BOARD OF TRUSTEES OF THE TEAMSTERS LOCAL UNION 929 RETIREMENT PLAN v. HPT FOODS, INC.
Filing
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MEMORANDUM OPINION & ORDER granting 11 Motion for Default Judgment; An Order of Judgment will be entered separately. Signed by Judge Noel L. Hillman on 1/10/17. (js)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BOARD OF TRUSTEES OF THE
TEAMSTERS LOCAL UNION 929
RETIREMENT PLAN f/k/a
TEAMSTERS LOCAL 929
SUPPLEMENTAL INCOME PLAN,
1:16-cv-02034-NLH-JS
MEMORANDUM
OPINION & ORDER
Plaintiff,
v.
HPT FOODS, INC.
doing business as
HOPE PLAZA THRIFTWAY,
Defendant.
APPEARANCES:
SUSAN A. MURRAY
FREEDMAN & LORRY, PC
1601 MARKET STREET
Suite 1500
PHILADELPHIA, PA 19103
On behalf of Plaintiff
HILLMAN, District Judge
WHEREAS, pending before the Court is the motion of Plaintiff,
Board of Trustees of the Teamsters Local Union 929 Retirement Plan
f/k/a Teamsters Local 929 Supplemental Income Plan, for default
judgment against Defendant, HPT Foods, Inc., which operated as
Hope Plaza Thriftway, for unpaid contributions, contractual
liquidated damages, statutory interest and attorneys' fees and
costs incurred by Plaintiff pursuant to 29 U.S.C. §§ 185(a) and
1132(g)(2); and
WHEREAS, Section 515 of the Employee Retirement Income
Security Act, 29 U.S.C. § 1145, provides that "[e]very Employer
who is obligated to make contributions to a multiemployer plan . .
. under the terms of a collectively bargained agreement shall . .
. make such contributions in accordance with . . . such
agreement"; and
WHEREAS, Plaintiff claims that Defendant has failed to pay
contributions in the estimated amount of $9,752.40 to the Fund
from the period from July 1, 2015 to March 27, 2016, when
Defendant ceased operations.
In addition, Defendant owes
liquidated damages in the amount of $1,411.26, which is for latepaid contributions - $436.02 - for the period from March 2015 to
June 2015, plus $975.24 representing 10% liquidated damages on
contributions owed from July 2015 to March 2016.
Defendant also
owes interest on the delinquent contributions in the amount of
$156.77 through July 10, 2016 and attorneys' fees and costs
totaling $3,397.00 through June 19, 2016; and
WHEREAS, because Defendant failed to respond to several
letters Plaintiff sent to Defendant demanding payment of the
outstanding liquidated damages and requesting the production of
records in order to conduct a payroll audit, Plaintiff instituted
the instant suit against Defendant; and
WHEREAS, Defendant was served with Plaintiff’s amended
complaint on May 2, 2016; but
WHEREAS, Defendant failed to file an answer or otherwise
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appear, and on May 31, 2016, the Clerk granted Plaintiff’s request
for the entry of default against Defendant pursuant to Fed. R.
Civ. P. 55(a); and
WHEREAS, because Defendant still has not appeared in this
action, Plaintiff has filed the instant motion for default
judgment against Defendant pursuant to Fed. R. Civ. P. 55(b); and
WHEREAS, although every “well-pled allegation” of the
complaint, except those relating to damages, are deemed admitted,
Comdyne I. Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990),
before entering a default judgment the Court must decide whether
“the unchallenged facts constitute a legitimate cause of action,
since a party in default does not admit mere conclusions of law,”
Chanel, 558 F. Supp. 2d at 535 (citation omitted); and
WHEREAS, the decision to enter a default judgment is left to
the Court's discretion, but “‘in exercising its discretion, the
trial court must consider three factors: 1) whether the plaintiff
will be prejudiced if the default is lifted; 2) whether the
defendant has a meritorious defense; and 3) whether the default
was the result of the defendant's culpable misconduct.’”
International Union of Operating Engineers of Eastern Pennsylvania
and Delaware Benefit Pension Fund v. N. Abbonizio Contractors,
Inc., 134 F. Supp. 3d 862, 865 (E.D. Pa. 2015) (quoting Hritz v.
Woma Corp., 732 F.2d 1178, 1182 (3d Cir. 1984)); and
WHEREAS, with regard to the second two factors, the Court
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finds that because Defendant was properly served but has failed to
appear in this action, it is unknown whether Defendant has a
meritorious defense to Plaintiff’s claims, and the inference is
that Defendant’s default was the result of its own culpable
misconduct; and
WHEREAS, with regard to the first factor, the Court finds
that Plaintiff will be prejudiced if default judgment is not
entered against Defendant, because under ERISA, a plan is still
required to pay benefits to participants regardless of whether an
employer makes its contributions to the plan, and “[i]f the plan
at issue is part of a multi-employer contribution system, as here,
any delinquent contributions owed by a covered employer impairs
the plan's ability to pay both the beneficiaries of the delinquent
employer as well as employees of companies who have made their
contributions.”
Id. (citing 29 C.F.R. § 2530.200b–2) (other
citation omitted); and
WHEREAS, if an employer fails to make the contributions as
required by the collective bargaining agreement and Section 515,
then the employer is subject to the provisions of Section
502(g)(2) of ERISA, 29 U.S.C. § 1132(g)(2), which provides for the
mandatory award of the following if a judgment under Section 515
is entered in the Fund's favor:
(A)
the unpaid contributions,
(B)
interest on the unpaid contributions,
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(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, and
(E)
such other legal or equitable relief as the court
deems appropriate; and
WHEREAS, the Court finds that Plaintiff has provided
competent documentation to support its demand 29 U.S.C. §§ 185(a)
and 1132(g)(2) for unpaid contributions, contractual liquidated
damages, statutory interest and attorneys' fees and costs;
THEREFORE,
IT IS on this
10th
day of
January
, 2017
ORDERED that Plaintiff’s Motion for Default Judgment [11] be, and
the same hereby is, GRANTED.
An Order of Judgment will be entered
separately.
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
At Camden, New Jersey
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