United States District Court, District of Columbia
SERVICE EMPLOYEES INTERNATIONAL UNION NATIONAL PENSION FUND, et al., Plaintiffs,
BAYVILLE HEALTHCARE, LLC d/b/a CRYSTAL LAKE REHABILITATION AND HEALTHCARE CENTER d/b/a CRYSTAL LAKE, Defendant.
CHRISTOPHER R. COOPER JUDEG
in this ERISA action-the Service Employees International
Union National Pension Fund and its trustees (collectively,
“the Fund”)-seek to recover unpaid contributions
and associated damages from a New Jersey-based healthcare
company. Despite having been properly served, the company has
not responded to the Complaint or the Clerk's entry of
default. Plaintiffs now request a default judgment, monetary
damages, attorney's fees, and court costs. Because
Plaintiffs have adequately established that the Defendant is
liable and that they are entitled to all the requested
relief, the Court will grant their motion and enter judgment
against the company.
Service Employees International Union National Pension Fund
is an “employee pension benefit plan” and a
“multiemployer plan” under the Employee
Retirement Income Security Act of 1974, 29 U.S.C. § 1002
et seq. (“ERISA”). The Fund is financed
by contributions made by employers who are signatories to
collective bargaining agreements. New Jersey-based Defendant
Bayville Healthcare, LLC is one such employer.
is required under its collection bargaining agreement-as
amended by an arbitration award and two memoranda of
agreement-and the Fund's policy governing the collection
of employer contributions (“SEIU's Collection
Policy”) to submit monthly reports and payments to the
plan based on the number of hours worked by its covered
employees. Toussaint Decl. ¶ 11. If Bayville fails to
make the required contributions, the Fund is entitled to file
suit to recover the unpaid contributions; interest on the
unpaid contributions; either an additional assessment of
interest on the unpaid contributions or liquidated damages
provided for under the plan not in excess of 20 percent,
whichever is higher; reasonable attorney's fees and
costs; and other legal or equitable relief as the court deems
appropriate. 29 U.S.C. § 1132(g)(2).
is also obligated to contribute “supplemental
contributions” to the Fund under the Pension Protection
Act of 2006 (“PPA”) because the Fund has been in
critical status since 2009. See 29 U.S.C. §
1085(a)(1)-(2); Toussaint Decl. ¶ 15-16. The collective
bargaining agreement required Bayville to follow the
Preferred Schedule of the Rehabilitation Plan, which sets the
supplemental contributions due each month at a rate that is a
percentage of the base contribution due. The rate increases
yearly. Toussaint Decl. ¶ 17. For example, from July 1,
2016 through June 30, 2017, Bayville owed a supplemental
contribution that equaled 72.1% of its base contribution each
month. From July 1, 2017 through June 30, 2018, the
supplemental rate was 85.5% of the contributions owed. From
July 1, 2018 through June 30, 2019, the rate increased to
99.9%. And effective July 1, 2019, Bayville is required to
supplement its contribution at a rate of 115.4% of what it
owes each month. Toussaint Decl. 17; 2019 Memorandum of
Agreement ¶ 4, Am. Compl. Ex. 4. Any failure to make a
supplemental contribution payment under the PPA is treated as
a delinquent contribution under ERISA, 29 U.S.C. §§
1085(c)(7), (e)(3), (e)(7), which means the Fund can recover
the unpaid supplemental contributions, interest, liquidated
damages, and reasonable attorney's fees and costs.
the Fund is permitted under its agreements with employers to
conduct an audit of its payroll records to ensure that the
remittance reports were accurate and to ensure that the
employer made the appropriate contributions during the audit
period. SEIU's Collection Policy § 4, Am. Compl.
Exh. 6. If the audit reveals that the employer owes
additional contributions, it is entitled to collect them,
plus interest, liquidated damages, attorney's fees and-in
some instances-the cost of the audit itself. Id.
§ 4(10), 5(3). The underreported and unpaid
contributions discovered in an audit are owed in addition to
any delinquent contributions calculated based on the
remittance reports themselves.
original Complaint, the Fund alleged that Bayville
“failed to remit certain reports, contributions, and
resulting interest and liquidated damages due for the period
of July 2016 through February 2019.” Compl. ¶ 30.
Bayville was properly served on April 3, 2019. It did not
respond to the Complaint, however, and the Clerk of the Court
entered default on April 30, 2019. The Fund then moved to
amend its Complaint, which the Court granted, to add a count
related to damages owed pursuant to an audit of
Bayville's payroll for the years 2016 and 2017 conducted
by the Fund detailing underreporting by Bayville. The Fund
filed the Amended Complaint on July 23, 2019. Via email,
without entering an appearance, Bayville requested an
extension of the deadline to respond to the Amended
Complaint. The Court granted the extension, but Bayville
still failed to respond. With the Court's prompting, the
Fund again sought entry of default. The Clerk obliged on
September 16, 2019.
Fund then petitioned the Court to enter a default judgment,
seeking a monetary judgment against Bayville in the amount of
$263, 176.78 (plus additional interest), which includes
delinquent contributions for the period of July 2016 through
September 2019, interest, liquidated damages, and audit
testing fees, as well as $11, 980.79 in attorney's fees
and court costs. Mot. Default J. 18. Bayville-again without
entering an appearance-sought an extension of time to respond
to the Fund's Motion for Default Judgment. The Court
granted the extension, but Bayville again failed to respond.
The Court now holds that entry of default judgment in favor
of the Fund is appropriate.
Standard of Review
judgment is a two-step procedure. See, e.g.,
Boland v. Cacper Constr. Corp., 130 F.Supp.3d 379,
382 (D.D.C. 2015). First, a plaintiff requests 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). Then, the plaintiff must move for entry
of default judgment. 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) (internal citation omitted).
“Default establishes a defaulting party's liability
for the well-pleaded allegations of the complaint.”
Id. After establishing liability, the court must
make an independent evaluation of the damages to be awarded
and has “considerable latitude in determining the
amount of damages.” Id. The court may 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)).
Court must determine whether a default judgment is
appropriate and, if Bayville is liable, whether Plaintiffs
are entitled to the manner and amount of relief they request.
The Court concludes that the company breached its duties
under ERISA and the SEIU Collection ...