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Fanning v. Seneca One Realty LLC

United States District Court, District of Columbia

July 14, 2017

MICHAEL R. FANNING, Plaintiff,
v.
SENECA ONE REALTY LLC, Defendant.

          MEMORANDUM OPINION

          CHRISTOPHER R. COOPER United States District Judge.

         Plaintiff Michael R. Fanning is the Chief Executive Officer of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers. He brought this ERISA action seeking to recover unpaid contributions to the fund along with prejudgment interest, liquidated damages, audit and attorneys' fees, and litigation costs from Seneca One Realty, LLC (“Seneca One”). Despite being properly served, Seneca One has failed to respond to the complaint, the Clerk's entry of default, and the Court's Order to Show Cause why judgment should not be entered against it. Fanning now moves for default judgment. Finding that Seneca One is liable, the Court will grant the motion and enter judgment against the company in the amount of $8, 343.87.

         I. Background

         Seneca One entered a binding collective bargaining agreement with Local No. 17 of the International Union of Operating Engineers (“Local 17”) for the work performed at One HSBC Center in Buffalo, NY. Compl. ¶¶ 2, 6; see also Pl.'s Mot. Entry Default J., Ex. B (Agreement between Seneca One and International Union of Operating Engineers). Fanning sues in his capacity as the Chief Executive Officer of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers (“Central Pension Fund”). Id. at ¶ 1. The collective bargaining agreement between Seneca One and Local 17 requires the company to pay contributions to the Central Pension Fund for hours worked by employees covered by the agreement. Id. at ¶ 7.

         The Central Pension Fund is an “employee benefit plan” and a “multiemployer plan” as those terms are defined under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1002 (“ERISA”). With these designations come certain obligations. Under ERISA and the Central Pension Fund's Restated Agreement and Declaration of Trust (“Declaration”), Seneca One was obligated to self-report the number of hours worked by covered employees and make monthly contribution payments to the Central Pension Fund, which are calculated based on these hours. See Pl.'s Mot. Entry Default J. 3, 4. Specifically, the collective bargaining agreement requires Seneca One to pay the Central Pension Fund $2.15 per hour for every hour worked by a covered employee, effective as of January 1, 2012. See Pl.'s Mot. Entry Default J., Ex. B art. 16

         Fanning alleges that from January 2013 to December 2015, Seneca One employed covered employees but failed to pay the corresponding, agreed-upon contributions to the Central Pension Fund. Compl. ¶¶ 7-9. The Declaration provides that an employer failing to make such payments is liable for the unpaid amount, liquidated damages of up to 20% of the unpaid amount, and interest at the annual rate of 9%, along with attorneys' fees, audit fees, and applicable litigation costs. Compl. ¶¶ 10, 12, 19; see also Pl.'s Mot. Entry Default J., Ex. A at § 4.5 (Declaration). Fanning is entitled as a third-party beneficiary of the collective bargaining agreement to enforce these terms. See Pl.'s Mot. Entry Default J. 3.

         Seneca One was properly served on January 24, 2017. See Feb. 16, 2017 Return of Service, ECF No. 3. It did not respond to the complaint, and the Clerk of the Court entered default on February 17, 2017. See Feb. 17, 2017 Clerk's Entry of Default, ECF No. 5. Fanning now seeks a monetary default judgment against Seneca One, comprised of unpaid contributions, accrued interest, liquidated damages, audit fees, attorneys' fees, and costs.

         Section 502(e)(2) of ERISA provides for federal jurisdiction “in the district where the plan is administered.” 28 U.S.C. § 1332(e)(2). Because the Central Pension Fund is administered in the District of Columbia, see Compl. ¶ 1, the Court may properly exercise jurisdiction over this case.

         II. Standard of Review

         The two-step procedure for requesting a default judgment has been set forth by this Court on multiple occasions. See, e.g., Boland v. Cacper Construction Corp., 130 F.Supp.3d 379, 382 (D.D.C. 2015). A plaintiff first must request that the Clerk of the Court enter default against a party who has “failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). The Court then decides whether an entry of default judgment is warranted. Fed.R.Civ.P. 55(b). Default judgment is available when “the adversary process has been halted because of an essentially unresponsive party.” Boland v. Elite Terrazzo Flooring, Inc., 763 F.Supp.2d 64, 67 (D.D.C. 2011). “Default establishes the defaulting party's liability for the well-pleaded allegations of the complaint.” Id. After establishing liability, the Court makes an independent evaluation of the damages award, which it has “considerable latitude” to determine. Id. The Court may hold a hearing if necessary or can rely on “detailed affidavits or documentary evidence” submitted by plaintiffs in support of their claims. Boland v. Providence Constr. Corp., 304 F.R.D. 31, 36 (D.D.C. 2014) (quoting Fanning v. Permanent Sol. Indus., Inc., 257 F.R.D. 4, 7 (D.D.C. 2009)).

         III. Analysis

         A. Liability

         Plaintiffs filed this suit on January 19, 2017 to recover the damages prescribed by ERISA, the collective bargaining agreement, and the Declaration. See Pl.'s Mot Entry Default J. 1. Seneca One was timely served with a summons and the complaint on January 24, 2017, and the Clerk of the Court declared Seneca One to be in default on February 17, 2017. Id. On April 27, 2017, the Court issued an Order to Show Cause why judgment should not be entered for Plaintiff and set May 12, 2017 as the deadline for Seneca One to respond. Seneca One has failed to respond to the complaint, the Clerk's entry of default, or the Court's Show-Cause Order.

         Because the Clerk of the Court has entered default and Seneca One has failed to respond, the Court accepts Fanning's well-pleaded allegations and holds that Seneca One is liable and that entry of default judgment is appropriate. See Elite Terrazzo Flooring, 763 F.Supp.2d at 67. ERISA requires employers to make contributions to multiemployer plans “in accordance with the terms and conditions of” the relevant collective-bargaining agreements. 29 U.S.C. § 1145. The Declaration specifies that contributions are due by the last day of the month following the month in which the work was done. See Pl.'s Mot Entry Default J. 3; Decl. of Michael R. Fanning (“Fanning Decl.”) ¶ 10. It also provides that the Central Pension Fund's “Trustees may, by their respective representatives, audit and examine the pertinent employment and payroll records of each Employer . . . whenever such examination is deemed necessary or advisable by the Trustees . . . .” Pl.'s Mot Entry Default J., Ex. A at 1 (Declaration). Plaintiff has submitted a ...


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