Court Opinion

ID: 2668182
Source: CourtListenerOpinion
Date Created: 2014-04-04 14:53:03.901291+00
Date Added: 2024-06-11T12:35:54.481886
License: Public Domain

UNITED STATES DISTRICT COURT
                            FOR THE DISTRICT OF COLUMBIA

 MICHAEL R. FANNING, as Chief
 Executive Officer of the Central Pension
 Fund of the International Union of Operating
 Engineers and Participating Employers,                     Civil Action No. 08-1124 (CKK)
    Plaintiff,

      v.

 PERMANENT SOLUTION INDUSTRIES,
 INC.,

    Defendant.

                                 MEMORANDUM OPINION
                                     (April 20, 2009)

       Plaintiff Michael R. Fanning, in his official capacity as Chief Executive Officer of the

Central Pension Fund of the International Union of Operating Engineers and Participating

Employers (hereinafter, “Plaintiff” or the “Fund”), filed a Complaint in this case against

Defendant Permanent Solution Industries, Inc. (hereinafter, “PSI”), on June 30, 2008, alleging

that PSI failed to pay to the Fund the proper amount of contributions owed under the relevant

Collective Bargaining Agreements. See Compl., Docket No. [1]. Although properly and timely

served with the Complaint and Summons, PSI failed to respond to the Complaint, and the Clerk

of the Court, upon motion by the Fund, entered default against PSI on October 28, 2008. See

Clerk’s Entry of Default, Docket No. [8]. Presently before the Court is the Fund’s [8] Motion for

Default Judgment. Having thoroughly considered the Fund’s submissions, including the Fund’s

supplemental briefing as requested by the Court, the attachments thereto, applicable case law,

statutory authority, and the record of the case as a whole, the Court shall GRANT the Fund’s [8]
Motion for Default Judgment, for the reasons stated below.

                                       I. BACKGROUND

       The Fund filed the Complaint in the above-captioned matter on June 30, 2008. See

Compl. As set forth in the Complaint, the Fund asserts that PSI is bound through its collective

bargaining agreements with the International Union of Operating Engineers Local No. 99 and

other related agreements to pay the Fund certain sums of money for each hour worked by

employees of PSI performing work covered by the relevant agreements. Id. ¶¶ 6-10. Pursuant to

the terms of those agreements, the Fund asserts that it is entitled to a monetary award in the

amount of the unpaid contributions, liquidated damages, interest on the unpaid contributions, as

well as costs, audit expenses and attorneys’ fees. Id. ¶¶ 11-13.

       As explained in the declaration of Michael R. Fanning, Chief Executive Officer of the

Fund, the Fund is a defined benefit, multiemployer, employee pension benefit plan. Pl.’s Mot.

for Def. J., Docket No. [8], Att. 3 (Declaration of Michael R. Fanning) (hereinafter “Fanning

Decl.”), ¶ 5. The Fund provides retirement, disability and survivor and death benefits to

employees (and their beneficiaries) working as operating engineers in various industries

throughout the United States. Id. ¶ 6. Contributions are made to the Fund by employers pursuant

to the terms of various collective bargaining agreements entered into with Local Unions of the

International Union of Operating Engineers. Id. ¶ 7. Signatory employers are required to make

the contributions to the Fund on a self-reporting basis each month. Id. ¶ 8. PSI is one such

signatory employer obligated to make contributions to the Fund under the terms of its collective

bargaining agreement and the Fund’s Restated Agreement and Declaration of Trust. Id. ¶¶ 9-10.

       The collective bargaining agreements entered into by PSI provide that for every hour

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worked by an employee performing work under the agreement, PSI is obligated to pay, in

addition to wages, contributions to the Fund. Id. ¶ 11. Pursuant to a payroll audit conducted by

Calibre CPA Group, LLC (hereinafter, “Calibre”), the Fund has determined that PSI owes

delinquent contributions for the period of February 2005 through December 2006 in the amount

of $139,913.61, and for the period of January 2007 through September 2008 in the amount of

$140,331.25.1 Id. ¶ 12; see also Pl.’s Mot. for Def. J., Att. 1 (Declaration of Patrice M. Clarke,

Compliance Department Manager for Calibre CPA Group, PLLC ) (hereinafter “Clarke Decl.”),

¶¶ 5, 8.

           In addition to unpaid contributions, pursuant to Sections 4.5(b) and (c) of the Restated

Agreement and Declaration of Trust, PSI owes liquidated damages at the rate of 15%2 and

interest on the unpaid contributions at the rate of 9% per annum from the date due until date paid

respectively. Fanning Decl. ¶ 13; see also Ex. A to Fanning Decl. (Restated Agreement and

Declaration of Trust) at §§ 4.5(b)-(c). Calibre has calculated that liquidated damages for the

periods of February 2005 through December 2006 and January 2007 through September 2008

total $20,987.04 and $21,049.69 respectively. Clarke Decl. ¶¶ 6, 9. Calibre has also calculated

that interest at the rate of 9% per annum from the date due until October 24, 2008 (the date of the

Clarke Declaration), totals $33,129.02 and $15,773.59 for those respective time periods. Id. ¶¶

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         The Fund indicates in its most recent supplemental filing that PSI has since made
intermittent payments to the Fund to reduce the delinquency owed. Pl.’s Supp. Mem., Docket
No. [9] at 3, n. 2. Specifically, PSI has made payments after the lawsuit was filed (between
November 21, 2008 and March 3, 2009) totaling $157,755.25. See id., Att. 1.
           2
         Although Section 4.5(b) of the Restated Agreement and Declaration of Trust authorizes
liquidated damages to be assessed at the rate of 20%, the Fund requests only 15% in the instant
Motion for Default Judgment. See Pl.’s Supp. Mem. at 2, n. 1.

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7, 10.

         Finally, under Section 4.5(e) of the Restated Agreement and Declaration of Trust, PSI is

obligated to pay to the Fund all costs, audit expenses, and attorneys’ fees incurred by the Trustees

in enforcing the parties’ agreements. Fanning Decl. ¶ 14; see also Ex. A to Fanning Decl.

(Restated Agreement and Declaration of Trust) at § 4.5(e). As set forth in the Declaration of R.

Richard Hopp, counsel of record for the Fund, the Fund incurred legal costs in the amount of

$445.00 and attorneys’ fees in the amount of $1,440.00 in enforcing the terms of the parties’

agreement. Pl.’s Mot. for Def. J., Att. 4 (Declaration of R. Richard Hopp) (hereinafter “Hopp

Decl.”), ¶¶ 4-5. In addition, the Fund incurred audit costs totaling $6,554.94. Clarke Decl., ¶ 11.

         PSI was served with the Complaint and Summons on August 6, 2008, and was therefore

required to respond by August 26, 2008. See Return of Service/Affidavit, Docket No. [2]. PSI

failed to file an answer or otherwise respond to the Fund’s Complaint, and the Fund subsequently

moved for entry of default. See Pl.’s Mot. for Entry of Default, Docket No. [7]. On October 28,

2008, the Clerk of the Court entered default against PSI. See Clerk’s Entry of Default, Docket

No. [7]. The Fund subsequently filed the instant Motion for Default Judgment. See Pl.’s Mot.

for Default J. Thereafter, as requested by the Court in a Minute Order dated April 15, 2009, the

Fund filed a Supplemental Memorandum in Support of its Motion for Default Judgment. See

Pl.’s Supp. Mem., Docket No. [9]. As of the date of this Order, PSI has not entered an

appearance nor filed any pleadings in this case.

                                     II. LEGAL STANDARD

         Federal Rule of Civil Procedure 55(a) provides that the clerk of the court must enter a

party’s default “[w]hen a party against whom a judgment for affirmative relief is sought has

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failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise.” FED . R.

CIV . P. 55(a). After a default has been entered by the clerk of the court, a court may enter a

default judgment pursuant to Rule 55(b). FED . R. CIV . P. 55(b). “The determination of whether

default judgment is appropriate is committed to the discretion of the trial court.” Int’l Painters

and Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57 (D.D.C.

2008) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). Upon entry of default by

the clerk of the court, the “defaulting defendant is deemed to admit every well-pleaded allegation

in the complaint.” Int’l Painters and Allied Trades Indus. Pension Fund v. R.W. Armine Drywall

Co., Inc., 239 F. Supp. 2d 26, 30 (D.D.C. 2002) (internal citation omitted). “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.” Id. (citing

Adins v. Teseo, 180 F. Supp. 2d 15, 17 (D.D.C. 2001)). Accordingly, when moving for a default

judgment, the plaintiff must prove its entitlement to the amount of monetary damages requested.

Id. “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.” Id.

                                        III. DISCUSSION

       Where, as here, there is a complete “absence of any request to set aside the default or

suggestion by the defendant that it has a meritorious defense, it is clear that the standard for

default judgment has been satisfied.” Auxier Drywall, LLC, 531 F. Supp. 2d at 57 (internal

quotation marks omitted). The Clerk of the Court entered PSI’s default, and the factual

allegations in the Complaint are therefore taken as true. See R.W. Armine Drywall Co., Inc., 239

F. Supp. 2d at 30. The Court finds that the Fund’s Complaint sufficiently alleges facts to support

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its claims. Accordingly, the Fund is entitled to default judgment as to PSI’s liability for its

failure to timely pay contributions to the Fund under the terms of PSI’s collective bargaining

agreement and related agreements.

       Although the default establishes a defendant’s liability, the Court makes an independent

determination of the sum to be awarded in the judgment unless the amount of damages is certain.

Adkins, 180 F. Supp. 2d at 17. Here, pursuant to the terms of the Restated Agreement and

Declaration of Trust, PSI is obligated to pay to the: (a) the total amount of unpaid contributions

still outstanding for the period of time from February 2005 through December 2006 as well as for

the period of time from January 2007 through September 2008; (2) liquidated damages at the rate

of 15%; (3) unpaid interest at the rate of 9% per annum; and (4) legal costs, attorneys’ fees and

audit costs. Mot. for Default J. ¶¶ 1-3; see also Ex. A to Fanning Decl. (Restated Agreement and

Declaration of Trust) at § 4.5. In addition, pursuant to 29 U.S.C. § 1132(g)(2), the Fund is

entitled to an award of: (A) the unpaid contributions; (B) interest on the unpaid contributions; (C)

liquidated damages in an amount equal to the greater of (i) interest on the unpaid contributions,

or (ii) 20 percent (or such higher percentage as may be permitted under Federal or State law) of

the amount determined by the court under 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.

       As discussed above, the Fund filed the declarations of Fanning, Clarke and Hopp, in

support of its Motion for Default Judgment. See supra pp. 2-4. Based on these declarations, the

Court finds that the Fund has established damages in the amount of:

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       ! $139,913.61 in unpaid contributions for the time period of February 2005 through
         December 2006 as well as $140,331.25 in unpaid contributions for the period of time
         from January 2007 through September 2008, minus $157,775.25 in payments PSI has
         recently made, for a total of $122,469.61 in unpaid contributions;

       ! $20,987.04 in liquidated damages at a rate of 15% for the time period of February
         2005 through December 2006 as well as $21,049.69 in liquidated damages at a rate of
         15% for the period of time from January 2007 through September 2008, for a total of
         $42,036.73 in liquidated damages;

       ! $33,129.02 in interest at a rate of 9% per annum for the time period of February 2005
         through December 2006 as well as $15,773.59 in interest at a rate of 9% per annum
         for the period of time from January 2007 through September 2008, for a total of
         $48,902.61 in interest;

       ! $445.00 in legal costs, $1,440.00 in attorneys’ fees, and $6,554.94 in auditing costs,
         for a total of $8,439.94 in costs and attorneys’ fees.

       Therefore, pursuant to the terms of the Restated Agreement and Declaration of Trust and

29 U.S.C. § 1132(g)(2), the Court shall award the Fund a monetary judgment in the amount of

$221,848.89.

                                     IV. CONCLUSION

       For the reasons set forth above, the Court shall GRANT Plaintiff’s [8] Motion for Default

Judgment and shall enter a judgment for Plaintiff in the amount of $221,848.89. An appropriate

order accompanies this memorandum opinion.

Date: April 20, 2009

                                                            /s/
                                                           COLLEEN KOLLAR-KOTELLY
                                                           United States District Judge

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