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Reg'l Dist. Council v. Mile High Rodbusters, Inc.

United States District Court, D. Colorado

November 25, 2014

REGIONAL DISTRICT COUNCIL, by and through Daniel S. Parker, in his representative capacity as President, DANIEL S. PARKER, in his representative capacity as President of Regional District Council, REGIONAL LOCAL UNION NO. 847, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL, ORNAMENTAL AND REINFORCING IRON WORKERS, AFL-CIO, by and through Donald A. Zampa, in his representative capacity as Administrator, DONALD A. ZAMPA, in his representative capacity as Administrator of Regional Local Union No. 847, International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, AFL-CIO, REGIONAL DISTRICT COUNCIL WELFARE TRUST FUND, by and through its Board of Trustees, REGIONAL DISTRICT COUNCIL VACATION TRUST FUND, by and through its Board of Trustees, and REGIONAL DISTRICT COUNCIL TRAINING TRUST, by and through its Board of Trustees, Plaintiffs,
v.
MILE HIGH RODBUSTERS, INC., Defendant

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For Regional District Council, By and Through Daniel S. Parker, In His Representative Capacity as President, Daniel S. Parker, In his Representative Capacity as President of Regional District Council, Regional Local Union No. 847, International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, AFL-CIO, By and Through Donald A. Zampa, In His Representative Capacity as Administrator, Donald A. Zampa, In His Representative Capacity as Administrator of Regional Local Union No. 847, International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, AFL-CIO, Regional District Council Welfare Trust Fund, By and Through Its Board of Trustees, Regional District Council Vacation Trust Fund, By and Through Its Board of Trustees, Regional District Council Training Trust, By and Through Its Board of Trustees, Plaintiffs: Jamie L. Reyes-Jones, LEAD ATTORNEY, Michael Anthony Evans, Hartnett Gladney Hetterman, L.L.C., St. Louis, MO.

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RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

Kristen L. Mix, United States Magistrate Judge.

This matter is before the Court on Plaintiffs' Motion for Partial Default Judgment and an Order Compelling an Accounting [#42][1] (the " Motion" ). Pursuant

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to 28 U.S.C. § 636(b)(1) and D.C.COLO.LCivR 72.1(c), the Motion is referred to the undersigned for recommendation [#43]. Plaintiffs seek partial default judgment against Defendant, which has not entered an appearance in this action. For the reasons set forth below, the Court RECOMMENDS that the Motion [#42] be GRANTED in part and DENIED in part.

I. BACKGROUND

Plaintiffs filed this lawsuit on January 28, 2013, alleging violations of the Employee Retirement Income Security Act of 1974 (" ERISA" ).[2] Compl. [#1]. Defendant is a signatory to a Collective Bargaining Agreement (the " Agreement" ) with Plaintiff Regional Local Union No. 847, International Association of Bridge, Structural, Ornamental and Reinforcing Iron Workers, AFL-CIO (the " Regional Local Union" ) and Plaintiff Regional District Council. Id. ¶ 13. According to the Agreement, these Plaintiffs are collectively the exclusive representative of Defendant's bargaining unit employees. Id. ¶ 14. The Agreement requires Defendant to file reports of hours worked by its employees and to pay contributions to Plaintiffs Regional District Council Welfare Trust Fund, Regional District Council Vacation Trust Fund, Regional District Council Training Trust (collectively, the " Trusts" ), Regional District Council, and Regional Local Union. Id. ¶ 16. These contributions include fringe benefit contributions and dues and wage deductions. Id. The amounts contributed depend on specified rates for hours worked by Defendant's employees during employment covered by the Agreement. Id. The Agreement requires Defendant to file reports and make contributions on the fifteenth day of each month for the prior month's work. Id. ¶ 17. The Agreement also provides that if Defendant does not timely pay fringe benefit contributions, then (1) Defendant is liable for interest on the unpaid amounts at a rate of 1.5% per month, and (2) Defendant is liable for accounting fees, attorneys' fees, auditing fees, and expert fees in the event that litigation is required to collect unpaid contributions. Id. ¶ ¶ 18-19. Defendant is now delinquent in its obligation to report and pay contributions to the Plaintiff Trusts and has therefore violated its duties under the Agreement. Id. ¶ ¶ 22-23. Demand was made on Defendant to resolve its delinquency, but it failed to do so. As a result Plaintiffs instigated the present lawsuit, primarily seeking damages. Id. ¶ 25.

II. ANALYSIS

Pursuant to Fed.R.Civ.P. 55, default may enter against parties who fail to appear or otherwise defend a lawsuit.

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Here, Entry of Default [#40] was proper because Defendant failed to respond to Plaintiffs' Complaint [#1]. Before proceeding with a default judgment, however, the Court must consider whether it has jurisdiction, whether the facts establish a legitimate basis for the entry of judgment, and whether the amount of damages can be ascertained. See Grady v. Swisher, No. 11-cv-02880-WYD-KLM, 2014 WL 3562794, at *5 (D. Colo. July 18, 2014).

A. Jurisdiction

In determining whether a default judgment is warranted, the Court must first consider whether it has jurisdiction over the subject matter and the defendants. Dennis Garberg & Assocs., Inc., v. Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997); Williams v. Life Sav. & Loan, 802 F.2d 1200, 1202-03 (10th Cir. 1986). The Court must do so in consideration of the well-established rule that " a judgment is void if the court that enters it lacks jurisdiction over either the subject matter of the action or the parties to the action." United States v. 51 Pieces of Real Prop., 17 F.3d 1306, 1309 (10th Cir. 1994).

1. Subject Matter Jurisdiction

Plaintiffs assert that the Court has federal question jurisdiction over this matter because the action arises out of alleged violations of ERISA. Compl. [#1] P 11. Federal question jurisdiction is governed by 28 U.S.C. § 1331, which provides in pertinent part that " [t]he district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." Because Plaintiffs' ERISA cause of action arises under federal law, the Court has jurisdiction over the subject matter. Accordingly, based on federal question jurisdiction, the Court finds that it has subject matter jurisdiction over this dispute.

2. Personal Jurisdiction

In addition to subject matter jurisdiction, entry of a default judgment in a civil case requires personal jurisdiction over the defendant. Bixler v. Foster, 596 F.3d 751, 761 (10th Cir. 2010). The Court must first address the adequacy of service in deciding whether it has personal jurisdiction over Defendant. See United States v. Elsberg, No. 08-cv-00522-MSK-KLM, 2010 WL 5177439, at *2 (D. Colo. Aug. 17, 2010). Plaintiffs' Complaint identifies Defendant as a corporation. Compl. [#1] P 9. Therefore, the Court analyzes the adequacy of service in the context of Fed.R.Civ.P. 4(h), which establishes the requirements for service on a corporation, partnership, or association. Such an organization may be served " in the manner prescribed by Rule 4(e)(1) for serving an individual," which in turn permits service by " following the state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made . . . ." Here, Plaintiffs served Defendant according to Colo. Rev. Stat. § 7--90--704(2), which provides in relevant part:

If an entity that is required to maintain a registered agent pursuant to this part 7 has no registered agent, or if the registered agent is not located under its registered agent name at its registered agent address, or if the registered agent cannot with reasonable diligence be served, the entity may be served by registered mail or by certified mail, return receipt requested, addressed to the entity at its principal address.

Plaintiffs have demonstrated that the registered agent for Defendant was not located at its registered agent address. Aff. of Aaron Stephens [#32-1] ¶ 2; Advice to Court Regarding Return of Service [#35-1] at 1-2. They have ...


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