TRUSTEES OF THE NATIONAL ELEVATOR INDUSTRY PENSION, HEALTH BENEFIT, EDUCATIONAL, ELEVATOR INDUSTRY WORK PRESERVATION FUNDS, ELEVATOR CONSTRUCTORS ANNUITY AND 401(K) RETIREMENT PLAN v. 1ST PRIORITY ELEVATOR CO. et al
MEMORANDUM. SIGNED BY HONORABLE R. BARCLAY SURRICK ON 12/4/2017. 12/5/2017 ENTERED AND COPIES MAILED TO UNREPS AND E-MAILED.(amas)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
TRUSTEES OF THE NATIONAL ELEVATOR
INDUSTRY PENSION, ET AL.
1ST PRIORITY ELEVATOR COMPANY, ET AL. :
DECEMBER 4 , 2017
Presently before the Court is Plaintiffs’ Motion for Default Judgment. (ECF No. 5.) For
the following reasons, the Motion will be granted.
In this ERISA action, Plaintiffs, which include Trust Funds for the National Elevator
Industry (“NEI Funds”), seek to collect delinquent employee benefit fund contributions from
Defendant 1st Priority Elevator Company and 1st Priority Elevator’s owner and officer, Mauline
Williams (the “Individual Defendant”). 1 Plaintiffs request the outstanding contributions due, as
well as interest and liquidated damages on those payments.
The Complaint alleges that on September 22, 2003, 1st Priority Elevator and the
International Union of Elevator Constructors (the “Elevator Union”) entered into a Collective
Bargaining Agreement (“CBA”) establishing the terms and conditions of employment for the
elevator workers employed by 1st Priority Elevator. (Compl. ¶ 5, ECF No. 1.) Pursuant to the
CBA, 1st Priority Elevator was bound by the terms and conditions of the Declarations of Trust
The Plaintiffs are the Boards of Trustees of the National Elevator Industry Pension,
Health Benefit, Educational, Elevator Industry Work Preservation Funds, Elevator Constructors
Annuity and 401(k) Retirement Plan Funds. The NEI Funds are multi-employer benefit plans, as
defined by ERISA. See 29 U.S.C. § 1002(3) and (37).
(referred to as the “Trust Agreements” in the Complaint) associated with each of the NEI Funds.
(Id. ¶ 7.) Pursuant to the Declarations of Trust, 1st Priority Elevator was obligated to file
monthly reporting forms with the Plaintiff NEI Funds and to submit contributions that
correspond to the total number of hours worked by covered 1st Priority Elevator employees.
(Id. ¶¶ 6, 7.) These contributions finance the NEI Funds and provide pension, medical, and
educational benefits to the Union employees. (Default Mem. 1, ECF No. 4.) As a result, the NEI
Funds are third party beneficiaries to the CBA. (Id.)
Plaintiffs allege in the Complaint that an audit conducted by the Trustees revealed that for
the period January 1, 2012 through May 31, 2014, 1st Priority Elevator owes $37,627.17 in
additional contributions and interest. 2 Additional interest that has accrued since the time of the
audit totals $3,320.75. (Default Mem. 4.) The Declarations of Trust also provide that when an
employer fails to pay the amounts required by the CBA on time, the Fund Trustees may seek
liquidated damages in the amount of 20 percent, interest, costs, and attorneys’ fees associated
with the collection of the delinquent contributions. (Compl. ¶ 11.) The liquidated damages
amount associated with these delinquent contributions totals $7,132.64. (Default Mem. 4-5.)
Plaintiffs also seek audit fees in the amount of $3,862.00, and additional interest in the amount of
$80.66 for the late payment of contributions for the months of February, March, May, and June
2017. (Id. at 4.) Finally, Plaintiffs seek attorneys’ fees in the amount of $1,437.50 and costs in
the amount of $670, for having to bring this lawsuit. (Id. at 12.)
The Complaint was filed on July 12, 2017. Defendants were served with the Complaint
on July 28, 2017. (ECF No. 2.) Defendants failed to file an Answer, or otherwise plead or
defend this action. On August 8, 2017, the Clerk of the Court entered default against
The Declarations of Trusts for the NEI Funds provide that any participating employer
may be audited, and that the Trustees of the NEI Funds may designate a Certified Public
Accountant to conduct the audit. (Compl. ¶ 12.)
Defendants. (ECF No. 5.) On August 31, 2017, Plaintiffs filed this Motion for Default
Judgment. Defendants have not responded to the Motion and no attorney has entered an
appearance on behalf of Defendants.
In determining whether a default judgment is warranted, courts in this circuit weigh three
factors: (1) prejudice to the plaintiff if default is denied; (2) whether the defendant’s delay is due
to culpable conduct; and (3) whether the defendant appears to have a litigable defense.
Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000) (citation omitted). We are satisfied
that all of these factors weigh in favor of entering default judgment.
Plaintiffs will be prejudiced if the default is denied. Plaintiffs will be required to make
payments to its union members despite its inability to collect contributions from 1st Priority
Elevator that are due under the CBA and the Declarations of Trust. See Nat’l Elec. Benefit Fund
v. FJM Elec. Constr., LLC, No. 13-3057, 2015 WL 6750726, at *2 (E.D. Pa. Nov. 5, 2015)
(finding that plaintiff union would have been prejudiced if default judgment were denied because
it was still required to make vested payments to participants even if the employer failed to make
the required contributions).
In addition, Defendants’ culpability is evident from the fact that they failed to make
contributions or respond in any way to Plaintiffs’ claims despite being put on notice. See New
Jersey Bldg. Laborers’ Statewide Pension Fund & Trustees Thereof v. Belmont Contracting
Corp., No. 13-507, 2014 WL 3731267, at *2 (D.N.J. July 25, 2014) (finding that the defendant
“is culpable because it has been served with notice of this action, but has failed to properly
Finally, Defendants do not appear to have a litigable defense. With respect to 1st Priority
Elevator, Section 1145 of ERISA requires that “[e]very employer who is obligated to make
contributions to a plan or under the terms of a collectively bargained agreement . . . make such
contributions in accordance with the terms and conditions of such plan or such agreement.” 29
U.S.C. § 1145. In the event that an employer such as 1st Priority Elevator fails to make
contributions in violation of the CBA, the Court may 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 . . . ;
(D) reasonable attorneys’ fees and costs of the action, to be paid by the defendant;
(E) such other legal or equitable relief as the court deems appropriate.
29 U.S.C. § 1132(g)(2). Here, an independent audit revealed that 1st Priority Elevator failed to
make contributions for work performed by Union members pursuant to the CBA from January 1,
2012 through May 31, 2014. As a result of this failure, Plaintiffs are entitled to damages as set
forth in 29 U.S.C. § 1132(g)(2).
With respect to the Individual Defendant, Mauline Williams, Plaintiffs allege that he is
jointly and severally liable for the delinquent contributions and for damages as a result of his
breach of fiduciary duties. Under ERISA, “[a]ny person who is a fiduciary with respect to a
plan” is personally liable if they breach their fiduciary duties. 29 U.S.C. § 1109(a). For
fiduciary liability to attach to individuals, we must determine: (1) whether contributions are
“plan assets”; and (2) whether the individual exercises discretion in the management of the plan,
or exercises authority or control over the plan assets. Trustees of Nat. Elevator Indus. Pension,
Health Benefit, Educ., Elevator Indus. Work Pres. Funds v. Century Elevator, Inc., No. 11-3792,
2011 WL 4807914, at *3 (E.D. Pa. Oct. 11, 2011); see also 29 U.S.C. § 1002(21)(A) (stating that
a person is a fiduciary if he or she “exercises any discretionary authority or discretionary control
respecting management of such plan or exercises any authority or control respecting
management or disposition of its asset.”); Srein v. Frankford Trust Co., 323 F.3d 214, 220-21
(3d Cir. 2003).
Here, the record supports a finding that the Individual Defendant Mauline Williams is a
fiduciary. ERISA regulations define “plan assets” as amounts that a participant pays to an
employer, or amounts that a participant has withheld from his wages by an employer. 29 C.F.R.
§ 2510.3–102(a)(1). The CBA to which 1st Priority Elevator was bound provides:
Title to all monies paid into and/or due and owing to the National Elevator
Industry Health Benefit Fund, Pension Fund, Education Fund, National Elevator
Industry 401(k) Annuity Retirement Fund and the Elevator Industry Work
Preservation Fund . . . shall vest in and remain exclusively in the Trustees of said
(Default Mot. 10 (citing CBA ¶ 7, Default Mot. Ex. 1).) This language reveals that unpaid
contributions constitute “plan assets.” See Century Elevator, 2011 WL 4807914, at *4-5
(concluding that unpaid contributions were plan assets where language in CBA indicated that
money owed to a Trust Fund shall “vest” with the Trustee of that Trust).
The record also supports a finding that the Individual Defendant, who is the corporate
president, CEO, registered agent, and 50 percent owner of 1st Priority Elevator, exercised control
over the plan assets. The Complaint alleges that Mauline Williams determined the monthly
contributions owed by 1st Priority Elevator, exercised authority and control over the plan assets,
voluntarily entered into the CBA, and commingled plan assets with 1st Priority Elevator’s
general assets to pay other creditors. (Compl. ¶¶ 26, 31.)
These allegations also support a finding that the Individual Defendant breached his
fiduciary duties by failing to timely remit contributions pursuant to the CBA. Century Elevator,
2011 WL 4807914, at *5 (“ERISA fiduciaries are responsible for the ‘proper management,
administration, and investment of [plan] assets, the maintenance of proper records, the disclosure
of specific information, and the avoidance of conflicts of interest.’” (quoting Mertes v. Hewitt
Assocs., 508 U.S. 248, 252 (1993))). The Individual Defendant is jointly and severally liable
with the corporate Defendant, 1st Priority Elevator.
Finally, the record before us, which includes no filings from any of the Defendants, does
not reveal any litigable defenses. Accordingly, entering default judgment against Defendants is
With regard to Plaintiffs’ request for counsel fees in the amount of $1,437.50 and costs in
the amount of $670.00, counsel obviously met and conferred with their clients, prepared a
Complaint with exhibits, filed the Complaint in this Court, made arrangements for service on
Defendants, prepared and filed a Praecipe for Default, and prepared and filed the Motion for
Entry of Default Judgment with Exhibits, Memorandum, and a proposed order. The request for
attorneys’ fees and costs in the amount of $2,107.50 is clearly not unreasonable.
For these reasons, Plaintiffs’ Motion for Default Judgment will be granted. Judgment
will be entered in favor of Plaintiffs and against Defendants 1st Priority Elevator Company and
An appropriate Order follows.
BY THE COURT:
R. BARCLAY SURRICK, J.
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