UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
JAMES BOLAND et al.,
Plaintiffs,
v. Case No. 14-cv-01943 (CRC)
CACPER CONSTRUCTION CORP. et al.,
Defendants.
MEMORANDUM OPINION AND ORDER
On November 19, 2014, trustees of two union pension funds brought an action under the
Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002 et seq., to recover
unpaid contributions to those funds from a defunct New York construction company and its
principal, Adam Kulig. Defendants never responded to the complaint, the Clerk’s entry of default,
or the Court’s Order to Show Cause why judgment should not be entered against them. Plaintiffs
moved on March 19, 2015 for an entry of default judgment against the company and Kulig. On
July 16, 2015, the Court issued an order granting Plaintiffs’ motion as to the company, but denying
their motion as to Kulig, noting that “liability for delinquent pension contributions ordinarily does
not extend to individual corporate officers.” Mem. Op. & Order 1.
In a second effort to hold Kulig liable, Plaintiffs moved on August 13, 2015 to alter or
amend the judgment, claiming that the Court “misapprehen[ded] . . . the basis for [their] claim for
personal liability” against Kulig. Pls.’ Mot. Alter or Amend J. 1. Plaintiffs suggest that the Court
mistakenly understood them to argue that Kulig was “liable for delinquent pension contributions
simply by virtue of his status as a corporate owner or officer,” id., when they were actually arguing
that Kulig was liable “based on the uncontested and therefore conceded allegation that he continued
to carry on the business of Cacper Construction, beyond that necessary to wind up its affairs, after
the company was dissolved,” id. at 1–2. According to Plaintiffs, because “there is ample New York
caselaw holding a corporate owner personally liable in these circumstances, the Court’s July 16,
2015 judgment should [be] altered so as to include a default judgment against Kulig.” Id. at 2.
If Plaintiffs intended to argue that Kulig had taken on Cacper Construction’s liability, under
New York law, as a result of entering into collective bargaining agreements on Cacper’s behalf
after it had dissolved, one would not know it from reading Plaintiffs’ Complaint or Motion for
Default Judgment. Indeed, Plaintiffs made only the conclusory allegation that “Kulig has continued
to carry on the business of Cacper Construction after October 26, 2011 beyond that necessary to
wind up its affairs.” Compl. ¶ 15. Plaintiffs never spelled out what Kulig did to carry on the
business of Cacper, making it difficult to determine whether his actions were or were not
“necessary to wind up [Cacper’s] affairs.” This perfunctory presentation on Plaintiffs’ part led the
Court to understand that Plaintiffs sought to hold Kulig “liable for delinquent pension contributions
simply by virtue of his status as a corporate owner or officer.” Pls.’ Mot. Alter or Amend J. 1.
Nonetheless, based on the Court’s own review of the collective bargaining agreements
submitted by Plaintiffs with their complaint, it appears that Kulig did in fact operate Cacper
Construction in a manner beyond that necessary to wind up its affairs post-dissolution. And based
on the case law of New York—which Plaintiffs neglected to cite or reference anywhere in their
memorandum of support for their Motion for Entry of Default Judgment—the Court concludes that
Kulig is personally liable for the delinquent contributions. The Court will therefore amend its
judgment of July 16, 2015 so as to include a default judgment against Kulig in the full amount of
$31,367.22.
I. Background
As detailed in the Court’s July 16, 2015 Memorandum Opinion and Order, Cacper
Construction Corp. is a dissolved New York corporation that employed members of the
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International Union of Bricklayers and Allied Craftworkers. Compl. ¶¶ 5, 7. The construction
company and the union entered into collective bargaining agreements that obligated Cacper to make
payments to the Bricklayers & Trowel Trades International Pension Fund (“IPF”) and the
International Masonry Institute (“IMI”). Id. ¶ 7. These contributions funded pensions and other
benefits to employees working under contracts negotiated by Bricklayer local unions and
employers. Stupar Decl. ¶ 3.
The IPF and the IMI are “employee benefit plans” and “multiemployer plans” under ERISA.
With these designations come certain obligations. Pursuant to ERISA and the funds’ written
procedures governing the collection of employer contributions (“Collection Procedures”), Cacper
was required to submit monthly reports and payments to the IPF and IMI for covered employees.
Stupar Decl. Attach. 1, at 1. Because Cacper failed to make the required contributions, the trustees
were entitled to file suit to recover (1) 15 percent interest on those unpaid contributions; (2) an
additional assessment of 15 percent interest per year or 20 percent of the delinquent contributions,
whichever is higher; and (3) attorneys’ fees and other litigation costs. See id. at 1–2; accord 29
U.S.C. § 1132(g)(2) (A fiduciary may file suit “for or on behalf of a plan to enforce section 1145 of
this title”).
Plaintiffs, trustees of the IPF and the IMI, alleged that Cacper failed to make payments
during various periods between September 2012 and June 2014. Compl. ¶ 11. Plaintiffs contended
that Adam Kulig, the owner, had continued operating the business—even though Cacper’s
corporate status was dissolved in 2011—and is liable for the debts and obligations of the company.
Id. ¶¶ 14–15. The defunct corporation and Kulig were properly served in February 2015. Pls.’
Mot. Default J. 1; Return Service Affs. (ECF Nos. 4, 6). Neither responded to the complaint, and
the Clerk of the Court entered default. Pls.’ Mot. Default J. 1–2. Plaintiffs moved for entry of
default judgment against both Cacper and Kulig. Id. at 2. They sought statutory and contractual
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contributions, interest, attorneys’ fees and costs, and an order directing Cacper to comply with its
obligations to the IPF and the IMI. In all, Plaintiffs sought $31,367.22 in damages for the pension
funds. Id. at 2.
II. Standard of Review
Plaintiffs’ motion raises two issues: first, whether the Court may amend its judgment of July
16, 2015, and second, whether an entry of default judgment against Adam Kulig is appropriate.
This Court has the discretion to alter or amend its judgment pursuant to Federal Rule of Civil
Procedure 59(e). See Flynn v. Dick Corp., 565 F. Supp. 2d 141, 145 (D.D.C. 2008) (“The decision
to grant or deny a motion to alter or amend judgment is within the discretion of the district court.”),
order amended on reconsideration, 620 F. Supp. 2d 33 (D.D.C. 2009). The Court may choose to
exercise this discretion if, for instance, it has “misapprehended a party’s position.” Id.
Plaintiffs’ quest for a default judgment involves a two-step procedure. See Lanny J. Davis
& Assocs. LLC v. Republic of Equatorial Guinea, 962 F. Supp. 2d 152, 161 (D.D.C. 2013). First, a
plaintiff must request that the Clerk of the Court enter default against a party who has “failed to
plead or otherwise defend.” Fed. R. Civ. P. 55(a). Second, a plaintiff must move for entry of a
default judgment. Fed. R. Civ. P. 55(b). Default judgment is available when “the adversary
process has been halted because of an essentially unresponsive party.” Boland v. Elite Terrazzo
Flooring, Inc., 763 F. Supp. 2d 64, 67 (D.D.C. 2011). “Default establishes the defaulting party’s
liability for the well-pleaded allegations of the complaint.” Id. After establishing liability, a court
must make an independent evaluation of the damages to be awarded, and it has “considerable
latitude in determining the amount of damages.” Id. Plaintiffs must “prove [their] entitlement” to
the relief requested using “‘detailed affidavits or documentary evidence’ on which the court may
rely.” Boland v. Providence Constr. Corp., 304 F.R.D. 31, 36 (D.D.C. 2014) (quoting Fanning v.
Permanent Solution Indus., Inc., 257 F.R.D. 4, 7 (D.D.C. 2009)).
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III. Analysis
In light of Plaintiffs’ clarification that Kulig should be held personally liable under New
York law as a result of his actions after the dissolution of Cacper, the Court concludes that Federal
Rule of Civil Procedure 59(e) permits it to alter or amend its prior judgment, in which it declined to
enter default judgment against Kulig. Mem. Op. & Order 1. The Court must still determine
whether entry of default judgment against Kulig is appropriate and, if Kulig is liable, whether
Plaintiffs are entitled to the full amount of relief they request. The Court concludes that Kulig is
personally liable for Cacper’s breach of its duties under ERISA and the Collection Procedures and
that Plaintiffs are entitled to the full amount of relief requested.
A. Liability
Plaintiffs filed suit in November 2014 to recover the damages prescribed by ERISA and the
Collection Procedures. Compl. ¶ 1. Cacper was served with the Summons and Complaint on
February 2, 2015, and Kulig was served with the Summons and Complaint on February 5, 2015.
Pls.’ Mot. Default J. 1; Return Service Affs. (ECF Nos. 4, 6). The Clerk of the Court declared
Cacper to be in default on February 26, 2015 and Kulig to be in default on March 4, 2015. Pls.’
Mot. Default J. 2. The Court mailed an Order to Show Cause why judgment should not be entered
for Plaintiffs to both Defendants on May 4, 2015. Neither Defendant has responded to the
Complaint, the Clerk’s entry of default, or the Court’s Order to Show Cause.
1. Cacper Construction Company’s Liability
Because the Clerk of the Court has entered default, the Court accepts Plaintiffs’ well-pled
allegations as true to determine whether Defendants are liable and entry of default judgment is
appropriate. Elite Terrazzo Flooring, 763 F. Supp. 2d at 67. ERISA requires employers to make
contributions to multiemployer plans “in accordance with the terms and conditions of” the relevant
collective bargaining agreements. 29 U.S.C. § 1145. The IPF’s and IMI’s Collection Procedures
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specify that contributions are due “on or before the 15th day of the month” after the month in which
work was performed. Stupar Decl. Attach. 1, § 1.A.1. Plaintiffs submitted the declaration of David
F. Stupar, the Executive Director of the IPF and an authorized representative of the IMI, which set
forth in detail Cacper’s failure to make the required payments for various months between
September 2012 and June 2014. Stupar Decl. ¶¶ 9–10. As the Court held in its Memorandum
Opinion and Order of July 16, 2015 by failing to make these payments on time, Cacper became
liable for statutory and contractual damages. The Court may enter default judgment when a
defendant makes no request “to set aside the default” and gives no indication of a “meritorious
defense.” Fanning, 257 F.R.D. at 7. Cacper had not responded as of July 16, 2015 to the
Complaint since being served in February. The Court therefore concluded that entry of default
judgment against Cacper was appropriate. Mem. Op. & Order 1.
2. Adam Kulig’s Liability
Kulig was also properly served and has not responded, and the Court now reconsiders
whether, in light of Plaintiffs’ clarification, default judgment against Kulig is appropriate.
Although “liability for delinquent pension contributions . . . does not [ordinarily] extend to an
individual corporate owner or officer,” Int’l Broth. of Painters & Allied Trades Union v. George A.
Kracher, Inc., 856 F.2d 1546, 1550 (D.C. Cir. 1988), the law of New York—where Cacper was
incorporated—may impose personal liability on Kulig if he took significant action on Cacper’s
behalf after Cacper had dissolved, see 80-02 Leasehold, LLC v. CM Realty Holdings Corp., 999
N.Y.S.2d 158 (2014).
Plaintiffs support their assertion that “Kulig . . . continued to carry on the business . . .
after [it dissolved] beyond that necessary to wind up its affairs,” id., by providing copies of the
“collective bargaining agreements [signed by Kulig,] . . . which obligated Cacper Construction to
submit monthly reports and payments to the IPF and IMI on behalf of its covered employees.”
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Stupar Decl. ¶ 9. Kulig appears to have signed one of these agreements on December 13, 2012,
which purports to extend an earlier agreement from July 1, 2012 through June 30, 2015. Compl.
Ex. B. Kulig’s signature on this agreement indicates that he was conducting significant business on
behalf of Cacper well after it dissolved in October 2011 and that he was entering into contractual
obligations on the dissolved corporation’s behalf in his capacity as its owner and operator. The
Court therefore finds that Kulig entered into a contract on behalf of a dissolved corporation, in
addition to serving as an officer of that dissolved corporation.
Under New York case law, a person purporting to act on behalf of a dissolved corporation
can be held personally liable for any liability that he caused the corporation to incur. For example,
in 80-02 Leasehold, LLC, a New York appeals court observed, “Upon dissolution, [a] corporation’s
legal existence terminates and it is prohibited from carrying on new business. . . . It retains a limited
de jure existence solely for the purpose of winding up its affairs.” Id. at 160. The court went on to
hold that “[a] person who purports to act on behalf of a dissolved corporation is personally
responsible for obligations incurred.” Id. at 160. This “liability is not limited to the person who
executes a contract on behalf of a dissolved corporation, but extends to the officers of the dissolved
corporation.” Id. Additionally, in a recent ERISA case, the U.S. District Court for the Eastern
District of New York held that a sole proprietor could be personally liable under a collective
bargaining agreement for ERISA obligations if that person “acted on behalf of a nonexistent
corporation.” LaBarbera v. Avaline Trucking Inc., No. 07–CV–4698 (NG)(SMG), 2009 WL
3497491, at *4 (E.D.N.Y. 2009). The court found that “by signing the [collective bargaining
agreement] and doing business on behalf of a nonexistent corporation, [a person] assume[s]
personal liability for the obligations the [collective bargaining agreement] imposes on” the
corporation. Id. Such a person, the court ruled, “qualifies as ‘an employer’ under [ERISA] and is
personally liable for plaintiffs’ claims pursuant to that statute.” Id.
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Because a corporation’s legal existence terminates (except for very limited purposes) when
it is dissolved, and because Cacper appears to have been dissolved when at least one of the
agreements at issue here was signed, a person who entered into such an agreement on Cacper’s
behalf would be personally liable under New York law. Plaintiffs have asserted and provided
evidence to show that Kulig entered into an agreement on Cacper’s behalf under these
circumstances. As a result, because a default judgment against Cacper was appropriate in this case,
so too is a default judgment against Kulig. Having previously held that Plaintiffs are entitled to
$31,367.22 from Cacper Construction Corp., the full amount of relief requested, Mem. Op. & Order
5–7, the Court will enter judgment against Adam Kulig in the same amount.
IV. Conclusion
For the foregoing reasons, it is hereby
ORDERED that [13] Plaintiffs’ Motion to Alter or Amend Judgment is GRANTED. It is
further
ORDERED that [12] the Order of July 16, 2015 is VACATED as to the dismissal of claims
against Defendant Adam Kulig. It is further
ORDERED that Plaintiffs are awarded a monetary judgment against Adam Kulig in the
amount of $31,367.22.
This is a final, appealable order.
SO ORDERED.
CHRISTOPHER R. COOPER
United States District Judge
Date: September 17, 2015
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