Service Employees International National Industry Pension Fund v. Tandem Development Corporation

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
)
SERVICE EMPLOYEES )
INTERNATIONAL NATIONAL )
INDUSTRY PENSION FUND, et al., )
)
Plaintiffs, )
)
v. ) Civil Action No. 16-2524 (ABJ)
)
TANDEM DEVELOPMENT )
GROUP, LLC, )
)
Defendant. )
____________________________________)

MEMORADUM OPINION

Plaintiffs Service Employees International National Pension Fund (“SEIU Pension Fund”

or “Fund”) and the Trustees of the Fund brought this action against defendant Tandem

Development Group, LLC, 1 pursuant to the Employee Retirement Income Security Act

(“ERISA”), as amended, 29 U.S.C. § 1132 et seq. Compl. [Dkt. # 1]. They allege that defendant

failed to submit certain payroll records to the Fund in violation of the parties’ collective bargaining

agreement, and that defendant failed to submit to mandatory payroll audits. Compl. ¶¶ 14, 17–18.

1 In the caption of the complaint, plaintiffs name “Tandem Development Group LLC.”
Compl. [Dkt. # 1]. But in the caption listed on the docket of the court’s electronic filing system,
plaintiffs named “Tandem Development Corporation” as defendant. Elsewhere in the complaint,
they refer to defendant as “Tandem Security Development LLC.” Compl. ¶ 7. The Court believes
that “Tandem Development Group LLC” is the proper defendant in this action because that is the
party against whom the lawsuit was filed, that is the name reflected in the civil cover sheet and
summons filed by plaintiffs, see Civil Cover Sheet [Dkt. # 1-1]; Summons [Dkt. # 1-2], and that
is the party named in the collective bargaining agreement at the heart of this case. Ex. 1 to Compl.
[Dkt. # 1-3]; but see Ex. 4 to Compl. [Dkt. # 1-6] (pre-suit letters from plaintiffs to defendant in
the name of “Tandem Security Development”). The Clerk of Court is directed to amend the
caption to reflect that “Tandem Development Group, LLC” is the sole defendant in this action.
 Now pending before the Court is plaintiffs’ motion for an entry of default judgment. Pls.’

Mot. for Default J. [Dkt. # 11] (“Pls.’ Mot.”); Pls.’ Mem. in Supp of Pls.’ Mot. [Dkt. # 11-1] (“Pls.’

Mem.”). Plaintiffs seek injunctive relief in the form of the payroll reports and they request a court

order requiring defendant to submit to the payroll audits and to pay reasonable attorneys’ fees and

costs. Pls.’ Mem. at 11–12. Having considered plaintiffs’ submissions, applicable case law,

statutory authority, and the record as a whole, the Court will grant plaintiffs’ motion for default

judgment.

BACKGROUND

In January 2011, plaintiffs and defendant entered into a collective bargaining agreement

Compl. ¶ 9; Ex. 1 to Compl. [Dkt. # 1-3] (“CBA”). As part of the CBA, defendant agreed to abide

by a Trust Agreement, under which employers must “contribute to the [SEIU Pension] Fund the

required contributions and shall make such reports to the Fund as may be required by the Trustees.”

Ex. 2 to Compl. [Dkt. # 1-4] (“Trust Agreement”) § 3.1; CBA at 15; see also Compl. ¶ 14. Under

the Trust Agreement, an employer must submit “remittance reports” that contain “the names of

each covered employee and the number of compensable hours for each employee during the

reporting month,” along with the corresponding contributions. Compl. ¶ 14. Pursuant to the Trust

Agreement and the CBA, “[d]efendant was required to contribute $0.15 per hour for each hour

worked by covered employees.” Id. ¶ 10; CBA at 19.

The CBA also includes a collection policy, and that policy includes a provision requiring

defendant to submit to a “compliance audit program,” through which “[a]ll contributing Employers

are to be audited at least once over a six-year period.” CBA Collection Policy [Dkt. # 1-3] ¶ 7.

The complaint states that the purpose of a payroll audit “is to verify that an employer’s monthly

self-reporting of employee hours is consistent with the employer’s payroll records and state and

federal tax filings.” Compl. ¶ 15. The parties agreed in the Trust Agreement that the Fund could
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“examine payroll and other pertinent records of any Employer whenever such examination is

deemed necessary or advisable.” Trust Agreement § 5.1(14).

The Fund exercised its authority and selected defendant for two payroll audits for the

periods of January 2011 through December 2012 and January 2012 through December 2013.

Compl. ¶¶ 17–18. Plaintiffs sent several letters to defendant about each audit, “informing

Defendant of the audit” and requesting “certain documentation necessary to perform the payroll

review.” Id. Defendant failed to respond to these letters and failed to provide the required payroll

records. Id.

Plaintiffs filed a complaint with this Court on December 29, 2016, to “enforce Defendant’s

contractual and statutory obligations to provide payroll review records” to the SEIU Pension Fund.

Compl. ¶ 1. Defendant was served on February 16, 2017, see Aff. of Special Process Server

[Dkt. # 6], but it did not file an answer or otherwise respond to the complaint. Plaintiffs then filed

an affidavit for default, Pls.’ Aff. for Clerk’s Entry of Default [Dkt. # 7], and the Clerk of Court

entered defendant’s default. Clerk’s Entry of Default [Dkt. # 10]. Plaintiffs then filed a motion

for default judgment, requesting a Court order to require defendant to provide the payroll reports

and submit to the audit of its books and records, and seeking attorneys’ fees and costs. Pls.’ Mot.

at 1.

STANDARD OF REVIEW

Federal Rule of Civil Procedure 55(a) provides that the clerk of the court must enter a

party's 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, a court may enter a default judgment order pursuant to

Rule 55(b). Whether default judgment is appropriate is in the discretion of the trial court. Keegel

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v. Key West & Caribbean Trading Co., 627 F.2d 372, 375 n.5 (D.C. Cir. 1980); Jackson v. Beech,

636 F.2d 831, 836 (D.C. Cir. 1980). Upon entry of default by the clerk of the court, the “defaulting

defendant is deemed to admit every well-pleaded allegation in the complaint.” Int'l Painters &

Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., Inc., 239 F. Supp. 2d 26, 30

(D.D.C. 2002), citing Trans World Airlines, Inc. v. Hughes, 449 F.2d 51, 63 (2d Cir. 1971).

“Although the default establishes a defendant's liability, the court is required to make an

independent determination of the sum to be awarded unless the amount of damages is certain.”

Id., citing Adkins v. Teseo, 180 F. Supp. 2d 15, 17 (D.D.C. 2001). Accordingly, when moving for

a default judgment, the plaintiff must prove its entitlement to the amount of monetary damages

requested. Id. (citation omitted). “In ruling on such a motion, the court may rely on detailed

affidavits or documentary evidence to determine the appropriate sum for the default judgment.”

Id. (citation omitted)

ANALYSIS

Given “the absence of any request to set aside the default or suggestion by the defendant

that it has a meritorious defense,” the Court concludes that default judgment is appropriate in this

case. Int’l Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp.

2d 56, 57 (D.D.C. 2008), quoting Gutierrez v. Berg Contracting Inc., No. 99-3044, 2000 WL

331721, at *1 (D.D.C. Mar. 20, 2000). The Clerk of Court has already entered defendant’s default,

so the factual allegations in the complaint are therefore taken as true. See R.W. Amrine Drywall

Co., Inc., 239 F. Supp. 2d at 30. The Court finds that plaintiffs’ complaint sufficiently alleges

facts to support its claims, and therefore, plaintiffs are entitled to default judgment on the question

of defendant’s liability for its failure to turn over the required payroll records and submit to the

required audits.

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I. Plaintiffs are entitled to the payroll review records, and the Court will order
defendant to cooperate with the required audits.

Under ERISA, “[e]very employer who is obligated to make contributions to a

multiemployer plan . . . under the terms of a collectively bargained agreement shall, to the extent

not inconsistent with law, make such contributions in accordance with the terms and conditions

of . . . such agreement.” 29 U.S.C.A. § 1145. ERISA also requires that the court “shall

award . . . such other legal or equitable relief as the court deems appropriate.” 29 U.S.C.

§ 1132(g)(2)(e). This relief can include an injunction requiring a defendant to permit, and

cooperate with, an audit of its books and records. See, e.g., Boland v. Smith & Rogers Constr. Co.,

201 F. Supp. 3d 144, 150 (D.D.C. 2016) (directing the defendant to “deliver its books and

records . . . to Plaintiffs’ auditor and pay any delinquent contributions uncovered through the

audit”).

Defendant has failed to submit to the required payroll audits for the years 2011, 2012, and

2013 and it has also not provided the necessary payroll reports. Compl. ¶ 17–18; see also CBA at

15; Trust Agreement § 5.1(14). Until those reports are received, the Court cannot determine if

defendant owes any additional contributions to plaintiffs because “the Fund has no way of

verifying, absent an audit, whether the hours or salaries reported in the employer’s reports, and as

a result, the owed contributions, accurately reflect the number of hours that covered employees

actually worked or the amounts that covered employees were actually paid.” Decl. of Andre

Joseph [Dkt. # 11-1] ¶ 11; see Serv. Emps. Int’l Union Nat. Indus. Pension Fund v. Artharee, 942

F. Supp. 2d 27, 30 (D.D.C. 2013) (holding that an employer must submit its delinquent remittance

reports before the Court can calculate the specific amount of damages owed to a multiemployer

plan plaintiff).

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 In this case, “equitable relief is warranted because defendant ‘has demonstrated no

willingness to comply with either its contractual or statutory obligations or to participate in the

judicial process.’” Fanning v. Warner Ctr., L.P., 999 F. Supp. 2d 263, 267 (D.D.C. 2013), quoting

Int'l Painters & Allied Trades Indus. Pension Fund v. Zak Architectural Metal & Glass, LLC, 635

F. Supp. 2d 21, 26 (D.D.C. 2009). So the Court will grant plaintiffs’ motion for injunctive relief

and order defendant to submit the payroll records and cooperate with the audits.

II. Plaintiffs must submit more information before the Court orders an award of
attorneys’ fees and costs.
Plaintiffs have also requested that the Court order defendant to pay $6,925.50 in attorneys’

fees and $566 in costs associated with this case. Pls.’ Mem. at 11. ERISA provides that if the

action is brought under section 1145 to recover contributions to a multiemployer plan pursuant to

a collective bargaining agreement, “the court shall award the plan . . . reasonable attorney’s fees

and costs” if the plan receives a judgment in its favor. 29 U.S.C. § 1132(g)(2)(D).

The “reasonableness of the fees requested by the plaintiff is a ‘judgment call’ which only

the court can make.” Amrine Drywall, 239 F. Supp. 2d at 31, quoting Combs v. Coal & Mineral

Mgmt. Servs., Inc., 105 F.R.D. 472, 475 (D.D.C. 1984). Reasonable attorneys’ fees are calculated

by “multiplying the number of hours reasonably expended on the litigation times a reasonable

hourly rate.” Blum v. Stenson, 465 U.S. 886, 888 (1984); see Bd. of Trs. of Hotel & Res. Emps.

Local 25 v. JPR, Inc., 136 F.3d 794, 801 (D.C. Cir. 1998) (applying this standard in calculating

attorneys’ fees under ERISA). When preparing a fee application, plaintiffs must provide the Court

with “sufficiently detailed information about the hours logged and the work done” “based on

contemporaneous time records” in order to justify the hours expended. Nat’l Ass’n of Concerned

Veterans v. Sec’y of Def., 675 F.2d 1319, 1327 (D.C. Cir. 1982). And the reasonableness of the

hourly rate is determined by referencing the “prevailing market rates in the relevant community”

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and producing “satisfactory evidence . . . that the requested rates are in line with those prevailing

in the community.” Blum, 465 U.S. at 895.

To establish the amount of attorneys’ fees owed by defendant, plaintiffs submitted a

declaration from its lead attorney, Olga Metelitsa Thall. Decl. of Olga Metelitsa Thall in Supp. of

Mot., Ex. 2 to Pls.’ Mot. [Dkt. # 11-3] (“Thall Decl.”). The declaration includes documentation

listing the hours expended by each attorney or staff member for each task performed in the present

case. Slip Listing, Ex. A to Thall Decl. [Dkt. 11-3] (“Time Records”).

Although plaintiffs do provide sufficient information regarding the hours expended in this

case in the form of contemporaneous time records, the Court has no reference point to determine

the reasonableness of the hourly rates. The affidavit does not provide the extent of each biller’s

legal experience in order to inform a comparison to the prevailing market rates, nor does the

affidavit point to additional evidence of prevailing market rates such as the Laffey Matrix or the

U.S. Attorney’s Office Matrix, which the D.C. Circuit has “previously said litigants may rely upon

when seeking fees.” Role Models Am., Inc. v. Brownlee, 353 F.3d 962, 970 (D.C. Cir. 2004).

Absent such information, the Court cannot determine at this time whether the proposed hourly

rates are reasonable.

Accordingly, before the Court awards plaintiffs their requested attorneys’ fees, plaintiffs

must submit “satisfactory evidence . . . that the requested rates are in line with those prevailing in

the community” for attorneys, paralegals, and law clerks involved in ERISA litigation. See Blum,

465 U.S. at 895.

CONCLUSION

The Court will grant plaintiffs’ motion for default and order defendant to provide the

missing reports and comply with the payroll audits. The Court will retain jurisdiction to enter

judgment for any contributions, interest, or liquidated damages determined to be owed based on
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the remittance reports and audits. And the Court will enter a final attorneys’ fees and costs award

after the Court receives additional information supporting the request for fees and costs.

A separate order will issue.

AMY BERMAN JACKSON
United States District Judge

DATE: August 16, 2017

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