DISTRICT 65 PENSION PLAN v. CONTROL BUILDING SERVICES, INC. et al
Filing
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OPINION. Signed by Judge William J. Martini on 12/16/14. (gh, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
DISTRICT 65 PENSION PLAN by its
Trustees, ROBERT AMBROSINI, and
LARRY MAGARIK,
Docket No.: 14-cv-5467 (WJM)
OPINION
Plaintiffs,
v.
CONTROL BUILDING SERVICES, INC.
and CONTROL EQUITY GROUP, INC.,
Defendants.
WILLIAM J. MARTINI, U.S.D.J.:
This matter comes before the Court on Plaintiffs’ unopposed Motion for
Default Judgment against Defendants Control Building Services, Inc. (“CBS”) and
Control Equity Group, Inc. (“CEG”) pursuant to Federal Rule of Civil Procedure
55(b)(2). For the reasons set forth below, the Motion is hereby granted.
I.
FACTUAL BACKGROUND
Plaintiffs are an “employee benefit plan,” as defined by ERISA, 29 U.S.C. §§
1002(2), (3), and 1132(d)(1) (the “Plan”), and its Trustees. CBS was an “employer”
within the meaning of ERISA, 29 U.S.C. §§ 1002(5), (11), and (12). CEG was a
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“related employer” within the meaning of the Internal Revenue Code, 26 U.S.C. §
414(b), (c), (m), (n), or (o).
On or about August 31, 1994, CBS’s obligation to contribute to the Plan
ceased, and CBS effected a complete withdrawal from the Plan within the meaning
of ERISA, 29 U.S.C. § 1383. As a result of that withdrawal, CBS became obligated
to make statutorily-required payments to the Plan. (Complaint at ¶ 15). CBS
disputed some of its obligations. CBS and the Plan entered into a settlement
agreement on September 23, 1996. (Complaint at ¶ 16). Pursuant to the terms of
the settlement agreement, CBS elected to satisfy its obligations by making quarterly
payments of $1,407.00 until June 15, 2016. (Complaint at ¶ 16). Beginning with
the fourth quarter payment of 2013, CBS has failed to submit its payments.
(Complaint at ¶ 17).
II.
PROCEDURAL BACKGROUND
Proper service of the Complaint in this action was effectuated on the
Defendants on September 23, 2014. (ECF Nos. 3-4). Despite proper service, the
Defendants have failed to answer this Complaint or otherwise plead. The time for
Defendants to answer or otherwise respond to the Complaint expired. See Fed. R.
Civ. P. 12(a). Pursuant to Federal Rule of Civil Procedure 55(a), the Clerk entered
a Default against Defendants on November 18, 2014. (ECF No. 6). Plaintiffs served
Defendants with Notice of the Motion for Default Judgment on November 18, 2014
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and filed the Motion for Default Judgment on November 18, 2014. (ECF No. 6).
No opposition has been filed.
III.
JURISDICTION
Although a breach of a settlement agreement would normally be a state law
cause of action, see generally Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
375 (1994), because this involves enforcement of rights under ERISA, this Court
has federal question subject matter jurisdiction. See Bd. of Trustees of Hotel & Rest.
Employees Local 25 v. Madison Hotel, Inc., 97 F.3d 1479, 1487 (D.C. Cir. 1996).
IV.
LEGAL STANDARD
The mere fact of default does not entitle Plaintiff to judgment. To enter a
default judgment, the court must first determine whether a sufficient cause of action
has been stated, taking as true the factual allegations of the complaint. See Chanel,
Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535-36 (D.N.J. 2008). Once a cause of
action has been established, the district courts must make explicit factual findings as
to three factors: (1) whether the party subject to default has a meritorious defense,
(2) the prejudice suffered by the party seeking default, and (3) the culpability of the
party subject to default. Joe Hand Promotions, Inc. v. Waldron, CIV. 11-849
RBK/KMW, 2013 WL 1007398, at *4 (D.N.J. Mar. 13, 2013) (citing Doug Brady,
Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008);
Emcasco Ins. Co. v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987)). Although the facts
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plead in the Complaint are accepted as true, Plaintiff must prove damages. See
Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
V.
DISCUSSION
In this case, Plaintiffs plausibly plead that Defendants have breached their
obligations under the settlement agreement. The Court also finds that the facts
alleged and the exhibits attached merit entry of a default judgment. First, the Court
finds that there is no basis for Defendants to claim a meritorious defense, as Plaintiffs
provided ample evidence that Defendants entered into and then breached the terms
of the settlement agreement. See Days Inns Worldwide, Inc. v. LT Hospitality, Inc.,
No. 10-6125, 2011 U.S. Dist. LEXIS 76459, at *5-6 (D.N.J. July 14, 2011). Second,
it is clear that Plaintiffs have been prejudiced by Defendants’ failure to answer
because Plaintiffs have incurred additional costs, have been unable to move forward
with the case, and have been delayed in receiving relief. See Malik v. Hannah, 661
F. Supp. 2d 485, 490-91 (D.N.J. 2009). Third, where, as here, Defendants have
failed to respond, there is a presumption of culpability. See Teamsters Pension Fund
of Phila. & Vicinity v. Am. Helper, Inc., No. 11-624, 2011 U.S. Dist. LEXIS 115142,
at *10 (D.N.J. Oct. 5, 2011).
The Court further finds that Plaintiffs have submitted sufficient evidence to
support its request for damages. Fed. R. Civ. P. 55(b). Plaintiffs have also submitted
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sufficient evidence to support its request for reasonable attorneys’ fees and costs in
accordance with Local Civil Rules 54.1 and 54.2.
VI.
CONCLUSION
For the reasons set forth above, the Plaintiffs’ motion for Default Judgment is
granted. An appropriate order and judgment follows.
/s/ William J. Martini
_____________________________
WILLIAM J. MARTINI, U.S.D.J.
Date: December 16, 2014
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