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Eighth District Electrical Pension Fund v. Power Foundations, LLC

United States District Court, D. Colorado

November 6, 2019

EIGHTH DISTRICT ELECTRICAL PENSION FUND, EIGHTH DISTRICT ELECTRICAL PENSION FUND ANNUITY PLAN, JAMES MANTELE, as Chairman of the Delinquency Committee for the Eighth District Electrical Pension Fund and Eighth District Electrical Pension Fund Annuity Plan, NATIONAL ELECTRICAL BENEFIT FUND, and MOUNTAIN STATES LINE CONSTRUCTORS AREA JOINT APPRENTICESHIP AND TRAINING TRUST FUND, Plaintiffs,
v.
POWER FOUNDATIONS, LLC, Defendant.

          ORDER GRANTING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT

          CHRISTINE M. ARGUELLO, UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiffs Eighth District Electrical Pension Fund, Eighth District Electrical Pension Fund Annuity Plan, James Mantele, National Electrical Benefit Fund, and Mountain States Line Constructors Area Joint Apprenticeship and Training Trust Fund's Motion for Entry of Default Judgment Against Defendant Power Foundations, LLC. (Doc. # 16.) Defendant has not responded to Plaintiffs' Motion.[1] For the reasons that follow, the Court grants Plaintiffs' Motion.

         I. BACKGROUND

         Plaintiffs bring this suit to collect delinquent fringe benefit contributions from Defendant pursuant to the Employee Retirement Income Security Act (“ERISA”) and collective bargaining agreements (“CBAs”) with International Brotherhood of Electrical Workers Local Union No. 57 (“Local 57”). (Doc. # 1 at 1.) There are five Plaintiffs: (1) Eighth District Electrical Pension Fund (“Pension Fund”); (2) Eighth District Electrical Pension Fund Annuity Plan (“Annuity Plan”); (3) James Mantele; (4) National Electric Benefit Fund (“NEBF”); and (5) Mountain States Line Constructors Area Joint Apprenticeship and Training Trust Fund (“JATC”). (Id. at 2-3.) Except for Mantele, the other Plaintiffs (hereafter “Funds”) are each an “employee benefit plan” within the meaning of 29 U.S.C. § 1002(3) and a “multiemployer plan” within the meaning of 29 U.S.C. § 1002(37). (Id. at 2-3.) The Funds were established and operate pursuant to a written agreement and/or declaration of trust (“Trust Agreement”). (Id. at 4.)

         Defendant Power Foundations, LLC is a limited liability company incorporated in Utah and with its principal place of business in St. George, Utah. (Id. at 3.) Plaintiffs assert that Defendant is an employer within the meaning of 29 U.S.C. § 1002(5). (Id.) Defendant has agreed to one or more CBAs with Local 57. (Id.) These CBAs govern the terms and conditions of employment of Defendant's employees performing work covered by the CBAs. (Id. at 3-4.) Plaintiffs assert that every month Defendant is obligated under the CBAs and Trust Agreements to “timely submit reports and fringe benefit contributions” to the Funds. (Id.) Payments not made by the 15th day of the following month are deemed delinquent. (Id.)

         Plaintiffs allege that Defendant failed to make contributions to the Funds for the hours of covered work performed by its employees under the CBAs during the months of November 2017 and December 2017. (Id. at 4-5.) Therefore, Plaintiffs assert that Defendant effectively breached the CBAs and Trust Agreements, as well as its obligations under ERISA, 29 U.S.C. § 1145. (Id. at 5.) Because of this breach, Plaintiffs assert that Defendant is liable to Plaintiffs for the delinquent payments in the amount of $15, 020.09, interest on the delinquent payments accruing both pre and post judgment, liquidated damages in the amount of $1, 578.78, and reasonable attorney's fees. (Id.)

         Plaintiffs filed their Complaint on April 2, 2019. (Id. at 1.) Plaintiffs assert that they properly served Defendant by certified mail (Doc. # 16-1); however, Defendant did not file a Response. On June 13, 2019 and June 27, 2019, Plaintiffs filed Motions for Entry of Default and Default Judgment. (Doc. ## 12, 14.) The Clerk of the Court declined to docket an Entry of Default on both occasions because Plaintiffs failed to attach proof of service of process to their Motions. (Doc. ## 13, 15.) On August 7, 2019, Plaintiffs filed a renewed Motion for Entry of Default and Default Judgment (Doc. # 16), and on August 9, 2019, the Clerk of the Court docketed an Entry of Default (Doc. # 17).

         II. STANDARD OF REVIEW

         Pursuant to the Federal Rules of Civil Procedure, courts must enter a default judgment against a party that has failed to plead or otherwise defend an action brought against it. Fed.R.Civ.P. 55(b)(2). Default judgment may be entered by the clerk of court if the claim is for “a sum certain, ” Fed.R.Civ.P. 55(b)(1), in all other cases, “the party must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b)(2).

[D]efault judgment must normally be viewed as available only when the adversary process has been halted because of an essentially unresponsive party. In that instance, the diligent party must be protected lest he be faced with interminable delay and continued uncertainty as to his rights. The default judgment remedy serves as such a protection.

In re Rains, 946 F.2d 731, 732-33 (10th Cir. 1991) (internal quotation marks and citation omitted).

         A default amounts to an admission of liability, and all well-pleaded allegations in the complaint pertaining to liability are deemed true. See Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992) (internal citation omitted); Lyons P'ship, L.P. v. D&L Amusement & Entm't, Inc., 702 F.Supp.2d 104, 109 (E.D.N.Y. 2010). “The Court also accepts as undisputed any facts set forth by the moving party in affidavits and exhibits.” Bricklayers & Trowel Trades Int'l Pension Fund v. Denver Marble Co., No. 16-CV-02065-RM, 2019 WL 399228, at *2 (D. Colo. Jan. 31, 2019) (citing Purzel Video GmbH v. Biby, 13 F.Supp.3d 1127, 1135 (D. Colo. 2014)). 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 conclusions of law.” Leider v. Ralfe, No. 01 Civ. 3137 (HB) (FM), 2004 WL 1773330, at *7 (S.D.N.Y. July 30, 2004) (quoting In re Indus. Diamonds Antitrust Litig., 119 F.Supp.2d 418, 420 (S.D.N.Y. 2000)).

         Additionally, courts are required to make an independent determination of the amount of damages to be awarded, unless the amount of damages is certain. Ullico Cas. Co. v. Abba Shipping Lines, Inc., 891 F.Supp.2d 4, 7 (D.D.C. 2012) (citing Int'l Painters & Allied Trades Indus. Pension Fund v. Davanc Contracting, Inc., 808 F.Supp.2d 89, 94 (D.D.C. 2011)). “In instances where the amount of damages is not certain, the court may hold a hearing, but is not required to do so as long as there is a basis for determining damages for purposes of the default judgment.” Id. (citing Flynn v. Extreme Granite, Inc., 671 F.Supp.2d 157, 160 (D.D.C. 2009)).

         For instance, courts need not conduct a hearing “if the amount claimed is a liquidated sum or one capable of mathematical calculation.” Eighth Dist. Elec. Pension Fund v. Campbell Elec., Inc., No. 16-cv-03040-CMA, 2017 WL 1243059, at *2 (D. Colo. Mar. 17, 2017) (quoting Hunt v. Inter-Globe Energy, Inc., 770 F.2d 145, 148 (10th Cir. 1985)). In making an independent determination of the amount of damages, “the court may rely on detailed affidavits or documentary evidence.” Id. (quoting Breaking the Chain Found., Inc. v. Capitol Educ. Supp., Inc., 589 F.Supp.2d 25, 28 (D.D.C. 2008)); Lopez v. Highmark Constr., LLP, No. 17-cv-01068-CMA-MLC, 2018 WL 1535506, at *3 (D. Colo. Mar. 29, 2018) (same).

         In the context of a default judgment, a plaintiff “must . . . establish that on the law it is entitled to the relief it requests, given the facts as established by the default.” PHL Variable Ins. Co. v. Bimbo, No. 17-CV-1290 (FB) (ST), 2018 WL 4691222, at *2 (E.D.N.Y. Aug. 30, 2018), report and recommendation adopted, No. 17-CV-1290 (FB) (ST), 2018 WL 4689580 (E.D.N.Y. Sept. 28, 2018) (quoting Trs. of the Plumbers Local Union No. 1 Welfare Fund v. Generation II Plumbing & Heating, Inc., No. 07CV5150 (SJ) (SMG), 2009 WL 3188303, at *2 (E.D.N.Y. Oct. 1, 2009)).

         III. ANALYSIS

         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) (holding that default judgment against defendant over whom court has no personal jurisdiction is void). Second, courts must 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 v. Welch, 810 F.3d 761, 764 (10th Cir. 2016) (plaintiff in a default action did not need to prove complaint's factual allegations; however, the judgment must be supported by a sufficient basis in the pleadings).

         A. JURISDICTION

         1. Subject Matter Jurisdiction

         Plaintiffs assert that the Court has federal question jurisdiction over this matter pursuant to 29 U.S.C §§ 185(c), 1132, and 1145 due to its ERISA claims. (Doc. # 1 at 3.) 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, this Court has jurisdiction.

         2. Personal Jurisdiction

         The Court must also determine that Plaintiffs have made a prima facie case that exercising personal jurisdiction over Defendant is proper. Dennis Garberg and Assocs., Inc. v. Pack-Tech Int'l. Corp., 115 F.3d 767, 773 (10th Cir. 1997). An analysis of personal jurisdiction involves a two-step inquiry. First, the Court must determine “whether any applicable statute authorizes the service of process on [the] Defendant.” Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063, 1070 (10th Cir. 2008). Second, the Court must examine whether the exercise of such statutory jurisdiction comports with constitutional due process demands. Id.

         a. Service of Process

         The Court must first address the adequacy of service in deciding whether it has personal jurisdiction over Defendant. Reg'l Dist. Council v. Mile High Rodbusters, Inc., 82 F.Supp.3d 1235, 1241 (D. Colo. 2015). Plaintiffs' Complaint identifies Defendant as a corporation. (Doc. # 1 at 3.) Therefore, the Court analyzes the adequacy of service pursuant to Fed.R.Civ.P. 4(h), which establishes the requirements for service on a corporation, partnership, or association. Such an organization may be served β€œin the manner prescribed by Rule 4(e)(1) for serving an individual.” Fed.R.Civ.P. 4(e)(1). Pursuant to Rule 4(e)(1), β€œ[u]nless otherwise provided by federal law, ...


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