United States District Court, District of Columbia
ADAM M. DOWNS, et al., Plaintiffs,
JSP COMPANIES, INC., et al., Defendants.
L. FRIEDRICH UNITED STATES DISTRICT JUDGE
the Court is the Plaintiffs' Motion for Entry of Default
Judgment. Dkt. 9. For the reasons that follow, the motion
will be granted in part and denied in part.
plaintiffs are administrators of two benefit plans: the
Laborers' International Union North America National
Pension Fund (“LIUNA Pension Fund”) and the
Service Contract Education and Training Trust Fund
(“Education Fund”). Compl. ¶¶ 5, 7,
Dkt. 1. Both plans are multiemployer employee benefit plans
organized under the Employee Retirement Income Security Act
(“ERISA”). Id. ¶¶ 6, 8;
see 29 U.S.C. § 1002(3), (37). As set forth in
the complaint, the plans provide pension, education, and job
training benefits to eligible employees on whose behalf
employers contribute pursuant to collective bargaining
agreements with the Laborers' International Union or its
affiliated district councils. Compl. ¶¶ 6,
8. The complaint alleges that Defendant JSP
Companies, Inc. (“JSP”) is a corporation with its
primary office in Washington, D.C. and an “employer in
an industry affecting commerce” as defined by ERISA.
Id. ¶ 9; see 29 U.S.C. § 1002(5),
(11), (12). Defendant Jaime Canales is the owner and
president of JSP. Compl. ¶ 10. Under ERISA and
collective bargaining agreements with Public Service
Employees Union 527, JSP must make contributions to the LIUNA
Pension Fund and the Education Fund based on the number of
hours worked by its employees in covered employment. See
Id. ¶¶ 11, 12, 23, 24. JSP is also obligated
to pay interest on delinquent contributions. See Id.
¶¶ 17, 29. In this action, the plaintiffs seek a
total judgment of $142, 397.81 based on allegations that the
defendants failed to make required contributions.
Id. ¶¶ 21, 32; Pls.' Mot. at 1-3, Dkt.
9; Pls.' Mem. at 10-15, Dkt. 9-1. The plaintiffs also
seek equitable relief, namely orders directing the defendants
to submit to an audit, pay audit costs, pay delinquent
contributions and interest identified by the audit, and
comply with their contractual and statutory obligations.
See Compl. at 18-19; Pls.' Mem. at 15-17.
plaintiffs filed the complaint in this action on January 24,
2017. Dkt 1. Jaime Canales was duly served with the complaint
and summons on February 2, 2017. Aff. of Service, Dkt. 3. JSP
was duly served with the complaint and summons on February 9,
2017. Aff. of Service, Dkt. 4. Because the defendants did not
answer or otherwise respond to the complaint within the time
period allotted by Rule 12 of the Federal Rules of Civil
Procedure, the plaintiffs requested an entry of default. Dkt.
5. The plaintiffs also mailed a copy of their request to the
defendants. Dkt. 5-4. The Clerk of the Court entered default
on March 13, 2017. Dkt. 7; Dkt. 8. On September 1, 2017, the
plaintiffs moved this Court to enter a default judgment
against the defendants under Rule 55(b)(2). Dkt. 9. The case
was reassigned to the undersigned judge on December 4, 2017.
Federal Rules of Civil Procedure empower a federal district
court to enter a default judgment against a defendant who
fails to defend its case. Fed.R.Civ.P. 55(b)(2); Keegel
v. Key W. & Caribbean Trading Co., 627 F.2d 372, 375
n.5 (D.C. Cir. 1980). While federal policy generally favors
resolving disputes on their merits, default judgments are
appropriate “when the adversary process has been halted
because of an essentially unresponsive party.”
Mwani v. bin Laden, 417 F.3d 1, 7 (D.C. Cir. 2005)
(quotation marks omitted).
a default judgment is a two-step process. First, the
plaintiff must request that the Clerk of Court enter default
against a party who has failed to plead or otherwise defend.
Fed.R.Civ.P. 55(a). The Clerk's default entry establishes
the defaulting defendant's liability for the well-pleaded
allegations of the complaint. See Boland v. Providence
Constr. Corp., 304 F.R.D. 31, 35 (D.D.C. 2014). Second,
if the plaintiff's claim is not for a “sum certain,
” the plaintiff must apply to the court for a default
judgment. Fed.R.Civ.P. 55(b). At that point, the plaintiff
“must prove his entitlement to the relief requested
using detailed affidavits or documentary evidence on which
the court may rely.” Ventura v. L.A. Howard Constr.
Co., 134 F.Supp.3d 99, 103 (D.D.C. 2015) (quotation
marks and alterations omitted).
ruling on a motion for default judgment, a court “is
required to make an independent determination of the sum to
be awarded.” Fanning v. Permanent Sol. Indus.,
Inc., 257 F.R.D. 4, 7 (D.D.C. 2009) (quotation marks
omitted). In that inquiry, the court has “considerable
latitude.” Ventura, 134 F.Supp.3d at 103
(quotation marks omitted). The court may conduct a hearing to
determine damages, Fed.R.Civ.P. 55(b)(2), but the court is
not required to do so “as long as it ensures that there
is a basis for the damages specified in the default judgment,
” Ventura, 134 F.Supp.3d at 103 (quotation
marks and alterations omitted).
plaintiffs assert that Jaime Canales can be held personally
liable for the unpaid contributions because he is an
“employer” or a “fiduciary” under
ERISA. See Compl. ¶ 10 (citing 29 U.S.C. §
1002(5), (21)); Pls.' Mem. at 3-4. The Court disagrees.
is JSP's president and owner. “Officers of a
corporation do not fall within ERISA's definition of an
‘employer, ' and thus officers cannot be held
personally liable for a corporation's alleged ERISA
violations by virtue of their relationship to the employer
alone.” Oliver v. Black Knight Asset Mgmt.,
LLC, 812 F.Supp.2d 2, 14-15 (D.D.C. 2011). Rather, ERISA
liability for unpaid contributions generally extends to
individual corporate owners or officers only when they act as
the “alter egos” of their corporations or when
circumstances permit piercing the corporate veil. See
Int'l Bhd. of Painters & Allied Trades Union v.
George A. Kracher, Inc., 856 F.2d 1546, 1550 & n.28
(D.C. Cir. 1988).
the plaintiffs do not sufficiently allege-indeed, it appears
they do not attempt to allege-that Canales acted as an
“alter ego” of JSP or that circumstances permit
piercing the corporate veil. In particular, the plaintiffs do
not allege that (1) Canales and JSP lack separate
personalities due to a unity of interest and ownership, based
on factors such as the nature of corporate ownership and
control, failure to maintain adequate corporate records and
formalities, and commingling of funds and corporate assets;
and (2) an inequitable result would follow if the JSP's
actions were treated as those of JSP alone. See Labadie
Coal Co. v. Black, 672 F.2d 92, 96-97 (D.C. Cir. 1982)
(describing standard); United States v. Dynamic Visions,
Inc., 220 F.Supp.3d 16, 25 (D.D.C. 2016). Therefore,
Canales cannot be held personally liable as an
“employer” under ERISA. See Oliver v. Black
Knight Asset Mgmt., LLC, 812 F.Supp.2d 2, 16 (D.D.C.
2011) (dismissing ...