Wilson et al v. Bill Hawk, Inc.

Filing 12

REPORT AND RECOMMENDATION that 10 MOTION for Default Judgment be granted and judgment be entered against the defendant in the amount of $9,881.69 in accumulated interest and $2,090.00 for attorneys fees and costs. Objections to R&R due within fourteen (14) days. Signed by Magistrate Judge Terence P. Kemp on 6/16/2015. (agm)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Carol A. Wilson, et al.,
Plaintiffs,
v.

:
:
:
:

Bill Hawk, Inc.,
Defendant.

Case No. 2:15-cv-1039
JUDGE ALGENON L. MARBLEY
Magistrate Judge Kemp

:
:
REPORT AND RECOMMENDATION

This matter is before the Court on the plaintiffs’ response
to this Court’s May 11, 2015 show cause order (Doc. 6), and the
plaintiffs’ motion for default judgment (Doc. 10).

For the

reasons set forth below, the Court finds that the plaintiffs have
set forth good cause as to why this action should not be
dismissed.

Further, the Court will recommend that the

plaintiffs’ motion for default judgment be granted.
I. Background
The plaintiffs in this action are the Trustees of the Ohio
Operating Engineers Health and Welfare Plan, the Trustees of the
Ohio Operating Engineers Pension Fund, the Trustees of the Ohio
Operating Engineers Apprenticeship and Training Fund, and the
Trustees of the Ohio Operating Engineers Education and Safety
Fund (collectively “the Trustees”) and Carol A. Wilson, an
administrator authorized by the Trustees to bring this action on
their behalf.

The plaintiffs filed this action against the

defendant Bill Hawk, Inc., alleging that the defendant entered
into certain agreements which required it to make timely payments
to the Trustees for each employee covered by the agreements.
Specifically, the plaintiffs allege the following concerning the
relevant agreements:

Defendant executed two Distribution and Maintenance
Agreements State of Ohio All Zones (“Distribution and
Maintenance Agreements”), both of which are dated March
2, 2011 and February 12, 2014, and Acceptance of
Agreement dated September 7, 2001, and a Non-AGC of
Ohio/LRD Members Agreement dated December 3, 1999, by the
terms of which Defendant also became a party to the
Agreements and Declaration of Trusts that established the
Ohio Operating Engineers Health and Welfare Plan, the
Ohio Operating Engineers Pension Fund, the Ohio Operating
Apprenticeship and Training Fund and the Ohio Operating
Engineers Education and Safety Fund and became bound by
the terms and conditions set forth therein.
Compl. at ¶10.

The plaintiffs allege that the Trustees’ Field

Auditor conducted an audit of the defendant’s payroll records on
June 19, 2014, and the audit disclosed unpaid contributions and
late charges for the time period beginning October 1, 2013 and
ending June 1, 2014.

The plaintiffs claim that, although the

defendant has paid the delinquent contributions in full, it still
owes late charges for interest which accrued before it paid the
delinquent contributions.

The plaintiffs allege, inter alia,

that:
the Trust Agreements, Defendant’s collective-bargaining
agreements, and the rules and regulations adopted by the
Pension Trustees on May 26, 1989 and by the Health and
Welfare Trustees on June 13, 1989, by the Apprenticeship
and Training Trustees on July 12, 1989 and by the
Education and Safety Trustees on September 25, 1989,
specifically provide that the Trustees shall be entitled
to recover interest of 1.5 percent per month (18 percent
per annum) times the unpaid balance of the delinquent
contributions in addition to the unpaid contributions.
Id. at ¶11.

Thus, the plaintiffs claim that they are owed unpaid

interest by the defendant.
Based on the foregoing, in Count I of the complaint, the
plaintiffs claim that the defendant “owes the Trustees of all
four funds interest on the audit findings in the amount of
$9,881.69.”

Id. at ¶13.

In Count II of the complaint, the

plaintiffs allege that the Trust Agreements, the defendant’s
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collective bargaining agreements, and the rules and regulations
adopted by the Trustees, in addition to 29 U.S.C. §1132(g)(1),
allow them to recover all costs of collection, including
reasonable attorney’s fees.

Thus, the plaintiffs claim that the

defendant “owes the Trustees of all four funds reasonable
attorney’s fees as set by the court and court courts.”
¶15.

Id. at

In Count III of the complaint, the plaintiffs seek

injunctive relief, alleging that the defendant “continues to
refuse to comply with the agreements by failing, neglecting,
omitting, and refusing each month to properly report and make
contributions for each employee covered by the agreements, thus
creating additional delinquencies each month.”

Id. at ¶16.

In

their request for relief, the plaintiffs seek an order of this
Court allowing them to conduct an audit of the defendant’s books
and records, and they demand a preliminary injunction and a
permanent injunction enjoining the defendant from violating the
terms of the relevant agreements and disposing of any assets.
The plaintiffs also request that this Court retain jurisdiction
over this action pending the defendant’s compliance with Court
orders.

Although the record reflects that the defendant received

notice of the complaint, it has failed to respond.
II. The May 11, 2015 Show Cause Order
In a May 11, 2015 order, this Court observed that the
complaint had been served upon the defendant Bill Hawk, Inc., the
time for filing an answer had passed, and that the plaintiffs had
not moved for the entry of default.

Pursuant to Local Rule of

Court 55.1, the Court directed the plaintiffs to show cause
within 14 days why this action should not be dismissed.

The

Court further ordered that, if appropriate, the plaintiffs should
also submit a request to enter default pursuant to Fed. R. Civ.
P. 55, and a separate motion for default judgment.

(Doc. 5).

On May 12, 2015, the plaintiffs filed a response to the show

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cause order.

In the response, the plaintiffs state the summons

issued by the Clerk’s Office was defective.

More specifically,

the plaintiffs state that:
[u]pon examination of the Summons after its return,
Counsel noticed that the Deputy Sheriff did not complete
the Proof of Service on the second page of the Summons,
nor did the Sheriff’s Office provide a form which was
signed under oath by the Deputy Sheriff. As a result,
Counsel then made a few attempts to fax the Summons back
to the Sheriff’s Office on April 22-23, 2015 which was
received successfully on April 23. Counsel then received
the Proof of Service from the Sheriff’s Office by mail on
Monday, May 1, 2015. Plaintiffs’ counsel then filed the
executed Summons on that date.
(Doc. 6 at 2) (citations and footnote omitted).

The plaintiffs’

counsel indicated that he “had begun preparing default pleadings
on May 8, 2014 ... and [he planned to] file the Application and
Entry for Default Judgment within the next twenty-four to thirtysix hours.”

Id.

Based on the foregoing, the Court finds that the plaintiffs
have set forth good cause as to why this action should not be
dismissed.

Further, consistent with this Court’s order, the

plaintiffs submitted a request to enter default pursuant to Fed.
R. Civ. P. 55 on May 13, 2015 (Doc. 7), and a separate motion for
default judgment on May 15, 2015 (Doc. 10).

The Clerk entered

default against the defendant on May 14, 2015.

(Doc. 9).

Thus,

the motion for default judgment is properly before the Court for
consideration.
III. The Motion for Default Judgment
Federal Rule of Civil Procedure 55(b) authorizes a court to
enter default judgment against a party whose default has been
entered by the clerk.

Once default has been entered, a

defaulting defendant is considered to have admitted all of the
well-pleaded allegations relating to liability.

See Antoine v.

Atlas Turner, Inc., 66 F.3d 105, 110 (6th Cir. 1995).

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The mere determination of the defendant’s liability does
not, however, automatically entitle the plaintiffs to default
judgment.

The decision to grant default judgment falls within

the Court’s discretion.

10A Charles Alan Wright & Arthur R.

Miller, Fed. Prac. & Proc. Civ. §2685 (3d ed.).

In determining

whether to enter judgment by default, courts often consider such
factors as
the amount of money potentially involved; whether
material facts or issues of substantial public importance
are at issue; whether the default is largely technical;
whether plaintiff has been substantially prejudiced by
the delay involved; and whether the grounds for default
are clearly established or are in doubt. Furthermore,
the court may consider how harsh an effect a default
judgment might have; or whether the default was caused by
a good-faith mistake or by excusable or inexcusable
neglect on the part of the defendant.
Id. (footnotes omitted).
While the well-pleaded factual allegations of the complaint
are taken as true when a defendant is in default, damages are
not.

Where damages are unliquidated, a default admits only

defendant’s liability and the amount of damages must be proved.
Id.

Although the court may conduct an evidentiary hearing to

determine damages, such a hearing is not a prerequisite to the
entry of a default judgment if a detailed affidavit allows a
decision on the record.

See Joe Hand Promotions, Inc. v. RPM

Management Co., LLC, 2011 WL 5389425 (S.D. Ohio Nov. 7, 2011).
In their motion for default judgment, the plaintiffs request
interest in the amount of $9,881.69, attorney’s fees in the
amount of $1,690.00, and Court costs in the amount of $400.00.
(Doc. 10 at 2).

Although the plaintiffs requested injunctive

relief in the complaint, they do not request such relief in their
motion for default judgment.

The plaintiffs’ motion for default

judgment is brought pursuant to Rule 55(b)(1).

That Rule applies

to a judgment by default when the claim is for a sum certain.
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It

states:
If the plaintiff’s claim is for a sum certain or a sum
that can be made certain by computation, the clerk – on
the plaintiff’s request, with an affidavit showing the
amount due – must enter judgment for that amount and
costs against a defendant who has been defaulted for not
appearing and who is neither a minor nor an incompetent
person.
Unpaid interest is generally considered a “sum certain” under
ERISA and the parties’ agreements.

See Carpenters Labor-

Management Pension Fund v. Freeman-Carder, LLC, 498 F. Supp.2d
237, 241 (D.D.C. 2007).
It is undisputed that the defendant entered into agreements
with the plaintiffs obligating it to make employer contributions
pursuant to those agreements.

Further, it is undisputed that the

defendant made delinquent contributions and has failed to pay
interest as required by the agreements.

Finally, the plan and

funds at issue fall within the provisions of the Employee
Retirement Income Security Program (“ERISA”), 29 U.S.C. §1002(1),
(2), (3) and 29 U.S.C. §1132(g).

The plaintiffs claim the

assessment of interest is authorized by 29 U.S.C. §1132(a)(3),
which provides that a civil action may be brought “by a
participant, beneficiary or fiduciary (A) to enjoin any act or
practice which violates any provision of this subchapter or the
terms of the plan, or (B) to obtain appropriate equitable relief
(i) to redress such violation or (ii) to enforce any provision of
this subchapter.”

In addition, the plaintiffs submitted the

affidavit of Ms. Wilson, the administrator, stating that, upon
her examination of the Employer Monthly Reports, the Trustees’
Field Auditor’s audit report dated June 19, 2014, and the records
submitted to her by the defendant, she determined that the
defendant failed to make timely contributions for the audit
period from October 1, 2014 to June 1, 2014, and that the
defendant had accumulated interest charges in the amount of

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$9,881.69.

(Doc. 7, Ex. 1 at ¶6).

Ms. Wilson’s affidavit is sufficient to allow a decision on
the record without an evidentiary hearing.

Based upon the

foregoing, the Court finds that the plaintiffs seek a sum certain
in unpaid interest accumulated pursuant to the relevant
agreements.

The Court also finds that ERISA allows for recovery

of such interest in this action.

Consequently, the Court will

recommend that the motion for default judgment be granted to the
extent that the plaintiffs seek accumulated interest charges in
the amount of $9,881.69.

The Court now examines the request for

attorney’s fees.
ERISA, 29 U.S.C. §1132(g) applies to attorney’s fees and
costs.

Here, the plaintiffs move for attorney’s fees pursuant to

29 U.S.C. §1132(g)(1).

That statute provides that, “[i]n any

action under this subchapter ... by a participant, beneficiary,
or fiduciary, the court in its discretion may allow a reasonable
attorney’s fee and costs of the action to either party.”

“The

starting point for determining the amount of a reasonable
attorney fee is the ‘lodestar’ amount which is calculated by
multiplying the number of hours reasonably expended on the
litigation by a reasonable hourly rate.”

Imwalle v. Reliance

Medical Products, Inc., 515 F.3d 531, 551-552 (6th Cir. 2008),
citing Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S. Ct. 1933,
76 L. Ed.2d 40 (1983).

“Where the party seeking attorney fees

has established that the number of hours and the rate claimed are
reasonable, the lodestar amount is presumed to be the reasonable
fee to which counsel is entitled.”

Imwalle, 515 F.3d at 552

(citation omitted).
In support of their request for attorney’s fees, the
plaintiffs attach the affidavit of counsel Bryan C. Barch.

Mr.

Barch avers that he worked a total of 8.45 hours in this matter
at a rate of $200.00 per hour.

(Doc. 10, Ex. 1 at ¶5).

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Thus,

the attorney’s fees in this matter are $1,690.00.

Id. at ¶6.

A

detailed invoice itemizing the fees is attached to Mr. Barch’s
affidavit.

The Court has reviewed the affidavit and the itemized

fees, and it concludes that they are reasonable.

Therefore, the

Court will recommend that the $1,690.00 in attorney’s fees be
added to the $9,881.69 owed for accumulated interest.

The Court

will also recommend that the plaintiffs be awarded $400.00 in
Court costs.
IV. Recommendation
For the reasons set forth above, it is recommended that the
motion for default judgment (Doc. 10) be granted and judgment be
entered against the defendant in the amount of $9,881.69 in
accumulated interest and $2,090.00 for attorney’s fees and costs.
V. PROCEDURE ON OBJECTIONS
If any party objects to this Report and Recommendation, that
party may, within fourteen days of the date of this Report, file
and serve on all parties written objections to those specific
proposed findings or recommendations to which objection is made,
together with supporting authority for the objection(s).

A judge

of this Court shall make a de novo determination of those
portions of the report or specified proposed findings or
recommendations to which objection is made.

Upon proper

objections, a judge of this Court may accept, reject, or modify,
in whole or in part, the findings or recommendations made herein,
may receive further evidence or may recommit this matter to the
magistrate judge with instructions.

28 U.S.C. §636(b)(1).

The parties are specifically advised that failure to object
to the Report and Recommendation will result in a waiver of the
right to have the district judge review the Report and
Recommendation de novo, and also operates as a waiver of the
right to appeal the decision of the District Court adopting the
Report and Recommendation.

See Thomas v. Arn, 474 U.S. 140

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(1985); United States v. Walters, 638 F.2d 947 (6th Cir.1981).

/s/ Terence P. Kemp
United States Magistrate Judge

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