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Bricklayers and Trowel Trades International Pension Fund IPF v. Denver Marble Co.

United States District Court, D. Colorado

January 31, 2019

BRICKLAYERS AND TROWEL TRADES INTERNATIONAL PENSION FUND IPF; BRICKLAYERS & ALLIED CRAFTWORKERS INTERNATIONAL HEALTH FUND IHF; COLORADO TROWEL TRADES JOINT APPRENTICESHIP AND TRAINING FUND; and INTERNATIONAL MASONRY INSTITUTE IMI, Plaintiffs,
v.
THE DENVER MARBLE COMPANY, Defendant.

          ORDER

          RAYMOND P. MOORE UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on Plaintiffs' Renewed Motion for Entry of Default Judgment and for Award of Attorneys' Fees and Non-Taxable Costs (Motion, ECF No. 26). The case involves Plaintiffs' alleged rights to monetary contributions under the Employee Retirement Income Security Act (“ERISA”) and a Collective Bargaining Agreement (“CBA”). The Court denied Plaintiffs' first motion for default judgment because they had not provided (A) a clear indication of the specific source of recovery requested (ERISA or CBA) or sufficient proof to support said recovery, matched to the elements of an ERISA claim; and (B) direction as to whether they maintained their request for injunctive relief. (Id. at 3-4.) The instant Motion cures only some of these defects; therefore, it is DENIED without prejudice.

         I. LEGAL STANDARD

         A party may not simply sit out the litigation without consequence. See Cessna Fin. Corp. v. Bielenberg Masonry Contracting, Inc., 715 F.2d 1442, 1444-45 (10th Cir. 1983) (“[A] workable system of justice requires that litigants not be free to appear at their pleasure. We therefore must hold parties and their attorneys to a reasonably high standard of diligence in observing the courts' rules of procedure. The threat of judgment by default serves as an incentive to meet this standard.”).

         “Even after default, however, it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.” 10A Wright et al., Fed. Prac. & Proc. § 2688, at 63. Additionally, a court need not accept conclusory allegations. Moffett v. Halliburton Energy Servs., Inc., 291 F.3d 1227, 1232 (10th Cir. 2002). Although “[s]pecific facts are not necessary” in order to state a claim, Erickson v. Pardus, 551 U.S. 89, 93 (2007) (per curiam) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007)), the well-pleaded facts must “permit the court to infer more than the mere possibility of misconduct.” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009) (internal quotation marks and alteration marks omitted). “[A] party is not entitled to a default judgment as of right; rather the entry of a default judgment is entrusted to the ‘sound judicial discretion' of the court.Greenwich Ins. Co. v. Daniel Law Firm, No. 07-cv-2445-LTB-MJW, 2008 WL 793606, at *2 (D. Colo. Mar. 22, 2008) (citation omitted, brackets in original); Tripodi v. Welch, 810 F.3d 761, 764 (10th Cir. 2016) (default judgment committed to court's sound discretion).

         Following a clerk's entry of default, courts follow two steps before granting default judgment. First, a court must ensure it has subject matter and personal jurisdiction. Williams v. Life Sav. & Loan, 802 F.2d 1200, 1203 (10th Cir. 1986); Marcus Food Co. v. DiPanfilo, 671 F.3d 1159, 1166 (10th Cir. 2011) (default judgment against defendant over whom court has no personal jurisdiction is void). Second, courts consider whether the well-pleaded allegations of fact-which are admitted by a defendant upon default-support a judgment on the claims against the defaulting defendant. See Tripodi, 810 F.3d at 764 (by his default, defendant relieved plaintiff from having to prove complaint's factual allegations; the judgment, however, must be supported by sufficient basis in the pleadings).

         Where the complaint states an adequate legal basis for relief against a party in default, default judgment may be appropriate. Mrs. Condies Salad Co. v. Colorado Blue Ribbon Foods, LLC, 858 F.Supp.2d 1212, 1218 (D. Colo. 2012). The Court also accepts as undisputed any facts set forth by the moving party in affidavits and exhibits. Purzel Video GmbH v. Biby, 13 F.Supp.3d 1127, 1135 (D. Colo. 2014).

         II. BACKGROUND

         This is an action for alleged unpaid contributions under ERISA, 29 U.S.C. 1132(g)(2)(A), and pursuant to the CBA. Specifically, in a single claim for relief, Plaintiffs' Complaint against Defendant Denver Marble Company (“Denver Marble”) seeks any unpaid contributions “as well as any other contributions determined as due by audit, timecards, or otherwise pursuant to ERISA”; liquidated damages on all late-paid and unpaid contributions under the CBA and ERISA; interest; attorneys' fees and costs, including audit fees; injunctive relief; and the Court to retain jurisdiction pending compliance with any court order. (ECF No. 1, at 8-9.)

         Denver Marble was served with the Complaint but failed to timely answer or otherwise respond. Upon Plaintiffs' motion, the Clerk entered default against Defendant. (ECF Nos. 17, 18.) Thereafter, Plaintiffs filed an initial motion for default judgment (First Motion, ECF No. 23), which the Court denied without prejudice. (Denial Order, ECF No. 24.)

         As laid out in the Denial Order, the Court is satisfied that it has jurisdiction over the claims presented and Denver Marble itself. (Id. at 3.) But problematically, the Court was left without (A) a clear indication of the specific source of recovery requested (ERISA or CBA) or sufficient showing that Plaintiffs may recover, matched to the elements of an ERISA claim; and (B) direction as to whether Plaintiffs maintained their request for injunctive relief or that such relief is available under the circumstances. (Id. at 3-4.) Having failed to receive guidance from Plaintiffs on these issues, the Court declined to enter default judgment and denied the First Motion without prejudice.

         III. ANALYSIS

         The Court's jurisdiction has not changed. (See Denial Order at 3.) Thus, the Court turns to whether-taking the well-pleaded factual allegations as true-it may enter a final default judgment at this juncture.

         A. Denver Marble may be liable to Plaintiffs under ERISA because of its failure to make ...


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