TRUSTEES OF THE NEW JERSEY B.A.C. HEALTH FUND et al v. THURSTON F. RHODES, INC.

Filing 19

OPINION. Signed by Judge Renee Marie Bumb on 8/9/2017. (tf, )

[Docket No. 14]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
CAMDEN VICINAGE

TRUSTEES OF THE NEW JERSEY
B.A.C. HEALTH FUND, et al.,
Plaintiff(s),

Civil No. 16-892 (RMB/AMD)
OPINION

v.
THURSTON F. RHODES, INC. d/b/a
J & M CONCRETE & GENERAL
CONTRACTING,
Defendant.

APPEARANCES:
Milania Dostanitch, Esq.
Nicole Marimon, Esq.
Virginia & Ambinder, LLP
40 Broad Street, 7th Floor
New York, New York 10004
Attorneys for Plaintiffs Trustees of the New Jersey B.A.C.
Health Fund, Trustees of the New Jersey B.A.C. Annuity
Fund, Trustees of the B.A.C. Local 5 Pension Fund, Trustees
of the New Jersey BM&P Apprentice and Education Fund,
Trustees of the Bricklayers & Trowel Trades International
Pension Fund, Trustees of the International Masonry
Institute, and Richard Tolson, as Administrator of B.A.C
Administrative District Council of New Jersey

BUMB, UNITED STATES DISTRICT JUDGE:
This matter comes before the Court upon the renewed Motion
for Default Judgment [Docket No. 14] by Plaintiffs Trustees of
the New Jersey B.A.C. Health Fund, Trustees of the New Jersey
B.A.C. Annuity Fund, Trustees of the B.A.C. Local 5 Pension

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Fund, Trustees of the New Jersey BM&P Apprentice and Education
Fund (the “Local Funds”), Trustees of the Bricklayers & Trowel
Trades International Pension Fund (“IPF”), Trustees of the
International Masonry Institute (“IMI” and, together with IPF
and the Local Funds, the “Funds”), and Richard Tolson, as
Administrator of B.A.C Administrative District Council of New
Jersey (the “Union” and, together with the Funds, the
“Plaintiffs”), seeking the entry of default judgment against
Defendant Thurston F. Rhodes, Inc. d/b/a J & M Concrete &
General Contracting (the “Defendant”), pursuant to Federal Rule
of Civil Procedure 55(b)(2).

For the following reasons, the

Plaintiffs’ motion will be granted, in part, and denied, in
part.
I.

FACTUAL AND PROCEDURAL BACKGROUND
On February 18, 2016, Plaintiffs commenced the instant

litigation against Defendant, seeking to recover amounts owed to
Plaintiffs pursuant to a collective bargaining agreement and
Sections 502(a)(3) and 515 of the Employee Retirement Income
Security Act (“ERISA”) of 1974, 29 U.S.C. §§ 1332(a)(3), 1145,
and Section 301 of the Labor Management Relations Act of 1947,
29 U.S.C. § 185.

Compl. ¶¶ 1, 16-23 [Docket No. 1].

As alleged

in the Complaint, Defendant did not pay certain required
contributions and dues check-offs owed to its employees for work
performed on the Yard House, Moorestown Mall project between

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August 27, 2015 and October 16, 2015 (the “Mall Project”).
Compl. ¶ 14.
The Defendant was served with the Summons and Complaint on
February 24, 2016.

Marimon Decl. Ex. B [Docket No. 16-2].

The

time for Defendant to respond to the Complaint expired on March
16, 2016.

To date, Defendant has not answered or otherwise

responded to the Complaint.

The Clerk of the Court, upon

request by Plaintiffs, entered default against Defendant on July
14, 2016 [Docket Nos. 5, 6].

Thereafter, Plaintiffs filed a

Motion for Default Judgment [Docket No. 6], which the Court
denied without prejudice on January 10, 2017 due to Plaintiffs’
failure to establish sufficient proof of service upon Defendant
and to adequately support their entitlement to the relief sought
[Docket No. 12].

At the Court’s direction, Plaintiffs served

Defendant with a copy of the January 10, 2017 Memorandum Opinion
and Order.

Marimon Decl. Ex. E [Docket No. 16-5].

Plaintiffs

filed the renewed Motion for Default Judgment against Defendant
on February 9, 2017 [Docket No. 14] and served Defendant [Docket
No. 18].

Defendant has not opposed or otherwise responded to

the instant motion or appeared in the litigation.
Plaintiffs now request that default judgment be entered in
Plaintiffs’ favor and against Defendant in the total amount of
$18,297.93, representing (1) contributions of $5,593.15;
(2) interest thereon of $948.31; (3) liquidated damages of

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$1,118.63; (4) dues check-offs of $607.50; and (5) attorneys’
fees and costs of $10,030.34, plus interest from February 7,
2017 through the date of the entry of default judgment.
II.

LEGAL STANDARD

“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. Rock Canyon, Inc., 2015 WL
881694, at *1 (D.N.J. Mar. 2, 2015) amended on reconsideration,
2015 WL 1321722 (D.N.J. Mar. 24, 2015) (quoting Teamsters Health
& Welfare Fund of Phila. & Vicinity v. Dubin Paper Co., 2012 WL
3018062, at *2 (D.N.J. July 24, 2012)).

The propriety of

default judgment depends on (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.

Butler v. Pennsylvania

Bd. of Prob. & Parole, 613 F. App’x 119, 122 (3d Cir. 2015)
(quoting Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir.
2000)).
III. ANALYSIS
A. Proof of Service
The Summons and Complaint were served personally upon Jesus
Mendoza, a managing agent authorized to accept service on behalf

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of Defendant, on February 24, 2016.
No. 16]; Marimon Decl. Ex. B.

Marimon Decl. ¶ 4 [Docket

When Defendant failed to timely

respond to the Complaint, Plaintiffs properly sought entry of
default pursuant to Federal Rule of Civil Procedure 55(a)
[Docket No. 5].

Likewise, Plaintiffs have served Defendant with

the original Motion for Default Judgment, the Court’s Memorandum
Opinion and Order, and the renewed Motion for Default Judgment.
Marimon Decl. Exs. C, E [Docket Nos. 16-3, 16-5]; Aff. of Serv.
[Docket No. 18].

Accordingly, the Court finds that there has

been sufficient proof of service upon the Defendant.
B. Cause of Action
“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, 2013 WL 4517935, at *4 (D.N.J. Aug.
26, 2013) (“LIUNA”) (citing ERISA Section 515, 29 U.S.C.
§ 1145); see also Rock Canyon, 2015 WL 881694, at *1.

ERISA

Section 502(a) allows a plan fiduciary to sue an employer for
failure to make required contributions to a benefit fund.
29 U.S.C. § 1132(a); Dubin Paper Co., 2012 WL 3018062, at *3.
If a court grants default judgment in favor of the plan
fiduciary, ERISA Section 502(g)(2) requires the court to award

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(1) unpaid contributions; (2) interest on the unpaid
contributions; (3) liquidated damages not to exceed twenty
percent of the unpaid contributions; (4) reasonable attorneys’
fees and costs; and (5) other relief the court deems
appropriate.

29 U.S.C. § 1132(g)(2); see also Rock Canyon,

2015 WL 881694, at *1; LIUNA, 2013 WL 4517935, at *4.
According to the Complaint, Defendant was bound by a
collective bargaining agreement with Plaintiffs.

Compl. ¶ 12.

Additionally, in connection with the instant motion, Plaintiffs
submitted a copy of the collective bargaining agreement, which
establishes that, under Article XI of the agreement, Defendant
was required to pay specified contributions to the Plaintiffs.
Mercadante Decl. Ex. A, Art. XI {Docket No. 15-1].

Plaintiffs

further allege that Defendant contravened the collective
bargaining agreement by failing to remit certain sums to the
Funds as required by Article XI.

Compl. ¶ 17. Accordingly, the

Court finds that Plaintiffs have demonstrated that Defendant was
obligated to make contributions pursuant to the collective
bargaining agreement.
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.”

Operative Plasterers &

Cement Masons Int’l Ass’n Local No. 8 v. Specialty Stucco
Restoration, 2006 U.S. Dist. LEXIS 92460, at *7 (D.N.J. Dec. 20,

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2006) (internal citation omitted).

Here, Plaintiffs submit the

Declaration of Gary Mercadante, Administrator of the Local Funds
[Docket No. 15].

Based upon his review of Plaintiffs’ records,

Mr. Mercadante calculated that Defendant failed to pay
$10,503.68 in contributions to the Funds and $690.54 in dues
check-offs to the Union as required by the collective bargaining
agreement for work performed in connection with the Mall
Project.

Mercadante Decl. ¶ 6.

As of February 7, 2017, the

date of Mr. Mercadante’s declaration, $5,593.15 in contributions
and $607.50 in dues check-offs remain outstanding.

Id.

Having reviewed the Complaint and Plaintiffs’ submissions
in connection with the instant motion, the Court finds that
Plaintiffs’ allegations sufficiently state a cause of action
under ERISA.
C. Propriety of Default Judgment
To determine whether default judgment is proper, the Court
must first consider the prejudice to the Plaintiffs if the
Motion for Default Judgment is not granted.

By failing to

respond to Plaintiffs’ Complaint or to oppose the Motion for
Default Judgment, Defendant has deprived Plaintiffs of the
opportunity to litigate their claims against Defendant.
Further, Defendant’s failure to make the required contributions
may negatively impact Plaintiffs’ ability to pay their
beneficiaries.

See New Jersey Bldg. Laborers’ Statewide Pension

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Fund & Trustees Thereof v. Pulaski Const., 2014 WL 793563, at *3
(D.N.J. Feb. 26, 2014); see also Specialty Stucco, 2006 U.S.
Dist. LEXIS 92460, at *7.

Therefore, the Court finds that

Plaintiffs would be prejudiced if default judgment is not
entered in their favor.
This Court next evaluates whether the Defendant has any
meritorious defenses.

As Defendant has failed to submit a

responsive pleading addressing why default judgment should not
be entered in Plaintiffs’ favor, the Court is “not in a position
to determine whether [Defendant] has any meritorious defense or
whether any delay is the result of culpable misconduct.”
Specialty Stucco, 2006 U.S. Dist. LEXIS 92460, at *6-7 (quoting
Carpenters Health & Welfare Fund of Philadelphia & Vicinity v.
Naglak Design, 1995 WL 20848, at *2 (E.D. Pa. Jan. 18, 1995));
see also Pulaski Const., 2014 WL 793563, at *3 (“The Court has
no duty to construct a defense for Defendant.”).

The Court

nevertheless notes that there is no indication that Defendant
has a meritorious defense.
Finally, Defendant’s “failure to respond permits the Court
to draw an inference of culpability on [its] part.”

Fed. Ins.

Co. v. Secure Cargo Corp., 2013 WL 1222653, at *3 (D.N.J. Mar.
25, 2013) (citing Surdi v. Prudential Ins. Co. of Am., 2008 WL
4280081, at *2 (D.N.J. Sept. 8, 2008)).

Defendant was served

with the Complaint, as well as the original and the renewed

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Motions for Default Judgment, but did not respond.

Moreover,

Mr. Giletto’s August 9, 2016 letter to the Court on Defendant’s
behalf [Docket No. 9], in which he requested additional time to
obtain counsel, establishes that Defendant is aware of the
litigation.

On August 12, 2016, the Court granted Defendant an

additional thirty days to obtain counsel and participate in the
litigation [Docket No. 10].

Yet Defendant failed to initiate

further contact with the Court or Plaintiffs, apart from a phone
call to Plaintiffs’ counsel in late September 2016 to discuss
the facts of the case [Docket No. 11].

The Court finds that

these facts and Defendant’s longstanding inaction, despite being
aware of this lawsuit, are indicative of culpability on
Defendant’s part.

See Moroccanoil, Inc. v. JMG Freight Grp.

LLC, 2015 WL 6673839, at *2 (D.N.J. Oct. 30, 2015) (citing
Nationwide Mut. Ins. Co. v. Starlight Ballroom Dance Club, Inc.,
175 F. App’x 519, 523 (3d Cir. 2006) (holding that defendant’s
failure to respond to communications from plaintiff and the
court can constitute culpability)).

These factors favor entry

of default judgment against Defendant.
D. Damages
The Court now considers Plaintiffs’ request for damages.
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.”

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Specialty Stucco, 2006 U.S.

Dist. LEXIS 92460, at *7 (internal citation omitted).

Because

this action seeks delinquent contributions, the Court must award
(1) the unpaid contributions; (2) interest; (3) the greater of
either interest or liquated damages provided under the plan, not
to exceed 20% of the unpaid contributions; and (4) reasonable
attorneys’ fees and costs.

29 U.S.C. § 1132(g)(2).

Here, Plaintiffs seek $5,593.15 in outstanding unpaid
contributions and $607.50 in outstanding dues check-offs for
work performed in connection with the Mall Project under the
terms of the parties’ collective bargaining agreement.

In

support of these amounts, Plaintiffs submit Mr. Mercadante’s
Declaration, as well as the spreadsheets setting forth his
calculations.

Mercadante Decl. ¶¶ 1, 6; Mercadante Decl.

Exs. C, D [Docket Nos. 15-3, 15-4].

Plaintiffs further seek

interest on the delinquent contributions owed to the Local Funds
in the amount of $238.07 and to the IPF in the amount of
$710.24, for a total of $948.31.

Mercadante Decl. ¶ 10.

The

interest owed was calculated pursuant to the Statement of Policy
for Collection of Employer Contributions (the “Collection
Policy”), which provides for 10% compounded interest on
delinquent contributions payable to the Local Funds and 15%
compounded interest payable to the IPF.

Id. ¶¶ 9-10; Mercadante

Decl. Ex. E, Art. II ¶ 6 [Docket No. 15-5].

Plaintiffs also

submit a spreadsheet setting forth Mr. Mercadante’s interest

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calculations in support of their request.
Ex. F [Docket No. 15-6].

Mercadante Decl.

The Court finds that these amounts

have been properly calculated and supported.
Plaintiffs also seek liquidated damages in the amount of
$1,118.63.

Mercadante Decl. ¶ 11.

ERISA provides for

liquidated damages not to exceed twenty percent of the unpaid
contributions.

29 U.S.C. § 1132(g)(2).

Additionally, the

Collection Policy provides for the recovery of liquidated
damages of 20% of the amount of delinquent contributions owed.
Mercadante Decl. Ex. E, Art. II ¶ 6.

Here, $1,118.63 represents

20% of the outstanding unpaid contributions of $5,593.15.
Accordingly, the Court finds that Plaintiffs’ request for
liquidated damages is properly supported and appropriate.
Finally, Plaintiffs seek attorneys’ fees in the amount of
$9,241.00 and costs of $609.34, for a total of $9,850.34.1
Marimon Decl. ¶¶ 16-17.

In support of their request, Plaintiffs

submit timesheets documenting the legal services performed on
the specified dates and by whom they were performed.
Decl. Ex. F [Docket No. 16-6].

Marimon

Additionally, counsel provides

the hourly rates charged as follows: $90 for paralegals; $200
for associates Nicole Marimon, Milana Dostanitch, and Thomas

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Plaintiffs erroneously conclude that the sum of these
figures is $10,030.34. See, e.g., Marimon Decl. ¶¶ 16-18. The
Court assumes this was a mere miscalculation.
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Horgan; and $200 for law clerk Jesse Isleman.

Marimon Decl.

¶¶ 11-15.
According to this Court’s calculations and review of the
time sheets, the three associates and one law clerk collectively
billed a total of 44 hours, amounting to $8,800.00 in legal
fees.

Marimon Decl. Ex. F.

Additionally, four paralegals

collectively billed 4.9 hours, amounting to $441.00 in paralegal
fees.

Id.

The Court finds that the hourly rates billed for the

associates, law clerk, and paralegals are reasonable in the
ERISA context.

See e.g., J & J Sports Prods, Inc. v. Castro,

2015 WL 389381, at *5 (D.N.J. Jan. 28, 2015) (finding an hourly
rate of $95 appropriate for a paralegal); Dubin Paper Co., 2012
WL 3018062, at *5 (finding that an hourly rate of $275 was
appropriate in an ERISA case).

The Court also finds the 4.9

hours billed by the paralegals to be reasonable and awards
Plaintiffs $441.00 in paralegal fees.
The Court, however, does not find the number of attorney
hours billed to be reasonable.

Prior to the entry of this

Court’s January 10, 2017 Memorandum Opinion and Order,
Plaintiffs’ counsel billed 14.8 attorney hours preparing the
Complaint and the first Motion for Default Judgment, performing
legal research in connection with alter ago theories of
liability, and communicating regarding the litigation.

Indeed,

Plaintiffs’ counsel billed 9.7 hours, or $1,940, preparing just

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the original Motion for Default Judgment, which included no
memorandum of law and which this Court found to be deficient.
Thereafter, in response to this Court’s Memorandum Opinion and
Order directing Plaintiffs to submit a properly supported
renewed Motion for Default Judgment addressing the deficiencies
identified by the Court, Plaintiffs’ counsel billed 29.2
additional attorney hours preparing their roughly 11-page
memorandum of law and supporting documents.

The Court sees no

reason why counsel billed over forty hours preparing a routine
and properly supported motion for default judgment.

See, e.g.,

LIUNA, 2013 WL 4517935, at *5 (finding 10.6 hours at an hourly
rate of $300 reasonable for an ERISA case); Dubin Paper Co.,
2012 WL 3018062, at *5 (finding 10.5 hours billed at hourly rate
of $275 to be reasonable in ERISA context); Teamsters Health &
Welfare Fund v. Cressman Trucking, Inc., 2012 WL 32131, at *2
(D.N.J. Jan. 4, 2012) (finding 17.2 hours billed at hourly rate
of $250 to be reasonable in ERISA case); Teamsters Pension Fund
of Philadelphia & Vicinity v. Am. Helper, Inc., 2011 WL 4729023,
at *5 (D.N.J. Oct. 5, 2011) (finding 9.32 hours billed at hourly
rate of $250 to be reasonable in ERISA case).
As a result, the Court denies Plaintiffs’ request for
attorneys’ fees without prejudice.

See Trustees of the New

Jersey B.A.C. Health Fund v. Bryant Caulking & Waterproofing,
Inc., 2017 WL 784944, at *7 (D.N.J. Mar. 1, 2017) (denying

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without prejudice plaintiffs’ request for attorneys’ fees in the
amount of $14,709 as unreasonable).

The Court will direct

counsel to address the reasonableness of their fees.
Finally, Plaintiffs are entitled to recover reasonable
costs of the action under Section 502(g)(2)(D) of ERISA.
29 U.S.C. § 1132(g)(2)(D).

Here, Plaintiffs submit billing

records accounting for administrative costs including filing
fees and service fees associated with this litigation, amounting
to $609.34.

Marimon Decl. Ex. F.

The Court finds that these

costs are reasonable and should be awarded.
In sum, the Court shall award Plaintiffs a total amount of
$9,317.93, representing (1) $5,593.15 in unpaid contributions;
(2) $948.31 in interest; (3) $1,118.63 in liquidated damages;
(4) $607.50 in dues check-offs; (5) $441.00 in paralegal fees;
and (6) $609.34 in litigation costs, as well as interest
incurred from the date of filing the renewed motion through the
entry of this Order and accompanying Judgment.

Plaintiffs’

request for attorneys’ fees is denied without prejudice.
Plaintiffs’ counsel shall be granted an opportunity to provide
additional support for the reasonableness of their request for
attorneys’ fees.

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IV.

CONCLUSION

For the foregoing reasons, Plaintiffs’ Motion for Default
Judgment will be granted, in part, and denied, in part.
Specifically, the Motion is denied without prejudice as to
Plaintiffs’ request for attorneys’ fees.
in all other respects.

The Motion is granted

An appropriate Order and Judgment shall

issue on this date.
s/Renée Marie Bumb
RENÉE MARIE BUMB
UNITED STATES DISTRICT JUDGE
Dated: August 9, 2017

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