TRUSTEES OF INTERNATIONAL UNION OF PAINTERS AND ALLIED TRADES DISTRICT COUNCIL 711 HEALTH & WELFARE FUND v. CAPE SIGN SERVICE, INC.
1:20-cv-07262
D.N.J.Nov 29, 2021Background
- Plaintiffs are the Trustees of a multi-employer benefit Funds and the Union; they sue to collect employer contributions owed under a collective bargaining agreement governed by ERISA § 515/§ 1145.
- Defendant Cape Sign Service, Inc. allegedly failed to remit required contributions and dues check-offs for the period Jan. 1, 2012–Dec. 31, 2016, producing $16,715.96 in delinquent contributions and, with interest/liquidated damages, a claimed balance of $21,333.77 after a partial $1,650 payment.
- Plaintiffs filed suit June 15, 2020; the company’s president was served July 20, 2020; defendant did not answer and the Clerk entered default on Dec. 14, 2020.
- Plaintiffs moved for default judgment April 28, 2021 seeking $21,333.77 in unpaid contributions/interest/liquidated damages plus $4,545.60 in attorney’s fees and costs (total $25,879.37).
- The Court found service proper, held the Complaint adequately alleged an ERISA § 1145 claim, and that the three default-judgment factors (prejudice, lack of meritorious defense, culpability) favored plaintiffs.
- The Court awarded $21,333.77 for contributions/interest/liquidated damages and $4,545.60 in fees and costs, for a default judgment of $25,879.37.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Service of process | Service on company president suffices for corporate service | No response / no contested argument | Service was proper; process effectively served on the president |
| Validity of statutory claim | Failure to remit contributions/dues violates ERISA § 1145 | No response / no defense pleaded | Complaint states a valid ERISA § 1145 claim |
| Appropriateness of default judgment | Default appropriate because plaintiffs are prejudiced, no defenses, and defendant culpable | No response / no showing of meritorious defense | Default judgment granted (prejudice, no meritorious defense, culpability) |
| Damages and fees | Plaintiffs seek specified unpaid contributions, interest, liquidated damages, and attorney’s fees; provided records and lodestar support | No response / did not contest amounts or rates | Court found calculations supported, awarded $21,333.77 plus $4,545.60 in fees/costs (total $25,879.37) |
Key Cases Cited
- Chanel v. Gordashevsky, 558 F. Supp. 2d 532 (D.N.J.) (default judgment standards and practice)
- Anchorage Assocs. v. V.I. Bd. of Tax Rev., 922 F.2d 168 (3d Cir.) (district court discretion to enter default judgment)
- Hritz v. Woma Corp., 732 F.2d 1178 (3d Cir.) (court preference to decide cases on the merits when practicable)
- Gold Kist, Inc. v. Laurinburg Oil Co., 756 F.2d 14 (3d Cir.) (requirement of sufficient proof of service before default judgment)
- Cent. Pa. Teamsters Pension Fund v. McCormick Dray Line, Inc., 85 F.3d 1098 (3d Cir.) (ERISA § 1145 requires employer contributions in accordance with the collective bargaining agreement)
- Comdyne I, Inc. v. Corbin, 908 F.2d 1142 (3d Cir.) (damages allegations are not assumed true on default; court may hold hearing unless amount is for a sum certain)
- United Auto. Workers Local 259 v. Metro Auto Ctr., 501 F.3d 283 (3d Cir.) (lodestar method as the starting point for attorney’s fees)
- Evans v. Port Auth., 273 F.3d 346 (3d Cir.) (fee requests must include fairly definite information on how hours were spent)