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Boland v. Providence Construction Corp.

United States District Court, District of Columbia

May 29, 2014

JAMES BOLAND, et al., Plaintiffs,
v.
PROVIDENCE CONSTRUCTION CORP., Defendant.

MEMORANDUM OPINION

KETANJI BROWN JACKSON UNITED STATES DISTRICT JUDGE

Plaintiffs, fiduciaries of the Bricklayers & Trowel Trades International Pension Fund (“IPF”) and the International Masonry Institute (“IMI” and, collectively, “Plaintiffs” or the “Funds”), filed this action against Defendant Providence Construction Corporation (“Defendant” or “Providence Construction”) on November 21, 2013. (Compl., ECF No. 1.) In the complaint, Plaintiffs allege that Providence Construction failed to pay to the Funds the proper amount of contributions owed under the governing Collective Bargaining Agreements and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1145. (See Compl. ¶¶ 8-11.) Although properly and timely served with the complaint and summons, Defendant has failed to respond to the complaint; accordingly, the Clerk of Court entered default against Providence Construction on January 7, 2014. (See Clerk’s Entry of Default, ECF No. 5.) Before this Court at present is Plaintiffs’ motion seeking default judgment and monetary damages. (Mot. For Entry of Default J. & Incorporated Mem. in Supp. Thereof (“Pls.’ Mot.”), ECF No. 7.) Upon consideration of Plaintiffs’ motion and the attachments thereto, applicable case law, statutory authority, and the record of this case as a whole, this Court concludes that Plaintiffs’ motion should be GRANTED. A separate order consistent with this opinion will follow.

I. BACKGROUND

A. The Parties

According to the facts alleged in the complaint, Providence Construction is a New York-based construction company that employs members of the International Union of Bricklayers and Allied Craftworkers (the “Union”). (See Compl. ¶¶ 5-6.) Providence Construction has entered collective bargaining agreements (“CBAs”) with the Union and its local affiliate. (Id. ¶¶ 7-8; Decl. of David F. Stupar in Supp. of Pls.’ Mot. for Default J. (“Stupar Decl.”), ECF No. 7-1, ¶ 7; see also CBA 1, Ex. A to Compl., ECF No. 1-1; CBA 2, Ex. B to Compl., ECF No. 1-2.) Under the CBAs, and also pursuant to ERISA, Providence Construction is bound to pay certain sums of money for each hour that employees covered by the CBA work. (Compl. ¶¶ 7-12; Stupar Decl. ¶ 3; see also CBA 2 § 12 (referring to Hourly Wages).) To fulfill its obligations under the CBAs, Providence Construction is required to submit monthly reports calculating the amount due and to make monthly contributions to the Union. (CBA 2 § 12; see also Compl. ¶¶ 5-6; Stupar Decl. ¶ 7.)

Plaintiffs are multi-employer funds established pursuant to ERISA that provide pension and other benefits to Union-member employees who work in the construction industry under CBAs negotiated between Union affiliates and employers. (Stupar Decl. ¶ 3.) Participating employers, like Providence Construction, finance the benefits that the funds provide. (Id. ¶ 2.) The Funds’ methods of collecting contributions and disbursing benefits are governed generally by ERISA and specifically by their Plan and Trust Agreements and a set of procedures that the Funds’ trustees adopted to direct collection of monies that contributing employers owe to the Funds. (See Id . ¶¶ 1, 3-4; Compl. ¶ 12; General Collection Procedures of the Central Collection Unit (“Collection Procedures”), Attach. 1 to Stupar Decl., ECF No. 7-1, at 7.)

According to the CBAs, the Collection Procedures, and ERISA, employers are required to make monthly reports and contributions on the fifteenth day of each month. (Stupar Decl. ¶¶ 4-5.) The Funds are entitled to interest on any unpaid contributions at a rate of 15% per year. (Collection Procedures at 8, Item B.2; Compl. ¶ 12; Stupar Decl. ¶ 10.) See also ERISA Section 502(g)(2), 29 U.S.C. § 1132(g)(2)(D) (directing that “interest on unpaid contributions shall be determined using the rate provided under the plan”).) The Collection Procedures further provide that, in the event that the delinquent contributions are not paid in the first instance and the matter is referred to counsel, the Funds may seek additional monies beyond the unpaid contributions themselves and the interest on those contributions. (See Collection Procedures at 8, Item II.A.) Specifically, Item II.A of the Collection Procedures provides for the higher of “an additional computation of interest” also at the rate of 15% per year, or liquidated damages at the rate of 20% of the contributions. (Id.) In addition, Item II.C of the Collection Procedures entitles the Funds to “all moneys recoverable from an employer, including damages that may be recoverable under Section 502(g)(2) of ERISA[.]” (Id. at 9, Item II.C.) ERISA Section 502(g)(2), in turn, provides that a court “shall award” the plan “reasonable attorneys’ fees and costs of the action”—in other words, costs, audit expenses, and attorneys’ fees that the Funds incur in seeking to collect unpaid contributions owed under the CBA. See ERISA Section 502(g)(2), 29 U.S.C. § 1132(g)(2)(D).

B. The Complaint

In this action, the Funds allege that Providence Construction submitted all required reports calculating amounts due, but failed to submit related contributions for covered work performed during various months from February 2012 through April 2013. (Compl. ¶ 11; Stupar Decl. ¶ 8.) The Funds seek relief in the form of unpaid contributions, interest on unpaid contributions, and attorneys’ fees and other litigation costs associated with this action, as well as an order directing Providence Construction to comply with its contribution obligations under the CBAs and to pay any judgments ordered in this action. (See Compl. at 5-6.)

The requested monetary damages are calculated with reference to the terms of the CBAs as well as the Funds’ Collection Procedures and the guidance set forth in ERISA. According to Plaintiffs, pursuant to the reports that Providence Construction prepared and sent to the Funds, Providence Construction owes the Funds $10, 544.23 in delinquent contributions for work performed during various months from February 2012 through April 2013. (Compl. ¶ 11; Stupar Decl. ¶ 8.) Applying the 15% interest rate set forth in the Collection Procedures (see Collection Procedures at 8, Item I.B.2) to the $10, 544.23 of unpaid contributions that Providence Construction allegedly owes in this case, the Funds seek $2, 160.32 in interest. (Stupar Decl. ¶ 10.)[1] In addition, the Funds seek interest in the same amount, $2, 160.32, in lieu of liquidated damages. (Stupar Decl. ¶ 11; see also Collection Procedures at 8, Item II.A.)[2] The Funds also seek to recover costs and attorneys’ fees associated with this action. (Compl. at 5-6.) As set forth in the Declaration of David F. Stupar, the Executive Director of the IPF and an authorized representative to effect collections on behalf of the IMI, the Funds incurred legal costs in the amount of $400.00 for the filing fee and $327.00 for service of process in this case. (Stupar Decl. ¶¶ 12-13.) The Funds also seek attorneys’ fees in the amount of $4, 335.00. (Id. ¶ 14.)

In total, based on the $15, 591.87 in delinquent contributions, interest, additional computation of interest, court fees, and service of process fees, along with the $4, 335.00 in attorneys’ fees, the Funds maintain that Providence Construction is obligated to pay a total of $19, 926.87. (See Pls.’ Mot. at 2; Stupar Decl. ¶ 16; Decl. of Charles V. Mehler III (“Mehler Decl.”), ECF No. 7-2, ¶ 18.)

C. Service And Default

The Funds served Providence Construction with the complaint and summons in this case on December 4, 2013. (Return of Service/Affidavit of Summons & Compl. Executed, ECF No. 3.)[3] When Providence Construction failed to file an answer within the time period allotted by Federal Rule of Civil Procedure 12(a)(1)(A), the Funds requested an entry of default. (Aff. for Default, ECF No. 4.) The following day, the Clerk of the Court entered default (Clerk’s Entry of Default, ECF No. 5), and mailed a copy of the entry of default to Providence Construction. When that correspondence was returned to the court as undeliverable (ECF No. 6), the Clerk’s Office mailed a second copy of the entry of default to Providence Construction on April 25, 2014.[4] More than three weeks have passed since the second entry of default was mailed, and Providence Construction has not sought to set aside default or otherwise defend itself in this action.

The Fund has now filed the instant motion for default judgment pursuant to Federal Rule of Civil Procedure 55(b)(2). (Pls.’ Mot. at 1.)[5] Although Providence Construction has been properly served with the complaint in this matter and presumably has also received the Funds’ affidavit for default, the Clerk’s entry of default, and the Funds’ pending motion for default judgment, it has ...


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