INTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES DISTRICT COUNCIL 711 HEALTH & WELFARE, VACATION, AND FINISHING TRADES INSTITUTE FUNDS et al v. RE-NU ALTERATIONS, INC.

Filing 11

MEMORANDUM OPINION filed. Signed by Judge Michael A. Shipp on 6/14/2013. (eaj)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

INTERNATIONAL UNION OF
PAINTERS AND ALLIED TRADES
DISTRICT COUNCIL 711 HEALTH &
WELFARE, VACATION, and FINISHING:
TRADES INSTITUTE FUNDS and
HARRY J. HARCHETTS,

Civil Action No. 12-3103 (MAS) (TJB)

MEMORANDUM OPINION

Plaintiffs,

v.
RE-NU ALTERATIONS, INC.,
Defendant.

SHIPP, District Judge

This matter comes before the Court upon Plaintiffs International Union of Painters and
Allied Trades District Council 711 Health & Welfare, Vacation, Finishing Trades Institute
Funds, and Harry J. Harchetts's (collectively, "Plaintiffs"), Motion for Entry of Default
Judgment ("Plaintiffs' Motion"), pursuant to Federal Rule of Civil Procedure ("Rule") 55(b)(2).
(Pis.' Mot., ECF No. 9.) Defendant Re-Nu Alterations, Inc. ("Re-Nu" or "Defendant") has failed
to file an opposition. The Court has carefully considered the submissions and decided the matter
without oral argument pursuant to Rule 78. For good cause shown, Plaintiffs' Motion for Default
Judgment is GRANTED.
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Background

Plaintiffs brought action "as Trustee and Fiduciary for District Council 711 Health &
Welfare, Vacation and Finishing Trades Institute Funds ('the Funds')," which are "trust funds

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established and maintained pursuant to Section 302(c)(5) of the LMRA, 29 U.S.C. §186(c)(5)
and are employee benefit plans established and maintained pursuant to Section 3(1 )(2) and (3) of
ERISA, 29 U.S.C. § 1002(1), (2) and (3) .... " (Compl. ~ 4, ECF No. 1.)
A Collective Bargaining Agreement between the Union and Defendant required
Defendant to make timely contributions to the Funds "on behalf of eligible employees ofRe-Nu
who were employed on projects within the State ofNew Jersey." (Compl. ~ 13.) Plaintiffs allege
that an audit revealed that Re-Nu "failed to remit and/or has only remitted a portion of the
required contributions to the Funds for the benefit of its employees for the period of January 1,
2007 through September 30, 2009." (Compl.

~

17.)

On May 23, 2012, Plaintiffs filed a Complaint requesting relief. Although Plaintiffs
properly served the Complaint, Defendant failed to file a timely response as required by Rule
12(a)(1)(A). On September 12, 2012, the Clerk of the Court subsequently entered default against
the Defendant. Plaintiffs now move for a default judgment against the Defendant.

II.

Analysis
Once a party has defaulted, the consequence is that "the factual allegations of the

complaint, except those relating to the amount of damages, will be taken as true." Comdyne L

Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990) (internal quotations omitted) (citing Thomson
v. Wooster, 114 U.S. 104 (1885)). Entry of default judgment where damages are not a "sum
certain" requires an application to the court to prove, inter alia, damages. Fed. R. Civ. P.
55(b)(2); Comdyne, 908 F.2d at 1149. In addition, liability is not established by default alone.

D.B. v. Bloom, 896 F. Supp. 166, 170 n.2 (D.N.J. 1995). The Court must first determine whether
default judgment is proper. Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). The
Court must consider three factors that control whether a default judgment should be granted:

2

(1) prejudice to the plaintiff if default is denied; (2) whether the defendant appears to have a
meritorious defense; and (3) whether the defendant's delay is due to culpable conduct. United

States v. $55,518.05 in US. Currency, 728 F.2d 192, 195 (3d Cir. 1984).

A.

Plaintiffs are Entitled to Payment of Delinquent Contributions, Interest,
Double Interest, and Attorney's Fees and Costs

Here, the Court finds it appropriate to enter default judgment because the longer Plaintiffs
do not receive payment, the more they are harmed and therefore prejudiced. Moreover, it appears
that Defendant was properly served and that Plaintiffs properly brought their default judgment
motion. In addition, the Court is unaware of any viable defenses available to Defendant with
regard to Plaintiffs' requested award. Finally, the Court finds that Defendant's failure to respond
to the Complaint was the result of Defendant's culpable conduct.
Where a fiduciary refuses to pay delinquent contributions, the Court shall award:
(A) the unpaid contributions, (B) interest on the unpaid contributions, (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 ... , (D) reasonable attorney's fees and costs of the action ... , and
(E) such other legal or equitable relief as the court deems appropriate.
29 U.S.C. § 1132(g)(2)(A)-(E) (2009). Plaintiffs, therefore, properly request $145,591.89 in
unpaid contributions, $55,209.98 in interest, and $1,342.95 in attorney's fees and costs.
(Bushinsky Aff. at 3, ECF No. 9-1.) Plaintiffs' request for $2,362.50 as compensation for an
"Audit Fee" is also proper either as a "cost[] of the action" or a "legal or equitable relief [that]
the court deems appropriate." See § 1132(g)(2)(D)-(E). Finally, Plaintiffs' request for an
additional $55,209.98 of interest 1 is proper because "Congress purposefully mandated a double

1

Plaintiffs originally filed an affidavit requesting$ $29,118.36 in liquidated damages pursuant to
29 U.S.C. § 1132(g)(2)(C)(ii). That affidavit was subsequently revised and resubmitted with a
request for $55,209.98 in "double interest" pursuant to 29 U.S.C. 1132(g)(2)(C)(i). (See ECF No.
10.)
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award in interest against delinquent employers in order to compensate plans for incidental costs
caused by delays in payment." Bennett v. Machined Metals Co., Inc., 591 F. Supp. 600, 605
(E.D. Pa. 1984); see Moriarty ex rei. Local Union No. 727., IB.T. Pension Trust, and the

Teamsters Local Union No. 727 Health and Welfare Trust v. SVEC, 429 F.3d 710, 720-21 (7th
Cir. 2005) (holding that the defendant must pay the greater of "double interest" and "liquidated
damages"); Vernau v. Bowen Enters., Inc., 648 F. Supp. 721 (W.D. Pa. 1986). Therefore, the
Court grants Plaintiffs' Motion.

III.

Conclusion
For the reasons stated above, Plaintiffs' motion for default judgment is GRANTED

against Re-Nu Alterations, Inc. The Court grants the requested award: (1) $145,591.89 for
unpaid delinquent contributions; (2) $55,209.98 in interest; (3) $55,209.98 in double interest;
(4) $1,342.95 in attorney's fees and costs; and (5) $2,362.50 in audit fees. An Order consistent
with this Opinion will be entered.

Itt

Dated: June

Jt/: 2013

MICHAEL A. SHIPP
UNITED STATES DISTRICT JUDGE