National Shopmen Pension Fund v. Builders Metal Supply, Inc.

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

NATIONAL SHOPMEN PENSION FUND,
et al,

Plaintiff,
Civil Action No. 13-1389 (CKK)
v.

BUILDERS METAL SUPPLY, INC.,

Defendant.

MEMORANDUM OPINION
(June 3, 2014)

The National Shopmen Pension Fund (“the Fund”) and its Trustees, Walter Wise and

Timothy O’Connell (collectively, “Plaintiffs”) filed suit against Builders Metal Supply, Inc.

seeking legal and equitable relief under the Employee Retirement Income Security Act of 1974

(“ERISA”), as amended by the Multiemployer Pension Plan Amendments Act of 1980, 29

U.S.C. § 1145. Plaintiffs allege that Defendant failed to submit remittance reports and

contributions to the Fund for the months of June 2012 through August 2013. Compl. ¶ 12.

Plaintiffs seek to recover unpaid contributions, liquidated damages, interest, and attorneys’ fees

and costs incurred by the Fund pursuant to 29 U.S.C. §§ 1132(g)(2)(A)-(D) and a collective

bargaining agreement. Although properly and timely served, Defendant has failed to respond to

Plaintiffs’ lawsuit, and the Clerk of the Court, upon request by Plaintiffs, has since entered

default against Defendant. See Clerk’s Entry of Default, ECF No. [9]. Presently before the

Court is Plaintiffs’ [11] Motion for Default Judgment. Having considered Plaintiffs’ Complaint,

Plaintiffs’ submissions and attachments thereto, the applicable case law, statutory authority, and
the record of the case as a whole, the Court GRANTS IN PART and DENIES IN PART

Plaintiffs’ [11] Motion for Judgment by Default, for the reasons stated below.

I. BACKGROUND

Plaintiff National Shopmen Pension Fund is a multiemployer employee benefit plan

within the meaning of Sections 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3) and 1002(37),

and a joint labor-management pension fund established pursuant to Section 302(c) of the Labor

Management Relations Act (“LMRA”), 29 U.S.C. §186(c). Compl. ¶ 3. Its purpose is to

provide pension, retirement and related benefits to the eligible employees of employers who

contribute to the Fund pursuant to various collective bargaining agreements with affiliated

Shopmen’s Local Unions of the International Association of Bridge, Structural and Ornamental

Iron Workers, AFL-CIO. Id. Plaintiffs Walter Wise and Timothy O’Connell are Trustees of the

Fund. The Trustees are fiduciaries of the Fund within the meaning of Section 3(21) of ERISA,

29 U.S.C. § 1002(21). Id. ¶ 4.

On September 12, 2013, Plaintiffs filed a Complaint against Defendant Builder Metal

Supply, Inc. At all times relevant to Plaintiffs’ Complaint, Defendant employed employees

represented for the purposes of collective bargaining by Shopmen’s Local Union No. 468 of the

International Association of Bridge, Structural and Ornamental and Reinforcing Iron Workers.

Id. ¶ 6. Defendant and Local 468 were parties to and bound by a Collective Bargaining

Agreement (“CBA”). Id. ¶ 7. The CBA obligates Defendant to make monthly contributions to

the Fund on behalf of Defendant’s employees for all hours of work covered by the CBA and to

submit monthly remittance reports to the Fund showing the hours paid to each employee covered

by the CBA for the month. Id. ¶ 8. Plaintiffs allege in their Complaint that for the months of

June 2012 through August 2013, Defendant failed to pay the Fund an estimated amount of

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$9,585.00 in required contributions owed under the terms of the CBA and the Amended and

Restated Agreement and Declaration of Trust (“Trust Agreement”). Id. ¶ 11. Defendant also

failed to produce the remittance reports for the same time period. Id. ¶ 12. Plaintiff further

alleges that pursuant to the Trust Agreement and Section 502(g)(2) of ERISA, 29 U.S.C. §

1132(g)(2), Defendant owes the Fund interest on the delinquent contributions at the rate

specified under Internal Revenue Code Section 6621, liquidated damages equal to the greater of

the interest or 20% of the contributions, and reasonable attorneys’ fees and costs of this action.

Id. ¶ 13.

Defendant was served with the Complaint on September 18, 2013. See Cert. of Service,

ECF No. [5]. Pursuant to Federal Rule of Civil Procedure 15(a)(3), Defendant was required to

file an answer or otherwise respond to the Amended Complaint by no later than October 9, 2013.

Defendant failed to do so, however, and, at Plaintiffs’ request, the Clerk of the Court entered

default against Defendant on November 1, 2013. See Clerk’s Entry of Default, ECF No. [9].

Subsequently, Plaintiffs filed the now-pending Motion for Default Judgment. See Pl.s’ Mot. for

Def. J., ECF No. [11]. In their motion, Plaintiffs move for default judgment seeking judgment

for $17,419.72 in delinquent contributions, interest, liquidated damages, and attorneys’ fees and

costs.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(a) provides that the Clerk of the Court must enter a

party’s request for a default “[w]hen a party against whom a judgment for affirmative relief is

sought has failed to plead or otherwise defend, and that failure is shown by affidavit or

otherwise.” Fed. R. Civ. P. 55(a). After a default has been entered by the Clerk, a party may

move the court for a default judgment. Fed. R. Civ. P. 55(b)(2). “The determination of whether

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default judgment is appropriate is committed to the discretion of the trial court.” Int’l Painters &

Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57 (D.D.C.

2008) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)). Where, as here, there is a

complete “absence of any request to set aside the default or suggestion by the defendant that it

has a meritorious defense, it is clear that the standard for default judgment has been satisfied.”

Auxier Drywall, 531 F. Supp. 2d at 57 (citation omitted).

III. DISCUSSION

The Clerk of the Court entered a default as to Defendant on November 1, 2013, therefore

the factual allegations in the Complaint are taken as true. Int’l Painters & Allied Trades Indus.

Pension Fund v. R.W. Amrine Drywall Co., 239 F. Supp. 2d 26, 30 (D.D.C. 2002). The Court

finds that Plaintiffs’ Complaint sufficiently alleges facts to support their claims. Plaintiffs are

thus entitled to default judgment as to Defendant’s liability for its failure to pay certain charges

in connection with late contributions, and for its failure to submit remittance reports and

contributions for June 2012 through August 2013.

While the entry of default establishes Defendant’s liability, the Court is required to make

an independent determination of the amount of damages to be awarded, unless the amount of

damages is certain. Int’l Painters & Allied Trades Indus. Pension Fund v. Davanc Contracting,

Inc., 808 F. Supp. 2d 89, 94 (D.D.C. 2011) (citing Adkins v. Teseo, 180 F. Supp. 2d. 15, 17

(D.D.C. 2001)). Under section 515 of ERISA, “[e]very employer who is obligated to make

contributions to a multiemployer plan under the terms of the plan or under the terms of a

collectively bargained agreement shall . . . make such contributions in accordance with the terms

and conditions of such plan or such agreement.” 29 U.S.C. § 1145. When an employer fails to

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make such contributions, ERISA provides that the fiduciary for a plan may bring an action and

obtain a mandatory award for the plan consisting of:

(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.

Id. § 1132(g)(2). Interest is calculated using the rate provided under the plan, or, if none, the rate

prescribed by 26 U.S.C. § 6621. Id. In addition to the remedies available under ERISA, a

benefit trust fund may, as a third-party beneficiary, recover for breach of a collective bargaining

agreement under 29 U.S.C. § 185(a). See Hudson County Carpenters Union Local Union No. 6.

v. V.S.R. Constr. Corp., 127 F.Supp.2d 565, 568 (D.N.J. 2000) (“It is well-established that the

failure to make contributions to a union trust fund as required by a collective bargaining

agreement constitutes a violation of ERISA § 515 and a violation of LMRA § 301 [29 U.S.C. §

185].”); see also Bugher v. Feightner, 722 F.2d 1356, 1357–60 (7th Cir. 1983) (explaining that

ERISA remedies are intended to supplement rather than supersede rights existing under 29

U.S.C. § 185(a)).

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 Plaintiffs have provided the Court with affidavits to support a damages award of

$17,419.72, including attorneys’ fees and costs. As set forth in the Declaration of A.H. Higgs,

Jr., Administrator for the Fund, Plaintiffs have calculated that Defendant owes $6,695.07 in

unpaid contributions for the period of June 2012 through March 2013. See Higgs Decl., Pl.’s

Mot. Ex. A, ECF No. [11-2], ¶ 9; see also Pl.’s Mot. Ex. 5. Because Defendant failed to submit

remittance reports to the Fund for the period of April 2013 through September 2013, Plaintiffs

estimated that Defendant owes $3,834 in unpaid contributions for this period based on “the

highest amount of hours reported to the Fund in any month during the preceding 12-month

period multiplied by the applicable contribution rate.” Higgs Decl. ¶ 9; see also Pl.’s Mot. Ex. 5.

The Court approves this calculation as a reasonable estimate of the unpaid

contributions. See Int'l Painters & Allied Trades Indus. Pension Fund v. Advanced Pro Painting

Servs., 697 F.Supp.2d 112, 116–17, (D.D.C. 2010) (accepting plaintiffs estimate of damages

based on an average of unpaid contributions reported in previous two months); Flynn v. Extreme

Granite, Inc., 671 F.Supp.2d 157, 162 (D.D.C. 2009) (“In light of the defendant's failure to

provide periodic reports or allow the plaintiffs access to the defendant's books and records, the

court accepts the plaintiffs' estimation of delinquent contributions as both reasonable and as

accurate as possible under the circumstances.”); R.W. Amrine Drywall Co., 239 F.Supp.2d at 31–

32 (granting request for damages based in part on estimates of money owed based on prior

remittance reports). As Defendant made a partial payment of $1,000 towards the delinquent

contributions after this suit was filed, see Higgs Decl. ¶ 12, the Court finds that Plaintiffs should

be granted default judgment in the amount of $9,529.07 in unpaid contributions.

In addition, Plaintiffs have adequately demonstrated that Defendant owes interest on the

unpaid amounts through October 31, 2013, in the amount of $211.49, based on the total amount

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of unpaid contributions indicated above and the Internal Revenue Service interest rate of 3% per

year as provided in the Trust Agreement and the Statement of Policy for Collection of

Delinquent Contributions (“Collection Policy”). Higgs Decl. ¶ 8; see also Pl.’s Mot. Ex. 1 (Trust

Agreement), ECF No. [11-3], at 36; Pl.’s Mot. Ex. 2 (Collection Policy), ECF No. [11-4], at 6.

Plaintiffs have also adequately demonstrated that they are entitled to liquidated damages in the

amount of twenty percent of the total unpaid contributions, as provided for both in 29 U.S.C. §

1132(g)(2) and the Trust Agreement and Collection Policy, which equals $2,105.81. Higgs Decl.

¶ 8; see also Pl.’s Mot. Ex. 1 (Trust Agreement), at 36; Pl.’s Mot. Ex. 2 (Collection Policy), at 6.

Finally, Plaintiff requests an award of attorneys’ fees and costs in the amount of

$5,573.35. Pl.’s Mot. at 6. ERISA provides that the defendant must pay the reasonable

attorney's fees and costs incurred by the plaintiff in an action seeking delinquent contributions.

29 U.S.C. § 1132(g)(2)(D). Plaintiff provides a declaration from Marc H. Rifkind, counsel

retained by the Trustees of the Fund to collect delinquent contributions owed to the Fund, in

which Mr. Rifkind avers to the amount of attorneys’ fees and costs attributable to this matter.

Rifkind Decl. ¶ 3, Pl.’s Mot. Ex. 3, ECF No. [11-8]. However, Mr. Rifkind only provides the

names and titles of individuals who worked on this matter and their regular hourly rates before

declaring the total amount of attorneys’ fees and costs. Mr. Rifkind does not specify, nor

provide any documentation supporting, the number of hours each individual worked on this

matter. Mr. Rifkind also does not identify or itemize the costs allegedly incurred. Consequently,

the Court does not have any basis on which to make an independent determination of the amount

of attorneys’ fees and costs to be awarded. Moreover, the Court cannot determine the

reasonableness of the fees requested by Plaintiff from the limited information Mr. Rifkind

provided. “Without additional information as to the experience of each attorney at issue, as well

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as the work performed by each attorney for specific periods of time, the Court cannot determine

whether the rates and hours billed by the Plaintiffs’ attorneys were reasonable.” SEIU v.

Artharee, 942 F.Supp.2d 27, 31 (D.D.C. 2013). In its discretion, the Court declines to enter a

default judgment for attorneys’ fees and costs absent documentation of the hours each attorney

worked on this matter, the specific costs incurred by the attorneys, and the reasonableness of

their fees. Accordingly, the Court shall deny Plaintiffs’ motion for attorneys’ fees and costs

without prejudice.

IV. CONCLUSION

For the foregoing reasons, the Court finds that Plaintiffs provided sufficient

documentation to support their request for damages, but failed to provide the documentation

necessary to support their request for attorneys’ fees and costs. Accordingly, Plaintiffs’ [18]

Motion for Default Judgment is GRANTED IN PART and DENIED IN PART as set forth

above. The Court enters judgment for the Fund in the amount of $11,846.37.

An appropriate Order accompanies this Memorandum Opinion.

/s/

COLLEEN KOLLAR-KOTELLY
UNITED STATES DISTRICT JUDGE

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