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Fanning v. AMF Mechancial Corp.

United States District Court, District of Columbia

May 24, 2018

MICHAEL R. FANNING, Plaintiff,
v.
AMF MECHANICAL CORPORATION, Defendant.

          MEMORANDUM OPINION

          TIMOTHY J. KELLY UNITED STATES DISTRICT JUDGE.

         Plaintiff Michael R. Fanning, the CEO of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers (“Central Pension Fund”), has filed suit against Defendant AMF Mechanical Corporation (“AMF Mechanical”) for failure to pay its required contributions to the fund from January 2013 through December 2015, in violation of applicable collective bargaining agreements and the Employee Retirement Income Security Act of 1974 (“ERISA”), Pub. L. No. 93-406, 88 Stat. 829. ECF No. 1 (“Compl.”). To date, AMF Mechanical has failed to answer or otherwise defend this action. Fanning has moved for a default judgment, asking the Court to enter judgment in the amount of $73, 924.13 and to order AMF Mechanical to submit to an audit of its payroll records from January 2016 through May 2016. ECF No. 8; see also ECF No. 8-1 (“Pl.'s Br.”); ECF No. 8-3 (“Pl.'s App”). For the reasons stated in this Opinion, the motion will be granted.

         I. Background

         Fanning is a designated fiduciary of the Central Pension Fund, which is a multiemployer plan and an employee benefit plan, as those terms are defined under ERISA. Compl. ¶ 1 (citing 29 U.S.C. § 1002(1), (21), (37)); see also 29 U.S.C. § 1132(a)(3). The fund provides retirement, disability, death, and other benefits to operating engineers working in various industries, Pl.'s App. 001-004 (“Fanning Decl.”) ¶ 6, and is governed by its Restated Agreement and Declaration of Trust (the “Trust Agreement”), Pl.'s App. 005-009. AMF Mechanical is a Maryland corporation and an “employer” in an “industry or activity affecting commerce, ” as those terms are defined by ERISA. See Compl. ¶ 2 (citing 29 U.S.C. §§ 1001a, 1002(5), (9), (11), (12)). AMF Mechanical and the International Union of Operating Engineers, Local Union Nos. 399 and 564, entered into collective bargaining agreements (“CBAs”), Pl.'s App. 010-023, that, among other things, bind AMF Mechanical to the terms of the Trust Agreement, see Id. at 012, 016. Under these agreements, AMF Mechanical was required to make monthly contributions to the fund based on the number of hours worked by its employees in covered employment. Compl. ¶ 7; Fanning Decl. ¶ 7.

         On July 27, 2017, Fanning filed suit against AMF Mechanical asserting that, based on the results of a December 2016 payroll audit, the company underreported the number of qualifying hours worked from January 2013 through December 2015 and, as a result, failed to pay in full its owed contributions during that time period. Compl. ¶¶ 14-15; Fanning Decl. ¶¶ 10-11. In his complaint, Fanning requests that the Court require the company to (1) pay the owed contributions, accrued interest, liquidated damages, and related audit costs, legal costs, and attorney's fees; and (2) submit to an audit of its payroll records from January 2016 through May 2016. Compl. at 5-6. On August 29, 2017, AMF Mechanical was served with the complaint, making its answer due 21 days later, on September 19. ECF No. 4; see Fed. R. Civ. P. 12(a)(1)(A)(i). AMF Mechanical did not timely file an answer. On September 26, Fanning requested an entry of default. ECF No. 5. The next day, September 27, the Clerk of Court entered default, ECF No. 6, and Fanning served AMF Mechanical with a copy of the entry of default, ECF No. 7. AMF Mechanical did not move to set aside the entry of default. On October 2, Fanning moved for a default judgment, and served AMF Mechanical with a copy of the motion. ECF Nos. 8, 8-5. AMF Mechanical has not filed any opposition to the motion, or made any other appearance in this case.

         II. Legal Standard

         “A court has the power to enter default judgment when a defendant fails to defend its case appropriately or otherwise engages in dilatory tactics.” Boland v. Elite Terrazzo Flooring, Inc., 763 F.Supp.2d 64, 66-67 (D.D.C. 2011) (citing Keegel v. Key W. & Caribbean Trading Co., 627 F.2d 372, 375 n. 5 (D.C. Cir. 1980)). However, “[b]ecause courts strongly favor resolution of disputes on their merits, ” a default judgment “usually is available ‘only when the adversary process has been halted because of an essentially unresponsive party.'” Id. at 67 (quoting Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)).

         Under Federal Rule of Civil Procedure 55, there is a “two-step procedure” in obtaining a default judgment. Ventura v. L.A. Howard Constr. Co., 134 F.Supp.3d 99, 102 (D.D.C. 2015). First, after a defendant “has failed to plead or otherwise defend, ” the plaintiff may request that the Clerk of the Court enter default against that defendant. Fed.R.Civ.P. 55(a). Second, after default is entered, the plaintiff may move for a default judgment. Fed.R.Civ.P. 55(b)(2). “By providing for a two-step process, Rule 55 allows the defendant the opportunity to move the court to set aside the default before the court enters default judgment.” Int'l Painters & Allied Trades Indus. Pension Fund v. Zak Architectural Metal & Glass, LLC, 635 F.Supp.2d 21, 23 n.1 (D.D.C. 2009); see Fed. R Civ. P. 55(c).

         An entry of default “establishes the defaulting party's liability for the well-pleaded allegations of the complaint.” Elite Terrazzo Flooring, 763 F.Supp.2d at 67 (collecting cases). However, this “does not automatically establish liability in the amount claimed by the plaintiff.” Carazani v. Zegarra, 972 F.Supp.2d 1, 12 (D.D.C. 2013). Rather, the Court “is required to make an independent determination of the sum to be awarded, ” Int'l Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., 239 F.Supp.2d 26, 30 (D.D.C. 2002), and is afforded “considerable latitude” in making its determination, Elite Terrazzo Flooring, 763 F.Supp.2d at 67. In his motion for default judgment, the plaintiff must prove to the Court his requested damages “to a reasonable certainty.” Id. at 68. In support, the plaintiff may offer “detailed affidavits or documentary evidence” on which the Court may rely, and is “entitled to all reasonable inferences from the evidence [he] offer[s].” Amrine Drywall, 239 F.Supp.2d at 30. The Court may conduct a hearing to determine damages, Fed.R.Civ.P. 55(b)(2), but is not required to do so “as long as it ensure[s] that there [is] a basis for the damages specified in the default judgment, ” Elite Terrazzo Flooring, 763 F.Supp.2d at 67 (alterations in original) (internal quotation marks omitted).

         III. Analysis

         A. Liability

         Fanning filed his complaint on July 27, 2017, and served AMF Mechanical by private process server on August 29. ECF Nos. 1, 4. On September 26, Fanning requested an entry of default on the ground that AMF Mechanical had not timely filed an answer to the complaint. ECF No. 5. The Clerk of Court declared AMF Mechanical to be in default on September 27, and subsequently sent AMF Mechanical a copy of the default entry by first-class mail. ECF Nos. 6, 7. On October 2, Fanning moved for a default judgment, and sent AMF Mechanical a copy of the motion by first-class mail. ECF Nos. 8, 8-5. To date, AMF Mechanical has not filed an answer, moved to vacate the default entry, opposed the motion for default judgment, or otherwise defended this action.

         Because default has been entered, AMF Mechanical is liable for the well-pleaded allegations in Fanning's complaint. See Amrine Drywall, 239 F.Supp.2d at 30. Upon review of the complaint and the relevant law, the Court concludes that Fanning's allegations are, in fact, well-pleaded. “ERISA requires employers to make contributions to multiemployer plans ‘in accordance with the terms and conditions of' the relevant collective-bargaining agreements.” Boland v. Smith & Rogers Constr. Ltd., 201 F.Supp.3d 144, 147-48 (D.D.C. 2016) (quoting 29 U.S.C. § 1145). Here, AMF Mechanical was required by the CBAs to contribute “certain sums of money to the Central Pension Fund for certain hours paid to employees” in covered employment. Compl. ¶¶ 6-8. According to Fanning, from January 2013 through December 2015, AMF Mechanical failed to contribute the full amount owed under the CBAs to the Central Pension Fund. Id. ¶¶ 14-15, 17. These delinquent contributions apparently total $48, 927.21 and remain unpaid. Id. ¶¶ 15, 17. Because default has been entered and Fanning's allegations are well-pleaded, AMF Mechanical is liable for its failure to pay its required contributions to the Central Pension Fund.

         “[W]hen a defendant makes no request ‘to set aside the default' and gives no indication of a ‘meritorious defense, '” the Court may enter a default judgment against the defendant. Smith & Rogers Constr., 201 F.Supp.3d at 148 (quoting Fanning v. Permanent Sol. Indus., Inc., 257 F.R.D. 4, 7 (D.D.C. 2009)). Here, AMF Mechanical was served in August 2017 and, since then, has not responded to the complaint, moved to set aside the default entry, opposed Fanning's motion for default ...


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