar y- du ty clai m ag ain s t Ro man owi cz is witho ut mer it . Un der Rul e 55 (b ) o f the F ede r al Rules of Civil P r oce du r e, wh er e a pa r ty has app lie d for a default judgment, the “[district] court may conduct hea rings or

make referrals” in order to, among other things, “determine the a mount of damages[,] establish the truth of any al lega tion by evidenc e[,] or investigate any other matter.” Fed. R. C iv. P. 55(b)(2)(B -D) (emphasis added). In per mi tt in g, b ut no t r equ ir in g, a dis tr

ict cou r t t o co nd uct

a hea r in g be fo r e r ul

in g ona def

aul t13

ju dgm ent , Rule 5 5(

b) com mi ts this dec is io n t o the s ou nddi s cr et io n o f the dis tr

ict cou r t. We th er ef or e r evi ew the D is tr

ict Cou r t’ s dec is io n f

or “ab us e of di s cr et io n. ” See Sims v. Blo t

, 53 4 F .3d 117 , 13 2 ( 2d Cir . 20 08) (“ A di s tr

ict cou r t h as abu s ed i ts di s cr et io n i f i t b as ed i ts r ul

in g onan erroneous view of the law or on a c learly e rroneous assess ment of the evidenc e, . . . or rendered a dec is io n that

cann ot be l ocat ed w

ithi n the r ang e of

per mi s s ib le d ecis io ns .” (

in te r nal qu ot ati onmar ks andcit ati on s om it te d) ). The Joint B oard assert s that the Dis trict Court err ed inasmuch a s it “ sua sponte , undertook to anal yze the subs tantive cl aims aga inst Romanowic z without giving [the Joint B oard] the opportunity
to s ub mi t f

ur th er evi den ce that

would te ndto s ho w that

Rom ano wicz act ed as a f

id uci ary.” App ell ant ’s B r . 40 . O ur

r evi ew o f the r eco r d r eveals th at, no tw iths tan di ng i ts con te nt

io n o n ap peal , th e J oi nt B oar d n ever

as kedfo r a hea r in g, an d o ne w as no t n eces s ary. T he J oi nt B oar d h ad am pl e opportunity to amend its complaint or s upplement its alleg ations with evidenc e prior to moving for a defaul t judgment aga inst Romanowic z. In moving for default judgment, the Joint Board chose to
r ely o n the alleg ati on s init s com pl ain t as well as tw o d ecla r ati on s ands even te en e xh ib it s th at i t submitt ed with its motion for a defaul t judgment. The Joint B oard not only failed to request a hear in g bu t i t as s ur ed the D is tr ict Cou r t that

entry of a def aul t j ud gm ent

agai ns t Ro man owi cz wo ul d entail “ no findings of f

act or disputed questions of law.” J.A. 7. Simila rly, the Joint Board did not ask for a hearing on its objection to the Magistrate Judge’s Report and Re commendation. Fo llo win g Rom ano wicz ’s def aul t, th er e wer e no di s pu te d i s s ues of fa ct , an d p ar ti cul arly i n lig ht of th e J oi nt B oar d’ s failu r e t o r equ es t a h ear in g, w e hav e no tr ou bl e co ncl udin g that th e Di s tr ict Cou r t ac te d we ll w

ithi n i ts di s cr et

io n i n p r oce edi ng w

itho ut on e. Personal Liabilit

y for Dishon ored Checks Fi nally, we tur n t o the J oi nt B oar d’ s argum ent

th at the D is tr

ict Cou r t e r r ed i n h ol di ng thatAf te r th e J oi nt B oar d f ile d i ts com pl ain t, andpr

io r to Whi ff en’ s def aul t, Whi ff

en c ov er ed 9 th e ch eck i n the am ou nt

of $19 ,04 8.4 8. A cco r di ngl

y, o nly the r emainin g t

wo c hec ks , whichto tal ed $ 16 ,95 6.4 5, w er e be fo r e t he D is tr ict Cou r t as a po s s ib le b as is fo r Rom ano wicz ’s per s on al l

iab ili ty . 14 Romanowicz c ould not be liabl e for dishonor ed che cks he signed on beha lf of Whiffen. Purs uant 9
to s ect io n 3 -4 03 o f the N .Y. U.C. C., “ [a] n au th or izedr epr es ent ati

ve wh o s ign s hi s nam e t o an in s trum ent

. . . exce pt

as ot her wis e es tab lis hedbet

weenth e im mediat e par ti es , is per s on ally ob lig ate d if the instrument names the person repr esented but does not s how that the representative signed in a representative capa city.” N.Y . U.C. C. § 3-403(2)(b). As explained by the New Y ork Court of App eals , thi s r ul e “ai ms to fo s te r cer tai nt y anddef init ene s s inth e law

of com mer cial

pap er .” Ro tuba Extruders, Inc. v. Cepp os

, 46 N. Y.2 d 2 23, 228 (1 978 ); see also I n re Golden Distrib., L td

, 13 4 B .R. 7 70, 774 (Bankr. S.D.N.Y. 1991) (“W hile [section 3-403(2)(b)] may seem harsh, the rule is in keeping with the gen er al i nt ent

andpu r po s e of

th e ne got iab le i ns trum ent

law t o p r ot ect

ho ld er s indu e co ur s e. Com mer cial

pap er mu s t b e pe r mi tt ed t o b e f r eely neg ot iab le wi th ou t u nd ue r

is k.” (i nt er nal qu ot ati onmar ks om it te d) ). I n thi s cas e, the J oi nt

B oar d’ s com pl ain t alleg ed, andou r r evi ew o f the r eco r d co nf ir ms , that the chec ks contain Whiffen’s name, but “[t]he fac e of eac h of the dishonor ed che cks does not di s clo s e t hat

Rom ano wicz s ign ed the c hec k ina r epr es ent ati ve ca paci ty .” J .A. 14 ( Com p. ¶ 30). Even w here, as here, the fac e of a che ck indic ates that funds are dr awn from a corporate ac count, th e in di vid ual who s ign s th e ch eck m ay be per s on ally li abl e un der s ect io n 3 -4 03 u nl es s he s pec if

ically in di cat es th at h e is s ignin g ina r epr es ent ati ve ca paci ty . See N. Y. U .C.C. 3- 403 (2)( b)
. M agis tr ate J ud ge G ol d n ever th eles s r eco mm end ed that th e Di s tr ict Cou r t h ol d that Romanowicz ha d signed in a representative c apac ity, based on the Magi str ate Judge’s observation th at “ it s eem s lik ely that

th e par ti es had‘o th er

wis e es tab lis hed ’” that

Rom ano wicz was s ignin g inhi s
r epr es ent ati

ve ca paci ty . J .A. 228 . T he M agis tr ate J ud ge we nt onto no te th at the J oi nt

B oar d h ad15

“offered no evidenc e, nor made a ny assertions of fact, suggesting there was not such a course of deal in g.” J.A. 229. The District Court adopted Magistr ate Judge Gold’s recommenda tion, reasoning that Romanowicz’s representative ca pacity was confirmed by the fac t that “wee kly pa yments [fr om Whi ff en t o the J oi nt

B oar d] us ually t oo k the f

or m o f c hec ks s ign ed b y Rom ano wicz .” Finkel , 20 07 WL 1 395 562 at * 2. T he J oi nt B oar d ar gue s th at the p ar ty

s eeki ng t o av oi d p er s on al l iab ili ty un der s ect io n 3

- 403(2)(b) bears the bur den of establishing an understanding betwe en the parties that he signed the che cks s ol ely i n a r epr es ent ati ve ca paci ty

andth at, inthis cas e, Ro man owi cz f ail ed t o m eet

th at burden. Acc ording to the Joint B oard, the Distr ict Court sua sponte raised an affirmative defense on beh alf of Rom ano wicz ander r on eou s ly p lace d a b ur denonth e J oi nt B oar d t o es tab lis h that

he h ad not signed the instr uments in a representative capa city. Further, the Joint B oard argues that the Distr ict Court’s finding of a “likely ” understanding in the course of dealing be tween the Joint Board

a nd R om a no wi cz a mo un te d to a n i nfe re nc e a ga in st i t, in co ntr ave nti on of t he rul e t ha t a co urtmu st dr aw all r eas on abl e in fe r enc es infa vo r of th e pl ain ti ff

whe r e the d ef

end ant has def aul te d. See Au Bo n Pa in Co rp. , 65 3 F .2dat 6 5. We a gree with the Joint Board that, in this r espect, the District Court err ed as a ma tter of law. T he D is tr

ict Cou r t c or r ect

ly n ot ed that , u nd er

s ect io n 3 -4 03(

2) (b), a s ign ato ry of

a di s ho no r ed che ck wh o f

ail ed t o i ndicat e onth e f

ace o f the c hec k that

he s ign ed i n a r epr es ent ati ve ca paci ty

may escape pe rs onal lia bility whe re “there [is] an underst anding, i mplicit in the course of dealing [b et weenth e par ti es ,] th at h e was act in g ina r epr es ent ati

ve ca paci ty .” See Finkel

, 20 07 WL

139 555 62 at * 2 (describing a holding of In re Go lde n Di st ri bs. , Lt d. , 13 4 B .R. a t 7 74) . H owe ver , thi s exce pt io n i s an affirmative defense unde r New York law , and R omanowic z did not raise it. The New York Cou r t o f A pp eals has hel d that “[ t] o es cape per s on al l

iab ili ty [u nd er s ect io n 3 -4 03( 2) (b )] , the si gn er has the bur den to ‘es tab lis h’ an agr eem ent , u nd er s tan di ng o r cou r s e of deal in g t o the c on tr ary.” Ro tuba16

Extruders, 4 6 N .Y .2 d a t 2 29 (e mp ha sis a dd ed ). Un le ss the de fe nd a nt m a ke s “ an a ffirma tive demo ns tr ati o n that the taker of the note knewor unders tood that the signer intended to exec ute the in s trum ent

ina re pre se ntat iv e s tat us o nly , there can be no defense that, notwithstanding the form of the
no te , r epr es ent ati

ve l iab ili ty was other wis e es tab lis hedbet

weenth e par ti es .” Id

. (internal quotation
mar k an d al te r ati onom it te d) (e mp has is add ed) ; see also Go lden Distrib s., Ltd . v. Garced , 13 4 B .R. 7 66, 770 (B ankr . S. D. N. Y. 1 991 ) ( ho ld in g that

an i ndivi du al was per s on ally li abl e un der s ect io n 3

- 403 (2)( b) whe r e he faile d t o ap pear at his tr ial andth us faile d t o “d emo ns tr ate th at ther e was an understanding, implicit in his course of dealing with [a company ], that he wa s acting in a
r epr es ent ati

ve ca paci ty ”)
. CONCLUSI ON Fo r r eas on s s tat ed ab ov e, we AF FI RMth e ju dgm ent of th e Di s tr ict Cou r t i ns of

ar as it (1 )
con clu dedth at Ro man owi cz was no t anERI SA f id uci ary andth us was no t j oi nt ly an d s ever ally liable for Whiffen’s f

ailure to remit timely contributions to the 401(k) fund and (2) did not hold a hearing prior to dismis sing the Joint B oard’s breach-of-f iducia ry-duty claim. W e RE VER SE the judgment of the Distr

ict Court insofar as it held that Romanowic z is not pers onally liable for the di s ho no r ed c hec ks at i s s ue p ur s uan t t o N .Y. U.C. C. § 3 -4 03. Onr ema nd , the D is tr ict Cou r t s hall enter a defaul t judgment in favor of the Joint B oard with respect to the dishonor ed che cks. The Distr ict Court shall also ca lcula te the amount of damag es to reflect any pay ments by Whiffen or Rom ano wicz du r

in g the p end enc y of

this lit igat io n t o s ati s fy

th e am ou nt s owe d ther ef

r om . Def end ant -a pp ell ee Ro man owi cz s hall b ear th e co s ts of

this app eal. See

Fed. R. A pp. P. 39(a)( 4)
.