Directors of the Ohio Conference of Plasterers & Cement Masons Combined Funds, Inc. v Industrial Contracting Co.

Filing 10

Order: Plaintiff's motion for default judgment (Doc. No. 9 ) as to liability is granted. Plaintiff's motion is granted on the issue of requiring defendant to submit to an audit as described herein, and defendant is hereby ordered to cooperate with such audit in a timely manner. Any such audit must be completed by February 9, 2018. Plaintiff shall submit any evidentiary support of damages and attorney fees and costs by February 28, 2018. If such support is not submitted by February 28, 2018, the Court will schedule an evidentiary hearing. Judge Sara Lioi on 12/4/2017.(P,J)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

DIRECTORS OF THE OHIO
CONFERENCE OF PLASTERS &
CEMENT MASONS COMBINED FINDS,
INC.,

PLAINTIFF,
vs.
INDUSTRIAL CONTRACTING CO.,

DEFENDANT.

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CASE NO. 5:17-CV-125

JUDGE SARA LIOI

ORDER

Before the Court is the motion of plaintiff Directors of the Ohio Conference of Plasterers
& Cement Masons Combined Funds, Inc. (“plaintiff”) for entry of default judgment against
defendant Industrial Contracting Company (“defendant”) on the issue of liability, and for an
order requiring defendant to permit plaintiff to conduct an audit of its books and records in order
to determine the amount due and owing plaintiff. (Doc. No. 9 [“Mot.”].) For the reasons that
follow, the motion is granted.
A. BACKGROUND
On January 17, 2017, plaintiff filed suit against defendant for breach of collective
bargaining agreements (“CBAs”) between defendant and various local unions. (Doc. No. 1
(Complaint [“Compl.”]).) Plaintiff is responsible for collecting on behalf of employee benefit
plans identified in the CBAs. (Compl. ¶¶ 3-4.) The complaint seeks judgment in favor of plaintiff
and against defendant for unpaid benefit contributions, an audit, liquidated damages, interest,

attorney fees, and other collection costs. (Id. at 11-121.)
Personal service was perfected upon defendant (Doc. No. 6), however, defendant did not
answer or otherwise respond to the complaint. Plaintiff applied to the Clerk for entry of default
against defendant (Doc. No. 7), and the Clerk entered default against defendant on August 21,
2017 (Doc. No. 8).
B. LAW AND ANALYSIS
Federal Rule of Civil Procedure 55(b) governs the entry of default judgment. Rule 55(b)
provides that default judgment may be entered against a defendant who is neither a minor nor an
incompetent person. According to the complaint, defendant is a foreign corporation that has
conducted business in Ohio. As a business entity, defendant is not a minor, incompetent person,
or subject to the Soldiers and Sailors Relief Act of 1940. Zinganything, LLC v. Tmart UK Ltd.,
No. 5:14-CV-629, 2016 WL 362359, at *2 (N.D. Ohio Jan. 29, 2016) (citation omitted).
Rule 55(b)(1) provides that judgment may be entered by the Clerk if the amount is for a
sum certain “on the plaintiff’s request, with an affidavit showing the amount due[.]” Plaintiff did
submit an affidavit in support of its request for default judgment, but the affidavit did not address
the total amount due in support of the motion. In fact, plaintiff represented that it will not know
the full amount until it has an opportunity to audit defendant’s books and records. (Mot. at 149,
citing Doc. No. 9-1 (Affidavit of Tim Meyers [“Meyers Aff.”]) ¶ 7.)

All page number references are to the page identification number generated by the Court’s electronic docketing
system.
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The Court may enter default judgment pursuant to Rule 55(b)(2). That rule does not set
forth a standard to be applied in determining when a party is entitled to a judgment by default.
“When an application is made to the court under Rule 55(b)(2) for the entry of a judgment by
default, the district judge is required to exercise sound judicial discretion in determining whether
the judgment should be entered.” 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane,
Federal Practice and Procedure: Civ.3d § 2685 (1998) (footnotes omitted). “This element of
discretion makes it clear that the party making the request is not entitled to a default judgment as
of right […] .” Id.
1.

Default judgment as to liability

Once default is entered, the defaulting party is deemed to have admitted all of the wellpleaded factual allegations in the complaint regarding liability, including jurisdictional
averments. Ford Motor Co. v. Cross, 441 F. Supp. 2d 837, 846 (E.D. Mich. 2006) (citing
Visioneering Constr. v. U.S Fid. & Guar., 661 F.2d 119, 124 (6th Cir. 1981)); see also Fed. R.
Civ. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages—is admitted
if a responsive pleading is required and the allegation is not denied.”).
Plaintiff filed its complaint under § 301 of the Labor Management Relations Act of 1947
(LMRA), codified at 29 U.S.C. § 185, and § 502(a)(3), (e), and (f) of the Employee Retirement
Income Security Act of 1974 (ERISA), codified at 29 U.S.C. § 1132(a)(3), (e), and (f).
According to the complaint, plaintiff collects and receives fringe benefit contributions from
signatory employers to the CBAs, and those funds are administered by plaintiff. Defendant is a
signatory to the CBAs, however, it did not pay the fringe benefit contributions for its employees
as required by the CBAs. (See Compl. ¶¶ 16, 20, 24, 28, 30, 32, 34, 36, 38, 40.)
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Defendant is deemed to have admitted the allegations in the complaint by virtue of its
default, and those allegations are sufficient to establish plaintiff’s claims for breach of contract.
Accordingly, plaintiff is entitled to default judgment as to liability with respect to plaintiff’s
claims that defendant breached the CBAs because defendant did not make the required payments
in accordance with those agreements.
2.

Default judgment as to damages

Well-pleaded allegations in the complaint as to liability are taken as true when a
defendant is in default, but not as to damages. Ford Motor Co., 441 F. Supp. 2d at 846 (citing
Visioneering Constr., 661 F.2d at 124); Nat’l Satellite Sports, Inc. v. Mosley Entm’t Inc., No. 01CV-74510-DT, 2002 WL 1303039, at *3 (E.D. Mich. May 21, 2002) (the allegations of the
complaint regarding the amount of damages are not controlling) (citations omitted). “[T]he civil
rules ‘require that the party moving for a default judgment must present some evidence of its
damages.’” IBEW Local Union 82 v. Union Lighting Prot., No. 3:11-CV-208, 2012 WL 554573,
at *1 (S.D. Ohio Feb. 21, 2012) (quoting Mill’s Pride, L.P. v. W.D. Miller Enterpr., No. 2:07-cv990, 2010 WL 987167, at *1 (S.D. Ohio Mar. 12, 2010)).
Rule 55(b)(2) permits, but does not require, the district court to conduct an evidentiary
hearing to determine damages. Arthur v. Robert James & Assoc. Asset Mgmt., Inc., No. 3:11-cv460, 2012 WL 1122892, at *1 (S.D. Ohio Apr. 3, 2012) (citing Vesligaj v. Peterson, 331 F.
App’x. 351, 354-55 (6th Cir. 2009)). The Court may rely on affidavits submitted by plaintiff in
support of damages without the need for a hearing. Id. at *2 (citations omitted).
At this juncture, plaintiff does not seek default judgment with respect to a specific
amount of damages, but an order requiring defendant to submit to an audit so that plaintiff may
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determine the amount due and owing plaintiff in unpaid contributions under the CBAs. After
conducting the audit, plaintiff states that it will make further submissions to the Court regarding
the amount due. (See Mot. at 150.)
Plaintiff’s motion is granted in this regard. Any such audit must be completed by
February 9, 2018, and defendant is ordered to timely cooperate with plaintiff therewith. If, as a
consequence of the audit, plaintiff determines the amount of damages that are owed, plaintiff
may file a properly supported supplemental motion no later than February 28, 2018.
C. Conclusion
For all of the foregoing reasons, plaintiff’s motion for default judgment (Doc. No. 9) as to
liability is granted. Plaintiff’s motion is granted on the issue of requiring defendant to submit to
an audit as described herein, and defendant is hereby ordered to cooperate with such audit in a
timely manner. Any such audit must be completed by February 9, 2018.
Plaintiff shall submit any evidentiary support of damages and attorney fees and costs by
February 28, 2018. If such support is not submitted by February 28, 2018, the Court will
schedule an evidentiary hearing.
IT IS SO ORDERED.

Dated: December 4, 2017
HONORABLE SARA LIOI
UNITED STATES DISTRICT JUDGE

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