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Service Employees International Union National Industry Pension Fund v. Hamilton Park Health Care Center

United States District Court, District of Columbia

June 6, 2014

SERVICE EMPLOYEES INTERNATIONAL UNION NATIONAL INDUSTRY PENSION FUND, et al., Plaintiffs,
v.
HAMILTON PARK HEALTH CARE CENTER, LTD, et al., Defendants.

MEMORANDUM OPINION & ORDER

JOHN D. BATES, District Judge.

Before the Court is [12] plaintiffs' motion for partial default judgment and [17] two of the three defendants' motion to set aside [11] the Clerk's entry of default against them. Plaintiffs, an employee benefit plan and its trustees, brought this action to recover contributions (and associated interest, liquidated damages, and surcharges) purportedly unpaid by defendants, which are employers that are parties to collective bargaining agreements with plaintiffs. Upon consideration of the briefs, [1] applicable law, and the entire record herein, and for the reasons described below, the Court will order the moving defendants to pay plaintiffs' fees and costs associated with defendants' default as a condition of granting defendants' motion to vacate the default, and will grant plaintiffs' motion for default judgment against one defendant, Hamilton Park Health Care Center, Ltd.[2]

BACKGROUND

Plaintiffs are the Service Employees International Union ("SEIU") National Industry Pension Fund (the "SEIU Fund")-a multi-employer employee benefit plan-and its trustees. Pls.' Mot. at 2. A local SEIU chapter negotiated collective bargaining agreements with the Hamilton Park Health Care Center (the "Center"). Id. at 3. Under those agreements, the Center is required to make certain contributions on behalf of eligible employees to the SEIU Fund. Id . Plaintiffs filed a complaint alleging that the Center has become delinquent on those contributions, a state of affairs that purportedly also gives rise to liability for interest, liquidated damages, surcharges, and attorney's fees. Id . Plaintiffs' complaint named three defendants: Hamilton Park Health Care Center, Ltd.; Hamilton Park OPCO, LLC; and Alaris Health, LLC. Pls.' Compl. [ECF No. 1] ("Compl.") at 1. The Center was previously owned and operated by defendant Hamilton Park Health Care Center, Ltd., and is now owned and operated by defendants Hamilton Park OPCO, LLC, and Alaris Health, LLC (collectively referred to as "Alaris"). Defs.' Opp'n at 1.

According to Alaris, when it purchased the Center from Hamilton Park Health Care Center, Ltd., it took the Center free of any past liabilities to the SEIU Fund. Id . So when Alaris found itself named in a complaint seeking recovery for those contributions, its counsel contacted plaintiffs' counsel with the hope that the dispute could be resolved as against Alaris without further litigation. Id. at 1-2. No such luck. And because of Alaris's counsel's vain hope that plaintiffs would continue the action against only Hamilton Park Health Care Center, Ltd., Alaris failed to answer or otherwise respond to the complaint (as did Hamilton Park Health Care Center, Ltd.). Id. at 4-5.

The Clerk of the Court duly entered default against all three defendants under Fed. R. Entry of Default [ECF No. 11]; Pls.' Mot. Perhaps realizing that this Court would, indeed, See oversee this litigation in accordance with the Federal Rules of Civil Procedure-in particular, the requirement that defendants respond to a complaint-counsel for Alaris belatedly entered an appearance and filed an opposition to plaintiffs' motion, as well as a motion to set aside the default, on May 27, 2014.[3] See Defs.' Opp'n. The third defendant, Hamilton Park Health Care Center, Ltd., has yet to appear or respond.[4]

DISCUSSION

I. PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT

For the reasons explained below, the Court will vacate the default against Alaris, and thus deny the motion for default judgment as to Hamilton Park, OPCO, LLC, and Alaris Health, LLC. That leaves the default against defendant Hamilton Park Health Care Center, Ltd.-which has yet to appear or respond to plaintiffs' complaint-in place. After a default has been entered against a defendant 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 & 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, the "defaulting defendant is deemed to admit every well-pleaded allegation in the complaint." Int'l Painters, 239 F.Supp.2d at 30 (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 Adkins v. Teseo , 180 F.Supp.2d 15, 17 (D.D.C. 2001)). "[T]he court may rely on detailed affidavits or documentary evidence to determine the appropriate sum for the default judgment." Id . (citing United Artists Corp. v. Freeman , 605 F.2d 854, 857 (5th Cir. 1979)).

The complaint alleges all necessary elements of an award of liquidated damages, interest, and attorney's fees and costs to a prevailing employee benefit fund under 29 U.S.C. 1132(a)(3) and 1145. See Int'l Painters, 808 F.Supp.2d at 94. Hence, Hamilton Park Health Care Center, Ltd.'s failure to answer or otherwise respond to plaintiffs' complaint establishes its liability under those sections. Plaintiffs are thus entitled to default judgment against Hamilton Park Health Care Center, Ltd., but the Court must make an independent determination of the sum to be awarded unless the amount of damages is certain. See Adkins , 180 F.Supp.2d at 17. The Court will evaluate plaintiffs' request for damages based on the affidavits they have submitted.

Under Section 515 of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), "[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall... make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. 1145. When an employer fails to make those contributions, the fiduciary for a plan may bring an action under ERISA and obtain a mandatory award for the plan consisting of:

(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the ...

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