TRUSTEES OF THE NEW JERSEY B.A.C. HEALTH FUND et al v. EVEREST MASONRY CONSTRUCTORS INCORPORATED

Filing 22

OPINION. Signed by Judge John Michael Vazquez on 1/26/2017. (ld, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

TRUSTEES OF THE NEW JERSEY B.A.C.

HEALTH FUND, etal.

Civil Action No. 15-7703

Plaintiffs^
OPINION
V.

EVEREST MASONRY CONSTRUCTORS

INCORPORATED,

Defendant.

John Michael Vazquez, U,S»D.J,

I.

INTRODUCTION

This matter comes before the Court on Plaintiffs' unopposed motion for default judgment

against Defendant Everest Masonry Constructors Incorporated ("Everest") under Fed. R. Civ. P.
55(b). D.E. 17. The Court reviewed all submissions made in support ofthe motion, and considered

the motion without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the
reasons that follow. Plaintiffs' motion is granted.

II.

FACTS AND PROCEDURAL HISTORY

Through this action, Plaintiffs seek to collect delinquent employer benefit contributions.
Plaintiffs are (1) trustees of the New Jersey B.A.C. Health Fund (the "Health Fund"); (2) trustees

of the New Jersey B.A.C. Annuity Fund (the "Annuity Fund"); (3) trustees of the Local 4 Pension
Fund (the "Local 4 Pension Fund"); (4) trustees of the B.A.C. Local 5 Pension Fund (the "Local 5
Pension Fund"); (5) trustees of the New Jersey BM&P Apprentice and Education Fund (the
"Apprentice Fund") (collectively, the "Local Benefit Funds"); (6) trustees of the Bricklayers &
Trowel Trades International Pension Fund (the "IFF"); (7) trustees of the International Masonry
Institute (the "IMI" and together with the IFF, the "International Benefit Funds") (collectively with

the Local Benefit Funds, the "Funds"); and (8) Richard Tolson as administrator of the B.A.C.
Administrative District Council of New Jersey (the "Union").
Everest is a party to a Collective Bargaining Agreement (the "CBA") with the Union; the
CBA establishes the terms and conditions of employment for Everest employees that perform

covered work, as defined by the CBA, within a specific geographic area. Compl. ^13, D.E. 1;
Declaration of Gary Mercadante ("Mercadante Deck") Exs. A-B, D.E. 19. The CBA requires that

for each hour of covered work performed by Everest employees, Everest must make specified
contributions to the Funds, and dues check-offs and other contributions to the Union. Compl. ^
14; Mercadante Decl. Ex. A, Art. XI.

From April 22, 2015 through May 15, 2015, Everest

employees performed covered work at Ocean County College (the "Ocean County Project"), and

from April 30,2015 through May 7,2015, performed covered work at Passaic Community College
(the "Passaic Community Project" and collectively, the "Projects").

Everest failed to make

required contributions to the Funds for the Projects. Compl. ^ 15-16. Plaintiffs also contend that
Everest failed to pay obligatory dues check-offs to the Union for the Projects. Id.
Plaintiffs filed their two-count complaint against Everest on October 26, 2015. In Count

One, Plaintiffs allege that Everest's failure to make contributions to the Funds is in contravention
of the CBA and Section 515 of ERISA, 29 U.S.C. § 1145. Id.

18-22. In Count Two, Plaintiffs

contend that Everest's failure to remit dues check-offs to the Union violated the CBA. Id. ^ 24.

On January 19, 2016, Plaintiffs were granted a ninety-day extension to effectuate service
because, after repeated attempts, their process server was unable to locate and serve Defendant.
D.E. 4. On April, 14, 2016, Plaintiffs filed a declaration (1) explaining their diligent efforts to
serve Defendant; (2) seeking a thirty-day extension to serve the company; and (3) requesting

permission to serve by alternative means pursuant to New Jersey court rules. D.E. 12. The Court
granted Plaintiffs' requests the following day. D.E. 13. On April 18, 2016, Plaintiffs filed an
affidavit of service explaining that they served Defendant via certified mail, return receipt

requested, and first class mail, at "Defendant's registered agent's address on file with the State of
New Jersey Division of Revenue and Enterprise Services, a United Parcel Service box registered
to the Defendant, and the Defendant's principal place of business." D.E. 14. Defendant failed to
answer, move, or otherwise respond to the complaint. As a result, on November 15, 2016, default

was entered against Everest for failure to plead or otherwise defend.' D.E. 16. On December 2,

' Rule55(a) directs the Clerkof the Courtto entera party's default whenthat party"againstwhom
a judgment for affirmativerelief is sought has failed to plead or otherwise defend, and that failure
is shown by affidavit or otherwise." Fed. R. Civ. P. 55(a).

2016, Plaintiffs filed this motion for default judgment pursuant to Rule 55(b).^ D.E. 17.
In support for their claim for damages in this motion, Plaintiffs submitted a declaration
firom Gary Mercadante, the administrator of the Local Benefit Funds. Mercadante Decl. ^ 1. The

declaration includes a copy of "shop steward reports" for the projects, which outline the number
of hours Everest employees worked {id. Exs. C, E), a spreadsheet outlining Everest's delinquency
calculations {id. Exs. D, F), and a spreadsheet that provides the computation of interest due for the
delinquent contributions through December 1, 2016 {id. Ex. H). Plaintiffs also submitted a
declaration from Nicole Marimon, an attorney for Plaintiffs, explaining the legal work performed
on this case. See Declaration of Nicole Marimon, Esq. ("Marimon Decl."), D.E. 20.
III.

LAW AND ANALYSIS

A. Standard of Review

"The entry of a default judgment is largely a matter of judicial discretion, although the
Third Circuit has emphasized that such 'discretion is not without limits,.. . and [has] repeatedly
state[d] [its] preference that cases be disposed of on the merits whenever practicable.'" Chanel,
Inc. V. Gordashevsky, 558 F. Supp. 2d 532, 535 (D.N.J. 2008) (quoting//nVz v. Woma Corp., 732
F.2d 1178, 1181 (3d Cir. 1984)).

Prior to entering a default judgment, the court must: "(1) determine it has jurisdiction both

over the subject matter and parties; (2) determine whether defendants have been properly served;
(3) analyze the Complaint to determine whether it sufficiently pleads a cause of action; and (4)

^ Plaintiffs' affidavit of service, which was filed with this motion, indicates that on December 2,
2016, Plaintiffs mailed a copy of this motion to Defendant at the same addresses upon which they
served the complaint. D.E. 21.
4

determine whether the plaintiff has proved damages." Moroccanoil, Inc. v. JMG Freight Grp.
LLC, No. 14-5608,2015 WL 6673839, at *1 (D.N.J. Oct. 30,2015). Additionally, the Court must

consider the following three factors: (1) prejudice to the plaintiff if default is denied, (2) whether
the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to
culpable conduct. Id.', see also Nationwide Mut. Ins. Co. v. Starlight Ballroom Dance Club, Inc.,
175 F. App'x 519, 522 (3d Cir. 2006).
B. Jurisdiction and Service

"Before entering a default judgment as to a party *that has not filed responsive pleadings,
the district court has an affirmative duty to look into its jurisdiction both over the subject matter

and the parties.'" HICA Educ. Loan Corp. v. Surikov, No. 14-1045, 2015 WL 273656, at *2
(D.N.J. Jan. 22,2015) {quotingRamada Worldwide, Inc. v. Benton Harbor Hari Ohm, L.L.C., No.
08-3452, 2008 WL 2967067, at *9 (D.N.J. July 31, 2008)).
The Court has subject matter jurisdiction over this matter. Congress granted district courts

with exclusive subject matter jurisdiction for civil actions that arise under ERISA, without respect

to the amount in controversy or the citizenship of the parties. 29 U.S.C. § 1132(e)-(f). This Court
also has jurisdiction under Section 301 of the LMRA, which grants district courts with jurisdiction
over "[s]uits for violation of contracts between an employer and a labor organization representing

employees in an industry affecting commerce," also without respect to the amount in controversy
or citizenship of the parties. 29 US.C. § 185(a).

The Court also has personal jurisdiction over Defendant.

Everest is a New Jersey

corporation that maintains its principal place ofbusiness in New Jersey. Compl. f 12. As a result.

Everest is subject to general jurisdiction in this state. See Int'l Union of Painters v. Andrews
Window Servs. LLC, No. 15-3583, 2016 WL 3234516, at *2 (D.N.J. June 7, 2016). In addition.

Plaintiffs effected service by following New Jersey law, which is permissible under Rule 4. Fed.
R. Civ. P. 4(e)(1), (h). New Jersey law permits service by mail when "despite diligent effort and

inquiry personal service cannot be made in accordance with paragraph (a) of this rule."^ N.J. R.
4:4-4(b)(l). To serve a corporation by mail, a plaintiff must "mail[] a copy of the summons and
complaint by registered or certified mail, return receipt requested, and simultaneously, by ordinary
mail to ... a corporation . . . that is subject to suit under a recognized name, addressed to a

registered agent for service, or to its principal place of business, or to its registered office." N.J.
R. 4:4-4(b)(l)(C). Plaintiffs complied with New Jersey law; they filed a declaration explaining

their diligent efforts to effect personal service, then appropriately mailed a copy of the summons
and complaint to Everest's principal place of business and registered agent. D.E. 12, 14. As a
result, Everest was appropriately served with the summons and complaint.
C. Sufficiency of Plaintiffs' Causes of Action and Proof of Damages

Next, the Court must determine whether the complaint states a proper cause of action. The
Court must accept all well-pleaded factual allegations in the pleadings as true, except as to
damages. Chanel, Inc., 558 F. Supp. 2d at 535-36.
Count One states a valid cause of action. Section 515 of ERISA requires employers who

are obligated to make contributions to a multiemployer plan pursuant to a CBA to "make such
contributions in accordance with the terms and conditions of such plan or [the CBA]." 29 U.S.C.

^N.J. R. 4:4-4(a) sets forth the requirements for personal service.
6

§ 1145. In this instance, the CBA required Everest to make contributions to the Funds for covered
work. See Mercadante Deck Ex. A, Art. XI.

Plaintiffs contend that the Projects constituted

covered work and that Everest failed to make the required contributions. Compl.

15-16. Thus,

Defendant violated Section 515. Moreover, Section 502(g)(2) of ERISA provides that in an action

to enforce Section 515 in which judgment is entered for the plan, a court "shall award" (I) the

unpaid contributions; (2) interest on the unpaid contributions'^, (3) liquidated damages "not in
excess of 20 percent" of the principal amount; (4) reasonable attorney's fees and costs; and (5)
"such other relief as the court deems appropriate." 29 U.S.C. § 1132(g)(2). These penalties are
mandatory. See Trucking Emps. ofN. Jersey Welfare Fund, Inc. v. Bellezza Co., 57 F. App'x 972,

975 (3d Cir. 2003). Plaintiffs, therefore, entitled to recover these penalties. See, e.g., Int'l Union
ofPainters, 2016 WL 3234516, at *3.

Plaintiffs allege that for Count One, default judgment should be entered for $29,083.19.
Mercadante Decl. H 15. In support. Plaintiffs provide shop steward reports and spreadsheets
demonstrating that Everest failed to make $17,237.70 in contributions for the Ocean County

Project and $4,183.89 in contributions for the Passaic Community Project. Id. Exs. C-F.
Mercadante also states that using the ten percent rate for the Local Benefit Funds and the fifteen

percent rate for the International Benefit Funds, Everest owes $3,377.28 in outstanding interest.

Id. H12, Ex. H. Finally, Mercadante contends that Everest owes$4,284.32 in liquidated damages.

^ Interest on unpaid contributions is determined by usingthe rate provided for under the plan. 29
U.S.C. § 1132(g). The CBA provides that Everest is liable to the International Benefit Funds at
the rate of fifteen percent (15%), and states that Everest is liable to the Local Benefit Funds at a
rate of ten percent (10%). See Mercadante Decl. Ex. G.
7

or twenty percent of the principal amount due. Id.

13-14. Having reviewed the documentation

provided, the Court is satisfied that there is a sufficient basis for the requested damages.

Plaintiffs additionally argue that Everest is responsible for outstanding interest due through
the date ofjudgment. Plfs' Br. at 5. The Court agrees. Because Plaintiffs only provided interest
calculations through December 1, 2016, Plaintiff shall submit for approval, within fourteen (14)
days, an affidavit containing the calculation of interest sought through the date of the entry of this
judgment. If appropriate, the Court will enter an amended order to include this additional interest.
Plaintiffs also seek $5,531 in attorney's fees and SI83.35 in costs. "In awarding fees under
this rubric, the 'court should determine what constitutes a reasonable fee.'" Int 7 Union ofPainters,

2016 WL 3234516, at *4 (quoting Graziano v. Harrison, 950 F.2d 107, 114 (3d Cir. 1991)). In
addition, a request for fees "must be accompanied by fairly definite information as to hours devoted

to various general activities, e.g., partial discovery, settlement negotiations, and the hours spent by
various classes of attorneys." Id. (quoting United Auto. Workers Local 259 Soc. Sec. Dep't v.
Metro Auto Ctr., 501 F.3d 281, 291 (3d Cir. 2007)). Plaintiffs were billed for a total 30.9 hours in

this case. The billing record from Plaintiffs' attorneys provides a detailed account of the rates,

time, and professional services performed. The attorneys' work was billed at an hourly rate of
$300 and paralegals were billed at $90 per hour. See Marimon Decl.

3-7, Ex. A. In addition,

there were $183.35 of court and service fees. M f 8. The Court is satisfied that the fees and costs
are well documented and reasonable in light of the nature of the case and the services rendered.

Accordingly, the Court will award fees and costs for the requested amount of $5,714.35. This
amount, however, may also be augmented to take into account reasonable fees and expenses
8

incurred since December 1, 2016, through the Affidavit discussed above.
In Count Two, Plaintiffs contend that Everest violated Section 301 ofthe LMRA by failing
to pay dues check-offs to the Union, as required by the CBA. Section 301 permits "suits for

violations of contracts between an employer and a labor organization representing employees in
an industry affecting commerce." Trs. ofthe N.J. B.A.C. Health Fund v. Org Contracting^ No. 135854, 2015 WL 1730171, at *3 (D.N.J. Apr. 14, 2015) (quoting 29 U.S.C. § 185). Taking the

factual allegations as true. Plaintiffs state a valid claim. Id. As for damages. Plaintiffs allege that
Everest owes $1,992.10 for the Ocean County Project and $461.61 for the Passaic Community

Project. Mercadante Deck

6-7. The Court is satisfied that there is a sufficient basis for the

damages requested.
D. Default Judgment Factors

Before imposing the extreme sanction of default judgment, district courts must make

explicit factual findings as to (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. Moroccanoil, Inc., 2015 WL 6673839, at *1.

Here, all three factors weigh in favor of entering default judgment. First, considering that

Defendant has not responded in this matter, "Defendant has put forth no evidence or facts

containing any information that could provide the basis for a meritorious defense." HICA Educ.
Loan Corp., 2015 WL 273656, at *3. Additionally, there is nothing on the face of the complaint

indicatingthat a meritoriousdefenseis available. Next, without a defaultjudgment. Plaintiffshave
no other means to seek relief for the harm allegedly caused by Defendant. As a result. Plaintiffs

will be prejudiced if default judgment is not entered. See Int'l Union of Painters, 2016 WL
3234516, at *3.

Lastly, Defendant's failure to answer, without providing any reasonable

explanation, permits the Court to draw an inference of culpability on its part. Id. As a result, the
Court finds that default judgment is warranted.
IV.

CONCLUSION

For the reasons set forth above, Plaintiffs' motion for default judgment is granted. An
appropriate order accompanies this opinion.
Dated: January 26, 2017

John Michael

10