TRUSTEES OF THE REFRIGERATION & AIR CONDITIONING SERVICE DIVISION (UA-NJ) PENSION FUND, WELFARE FUND, ANNUITY FUND AND EDUCATION FUND v. R&M AIR SOLUTIONS, LLC

Filing 11

OPINION. Signed by Judge Madeline Cox Arleo on 7/28/17. (cm, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
TRUSTEES OF THE REFRIGERATION & AIR
CONDITIONING SERVICE DIVISION (USANJ) PENSION FUND, WELFARE FUND,
ANNUITY FUND and EDUCATION FUND, et
al.,
Plaintiffs,

Civil Action No. 16-7208
OPINION

v.
R&M AIR SOLUTIONS, LLC,
Defendant.

ARLEO, UNITED STATES DISTRICT JUDGE
THIS MATTER comes before the Court on Plaintiff Trustees of the Refrigeration & Air
Conditioning Service Division (UA-NJ) Pension Fund, Welfare Fund, Annuity Fund and
Education Fund (the “Trustees”) and the New Jersey Committee Representing the United
Association of Plumbers and Pipefitters of the United States and Canada’s (the “Funds”) (together,
“Plaintiffs”) motion for default judgment against Defendant R&M Air Solutions, LLC
(“Defendant”) pursuant to Federal Rule of Civil Procedure 55(b). ECF No. 8. For the reasons set
forth herein, the motion is GRANTED.
I.

BACKGROUND
This ERISA matter arises from Defendant R&M’s alleged failure to remit payments to

Plaintiffs in accordance with the terms of its Collective Bargaining Agreement (the “CBA”)
between Plaintiff Funds and Defendant.
Plaintiffs are trust funds established pursuant to the Labor Management Relations Act
(“LMRA”) Section 302(c)(5), 29 U.S.C. § 186(c)(5), and are employee benefit plans established
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and maintained pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29
U.S.C. § 1001, et seq. for the purpose of providing pension, welfare, annuity, and other benefits to
eligible participants. Compl. ¶ 5, ECF No. 1. The Funds are authorized to sue in their own names
pursuant to Section 502(d)(1) of ERISA, 29. U.S.C. § 1132(d)(1). Id. ¶ 6. The Trustees are
fiduciaries of the Funds within the meaning of Section 3(21) of ERISA, 29 U.S.C. § 1002(21)(A)
with respect to the collection of contributions due to the Funds. Id. ¶ 7.
The Funds maintain their principal place of business in West Trenton, NJ. Id. ¶ 8.
Defendant is a business located in Avenel, New Jersey. Id. ¶ 10. It is an employer within the
meaning of ERISA, 29 U.S.C. § 1002(5). Id.
At all relevant times, Defendant was a party to an Inside Agreement with one or more
local unions or district councils affiliated with the Refrigeration & Air Conditioning Service
Division (UA-NJ) Pension Fund, Welfare Fund, annuity Fund and Education Fund and the New
Jersey Committee representing the United Association of Plumbers and Pipefitters of the United
States and Canada (the “Union”). Id. ¶ 14. At all relevant times, Defendant was also a party to
the Agreements and Declarations of Trust (“Trust Agreements”) that govern the Funds, as well as
the Policy for Collection of Fringe Benefit Contributions (the “Policy”). Id. ¶ 15. Pursuant to
ERISA, 29 U.S.C. § 1145, and the terms of the Inside Agreement, the Trust Agreements, and the
Policy, Defendant agreed to: (1) remit fringe benefit contributions to the Funds in a timely manner;
(2) submit monthly remittance reports to the Funds; (3) produce, upon request by the Funds, all
books and records deemed necessary to conduct an audit of Defendant’s records concerning its
obligation to the Funds; (4) pay liquidated damages, interest, audit costs, and attorneys’ fees
expended by the Funds to collect any amounts due as a consequence of Defendant’s alleged breach.
Id. ¶ 16.

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Plaintiffs allege that Defendant has failed to remit the total amount of employee
contributions that are due to the Funds on behalf of eligible employees for the period of July 1,
2016 through August 31, 2016. Id. ¶ 17. Plaintiffs allege that they have demanded payment from
Defendant several times to no avail. Id. ¶ 18.
Plaintiffs initiated this lawsuit on October 13, 2016, asserting ERISA violations and
seeking damages for: (1) all contributions due and owing to the Funds; (2) interest on the
delinquent contributions; and (3) liquidated damages. See Compl. ¶ 21. Plaintiffs also sought
specific performance and attorneys’ fees. Id. After Defendant failed to appear, the Clerk entered
default on November 17, 2016. See ECF Text Order dated November 17, 2016. Plaintiffs then
filed the instant motion for Default Judgment, seeking an award of $4,733.63 in delinquent
contributions, interest, and liquidated damages, and $1,395.99 in attorneys’ fees and costs for a
total of $6,129.62. Affidavit of Steven J. Bushinsky (“Bushinsky Aff.”) ¶¶ 9-15, ECF No. 8-1.
II.

STANDARD OF REVIEW
“The district court has the discretion to enter default judgment, although entry of default

judgments is disfavored as decisions on the merits are preferred.” Animal Sci. Prods., Inc. v. China
Nat’l Metals & Minerals Imp. & Exp. Corp., 596 F. Supp. 2d 842, 847 (D.N.J. 2008). Before
entering 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) determine whether
the plaintiff has proved damages. See Chanel, Inc. v. Gordashevsky, 558 F. Supp. 2d 532, 535-36
(D.N.J. 2008); Wilmington Savings Fund Soc., FSB v. Left Field Props., LLC, No. 10-4061, 2011
WL 2470672, at *1 (D.N.J. June 20, 2011). Although the facts pled in the Complaint are accepted

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as true for the purpose of determining liability, the plaintiff must prove damages. See Comdyne
I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
Additionally, prior to granting default judgment, the Court must make explicit factual
findings as to: (1) whether the party subject to the default has a meritorious defense; (2) the
prejudice suffered by the party seeking default judgment; and (3) the culpability of the party
subject to default. Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177
(D.N.J. 2008).
III.

ANALYSIS
A. Jurisdiction & Service
The Court has jurisdiction over this dispute under the LMRA, 29.U.S.C. § 185(a), which

provides that “suits of violation of contracts between an employer and a labor organization . . .
may be brought in any district court of the United States having jurisdiction of the parties.” Am.
Compl. ¶ 2. The Court may exercise personal jurisdiction over the parties as all are entities located
in New Jersey. Id. ¶ 5-12.
Service of the Summons and Complaint was made on Defendant on October 18, 2016 by
personal service on Ricard Vazquez, Managing Agent of R&M, at 83 Demorest Avenue, Avenel,
NJ. See Affidavit of Service by Marian Zwierzynski, ECF No. 5.
B. Liability
Plaintiffs have pled an ERISA claim against Defendant. ERISA, 29 U.S.C. § 1145,
provides:
Every employer who is obligated to make contributions to a multiemployer plan
under the terms of the plan or under the terms of a collectively bargained agreement
shall, to the extent not inconsistent with law, make such contributions in accordance
with the terms and conditions of such plan or such agreement.
Id.
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Here, Plaintiffs have alleged: (1) that there was a contractual relationship based on a CBA,
Inside Agreements, and Trust Agreements with Plaintiff Funds, Compl. ¶¶ 14-15; (2) that the
Agreements provided for the payment of fringe benefits to the Funds; (3) that Defendant breached
the CBA by failing to make timely fringe benefit contributions from July 1, 2016 through August
31, 2016 , id. ¶ 17; and (4) that Plaintiffs suffered damages in the form of delinquent contributions,
id. ¶ 21.

Therefore, Plaintiffs have sufficiently alleged an ERISA violation to establish

Defendant’s liability for the purposes of this default judgment.
C. Appropriateness of Default Judgment
Next, the Court must consider: (1) whether the party subject to the default has a meritorious
defense; (2) the prejudice suffered by the party seeking default judgment; and (3) the culpability
of the party subject to default. Doug Brady, 250 F.R.D. at 177. The Court concludes that in the
absence of any responsive pleading and based upon the facts alleged in the Complaint, Defendant
does not have a meritorious defense. See Ramada Worldwide Inc. v. Courtney Hotels USA, LLC,
No. 11-896, 2012 WL 924385, at *5 (D.N.J. Mar. 19, 2012). Second, the Court finds that Plaintiffs
will suffer prejudice absent entry of default judgment as they will have no other means of obtaining
relief. Finally, the Court finds that Defendant has acted culpably as it has been served with the
Complaint, is not an infant or otherwise incompetent, and is not presently engaged in military
service. See Bushinsky Aff. ¶ 3; see also Super 8 Worldwide, Inc. v. Sairam Corp., No. 13-6161,
2014 WL 4388697, at *2 (D.N.J. Sept. 4, 2014); Nationwide Mut. Ins. Co. v. Starlight Ballroom
Dance Club, Inc., 175 F. App’x 519, 523 (3d Cir. 2006) (holding that a defendant’s failure to
respond to communications from the plaintiff and the court can constitute culpability).
D. Monetary Damages

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Plaintiff seek the following damages totaling $6,129.62: (1) $3,863.52 in delinquent
contributions; (2) $772.70 in liquidated damages; (3) $97.41 in interest, (4) $1,395.99 in attorneys’
fees; and (5) $59.99 in costs.
ERISA provides that in a Section 1145 action, a plan may be awarded the amount of unpaid
contributions, interest on the unpaid contributions, and liquidated damages that are provided for
under the plan and do not exceed 20 percent. 29 U.S.C. § 1132(g)(2); see also Board of Trustees,
Local 888 Pension Fund v. Fixture Hardware Mfg. Corp., No. 16-8629, 2017 WL 3622029, at *4
(D.N.J. Aug. 22, 2017); Teamsters Health & Welfare Fund of Philadelphia and Vicinity v. Dubin
Paper Co., No. 11-7137, 2012 WL 3018062, at *3 (D.N.J. Jul. 24, 2012).
Here, Plaintiffs have provided sufficient evidence to support the requested amounts. First,
Plaintiffs have submitted a copy of the CBA, which provides for the remittance of fringe benefits.
Plaintiffs have provided sufficient evidence that Defendant owes a delinquent balance of $3,863.52
by way of a payroll audit for unpaid benefits from July 1, 2016 through August 13, 2016. See Job
Status Report, Bushinsky Aff., Ex. D.
Second, Plaintiffs have also shown a contractual basis for an award of liquidated damages
of 20 percent and interest of 18 percent per annum on delinquent contributions, and attorneys’ fees
and costs. See Policy for Collection of Delinquent Contribution, Bushinsky Aff., Ex. B. The same
policy also provides that unpaid contributions become delinquent following an unsuccessful
collection attempt. Id. Plaintiffs accurately calculated liquidated damages and interest for the
period of January 15, 2017 through March 6, 2017 in the amount of $97.41 in interest and $772.70
in liquidated damages. See Interest and Liquidated Damages Calculation, Bushinksky Aff., Ex.
E. The Court therefore awards Plaintiffs a total of $4,733.63 in total contributions owed, liquidated
damages, and interest.

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Finally, Plaintiffs have submitted an affidavit attesting to their hours worked and hourly
rate charged. They indicate that legal services were performed by an associate at the rate of
$175.00 an hour, and by a paralegal at the rate of $90.00 an hour. Bushinsky Aff. ¶¶ 11-12. In
addition, Plaintiffs expended $59.99 in costs. Id. The Court therefore awards Plaintiffs a total of
$1,395.99 in attorneys’ fees and costs.
Based upon the foregoing, judgment shall be entered against the Defendant in the amount
of $6,129.62.
IV.

CONCLUSION
For the reasons set forth above, Plaintiffs Trustees of the Refrigeration & Air Conditioning

Service Division (UA-NJ) Pension Fund, Welfare Fund, Annuity Fund and Education Fund’s and
the New Jersey Committee Representing the United Association of Plumbers and Pipefitters of the
United States and Canada’s motion for final judgment by default against Defendant R&M Air
Solution, LLC is GRANTED. An appropriate order accompanies this opinion.
Dated: September 28, 2017
/s Madeline Cox Arleo___________
MADELINE COX ARLEO
United States District Judge

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