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Service Employees International Union National Industry Pension Fund v. M.R. of Amboy, LLC

United States District Court, District of Columbia

December 3, 2019

SERVICE EMPLOYEES INTERNATIONAL UNION NATIONAL INDUSTRY PENSION FUND, et al., Plaintiffs,
v.
M.R. OF AMBOY, LLC, et al., Defendants.

          MEMORANDUM OPINION

          DABNEY L. FRIEDRICH UNITED STATES DISTRICT JUDGE

         Before the Court is the Plaintiffs' Motion for Default Judgment. Dkt. 9. For the reasons that follow, the motion will be granted.

         I. BACKGROUND

         The plaintiffs in this case are the Service Employees International Union National Industry Pension Fund (Pension Fund), an employee pension benefit plan, and its trustees. Compl. ¶¶ 5-6. The Pension Fund is a multiemployer pension plan organized under the Employee Retirement Security Act (ERISA). Id. ¶ 5; see 29 U.S.C. § 1002(2), (3), (37)(A). The defendants, M.R. of Amboy, LLC and H.W. of Amboy, LLC, are limited liability companies registered in the state of New Jersey. Compl. ¶¶ 8-9. The plaintiffs allege the companies are “in effect alter egos” that operate and do business under the name Amboy Care Center. Id. ¶¶ 10- II. They also allege that the defendants are “employer[s] in an industry affecting commerce” as defined by ERISA. Id. ¶ 7; see 29 U.S.C. § 1002(5), (11), (12).

         The Service Employees International Union Local 1199 United Healthcare Workers East, N.J. Region (the Union) is the exclusive bargaining representative for certain employees at Amboy Care Center. Id. ¶ 12. As relevant here, Amboy's obligations are primarily governed by the collective bargaining agreement between the Union and Amboy. See id. ¶ 13. Under the terms of the agreement, Amboy must contribute certain amounts to the Pension Fund based on the number of hours worked by its employees covered by the agreement. Id. ¶ 16. Amboy must also submit remittance reports to the Pension Fund detailing the names and number of compensable hours for each covered employee. Id. ¶ 18. Pursuant to both the agreement and the Pension Protection Act of 2006, see 29 U.S.C.§ 1085, Amboy is required to pay supplemental contributions if the Pension Fund is deemed to be in “critical status” to help correct the Pension Fund's financial situation. Id. ¶ 21.

         The collective bargaining agreement also binds Amboy to the Pension Fund's Agreement and Declaration of Trust (Trust Agreement). Id. ¶ 17. Under the Trust Agreement, Amboy is liable for interest on delinquent contributions; liquidated damages; and attorneys' fees and costs. Id. ¶ 19. In this action, the plaintiffs seek a total judgment of $23, 623.80 based on allegations that the defendants failed to make required contributions and $6, 240.43 in attorneys' fees and costs. See Pls.' Mot. at 1.[1] The plaintiffs also seek equitable relief directing the defendants to submit missing remittance reports from August to September 2019 and to repay the corresponding contributions, interest and liquidated damages for these months. See Pls.' Mot. at 14-15.

         The plaintiffs filed this action on May 15, 2019. Dkt. 1. The defendants were duly served with the complaint and summons on May 20, 2019. Aff. of Service, Dkt. 5. 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. 6. The Clerk of Court entered default on June 13, 2019. Dkt. 7; Dkt. 8. On October 8, 2019, the plaintiffs moved this Court to enter a default judgment against the defendants under Federal Rule of Civil Procedure 55(b)(2).

         II. LEGAL STANDARD

         The 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) (internal quotation marks omitted).

         Obtaining 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) (internal quotation marks and alterations omitted).

         When 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) (internal quotation marks omitted). In that inquiry, the court has “considerable latitude.” Ventura, 134 F.Supp.3d at 103 (internal 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 (internal quotation marks and alterations omitted).

         III. ANALYSIS

         Due to the Clerk's default entry in this case, the defendants are deemed liable for the well-pleaded allegations in the complaint, including the allegation that the company failed to make timely contributions to the benefit plans. Providence Constr., 304 F.R.D. at 35. With liability established, the Court must independently determine the amount owed by the defendants.

         The defendants' obligations are set forth in Amboy's collective bargaining agreements with the Union. ERISA § 515 mandates that “[e]very employer who is obligated to make contributions to a multiemployer plan . . . [shall] make such contributions in accordance with the ...


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