ITPE PENSION FUND et al v. STRONGHOLD SECURITY, LLC

Filing 11

MEMORANDUM OPINION re: Plaintiffs' Motion for Default Judgment 8 . Signed by Magistrate Judge Alan Kay on 02/23/2012. (lcak1)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

ITPE Pension Fund, Trustees of the
ITPE Pension Fund, et al.
Plaintiffs,
v.
Stronghold Security, LLC
Defendant.

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Civil Number 1:11-cv-940 (ABJ)(AK)

MEMORANDUM OPINION
Pending before the Court is a Motion for Default Judgment [8] by Plaintiffs, ITPE
Pension Fund and the Trustees of the ITPE Pension Fund (collectively, “ITPE Pension Fund”).
Plaintiffs seek delinquent contributions from Defendant Stronghold Security, LLC
(“Stronghold”) under the Employee Retirement Investment Securities Act (“ERISA”). On
August 23, 2011, the Clerk of Court made an Entry of Default as to Stronghold [7]. Plaintiffs
filed a Motion for Default Judgment on September 29, 2011. The Motion was referred to a
United States Magistrate Judge for determination pursuant to LCvR 72.2(a) [10]. An evidentiary
hearing was held on February 21, 2011, at which Defendant was not represented by counsel.1

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Randy Williams, the Director of Operations at Stronghold, did appear at the hearing but
did not bring an attorney to represent the corporation.

I. BACKGROUND
Stronghold took over a contract to provide security services at the U.S. Corps of
Engineers, Washington Aqueduct in Washington, D.C., effective October 1, 2008. As part of
that contract, it became subject to the Collective Bargaining Agreement (“CBA”) negotiated by
the Industrial Technical Professional Employees Union (“ITPE Union”) and the previous
contractor. According to the CBA, Stronghold was required to contribute to the ITPE Pension
Fund based on the number of hours worked by ITPE Union members. The negotiated rate under
the existing contract was $0.80 per hour from October 1, 2008 through October 1, 2009 and was
re-negotiated to $0.70 per hour from October 1, 2009 through October 1, 2011. (Pls.’ Ex. 1 at 1;
Pls.’ Ex. 3 at 2.) Stronghold and the ITPE Union entered into a new CBA, effective August 1,
2011, that increases the rate back to $0.80. (Pls.’ Ex. 4 at 23.)
Both the 2008 and 2011 Collective Bargaining Agreements provide that Stronghold is
bound by the terms and conditions of the Agreement and Declaration of Trust that establishes the
ITPE Pension Fund. (Pls.’ Ex. 1 at 1; Pls.’ Ex. 4 at 23.) The Agreement and Declaration of
Trust, Section 7.01, states that the employer owes contributions to the ITPE Pension Fund by the
15th of each month. (Pls.’ Ex. 5 at 23.) Section 7.02(c) states that if a payment is more than ten
days late, the employer is responsible for interest at a rate of 1.5 percent per month and liquidated
damages of 20 percent of the delinquent amount. (Id. at 24.) In the event of a judicial
proceeding, Section 7.02(d) provides that a court can order the employer to pay for an audit of
the employer’s books and for ITPE Pension Fund’s reasonable attorneys fees and costs. (Id.)

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II. DISCUSSION
A. Standard for Default Judgment
The clerk of court must enter a default “[w]hen a party against whom a judgment for
affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by
affidavit or otherwise.” Fed. R. Civ. P. 55(a). Where the plaintiff’s claim is not for a sum
certain, the party must apply to the court for a default judgment. Fed. R. Civ. P. 55(b). “The
determination of whether default judgment is appropriate is committed to the discretion of the
trial court.” Int’l Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F.
Supp. 2d 56, 57 (D.D.C. 2008) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)).
The standard for default judgment is satisfied where the defendant makes no request to set aside
the default and no suggestion that it has a meritorious defense. J.D. Holdings, LLC v. BD
Ventures, LLC, 766 F. Supp. 2d 109, 113 (D.D.C. 2011).
Upon entry of default by the clerk of the court, the “defaulting defendant is deemed to
admit every well-pleaded allegation in the complaint.” U.S. v. Bentley, 756 F. Supp. 2d 1, 3
(D.D.C. 2010). The court must then make a determination of the sum to be awarded. Id. “The
court may rely on detailed affidavits or documentary evidence to determine the appropriate sum
for the default judgment.” Id.
Under ERISA, a pension fund which has obtained liability against a delinquent employer
may seek damages of (1) the unpaid contributions, (2) interest on the unpaid contributions; (3)
liquidated damages as provided in the pension plan but not exceeding 20 percent of the unpaid
contributions; (4) reasonable attorneys fees and costs; and (5) other legal or equitable relief that
the court finds appropriate. 29 U.S.C. § 1132(g)(2).
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At the hearing, Plaintiff presented three witnesses: (1) Sandra King, the Union
Representative for the ITPE Union; (2) Avery Lewis (“Lewis”), a Special Police Officer for
Stronghold who is employed at the Washington Aqueduct and is the ITPE Union Shop Steward
at the Aqueduct; and (3) Enzo LaVecchia, the Vice-President of ERISA Systems, Inc. and the
Contract Administrator of the ITPE Pension Fund. Plaintiffs also offered exhibits at the hearing.
Defendant offered no evidence prior to or at the evidentiary hearing disputing the requested sum.
B. Delinquent Contributions
Stronghold first became delinquent in its payments to ITPE Pension Fund in January
2009, when it paid $96.00 less than was due. (Pls.’ Mot. for Default Judgment at 6.) Stronghold
has continued to make intermittent payments to ITPE Pension Fund, with the most recent
payment submitted on January 6, 2012. (Pls.’ Ex. 15.) Stronghold has made payments sufficient
to cover its required contributions through April 15, 2011. Plaintiffs seek payment for delinquent
contributions from April 16, 2011 through January 30, 2012. (Pls.’ Ex. 14 at 10.)
To calculate the exact amount of delinquent contributions, Plaintiffs must determine the
number of hours worked during that period by union employees. Defendant has failed to submit
updated contribution reports to Plaintiffs. (Pls.’ Mot.for Default Judgment at 7.) Therefore,
Plaintiffs estimate the number of hours worked based on the average number of hours worked per
month over the last three months that Defendant paid its contributions. (See Pls.’ Ex. 16.)
Plaintiffs seek an increase in the number of hours based on communications with Lewis. Lewis
testified at the hearing that beginning on July 27, 2011, three additional union employees began

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working at the Aqueduct, bringing the total number of union employees from 12 to 15 and
adding 16 hours worked per day. (Pl.’s Ex. 14 at 11.)2
Accounting for the increased number of hours beginning July 27, 2011, Plaintiffs request
$14,258.00 in delinquent contributions. Further, Plaintiffs request $1,776.59 in interest and
$6,477.84 in liquidated damages. The Court will grant Plaintiffs’ requests.
C. Attorneys Fees and Costs
29 U.S.C. § 1132(g)(2)(D) allows a fund bringing a default judgment claim against an
employer to receive attorneys fees and costs. David Kelly (“Kelly”), the attorney for Plaintiffs,
filed a declaration to the Court that includes a detailed log of his time spent on the case and
documents an hourly rate of $280. (Declaration of H. David Kelly, Jr. [8-2].) The Court finds
Kelly’s number of hours, his rate and his costs reasonable, and approves the total amount sought
for attorneys fees and costs of $12,264.00.
D. Audit
Plaintiffs seek an audit of Defendant’s books and records at Defendant’s expense. (Pls.’
Mot. for Default Judgment at 5.) The Trust Agreement allows for an audit of the employer’s
books and records in the event of a judicial proceeding. (Pls.’ Ex. 5 at 24.) Plaintiffs need to
obtain certainty regarding the number of hours worked by ITPE Union employees. Accordingly,
the Court will grant an audit of Defendant’s books and records at Defendant’s expense.

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Lewis indicated a fourth additional employee may now be employed at the Aqueduct but
Plaintiffs’ calculations of delinquent contributions only reflects three additional employees
beginning on July 27, 2011.
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III. CONCLUSION
For the foregoing reasons, the Court grants Plaintiffs’ Motion for Default Judgment [8],
awards damages totaling $34,776.43, and grants leave for an audit of Defendant’s books and
records at Defendant’s expense.
A separate Order of judgment will accompany this Opinion.

Date: February 23, 2012

/s/
ALAN KAY
UNITED STATES MAGISTRATE JUDGE

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