BRICKLAYERS & ALLIED CRAFTWORKERS LOCAL 1 OF PA/DE et al v. GTC CERAMIC TILE, LLC et al
Filing
8
MEMORANDUM. SIGNED BY DISTRICT JUDGE GERALD J. PAPPERT ON 10/23/2024. 10/23/2024 ENTERED AND COPIES E-MAILED. NOT MAILED TO UNREPS.(ahf)
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
Bricklayers and Allied Craftworkers Local 1
of PA/DE, et al.,
CIVIL ACTION
NO. 23-3830
Plaintiffs,
v.
GTC Ceramic Tile, LLC, et al.,
Defendants.
Pappert, J.
October 23, 2024
MEMORANDUM
Bricklayers and Allied Craftworkers Local 1 of PA/DE and its associated
multiemployer plans sued GTC Ceramic Tile and its owner George Celona for failing to
make required contributions to the plans in violation of a Collective Bargaining
Agreement and the Employee Retirement Income Security Act (ERISA). GTC and
Celona failed to respond or otherwise participate in the litigation, so Plaintiffs obtained
an entry of default and now move for a default judgment under Rule 55(b)(2). The
Court grants the motion.
I
The plaintiff-funds are all multiemployer plans organized under ERISA. (Compl.
¶¶ 2–6, ECF No. 1.) GTC is party to a CBA requiring it to make monthly contributions
to the funds. (Compl. ¶ 9); (Morris Decl. ¶ 8, ECF No. 7-2.) The required contributions
vary according to the number of hours worked in a given month, which GTC tracks and
reports to Plaintiffs. (Compl. ¶¶ 12, 17.) The required contributions for a given month
are due on the 15th of the following month. (Morris Decl. ¶ 8.) The CBA provides that
1
the contributions “become assets of each Fund as of the date on which they are due.”
(Id. ¶ 9.) The CBA also provides that when GTC fails to timely make a required
contribution, it must pay (in addition to the contributions) liquidated damages, interest
and any attorneys’ fees and litigation costs. (Compl. ¶¶ 18–19.)
GTC failed to pay its required contributions for the months of June through
September 2021, September and October 2022, and January through March 2023.
(Morris Decl. ¶ 14.) It has also made its contributions late “at various points beginning
in 2021.” (Id. ¶ 15.) And it failed to make required reports of the hours its employees
worked during March and April 2024. (Id. ¶ 16.)
Plaintiffs filed this action on October 2, 2023, seeking a judgment that both GTC
and its owner George Celona are jointly and severally liable for $134,976.15 in
delinquent contributions, liquidated damages, interest, attorneys’ fees and litigation
costs. It also seeks an injunction requiring GTC to submit contribution reports for
March and April 2024 and to timely make its required reports and contributions in the
future.
II 1
Before entering a default judgment, the Court must “ascertain whether the
unchallenged facts constitute a legitimate cause of action.” Serv. Emps. Int’l Union v.
ShamrockClean, Inc., 325 F. Supp. 3d 631, 635 (E.D. Pa. 2018) (quotation marks
omitted). “A consequence of the entry of a default judgment is that the factual
The Court finds that GTC and Celona were properly served. See (Aff. of Service, ECF No. 3);
(Aff. of Service, ECF No. 4.) The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331.
Plaintiffs have met their burden to make a prima facie showing of personal jurisdiction over the
defendants, see D’Onofrio v. Il Mattino, 430 F. Supp. 2d 431, 437 (E.D. Pa. 2006), because they allege
that GTC is organized under Pennsylvania law (Compl. ¶ 7), and that Celona was served in
Pennsylvania (Aff. of Service, ECF No. 4).
1
2
allegations of the complaint, except those relating to the amount of damages, will be
taken as true.” Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990) (citations
and internal quotation marks omitted).
While the factual allegations of the complaint “will be taken as true,” the amount
of damages must still be proven. Comdyne I, Inc., 908 F.2d at 1149. “There must be an
evidentiary basis for the damages sought by plaintiff, and a district court may
determine there is sufficient evidence either based upon evidence presented at a
hearing or upon a review of detailed affidavits and documentary evidence.” Allstate
Ins. Co. v. Nw. Med., No. 23-2480, 2023 WL 7185566, at *3 (E.D. Pa. Oct. 31, 2023)
(internal citation omitted). It is within the Court’s discretion “to decide whether
further evidence or a hearing is necessary to ascertain if the evidence contained in
affidavits and documents in the record is sufficient to establish damages.” Id. (citing
Fed. R. Civ. P. 55(b)).
A
Plaintiffs first seek to hold GTC liable for its unpaid contributions plus interest,
liquidated damages, attorneys’ fees and litigation costs. Where a CBA requires an
employer to contribute to a multiemployer plan, the employer must do so in accordance
with the CBA’s terms. 29 U.S.C. § 1145. GTC failed to comply with the terms of the
CBA when it failed to remit monthly contributions for the months of June through
September 2021, September and October 2022, and January through March 2023,
(Morris Decl. ¶ 14.); when it untimely remitted contributions for several other months
between 2021 and May 2024, (id. ¶ 15); and when it failed to report the hours its
3
employees worked for the months of March and April 2024, (id. ¶ 15). GTC thus
violated its duties under § 1145.
When a court enters judgment in favor of a plan in an action under § 1145, the
court must 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 (or such higher percentage as may be permitted
under Federal or State law) of the amount determined by the court under
subparagraph (A),
(D) reasonable attorney’s fees and costs of the action, to be paid by the
defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
29 U.S.C. § 1132(g)(2). Interest is determined by using the rate set forth in the
CBA. Id.
Plaintiffs have submitted the affidavit of Maria Morris, Administrator of the
benefit funds sponsored by Local 1, establishing to the Court’s satisfaction the amounts
GTC owes in unpaid contributions, interest, and liquidated damages. GTC owes
$86,547.32 in reported but unpaid contributions, $22,156.05 in interest on the reported
but unpaid contributions, $9,548.75 in liquidated damages on the reported but unpaid
contributions, $5,275.07 in interest on its late-paid contributions through May 31, 2024,
4
and $6,684.46 in liquidated damages on its late-paid contributions through May 31,
2024. (Morris. Decl. ¶ 14–15.)
Plaintiffs have also submitted the affidavit of its attorney Kathleen Bichner in
support of the requested attorneys’ fees and litigation costs. Courts determine
reasonable attorneys’ fees using the lodestar—the product of a reasonable hourly rate
and the number of hours reasonably expended. Rode v. Dellarciprete, 892 F.2d 1177,
1183 (3d Cir. 1990). The requesting party must support its request with evidence. Id.
Once it does so, the Court “cannot decrease a fee award based on factors not raised at
all by an adverse party.” Id. Bichner’s affidavit contains sufficient evidence of her
experience to support the requested rate of $290 per hour, and it contains evidence of
billing entries sufficient to support the 14.5 hours she spent on this litigation. (Bichner
Decl. ¶ 1, Ex. A, ECF No. 7-2.) GTC having not objected to the fee request, Plaintiffs
are entitled to reimbursement of the requested $4,205.00 2 in attorneys’ fees. They are
also entitled to reimbursement of the requested $547.00 in litigation costs. See (id. ¶ 8.)
GTC thus owes the Plaintiffs $134,963.65.
B
Plaintiffs also seek to hold Celona personally liable for all damages. ERISA
imposes personal liability on “[a]ny person who is a fiduciary with respect to a plan who
breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries.” 29
U.S.C. § 1109(a). “[T]o the extent” a person “exercises any authority or control
respecting management or disposition of [plan] assets,” that person is a fiduciary with
respect to the plan. 29 U.S.C. § 1002(21)(A).
Bichner’s billing entries reflect a mathematical error that resulted in in over-counting the
total fees by $12.50. The Court has reduced the award accordingly.
2
5
The CBA between GTC and Local 1 states that “[c]ontributions required under
this Agreement shall become assets of each Fund as of the date on which they are
earned.” (Morris Decl. ¶ 9.) Overdue contributions are thus plan assets. See Trustees
of Nat’l Elevator Indus. Pension Fund v. Maple Mgmt. LLC, No. 19-4305, 2020 WL
7353093, at *14 (E.D. Pa. Dec. 15, 2020); Trustees of the Nat'l Elevator Indus. Pension
v. GMS Elevator Servs., Inc., No. 18-00538, 2018 WL 4510495, at *5 (E.D. Pa. Sept. 20,
2018). And as owner of GTC, Celona was responsible for determining and paying the
total amount of contributions owed each month, and he exercised control and discretion
over things like the company’s payroll and collection of receivables. (Compl. ¶¶ 11, 27,
28.) Celona thus had “the practical ability to dispose of plan funds … unilaterally [and]
undirected,” rendering him a fiduciary with respect to each of Local 1’s plans. See
Trustees of the Nat. Elevator Indus. Pension, Health Ben., Educ., Elevator Indus. Work
Pres. Funds v. Gateway Elevator Inc., No. 09-4206, 2011 WL 2462027, at *6 (E.D. Pa.
June 21, 2011).
Having violated his fiduciary duty to remit required contributions to the plans in
accordance with the CBA, see 29 U.S.C. § 1104(a)(1)(D), Celona is jointly and severally
liable for the $134,963.65 in unpaid contributions, interest, liquidated damages,
attorneys’ fees and litigation costs.
C
Plaintiffs additionally seek injunctive relief requiring GTC to submit
contribution reports for March and April 2024 and to timely submit its required reports
and contributions in the future. ERISA authorizes “such … equitable relief as the court
deems appropriate.” 29 U.S.C. § 1132(g)(2)(E). Given GTC’s failure to submit
6
contribution reports in March and April 2024 in violation of the CBA, and GTC’s
numerous other failures of its obligations under the CBA and ERISA, the Court deems
the injunctive relief requested by Plaintiffs appropriate. GTC must submit contribution
reports for March and April 2024 and going forward must timely report employee hours
and pay contributions to the plaintiff funds.
V
The Court must also evaluate three additional factors before granting a default
judgment: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant
appears to have a litigable defense, and (3) whether defendant’s delay is due to culpable
conduct.” Chamberlain v. Giampapa, 210 F. 3d 154, 164 (3d Cir. 2000). When the
defendant has failed to appear, evaluation of the factors tends to be “perfunctory”
because “the analysis is necessarily one sided.” Joe Hand Promotions, Inc. v. Yakubets,
3 F. Supp. 3d 261, 272 (E.D. Pa. 2014). Taken together, the factors here favor granting
default judgment.
The first factor favors default judgment because a plaintiff will generally always
“be prejudiced absent a default judgment when a defendant fails to respond to the
plaintiff’s claims because the plaintiff will be left with no other means to vindicate
[them].” United States v. Tran, No. 21-730, 2022 WL 159734, at *2 (E.D. Pa. Jan. 18,
2022) (internal quotation marks omitted). A defendant’s failure to participate at all
“portend[s] an indefinite delay without default judgment.” Id.; see also Chamberlain,
210 F.3d at 164 (finding no prejudice to plaintiff where defendant answered late, but
still answered). Both GTC and Celona have failed to appear or otherwise defend, so the
first factor favors default judgment.
7
The second factor favors a default judgment because “the court may presume
that an absent defendant who has failed to answer has no meritorious defense.” Joe
Hand, 3 F. Supp. 3d at 271–72 (adding that “it is not the court’s responsibility to
research the law and construct the parties' arguments for them”).
The third factor is at least neutral and at most favors default judgment. Some
courts deem the third factor neutral where the defendant’s motivations for not
participating in the litigation are unclear. See State Farm Fire & Cas. Co. v. Hunt, No.
14-6673, 2015 WL 1974772, at *5 (E.D. Pa. May 4, 2015). Others have found the failure
to engage in litigation sufficient to satisfy culpable conduct. See Penumella v. Pham,
No. 22-1197, 2023 WL 9004918, at *5 (E.D. Pa. Dec. 28, 2023). Whether this factor is
neutral or favors default judgment, the overall balance favors granting Plaintiffs’
motion.
An appropriate Order follows.
BY THE COURT:
/s/ Gerald J. Pappert
Gerald J. Pappert, J.
8
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?