Michiana Area Electrical Workers Health & Welfare Fund et al v. Vanderheyden Inc

Filing 9

OPINION AND ORDER granting Plaintiffs' 7 Motion for Default Judgment. Defendant is ORDERED to pay Plaintiffs $37,211.39 in delinquent contributions, penalties, processing fee, attorneys fees and costs. The Clerk is directed to enter FINAL JUDGMENT stating that Plaintiffs are entitled to the relief ordered herein and further directed to treat this matter as TERMINATED. Signed by Chief Judge Philip P Simon on 10/21/2016. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
HAMMOND DIVISION
TRUSTEES OF THE MICHIANA AREA
ELECTRICAL WORKERS HEALTH &
WELFARE FUND, TRUSTEES OF THE
MICHIANA AREA ELECTRICAL
WORKERS PENSION FUND, AND
TRUSTEES OF THE MICHIANA AREA
ELECTRICAL WORKERS MONEY
PURCHASE PLAN,
Plaintiffs,
v.
VANDERHEYDEN, INC. d/b/a
VANDERHEYDEN TECHNOLOGIES,
Defendant.

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) CAUSE NO. 2:16-CV-0306-PPS-PRC
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OPINION AND ORDER
Before the Court is Plaintiffs’ Motion for Default Judgment against Defendant
Vanderheyden, Inc. d/b/a Vanderheyden Technologies. [DE 7.] Because
Vanderheyden, Inc. has failed to respond to the complaint or otherwise defend this
action, Plaintiff’s Motion for Default Judgment is granted.
BACKGROUND
The Plaintiffs are trustees of a multi-employer health and welfare fund, pension
fund, and money purchase plan (the “Funds”). The Plaintiffs are suing on behalf of the
Funds to collect delinquent employment contributions owed by Vanderheyden, Inc.
under a collective bargaining agreement between it and the IBEW Local 153 and a letter
of assent in which it agrees to be bound by current and subsequent labor agreements,

which includes the trust agreement establishing the Michiana Area Electrical Workers
Pension Fund. [DE 1 at ¶11.] Plaintiffs claim that Vanderheyden, Inc. violated its
obligation under the collective bargaining agreement, the trust agreement, Sections
502(a)(3) and 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1132(a)(3) and § 1145, and Section 301(a) of the Labor Management Relations
Act of 1947 (“LMRA”), 29 U.S.C. § 185(a), in that it failed to pay contributions owed to
the Plaintiffs’ funds, as set forth in a payroll audit for the period of October 2011
through March 2016. [Id. at ¶11.]
Plaintiffs filed the complaint in this matter on June 28, 2016. [DE 1.] Service of
the summons and complaint was received by certified mail by Mark Vanderheyden,
who is a registered agent designated by law to accept service of process on behalf of
Vanderheyden, Inc. d/b/a Vanderheyden Technologies. [DE 4.] Defendant failed to
appear, plead, or otherwise defend the lawsuit. Accordingly, Plaintiffs filed an
application for clerk’s entry of default on July 25, 2016, [DE 6], which the Clerk of the
Court entered on July 29, 2016, [DE 6]. Plaintiffs moved for default judgment on
August 25, 2016. [DE 7.] They seek delinquent contributions, penalties, a processing
fee, attorneys fees, and costs totaling $37,211.39. [DE 8 at 5.] In their motion, Plaintiffs
state that, after this lawsuit was filed, Vanderheyden, Inc. made a payment, but still
owes contributions, penalties, and assessments. [Id. at 2.] Plaintiffs assert that
Vanderheyden, Inc. has never disputed the amounts owed. [Id. at 4.] Vanderheyden,
Inc. still has not appeared or responded.
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DISCUSSION
Federal Rule of Civil Procedure 55 governs the entry of default and default
judgment. Prior to obtaining a default judgment under Rule 55(b)(2), there must be an
entry of default as provided by Rule 55(a). See Hill v. Barbour, 787 F. Supp. 146, 148 n. 4
(N.D. Ill. 1992). Under Rule 55(a), the clerk is to enter the default of a party against whom
a judgment is sought when that party has failed to plead or otherwise defend.
Fed.R.Civ.P. 55(a). This entry is recognition of the fact that a party is in default for a
failure to comply with the rules. Since the Clerk already entered default against
Vanderheyden, Inc., I may enter a default judgment under Rule 55(b)(2). While Rule
55(b) gives district courts the power to enter default judgment, they must exercise
discretion when doing so. See O’Brien v. R.J. O’Brien & Assocs., Inc., 998 F.2d 1394, 1398
(7th Cir. 1993); Davis v. Hutchins, 321 F.3d 641, 646 (7th Cir. 2003). “As a general rule, a
default judgment establishes, as a matter of law, that defendant[] [is] liable to plaintiff as
to each cause of action alleged in the complaint.” O’Brien, 998 F.2d at 1404 (citation and
internal quotation marks omitted).

Courts may consider a number of factors when deciding a motion for default
judgment. These factors include the amount of money potentially involved, whether
material issues of fact or issues of substantial public importance are at issue, whether
the default is largely technical, whether plaintiff has been substantially prejudiced by
the delay involved, and whether the grounds for default are clearly established or are in
doubt. 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure: Civil § 2685

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(3d ed. 1998); see also American Nat’l Bank & Trust Co. of Chicago v. Alps Elec. Co., Ltd., No.
99 C 6990, 2002 WL 484845, at *1 (N.D. Ill. Mar. 29, 2002) (citation omitted).
In this case, there are few material issues of fact, and the grounds for default are
clearly established. This case has been pending since June 2016 and Vanderheyden, Inc.
has shown no intention to respond to the Complaint in the several months since it was
served. Notably, during the interim between when this action was filed and the
Plaintiffs moved for default judgment, Vanderheyden, Inc. made a payment towards its
delinquent contributions, likely in response to this lawsuit and to avoid penalties, but
neglected to respond to the complaint or participate in this lawsuit. The default,
therefore, is not simply a technicality. Moreover, Plaintiffs seek a relatively small
amount of money, and the lawsuit implicates no issues of public importance. Finally,
Vanderheyden, Inc.’s refusal to respond to Plaintiffs’ complaint prejudices Plaintiffs by
delaying their receipt of the money at issue. Thus, all of the factors weigh in favor of
default judgment.
When a court determines that the defendant is in default, all well-pleaded
allegations of the complaint will be taken as true. O’Brien, 998 F.2d at 1404 (citations
omitted); Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994). Here, this means that I must
take as true Plaintiffs’ assertion that Vanderheyden is liable to the Funds for delinquent
contributions. Yet, “[a]lthough upon default the factual allegations of a complaint
relating to liability are taken as true, those allegations relating to the amount of
damages suffered are ordinarily not.” Dundee Cement Co. v. Howard Pipe & Concrete
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Prods. Inc., 722 F.2d 1319, 1323 (7th Cir. 1983) (citations omitted). Though Federal Rule
of Civil Procedure 55(b)(2) provides that a court may hold a hearing or conduct an
investigation if necessary to determine the amount of damages, no such inquiry is
necessary if “the amount claimed is liquidated or capable of ascertainment from definite
figures contained in the documentary evidence or in detailed affidavits.” Id.; see also
Pope v. United States, 323 U.S. 1, 12 (1944) (“It is a familiar practice and an exercise of
judicial power for a court upon default, by taking evidence when necessary or by
computation from facts of record, to fix the amount which the plaintiff is lawfully
entitled to recover and to give judgment accordingly.”) (citations omitted). That is the
case here.
When a benefit plan wins a judgment to enforce payment of delinquent
contributions it is entitled to:
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of –
(I) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in
excess of 20 percent (or such higher percentage as may be permitted under
Federal or State law) of the amount determined by the court under
subparagraph (A),
(D) reasonable attorney’s fees and costs of the action to be paid by the defendant,
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and
(E) such other legal or equitable relief as the court deems appropriate.
29 U.S.C. § 1132(g)(2).
In support of the Funds’ claims for delinquent contributions, Plaintiffs submit the
affidavit of Brian Sullivan, an employee of the Funds whose duties include
administration of collections for employer contributions to the Funds. [DE 8-1 at ¶3.]
Sullivan avers that the Funds are owed $34,782.22 for the payroll audit, post-audit
delinquent contributions, and penalties. [Id. at ¶17.] He also states that the $25.00
processing fee is currently owed and that the Funds incurred court costs and attorneys
fees of $2,404.17 in mounting this collection lawsuit. [DE 8-7 at ¶6; DE 8-8 at ¶¶2-5.]
An affidavit and accompanying documentation from Plaintiffs’ attorney Teresa A.
Massa, reflects that her hourly rate is $225.00, which the Court finds reasonable. [DE 88 at ¶4.] Finally, the fact that Vanderheyden, Inc. made some payments towards its
delinquent contributions after this lawsuit was filed does not relieve it of the obligation
to pay the penalties for those delinquent penalties. See Operating Engineers Local 139
Health Benefit Fund v. Gustafson Const. Corp., 258 F.3d 645, 654 (7th Cir. 2001).
Plaintiffs are owed the full amount sought. Adding together the delinquent
contributions, penalties, processing fee, attorneys fees, and costs, Vanderheyden, Inc.
owes Plaintiffs a total of $37,211.39.
CONCLUSION
The Court, being duly advised, GRANTS the Motion for Default Judgment [DE
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7.] Defendant Vanderheyden Inc. d/b/a Vanderheyden Technologies is ORDERED to
pay Plaintiffs $37,211.39 in delinquent contributions, penalties, processing fee, attorneys
fees, and costs. The Clerk is directed to enter FINAL JUDGMENT stating that Plaintiffs
are entitled to the relief ordered herein. The Clerk is further directed to treat this matter
as TERMINATED.
SO ORDERED.
ENTERED: October 21, 2016

s/Philip P. Simon________________
PHILIP P. SIMON, CHIEF JUDGE
UNITED STATES DISTRICT COURT

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