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International Painters & Allied Trades Industry Pension Fund v. Zak Architectural Metal & Glass LLC

July 22, 2009

INTERNATIONAL PAINTERS & ALLIED TRADES INDUSTRY PENSION FUND AND GARY J. MEYERS, IN HIS OFFICIAL CAPACITY AS A FIDUCIARY, PLAINTIFFS,
v.
ZAK ARCHITECTURAL METAL & GLASS LLC, DEFENDANT.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Court

Re Document No.: 5

MEMORANDUM OPINION GRANTING THE PLAINTIFFS'MOTION FOR DEFAULT JUDGMENT

I. INTRODUCTION

This matter is before the court on the plaintiffs' motion for default judgment. The plaintiffs, International Painters and Allied Trades Industry Pension Fund and Gary J. Meyers, the fiduciary of the fund, filed this action on June 5, 2008, alleging that the defendant, Zak Architectural Metal and Glass LLC, failed to make contributions to an employee pension fund as required by collective bargaining agreements and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1145. The plaintiffs seek an order directing the defendant to comply with the terms of the collective bargaining agreements. The defendant was served on July 8, 2008, and to date it has not responded to the complaint. Accordingly, the court grants the plaintiffs' motion for default judgment and awards $50,661.73 in monetary relief. Additionally, the court grants the plaintiff's request for injunctive relief.

II. FACTUAL & PROCEDURAL BACKGROUND

On June 5, 2008, the plaintiffs initiated this action to recover delinquent contributions to the pension fund from the defendant. Compl. ¶¶ 16-17. The plaintiffs also sought interest on the delinquent contributions, late charges, liquidated damages, attorneys' fees and an audit of the defendant's records. Id. ¶¶ 17, 25, 28, 31, 33. The plaintiffs assert that the defendant agreed to abide by the Collective Bargaining Agreements ("Labor Contracts"), the Agreement and Declaration of Trust of the Fund ("Trust Agreement") and the International Painters and Allied Trades Industry Pension Plan ("Pension Plan"). Id. ¶¶ 11-13. The plaintiffs allege that in violation of these agreements, the defendant has failed to make monthly payments to the plaintiffs, file remittance reports or submit to requested audits, entitling the plaintiffs to various penalties for the defendant's non-performance. Id. ¶ 13. Finally, the plaintiffs contend that the defendant's failure to comply with the terms of the Labor Contracts and the Trust Agreement violates ERISA. Id. ¶ 16.

The defendant was served with the complaint and summons on July 8, 2008. Pls.' Req. for Entry of Default, Ex. 1 ("Cprek Decl.") ¶ 2. On August 5, 2008, the plaintiffs requested that the Clerk of the Court enter default against the defendant for failure to plead or otherwise defend against this action and forwarded a copy of the request to the defendant.*fn1 See Pls.' Req. for Entry of Default. The Clerk of the Court entered default against the defendant on August 6, 2008. See Entry of Default. Finally, on September 4, 2008, the plaintiffs filed the instant motion.*fn2 See generally Pls.' Mot. Throughout this period, the defendant has not pleaded or otherwise defendant against the 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. 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 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 the Plaintiffs' Motion for Entry of ...


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