Court Opinion

ID: 2659764
Source: CourtListenerOpinion
Date Created: 2014-04-03 03:40:01.31551+00
Date Added: 2024-06-11T12:58:21.791185
License: Public Domain

UNITED STATES DISTRICT COURT
                           FOR THE DISTRICT OF COLUMBIA

MICHAEL R. FANNING,

                      Plaintiff,
                                                    Civil Action No. 13-285 (BJR)
               v.

WEGCO, INCORPORATED,

                      Defendant.

                                   MEMORANDUM OPINION

               GRANTING THE PLAINTIFFS’ MOTION FOR DEFAULT JUDGMENT

                                     I. INTRODUCTION

       This matter comes before the Court on the plaintiff’s motion for default judgment

pursuant to Federal Rule of Civil Procedure 55(b)(2). Plaintiff Michael Fanning, acting as CEO

and designated fiduciary of the Central Pension Fund of the I.U.O.E. and Participating

Employers (“Central Pension Fund”), brought this action alleging that the defendant, Wegco Inc.

(“Wegco”), failed to make contributions to employee benefit funds in violation of a collective

bargaining agreement (“CBA”) and the Employee Retirement Income Security Act of 1974

(“ERISA”), 29 U.S.C. § 1145. Wegco, though properly served, has not responded to the

complaint. Accordingly, Plaintiff now seeks entry of default judgment and monetary damages.

For the reasons discussed below, the Court grants the motion.

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                       II. FACTUAL AND PROCEDURAL BACKGROUND

         On March 31, 2005, Wegco entered into a CBA with the International Union of

Operating Engineers, Local 547 (“the Union”), effective from July 1, 2005 until June 30, 2010.

Plaintiff’s Motion for Entry of Default Judgment (“Pl’s Mot.”), Dkt. #10, App. 000011-12.

Under the CBA, Wegco was required to contribute payments for each qualifying hour of work

performed by covered employees. See id. App. 000003. Plaintiff claims that Wegco failed to

make the required contribution for the month of April 2010. Compl. ¶ 9. 1 Plaintiff alleges that

Wegco submitted a check for April 2010, in the amount of $8,400 dollars, but that the check was

dishonored. Id. ¶ 15.

         On March 4, 2013, Plaintiff commenced this action seeking recovery of the delinquent

contributions and additional relief available under ERISA. Id. at 5. Plaintiff served Wegco with

summons on by substituted service on May 21, 2013. See Return of Service, Dkt. #3. After

Wegco failed to respond to the Complaint, Plaintiff requested an entry of default on June 28,

2013 and served Wegco with a copy of the affidavit in support of default. Aff. in Supp. of

Default, Dkt. #5, at 4. On July 1, 2013, the Clerk of the Court entered default against Wegco.

See Dkt. #6. Though counsel for Wegco corresponded with Plaintiff following the entry of

default, Wegco never filed an answer or other response to the Complaint. On August 9, 2013,

this Court ordered Plaintiff to file a motion for default judgment by August 26, 2013, or risk

dismissal for lack of prosecution. See Minute Order of August 9, 2013. Plaintiff filed this

motion on August 22, 2013, pursuant to Fed. R. Civ. P. 55(b)(2), 2 which was also served on the

1
  Plaintiff initially sought recovery of contributions for May and June 2010 as well, see Compl. ¶ 9, but withdrew
those claims in the motion for default judgment. Pl’s Mot. at 7.
2
 Rule 55 specifies a two-step process for a party seeking to obtain a default judgment. First, the plaintiff
must request that the Clerk of the Court enter a default against the party who has “failed to plead or

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defendant. See Pl.’s Mot. at 45. Plaintiff contends that it is entitled to entry of a default

judgment because Wegco has failed to appear, answer, plead or otherwise defend itself in

response to the summons and complaint. Id. at 2. Plaintiff seeks an order awarding a total of

$15,417.57, representing the contributions owed, prejudgment interest, liquidated damages, and

attorney fees. Id. at 4. 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). Fed. R. Civ. P. 55(a) 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.” 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. Fed. R. Civ. P. 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

otherwise defend” against an action. FED. R. CIV. P. 55(a). Second, if the plaintiff’s claim is not for a
“sum certain,” the party must apply to the court for an entry of default judgment. Id. 55(b)(2). This two-
step process gives a defendant an opportunity to move to set aside a default before the court enters
judgment. Id. 55(c); see also H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 432 F.2d
689, 691 (D.D.C. 1970) (stating that “[t]he notice requirement contained in Rule 55(b)(2) is . . . a device
intended to protect those parties who, although delaying in a formal sense by failing to file pleadings . . .

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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 Plaintiff’s Motion for Default Judgment

                            1. The Defendant is Liable to the Plaintiff

have otherwise indicated to the moving party a clear purpose to defend the suit”).

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        Default judgment is appropriate when an unresponsive party has halted the adversary

process. H. F. Livermore Corp., 432 F.2d at 691. As noted above, Plaintiff served Wegco with

the complaint on May 21, 2013. Since that date, Wegco has failed to plead or otherwise defend

itself in this action. Given the defendant’s unresponsiveness, the court concludes that the entry

of 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) (entering a default judgment because of the defendant’s failure to request that the court 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 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 (1973)); accord Black v. Lane, 22 F.3d

1395, 1399 (7th Cir. 1994). Plaintiff asserts that Wegco violated the CBA and ERISA by failing

to make the April 2010 contribution. See Compl. ¶ 9. Plaintiff relies on the CBA, a remittance

form submitted by Wegco, and a check, allegedly dishonored. Pl’s Mot. at 4-5. These well-

pleaded allegations that Wegco never paid the Central Pension fund are sufficient to establish

Wegco’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).

               2. The Court Grants Plaintiffs’ Request for Monetary Damages

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       29 U.S.C. § 1132(g)(2) provides:

       In any action under this subchapter by a fiduciary for or on behalf of a plan to
       enforce section 1145 of this title in which a judgment in favor of the plan is awarded,
       the court shall award the plan—
              (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 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.

       When moving for default judgment, the plaintiffs must prove that they are entitled to the

requested damages. R.W. Amrine Drywall Co., 239 F. Supp. 2d at 30 (citing Oberstar v. Fed.

Deposit Ins. Comm’n, 987 F.2d 494, 505 n.9 (8th Cir. 1993)). Unless the amount of damages is

certain, the court must make an independent determination of the sum to be awarded. Adkins,

180 F. Supp. 2d at 17. The court may rely on detailed affidavits or documentary evidence

provided by the plaintiffs in order to calculate the plaintiffs’ damages. R.W. Amrine Drywall

Co., 239 F. Supp. 2d at 30 (citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir.

1979)). Thus, although Plaintiff is entitled to relief in the form of unpaid contributions, interest

on the unpaid contributions, liquidated damages specified in the plan but not in excess of twenty

percent of the unpaid contributions, and any other appropriate equitable relief, 29 U.S.C. §

1132(g)(2), he must prove these damages to a reasonable certainty, Flynn v. Extreme Granite,

Inc., 671 F. Supp. 2d 157, 162 (D.D.C. 2009) (deeming the plaintiffs’ estimate of damages “as

accurate as possible under the circumstances”); Combs v. Coal & Mineral Mgmt. Servs., Inc.,

105 F.R.D. 472, 474 (D.D.C. 1984) (awarding monetary damages because the plaintiff’s

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affidavit set forth a calculation of the requested damages that the court was able to ascertain as

accurate).

       Plaintiff contends that Wegco failed to remit $8,400.00 in unpaid benefit contributions

for April 2010. Pl’s Mot. at 4-5. Plaintiff seeks recovery of that unpaid contribution, as well as

$2,382.57 in pre-judgment interest (calculated at 9 percent, the rate provided under the plan) and

$1,680.00 in liquidated damages (calculated at a rate of 20 percent of the unpaid contributions

per annum). Id. Additionally, Plaintiff seeks $2,955.00 in attorney’s fees and costs. Id. at 6.

The total amount sought by Plaintiff is $15,417.57. Id. at 7. Plaintiff has provided the Court

with sufficient information to ascertain money damages with reasonable certainty.

       The CBA provides for a contribution of $5.00 per hour worked, up to 40 hours per week,

effective July 1, 2009. Id. App. 000013. This rate would have been in effect for the month of

April, 2010. Plaintiff submitted a remittance form for the month of April 2010, listing $8400.00

in “total contributions.” Id. App. 000018. The breakdown on the following page lists seven

employees, each with 240 contributory hours, making the monthly contribution for each

employee $1200.00, and the total contribution $8400.00.” Id. App. 000019. Plaintiff also

attached to its motion a check for $8400.00 from Wegco to the “Central Pension Fund.” Id. App.

000020. This evidence is sufficient for the Court to determine that Plaintiff has correctly

calculated the unpaid contribution. See Int'l Painters & Allied Trades Indus. Pension Fund v.

Lasalle Glass & Mirror Co., 2010 WL 1539763, at *4 (D.D.C. Apr. 19, 2010) (approving the

plaintiffs’ calculation of damages as reasonable because the plaintiffs estimated the unpaid

contributions due each month based on an average of the three previous months for which

reports were submitted).

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         The amounts Plaintiff claims for interest and liquidated damages flow directly from the

amount of unpaid contributions. 29 U.S.C. § 1132(g)(2) provides that “interest on unpaid

contributions shall be determined by using the rate provided under the plan.” The Central

Pension Fund Restated Agreement and Declaration of Trust authorizes and empowers trustees to

assess and receive liquidated damages “in an amount up to twenty percent (20%) of the amount

found to be delinquent,” and “lost interest from the delinquent amounts, to be calculated at the

rate of 9% simple interest.” Pl’s Mot. App. 000008-9.

         Twenty percent of $8,400.00 is $1,680.00, and thus the amount of liquidated damages is

established. As for interest, the Court must first determine the period of time that the

contribution remained unpaid. The CBA specifies that contributions to the Central Pension Fund

were to be made monthly, within thirty days of the date required by the Fund. Id. App. 000013-

14. Fanning’s declaration, submitted with Plaintiff’s Motion, gives the due date for the April

2010 contribution as June 1, 2010, which appears to confirm the CBA language. Id. App.

000002. The Court determines that the relevant interest period runs from June 1, 2010 to August

22, 2013, when Plaintiff filed this action. At nine percent simple interest, the Plaintiff is entitled

to collect $2,439.91. 3

         Finally, Plaintiff requests attorney’s fees and costs in the amount of $2,955.00. The

documentation attached to Plaintiff’s motion indicates that Plaintiff incurred $2,425.00 in

attorney’s fees and $130.00 in costs associated with service of process. Id. App. 000023-26.

Plaintiff also claims a $400.00 filing fee. Id. at 6. The service of process costs are fully

3
 This amount differs slightly from the Plaintiff’s requested amount, $2,382.57. Plaintiff erroneously calculated the
interest period as 1,151 days. See Pl’s Mot. App. 000003. It is actually 1,178 days. Plaintiff also uses August 26,
2013 as the end date, presumably because that was the date before which the Court instructed Plaintiff to file a
motion for default. See Minute Order, August 9, 2013. Because Plaintiff actually filed the motion on August 22,

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documented. The attorney’s fees reflect a little under ten hours of work at a rate of $250.00 per

hour. Plaintiff did not provide information concerning applicable market rates, but instead

referred only to the Laffey matrix, citing Salazar v. District of Columbia, 123 F. Supp. 2d 8, 15

(D.D.C. 2000). Nevertheless, the Court concludes that Plaintiff’s request for attorney’s fees and

costs is reasonable. The $250.00 per hour rate is within the range approved recently by this

Court in LaSalle, 267 F.R.D. at 435 ($220.00 per hour), and in Int'l Painters & Allied Trades

Indus. Pension Fund v. Dettrey's Allstate Painting, LLC, 763 F. Supp. 2d 32, 37 (D.D.C. 2011)

(same). Though Plaintiff claims to have spent $400.00 on the filing fee, there is no

documentation of this payment. The receipt referenced in the docket lists only the standard

$350.00 fee. See Dkt. #1. 4

         For the foregoing reasons, the Court grants Plaintiff’s motion for default judgment, and

awards Plaintiff $15,424.91 - $8,400.00 in unpaid contributions, $1,680.00 in liquidated

damages, $2,439.91 in interest, and $2,905.00 in attorney’s fees and costs. An Order consistent

with this Memorandum Opinion will issue separately.

         November 21, 2013

                                                                BARBARA J. ROTHSTEIN
                                                                UNITED STATES DISTRICT JUDGE

2013, the Court has used the filing date as the closing date for the interest period.
4
  The Court notes that the current filing fee is indeed $400.00. It reflects not only the $350.00 statutory fee mandated
under 28 U.S.C. § 1914(a), but also the additional $50.00 administrative fee adopted by the Judicial Conference
under § 1914(b). That administrative fee took effect on May 1, 2013, after this action was filed.

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