TEAMSTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY et al v. ROCK CANYON, INC.

Filing 6

MEMORANDUM ORDER granting in part and denying in part 5 Motion for Default Judgment. ORDER that judgment shall be entered in favor of Plaintiffs and against Defendant in the amount of $14,231.63. Signed by Judge Renee Marie Bumb on 2/2/2015. (tf, )

NOT FOR PUBLICATION

[Dkt. Ent. 5]

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

TEAMSTERS HEALTH AND WELFARE
FUND OF PHILADELPHIA AND
VICINITY, and WILLIAM J.
EINHORN, Administrator,

Civil Action No. 14-04425
(RMB/JS)

Plaintiffs,

MEMORANDUM ORDER

v.
ROCK CANYON, INC.,
Defendant.

BUMB, United States District Judge:
Plaintiffs Teamsters Health and Welfare Fund of
Philadelphia and Vicinity and William J. Einhorn, Administrator
(the “Plaintiffs”) have moved for default judgment against
Defendant Rock Canyon, Inc. (the “Defendant”) pursuant to
Federal Rule of Civil Procedure 55(b)(2).

For the reasons that

follow, Plaintiffs’ motion is GRANTED.
On July 15, 2014, Plaintiffs commenced the above-captioned
action against Defendant pursuant to Section 301 of the Labor
Management Relations Act (“LMRA”), 29 U.S.C. § 185, Section 502
of the Employee Retirement Income Security Act of 1974
(“ERISA”), 29 U.S.C. § 1132, and Section 515 of ERISA, 29 U.S.C.
§ 1145.

Plaintiffs assert that, pursuant to the Collective

Bargaining Agreements (“Labor Contracts”) and the Agreement and
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Declarations of Trust (“Trust Agreement”) to which Defendant was
a party and/or agreed to abide by, that Defendant is obligated
to make certain contributions to Plaintiffs. (Compl. ¶¶ 7-9.)
However, a compliance audit revealed that Defendant has failed
to remit the full amount of the required contributions for the
period July 2013 through March 2014, and it has refused to
submit the payments despite having notice of the delinquencies.
(Id. at ¶¶ 10-12 & Ex. 2.)
Service of the Summons and Complaint were made upon
Defendant on July 30, 2014. (Dkt. Ent. 3.) The time for
Defendant’s response expired on August 20, 2014, and Defendant
has neither answered nor otherwise responded to the Complaint.
On September 19, 2014, Plaintiffs requested entry of default,
which the Clerk subsequently entered. (See Dkt. Ent. 4.)
Plaintiffs also filed the instant motion on September 19, which
was served upon Defendant by First Class Mail. (Dkt. Ent. 5.)
Defendant also failed to respond to the motion.
“Before granting a default judgment, the Court must
determine (1) whether there is sufficient proof of service,
(2) whether a sufficient cause of action was stated, and
(3) whether default judgment is proper.”

Teamsters Health &

Welfare Fund of Phila. & Vicinity v. Dubin Paper Co., No. 11–
7137, 2012 WL 3018062, at *2 (D.N.J. July 24, 2012) (citations
omitted).

Whether default judgment is proper depends on
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(1) whether a plaintiff will be prejudiced if default is not
granted, (2) whether a defendant has a meritorious defense, and
(3) whether the defendant’s delay is the result of culpable
misconduct.

See N.J. Bldg. Laborers’ Statewide Pension Fund and

Trustees Thereof v. Pulaski Construction, No. 13-519, 2014 WL
793563, at *3-4 (D.N.J. Feb. 26, 2014) (citing Chamberlain v.
Giampapa, 210 F.3d 154, 164 (3d Cir. 2000)).

As noted above,

the docket reflects that the summons and complaint were served
personally upon an owner of Defendant.

When Defendant failed to

respond to the Complaint, Plaintiffs properly sought entry of
default pursuant to Federal Rule of Civil Procedure 55(a).
“Under ERISA, an employer who is obligated to contribute to
a plan under the terms of a collective bargaining agreement must
make such contributions in accordance with the terms and
conditions of that agreement.”

Laborers Int’l Union of N. Am.

Local No. 199 Welfare, Pension, Apprenticeship & Training
Annuity v. RAMCO Solutions, No. 11-4976, 2013 U.S. Dist. LEXIS
120769, at *9–10 (D.N.J. Aug. 26, 2013) (“LIUNA”) (citing ERISA
Section 515, 29 U.S.C. § 1145).

Section 502(a) permits a plan

fiduciary to sue an employer for failure to make the required
contributions.

29 U.S.C. § 1132(a).

If a court enters judgment

in favor of the plan fiduciary, ERISA section 502(g)(2) requires
the court to award (1) unpaid contributions; (2) interest on the
unpaid contributions; (3) liquidated damages; (4) reasonable
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attorneys’ fees and costs; and (5) other relief the court deems
appropriate.

Operative Plasterers & Cement Masons Int’l Ass’n

Local No. 8 v. Specialty Stucco Restoration, No. 05-5879, 2006
U.S. Dist. LEXIS 92460, at *6 (D.N.J. Dec. 20, 2006) (citing 29
U.S.C. § 1132(g)(2)); see also LIUNA, 2013 U.S. Dist. LEXIS
120769, at *10.
According to the Complaint, Defendant was a party to and/or
agreed to abide by the terms of the Labor Contracts obligating
it to remit fringe benefit contributions to Plaintiffs in a
timely manner on behalf of eligible employees. 1

(Compl. ¶¶ 7-9.)

In connection with its motion for default judgment, Plaintiffs
submitted a Labor Contract entered into by Teamsters Local Union
No. 312, inter alia, and the Contractors Association of Eastern
Pennsylvania, signed on June 6, 2012, and effective for the
period May 1, 2012 through April 30, 2014. (Ex. 1.) Plaintiffs
also submitted a signature page signed on behalf of Defendant
and dated July 16, 2012, as well as an addendum signed by
Defendant on the same date, by which Defendant agreed to be
bound by the Labor Contracts during the relevant period. (Id.)
Accordingly, the Court is persuaded that Defendant was obligated
to make contributions pursuant to the Labor Contracts.

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“A consequence of the entry of a default judgment is that
‘the factual allegations of the complaint . . . will be taken as
true.’” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir.
1990) (citation omitted).
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While Defendant’s default constitutes an admission of the
allegations in the Complaint, “[a] default is not an admission
of the amount of damages claimed.” Specialty Stucco Restoration,
2006 U.S. Dist. LEXIS 92460, at *6, 7 (citation omitted). Here,
Plaintiffs further allege that it performed an internal
compliance audit, which revealed that Defendant owes $8,975.76
in outstanding contributions for the period from July 2013 to
March 2014.

(Ex. 2.)

Due to Defendant’s continued refusal to

make the obligated payments, however, that amount grew to
$11,898.80 up to and including delinquencies for June 2014.
(Ex. 5.)

Accordingly, Plaintiffs’ allegations sufficiently

state a cause of action under ERISA.
As to whether default is proper, Defendant’s failure to
respond to Plaintiffs’ Complaint or to oppose their motion for
default judgment has deprived Plaintiffs of the opportunity to
litigate their claims against Defendant.

And, Defendant’s

failure to make the required contributions can negatively impact
Plaintiffs’ ability to pay their beneficiaries and thus
Plaintiffs will be prejudiced if default judgment is not entered
in their favor.

See Specialty Stucco Restoration, 2006 U.S.

Dist. LEXIS 92460, at *6-7; Pulaski Construction, 2014 WL
793563, at *3.

Moreover, because Defendant has failed to file a

responsive pleading indicating why default judgment should not
be entered in Plaintiffs’ favor, the Court is “not in a position
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to determine whether [Defendant] has any meritorious defense or
whether any delay is the result of culpable misconduct.”

See

Specialty Stucco Restoration, 2006 U.S. Dist. LEXIS 92460, at
*6-7 (quoting Carpenters Health & Welfare Fund v. Naglak Design,
No. 94-2829, 1995 U.S. Dist. LEXIS 566, at *7 (E.D. Pa. Jan 18,
1995)); see also Pulaski Construction, 2014 WL 793563, at *3
(“The Court has no duty to construct a defense for Defendant.”).
Accordingly, these factors favor entry of default judgment
against Defendant.
Because this action seeks delinquent contributions, this
Court must award (1) the unpaid contributions; (2) interest;
(3) the greater of either interest or liquidated damages
provided under the plan not to exceed 20% of the unpaid
contributions; and (4) reasonable attorneys’ fees and costs.
U.S.C. § 1132(g)(2).

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Here, Plaintiffs submitted reports showing

outstanding remittances in the amount of $11,898.80. (Exs. 2,
6.)

Plaintiffs further submitted a calculation setting forth

the interest owed for the delinquency periods amounting to
$229.03.

(Ex. 6.)

The Court finds that these amounts are

properly calculated and supported.
Plaintiffs also seek $1,189.88 as liquidated damages on
late paid contributions, noting that the Fund’s Trust Agreements
permit such liquidated damages in an amount of 10% of the
outstanding contributions.

Plaintiff does not appear to have
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submitted the relevant section of the Trust Agreement setting
forth the amount of liquidated damages Defendant agreed to pay,
however, and thus the Court cannot award this amount in the
absence of proper substantiation.

Plaintiffs shall have twenty

days in which to submit additional documentation supporting
Plaintiffs’ entitlement to this amount.
Plaintiffs also seek attorneys’ fees in the amount of
$2,535.00 and costs of $513.80 for a total of $3,048.80.
of Susan A. Murray ¶ 3; see also Ex. 8.)

(Aff.

In support of their

request, Plaintiffs submit timesheets reflecting the legal
services performed on the specified date and by whom they were
performed.

(See Aff. of Susan A. Murray & Ex. 8.)

In addition,

counsel provides the hourly rates charged as follows: $250/hour
for partner, Susan Murray, and $150/hour for senior paralegal,
Kristine G. Becker.

(Aff. of Susan A. Murray ¶ 3.)

In looking

at the timesheets, however, Murray’s rate was $250/hour only for
the May 2014 entries, while all subsequent entries were billed
at $225/hour.

(Ex. 8.)

According to the Court’s calculation,

Becker spent 6.3 hours preparing the Complaint, coordinating
service of process, and calculating interest, attorneys’ fees
and costs.

Murray spent 6.9 hours communicating with

Defendant’s attorney, reviewing and revising the complaint, and
preparing the motion for default judgment.

The Court finds that

Murray’s fees are reasonable in light of the nature of the case
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and the services rendered.

See, e.g., Laborers Int’l Union of

N. Am. Local No. 199 Welfare, Pension, Apprenticeship &
Training, Annuity and Laborers-Employers Co-op. Educ. Trust
Funds of Delaware, Inc. v. Ramco Solutions, No. 11-4976, 2013 WL
4517935, at *5 (D.N.J. Aug. 26, 2013) (finding 10.6 hours of
work at a rate of $300/hour reasonable in ERISA matter).

In

addition, the Court finds that the costs incurred in the amount
of $513.80, which includes filing and service fees, are
reasonable and should be awarded.
As for the fees associated with Becker’s services, the
Court finds that Plaintiff has failed to substantiate the
$150/hour rate, which exceeds the rates courts generally have
found to be reasonable for paralegal work.

Cf. J & J Sports

Prods., Inc. v. Castro, No. 14-557, 2015 WL 389381, at *5
(D.N.J. Jan. 28, 2015) (finding $95/hour to be reasonable rate
for paralegal); Trustees of Nat. Elevator Industry Pension,
Health Ben., Educational, Elevator Industry Work Preservation
Funds v. Elevator Guild, LLC, No. 11-2870, 2013 WL 271888, at *4
(E.D. Pa. Jan. 23, 2013) (finding plaintiffs had adequately
demonstrated $118/hour rate for paralegal was reasonable);
Bucceroni v. City of Phil., No. 03-6371, 2006 WL 3420298, at *3
(E.D. Pa. Nov. 27, 2006) (awarding fees at rate of $100/hour for
paralegal); Haisley v. Sedgwick Claims Mgmt. Servs., Inc., No.
08-1463, 2011 WL 4565494, at *10 (W.D. Pa. Sept. 29, 2011)
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(finding plaintiffs failed to demonstrate $125/hour is a
reasonable rate for paralegals).

Plaintiff may file within

twenty days a supplemental affidavit and/or documentation
addressing the reasonableness of the $150/hour rate for
paralegal services rendered.
ACCORDINGLY, FOR THESE REASONS, IT IS on this, the 2nd day
of February 2015, hereby
ORDERED that Plaintiffs’ motion for default judgment is
GRANTED in part and DENIED in part; and it is further
ORDERED that judgment shall be entered in favor of
Plaintiffs and against Defendant in the amount of $14,231.63,
representing $11,898.80 in unpaid benefit contributions, $229.03
in accrued interest, $1,590.00 in attorneys’ fees, and $513.80
in costs; and it is further
ORDERED that Plaintiffs shall have twenty (20) days within
which to submit documentation supporting their request for
liquidated damages, as well as fees for paralegal services, as
discussed above.
s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE

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