United States District Court, District of Columbia
SERVICE EMPLOYEES INTERNATIONAL UNION NATIONAL INDUSTRY PENSION FUND, et al., Plaintiffs,
BRISTOL MANOR HEALTHCARE CENTER, INC., Defendant. Re Document No. 20.
MEMORANDUM OPINION DENYING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT; AND VACATING THE ENTRY OF DEFAULT
RUDOLPH CONTRERAS, District Judge.
The Service Employees International Union National Industry Pension Fund (the "Fund") is an "employee benefit plan" within the meaning of Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1002(2). The Fund and its Trustees brought suit under ERISA and the Labor Management Relations Act of 1947 ("LMRA") to collect unpaid contributions, interest, liquidated damages, and audit documents allegedly owed by Defendant, Bristol Manor Healthcare Center, Inc. ("Bristol Manor"), in violation of the applicable collective bargaining and trust agreements. After Bristol Manor failed to respond to the amended complaint, Plaintiffs filed for an entry of default, which the Clerk of the Court entered the next day. Plaintiffs now have moved for default judgment, and Bristol Manor has filed an opposition asking the Court to deny Plaintiffs' motion and set aside the default. For the reasons explained below, the Court will deny the motion for default judgment and vacate the entry of default.
A. Bristol Manor's Alleged Delinquencies
Bristol Manor, a New Jersey corporation, is a party to a Collective Bargaining Agreement ("CBA") with the 1199 SEIU United Healthcare Workers East, New Jersey (the "Union"). See Joseph Decl. ¶ 4. The CBA requires Bristol Manor to make contributions to the Fund based on the number of compensable hours its employees work. See Joseph Decl. ¶¶ 5-6; Am. Compl., Ex. 1. In addition, Bristol Manor is a party to the Fund's Trust Agreement and Collections Policy, under which it is required to submit monthly remittance reports reflecting the contributions owed to the Fund. See Joseph Decl. ¶¶ 7-8; Am. Compl., Ex. 2. Also under the Trust Agreement, Bristol Manor is liable to the Fund for interest on its delinquent contributions at the rate of ten percent per year, liquidated damages at the rate of twenty percent after the commencement of a lawsuit, and attorneys' fees and costs. See Joseph Decl. ¶¶ 9-10; Am. Compl., Ex. 3. Further, when the Fund was determined to be in critical status beginning in January 2009, it established a rehabilitation plan that assessed surcharges to all employer contributions in the amount of five percent starting in June 2009, and then ten percent effective December 1, 2009. See Joseph Decl. ¶¶ 12-13.
According to Plaintiffs, Bristol Manor failed to remit certain reports and pay certain contributions, interest, and liquidated damages for the period of February 2010 through February 2014. See Joseph Decl. ¶¶ 14-15. Specifically, Plaintiffs claim that Bristol Manor failed to submit the following reports and contributions:
Dietary and Housekeeping Employees: Bristol Manor owes $1, 802.23 in contributions, $208.46 in interest, and $1, 781.05 in liquidated damages for certain months from February 2010 through February 2014, along with reports for August 2013 and February 2014. See Joseph Decl. ¶¶ 18-20.
Recreational Employees: Bristol Manor owes $703.51 in contributions, $196.40 in interest, and $550.00 in liquidated damages. See Joseph Decl. ¶¶ 9-10, 24-26. Additionally, Bristol Manor failed to submit reports for February 2010, March 2010, May 2012, August 2013, January 2014, and February 2014. See Joseph Decl. ¶¶ 22-24.
Certified Nursing Assistants: Bristol Manor owes $1, 273.15 in liquidated damages, and it failed to submit reports for February 2010, March 2010, August 2013, December 2013, January 2014, and February 2014. See Joseph Decl. ¶¶ 16-17.
In total, Plaintiffs claim that Bristol Manor owes $5, 505.94 to the Fund. See Joseph Decl. ¶ 29.
Further, pursuant to the Trust Agreement, as well as the CBA and ERISA, Bristol Manor is obligated to provide information so that the Fund may complete an audit to verify that the correct amount of contributions is being paid. See Joseph Decl. ¶ 11. According to the Fund, it made repeated requests for this information, but Bristol Manor refused to provide the necessary documents, including: copies of its W-3s and W-2s for 2009 and 2010; the second page of the payroll register for 2009 for the periods of January 17, January 31, February 4, February 28, March 14, and April 11; and a key for the payroll codes. See Joseph Decl. ¶¶ 27-28.
B. Procedural History
On November 26, 2012, Plaintiffs filed the original complaint against Bristol Manor. See Compl., ECF No. 1. After four months of inaction by both parties, the Court issued an order on March 29, 2013, requiring Plaintiffs to show cause for their failure to serve the complaint and summons on Bristol Manor in a timely fashion under the Federal Rules of Civil Procedure. See Show Cause Order, ECF No. 3. On April 5, 2013, Plaintiffs filed a response explaining their difficulties in serving Bristol Manor, see Pls.' Resp. Show Cause Order, ECF No. 4, and on June 4, Bristol Manor finally was served with the complaint. See Return of Serv., ECF No. 7. After two more months of ...