Laborers Local Union 158 et al v. On-Call Flagging, Inc. et al

Filing 11

MEMORANDUM (Order to follow as separate docket entry). Signed by Honorable Yvette Kane on 4/12/17. (rw)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF PENNSYLVANIA
LABORERS LOCAL UNION 158, et al.,
Plaintiffs
v.
ON-CALL FLAGGING, INC., et al.,
Defendants

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No. 1:16-cv-00843
(Judge Kane)

MEMORANDUM
Before the Court is Plaintiffs’ motion for default judgment. (Doc. No. 9.) As Defendants
have yet to appear or defend in this action, no opposition to the motion has been filed. For the
reasons that follow, the Court will grant the motion and enter default judgment in favor of
Plaintiffs.
I.

BACKGROUND
On May 11, 2016, Plaintiffs Laborers Local Union 158, Laborers Local Union 158

Pension Fund, and Laborers Local Union 158 Health and Welfare Fund initiated the abovecaptioned action by filing a four-count complaint against Defendants On-Call Flagging, Inc.
(“On-Call Flagging”), and Kathleen Jennings (“Jennings”), pursuant to Section 301 of the LaborManagement Relations Act (“LMRA”), 29 U.S.C. § 185, Section 502 of the Employee
Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132(d), and the Pennsylvania
Wage Payment and Collection Law (“PWPCL”), 43 P.S. § 260. (Doc. No. 1.)
The complaint alleges as follows. Plaintiff Laborers Local Union 158 (“LLU 158”) is an
“employee organization” as defined by 29 U.S.C. § 1002(4) of ERISA. (Id. ¶ 2.) Plaintiffs
Laborers Local Union 158 Pension Fund (“Pension Fund”), and Laborers Local Union 158
Health and Welfare Fund (“Health and Welfare Fund”) (collectively referred to herein as the
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“Funds”), are employee benefit plans within the meaning of 29 U.S.C. § 1002(3) of ERISA. (Id.
¶ 3.) On-Call Flagging is an “employer” within the meaning of 29 U.S.C. § 1002(5) of ERISA.
(Id. ¶ 5.) Plaintiffs aver that On-Call Flagging is a signatory to a collective bargaining agreement
with LLU 158. (Id. ¶ 7.) Pursuant to the terms of the collective bargaining agreement, On-Call
Flagging agreed to pay certain sums to each of the Funds based on the hours worked by
employee-members of the bargaining unit represented by LLU 158. (Id. ¶ 8.) Moreover, the
collective bargaining agreement requires On-Call Flagging to pay liquidated damages and
interest in the event that it fails to make timely contributions. (Id. ¶ 12.) Plaintiffs claim that OnCall Flagging failed to contribute $12,469.45 to the Health and Welfare Fund and $11,152.80 to
the Pension Fund for work performed by its employees for the month of October 2015, in breach
of the governing collective bargaining agreement. (Id. ¶ 11.) Moreover, Plaintiffs allege that
On-Call Flagging failed to remit to the Funds liquidated damages, penalties, attorney’s fees, and
interest. (Id. ¶ 12.) Plaintiffs seek to recover all unpaid contributions, assessed interest and
penalties on such unpaid contributions, and attorney’s fees and costs in the amount of
$30,560.07.
A review of the docket reveals that on June 28, 2016, Jennings, in her capacity as
president of On-Call Flagging, waived service of the summons and complaint on behalf of
herself and On-Call Flagging. (Doc. No. 4.) Despite executing a formal waiver of service,
Defendants subsequently failed to timely appear, answer, move, or otherwise respond to
Plaintiffs’ complaint. As a result, Plaintiffs requested the Clerk of Court to enter default against
Defendants pursuant to Federal Rule of Civil Procedure 55(a). (Doc. No. 6.) On August 19,
2016, the Clerk entered default against Defendants for failure to plead or otherwise defend in the
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above-captioned action. (Doc. No. 8.) On August 30, 2016, Plaintiffs filed a motion for default
judgment under Federal Rule of Civil Procedure 55(b)(2), together with a brief in support
thereto. (Doc. Nos. 9, 10.) In addition to filing the motion and supporting brief, Plaintiffs
produced a number of exhibits, including the affidavits of John B. Dougherty and Paul Desanto,
copies of the relevant contractual provisions governing this dispute,1 and an itemized report of
the amounts owed. (Doc. Nos. 9-1, 10-1.) Plaintiffs also certified that copies of the motion for
default judgment were mailed to Jennings at her last known address in Belsano, Pennsylvania.
(Doc. No. 9-2 at 1.)
As Defendants have not responded to the pending motion for default judgment, the Court
deems Plaintiffs’ motion for default judgment unopposed. Accordingly, this matter is now ripe
for disposition.
II.

STANDARD OF REVIEW
Default judgments are governed by a two-step process set forth under Rule 55 of the

Federal Rules of Civil Procedure. An entry of default by the clerk of court under Rule 55(a) is a
prerequisite to a later entry of a default judgment under Rule 55(b). 10A Charles Alan Wright &
Arthur R. Miller, Federal Practice and Procedure § 2682 (3d ed. 2007) (“Prior to obtaining a
default judgment under either Rule 55(b)(1) or Rule 55(b)(2), there must be an entry of default as
provided by Rule 55(a).”). Once the clerk of court has entered a default, the party seeking the
default may then move for the court to enter a default judgment under Rule 55(b)(2). Entry of
default does not entitle a claimant to default judgment as a matter of right. 10 James Wm. Moore
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Specifically, Plaintiffs have attached to their supporting brief copies of the Independent Heavy,
Highway, Utility and/or Railroad Construction Agreement (Doc. No. 10-1 at 6), the Health and
Welfare Fund Amended and Restated Health and Welfare Plan Trust Agreement (Doc. No. 10-1
at 18), and Collections Policy Addendum (Doc. No. 10-1 at 23).
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et al., Moore’s Federal Practice § 55.31 (Matthew Bender ed. 2010). Indeed, it is well settled
that decisions relating to the entry of default judgments are committed to the sound discretion of
the district court. Emcasco Ins. Co.v. Sambrick, 834 F.2d 71, 74 (3d Cir. 1987).
Three factors control the exercise of the district court’s discretion in assessing whether
default judgment should be granted following the entry of default: “(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) (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195
(3d Cir. 1984)). If the defendant has been properly served but fails to appear, plead, or defend an
action, a court may “enter a default judgment based solely on the fact that the default occurred,”
without considering the Chamberlain factors. Anchorage Assocs. v. Virgin Islands Bd. of Tax
Review, 922 F.2d 168, 177 n.9 (3d Cir. 1990).
“A finding that default judgment is appropriate, however, is not the end of the inquiry.”
Martin v. Nat’l Check Recovery Servs., LLC, No. 12-1230, 2016 WL 3670849, at *1 (M.D. Pa.
July 11, 2016). Prior to entering a default judgment, the Court must also determine whether the
“unchallenged facts constitute a legitimate cause of action.” Wright et al., supra, at § 2688;
Broad. Music, Inc. v. Spring Mount Area Bavarian Resort, Ltd., 555 F. Supp. 2d 537, 541 (E.D.
Pa. 2008) (“Consequently, before granting a default judgment, the Court must . . . ascertain
whether the unchallenged facts constitute a legitimate cause of action, since a party in default
does not admit mere conclusions of law.”) (citations omitted). In conducting this inquiry, “the
well-pleaded, factual allegations of the complaint . . . are accepted as true and treated as though
they were established by proof.” E. Elec. Corp. of N.J. v. Shoemaker Const. Co., 652 F. Supp.
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2d 599, 605 (E.D. Pa. 2009) (citation omitted). However, while the Court must accept as true the
well-pleaded factual allegations of the complaint, the Court need not accept the moving party’s
factual allegations or legal conclusions relating to the amount of damages. Comdyne I, Inc. v.
Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).
III.

DISCUSSION
Having reviewed the record, including Plaintiffs’ complaint, motion, supporting brief,

and accompanying affidavits, the Court finds that entry of default judgment against Defendants
and in favor of Plaintiffs is appropriate. As an initial matter, the Court observes that Plaintiffs’
unchallenged allegations in the complaint, taken as true, sufficiently state causes of action under,
inter alia, ERISA and the PWPCL. Specifically, Section 502 of ERISA, 29 U.S.C. § 1132(g)(2),
permits a “fiduciary for or on behalf of a plan to enforce [29 U.S.C. §] 1145 . . . in which a
judgment in favor of the plan is awarded.” 29 U.S.C. § 1145 provides that “[e]very employer
who is obligated to make contributions to a multi-employer plan under the terms of the plan or
under the terms of a collectively bargained agreement shall, to the extent not inconsistent with
law, make such contributions in accordance with terms and conditions of such plan or such
agreement.” 29 U.S.C. § 1145. Where entry of default judgment in favor of the plan fiduciary is
appropriate, Section 502(g)(2) instructs the court to award: (1) unpaid contributions; (2) interest
on the unpaid contributions; (3) liquidated damages; (4) reasonable attorney’s fees and costs; and
(5) such other relief as the court deems warranted. 29 U.S.C. § 1132 (g)(2).
Similarly, the PWPCL authorizes unions to institute suit against employers to recover
delinquent benefit fund contributions, liquidated damages, and reasonable attorney’s fees. 43
P.S. §§ 260.a(a)-(f) (“Any employe[e] or group of employe[e]s, labor organization or party to
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whom any type of wages is payable may institute actions provided under this act . . . to recover
unpaid wages and liquidated damages . . . in addition to reasonable attorney[’s]fees.”).
Accordingly, the Court finds that the complaint asserts a legitimate cause of action against
Defendants, as it sufficiently alleges Plaintiffs’ entitlement to the aforementioned relief as
authorized by ERISA and the PWPCL as a result of Defendants’ failure to make the required
contributions to the Funds for the month of October 2015.
Furthermore, the Court finds that the three Chamberlain factors weigh in favor of
entering default judgment against Defendants. First, Plaintiffs will be prejudiced if the Court
declines to enter default judgment, as Plaintiffs are unable to proceed with the action due to
Defendants’ failure to respond and have no other means of recovering against Defendants. See
Broad. Music, Inc. v. Kujo Long, LLC, No. 14-449, 2014 WL 4059711, at *2 (M.D. Pa. Aug. 14,
2014) (“Plaintiffs will be prejudiced . . . by their current inability to proceed with their action
due to Defendants’ failure to defend.”). Second, Defendants have not asserted any meritorious
defenses to Plaintiffs’ claims through the filing of an answer or other responsive pleading to the
complaint, or through the filing of a response to the instant motion. Consequently, the Court is
unable to conclude from Defendants’ silence that Defendants have a viable, litigable defense.
See Laborers Local Union 158 v. Fred Shaffer Concrete, No.10-1524, 2011 WL 1397107, at *2
(M.D. Pa. Apr. 13, 2011) (Kane, J.). Third, the Court cannot discern from the record any excuse
or justification for Defendants’ default apart from Defendants own culpability. Indeed, despite
signing the waiver of service of summons, which was received and docketed by this Court on
July 7, 2016, Defendants have failed to enter an appearance or file a timely answer to the
complaint and have offered no reasons for its failure to do so. “A defendant’s default, or its

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decision not to defend against allegations in a complaint, may be grounds for concluding that the
defendant’s actions are willfull.” Innovative Office Prods., Inc. v. Amazon.com, Inc., No. 10–
4487, 2012 WL 1466512, at *3 (E.D. Pa. Apr. 26, 2012). In the absence of any excuse or
justification for Defendants’ failure to participate in this litigation, the Court must conclude that
the delay is the result of Defendants’ culpable conduct. See Laborers Local Union 158, 2011
WL 1397107, at *2. Accordingly, the Court is satisfied that the Chamberlain factors counsel in
favor of entering default judgment in favor of Plaintiffs, and thus, will grant Plaintiffs’ motion
for default judgment.
As a final matter, the Court must resolve Plaintiffs’ request for unpaid benefit fund
contributions, liquidated damages, interest, and attorney’s fees and costs. With respect to
Plaintiffs’ claim for unpaid fund contributions, liquidated damages and interest, Plaintiffs
maintain that Defendants failed to remit benefit fund contributions, liquidated damages, and
interest to the Funds in the amount of $30,560.07, which includes: $12,469.45 in delinquent
contributions owed to the Health and Welfare fund; $1,168.37 in interest owed to the Health and
Welfare Fund; $2,493.89 in liquidated damages owed to the Health and Welfare Fund;
$11,152.80 in delinquent contributions owed to the Pension Fund; $1,045.56 in interest owed to
the Pension Fund; and $2,230.56 in liquidated damages owed to the Pension Fund. The total
interest is calculated at a rate of ten percent (10%) per annum in accordance with the collective
bargaining agreement. (Doc. No. 10-1 at 10.) The liquidated damages amount totals twenty
percent (20%) of the assessed delinquent contributions to the Funds pursuant to the Collections
Policy Addendum to the collective bargaining agreement. (Id. at 23 ¶ 4(c)) (“If legal action is
deemed necessary, liquidated damages shall be increased to twenty percent (20%) of the amount
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of the delinquent contributions or other remittances . . . .”). In support of Plaintiffs’ request for
damages, Plaintiffs have produced copies of the relevant provisions of the collective bargaining
agreement (Doc. No. 10-1 at 6), an itemized report of the interest and liquidated damages
calculation for the Funds (Doc. No. 10-1 at 15), as well as the affidavit of Paul Desanto, the Plan
Administrator of the Funds (Doc. No. 10-1 at 2), who attests to Defendants’ delinquency in
remitting contributions to the Funds for the month of October 2015 as required by the governing
agreement. Having considered these submissions, the Court finds that Plaintiffs are entitled to
recover $30,560.07, inclusive of the unpaid benefit fund contributions, liquidated damages, and
interest.
With respect to Plaintiffs’ request for attorney’s fees and costs, Plaintiffs submit that they
are entitled to $1,400.00 in attorney’s fees and $413.92 in costs, which includes $13.92 in
certified mailings of the complaint. 29 U.S.C. § 1132(g)(2) instructs that the Court must award
the Funds reasonable attorney’s fees and costs of the action, to be paid by the defendant. 29
U.S.C. § 1132(g)(2). 28 U.S.C. § 1920 specifies the costs that are recoverable under 29 U.S.C. §
1132(g)(2), which includes filing fees. In support of their request for attorney’s fees and costs,
Plaintiffs attach to their motion for default judgment the affidavit of John B. Dougherty, Esquire,
counsel of record for Plaintiffs, who confirms that the attorney’s fee calculation is based on
approximately seven hours of legal preparation at the prevailing rate in the community for
similar services by attorneys of reasonably comparable skill, experience, and reputation of
$200.00 per hour. (Doc. Nos. 9-1, 10 at 5.) Plaintiffs also submit Mr. Dougherty’s time records,
which detail the nature of the legal work he performed in connection with this litigation. (Doc.
No. 9-1 at 5.) The Court finds that Plaintiffs have submitted adequate support for their request
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for attorney’s fees and costs, and thus are entitled to the proposed award of $1,813.92. See
Einhorn v. Connor, No. 15-5910, 2016 WL 3919660, at *3 (D.N.J. July 19, 2016).
IV.

CONCLUSION
Based on the foregoing, the Court will grant Plaintiffs’ motion for default judgment.

(Doc. No. 9.) An appropriate Order follows.

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