Defendants-Appellants Moulton Masonry & Construction, LLC (“the corporate defendant”), and Duane E. Moulton (“the individual defendant”), appeal from an amended judgment entered on January 16, 2014 by the United States District Court for the Northern District of New York (Hurd, /.). In that order, the district court denied defendants’ cross-motion to vacate the default entered on April 24, 2013, and granted plaintiffs’ motion for a default judgment against both defendants for $662,135.21. This amount—for which the defendants were held jointly and severally liable—accounts for $451,300.52 in withheld fringe benefit contributions and deductions, $104,628.81 in prejudgment interest through October 21, 2013, $99,203.93 in liquidated damages, and $7,001.95 in attorney’s fees and costs. We AFFIRM the denial of the defendants’ motion to vacate the entry of default. We further AFFIRM the entry of a default judgment for $662,135.21 against the corporate defendant. Because the district court erred in calculating the damages entered against the individual defendant, however, we VACATE the default judgment entered against the individual defendant and REMAND for further proceedings in accordance with this Opinion.
BACKGROUND
On July 13, 2009, Moulton Masonry & Construction, LLC, became a signatory to a collective bargaining agreement (“CBA”) with the Bricklayers and Allied Craftwork-ers, Local 2 in Albany, New York (“the Union”). Among other obligations, the CBA required the corporate defendant to make contributions to the Union’s Pension, Health Benefit, Annuity, and Education and Training Funds, as well as to the Bricklayers & Trowel Trades International Pension Fund (“the plaintiff funds”) and to remit deductions from the Union workers’ paychecks to those funds in accordance with stipulated schedules. The CBA also required the corporate defendant to submit to an audit of its books upon request
In the spring of 2012, the plaintiff funds initiated a payroll audit of the corporate defendant pursuant to the terms of the CBA. Moulton, however, failed to comply with repeated requests from the auditor. The plaintiff funds, therefore, instituted the present action in federal court. Moul-ton and the corporate defendant received the Summons and Complaint on February 27, 2013 and March 5, 2013 respectively. On March 28, 2013, the plaintiff funds’ counsel received a letter from Raeann C. Johnson, an attorney in Corinth, New York, requesting an extension of time to file an answer on behalf of the corporate defendant. Although the plaintiff funds agreed to this request on March 29, 2013, neither the individual nor the corporate defendant ever filed an answer or other responsive pleading. As a result of this failure, on April 24, 2013, the plaintiff funds requested that the court enter a default and served a copy of that request on the defendants. The district court clerk entered the default on that same day.
Though the defendants continued to ignore the judicial proceedings, Moulton did begin to work with the plaintiffs’ auditor— although the exact extent of that participation is disputed by the parties. On May 2 and May 7, 2013, the plaintiffs advised the defendants of the audit’s preliminary findings. The plaintiffs represent that they served their first discovery requests on June 5, 2013. On June 16, 2013, the defendants acknowledged receipt of the audit, and after several e-mails from the auditor requesting a response, Moulton replied with five proposed revisions on July 1, 2013. These revisions were specific to individual employees and did not challenge the audit methodology or raise any concerns about “out of trade hours.” On July 16, 2013, plaintiffs sent a letter to defendants reminding them of their discovery obligations. On August 19, 2013, the auditor issued his final report concluding that the corporate defendant owed the plaintiff funds $451,300.52.
On October 21, 2013, the plaintiff funds filed a motion for a default judgment. With it, they included affidavits from the fund administrators and business managers, the CBA, the Funds’ Agreement and Declaration of Trust and Collections Policy, affidavits from their auditor and legal counsel, as well as a number of other documents justifying their request for damages. Defendants, through new counsel, responded on December 9, 2013 with a brief in opposition as well ás a cross-motion to vacate the entry of default. Along with this filing, defendants included a six-page affidavit from Duane Moulton in which he attempted to explain his reasons for failing to participate in the litigation and challenged the methodology of the audit. The defendants, however, did not provide exhibits or documentary support for any of the statements made in this affidavit.
On January 2, 2014, the district court denied the defendants’ motion to vacate the initial entry of default and granted the plaintiffs’ motion for default judgment, awarding plaintiffs the full amount requested. This award included $451,300.52 in fringe benefit contributions and deductions, $104,628.81 in interest through October 21, 2013, $99,203.93 in liquidated damages, and $7,001.95 in attorney’s fees and costs for a total award of $662,135.21. Defendants appealed.
On appeal, the defendants challenge the district court decision on three grounds. First, they argue that the district court abused its discretion by denying the defendants’ motion to vacate the original entry of default. Second, they argue that because questions of fact remained regarding liability, even accepting all allegations in the complaint as true, the district court abused its discretion by entering a default judgment against them. Third, they argue that the district court abused its discretion in calculating the default judgment damages assessed against them. We consider each challenge in turn.
I. ENTRY OF DEFAULT
Under Rule 55(a) of the Federal Rules of Civil Procedure, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend ..., the clerk must enter the party’s default.” The entry of default is therefore not discretionary. That said, after such default is entered, “[t]he court may set aside an entry of default for good cause.” Fed.R.Civ.P. 55(c) (emphasis added). “Because Rule 55(c) does not define the term ‘good cause,’ [the Second Circuit] ha[s] established three criteria that must be assessed in order to decide whether to relieve a party from default or from a default judgment.” Enron Oil Corp. v. Diakuhara,
First, the record demonstrates that defendants’ default was willful. We have previously “interpreted “willfulness,’ in the context of a default, to refer to conduct that is more than merely negligent or careless,” but is instead “egregious and ... not satisfactorily explained.” SEC v. McNulty,
The defendants’ primary justification for failing to file a responsive pleading, or participate in the litigation in any way, is that Moulton believed his participation in the audit was sufficient to discharge the defendants’ duties. In his view, therefore, his failure to file a responsive pleading was a mere mistake and, therefore, excusable. A defendant’s responsibility to file a responsive pleading, however, is not obviated by participating in efforts which could, in theory, later resolve the case. See McNulty,
While defendants’ arguments, if credited, might give rise to an inference that their failure to file a responsive pleading was not in bad faith, “a finding of bad faith is [not] a necessary predicate to concluding that a defendant acted ‘willfully.’ ” Gucci Am., Inc. v. Gold Ctr. Jewelry,
Second, the defendants fail to meet their burden of offering evidence sufficient to establish a complete defense. See State St. Bank & Trust Co. v. Inversiones Errazuriz Limitada,
We need not reach the question of whether the plaintiff would suffer prejudice as we are “persuaded that the default was willful and ... [are] unpersuaded that the defaulting party has a meritorious defense.” McNulty,
II. DEFAULT JUDGMENT: LIABILITY
A court’s decision to enter a default against defendants does not by definition entitle plaintiffs to an entry of a default judgment. Rather, the court may, on plaintiffs’ motion, enter a default judgment if liability is established as a matter of law when the factual allegations of the complaint are taken as true. See City of New York v. Mickalis Pawn Shop, LLC,
Although plaintiffs contend that the defendants waived any argument that they were not hable as a matter of law by failing to present any such argument below, we need not decide that issue because defendants’ arguments on the point are wholly without merit. Under Section 515 of ERISA, 29 U.S.C. § 1145, any “employ
The allegations in the complaint when accepted as true, as we are required to do in deciding whether a default judgment is appropriate, establish the following facts: (1) the corporate defendant was bound to a Collective Bargaining Agreement with the Union; (2) it was obligated to remit contributions and deductions to the Funds and Union for hours worked by bricklayers, masons and plasterers in the Union’s jurisdiction; and (3) it was bound by the Funds’ Agreements and Declarations of Trust and Collections Policy. In addition, documentary evidence submitted by the plaintiffs, which the defendants did not contest, establishes that the corporate defendant failed to remit at least some contributions. These facts are sufficient to render the corporate defendant liable under ERISA. See 29 U.S.C. § 1145; Finkel v. Romanowicz,
The corporate defendant argues that it cannot be found liable as a matter of law under sections 1132 and 1145, because “[t]here was ... no evidence that [it] received any monies from any union labor.” Yet, a well-pleaded factual allegation in the complaint belies this claim. Plaintiffs alleged that the corporate defendant did, in fact, receive payment for union labor, and that allegation is accepted as true. See J.A. 16.
The district court never expressly articulated the legal theory under which it found Duane Moulton liable in his individual capacity. See generally Sasso v. Cervoni
But Section 409 of ERISA, 29 U.S.C. § 1109, provides an independent basis for Moulton’s liability in his individual capacity as a “fiduciary.” A fiduciary, under ERISA is “someone who ‘exercises any discretionary authority or discretionary control respecting management of [an ERISA benefit] plan or exercises any authority or control respecting management or disposition of its assets.’ ” Finkel, 377 F.3d at 85 (alteration and emphasis in the original) (quoting 29 U.S.C. § 1002(21)(A)(i)). A fiduciary that unlawfully withholds plan assets is “personally liable to make good to such plan any losses to the plan.” 29 U.S.C. § 1109(a). Though not all corporate officers are fiduciaries under ERISA’s expansive definition of the term, the Finkel court indicated that where a complaint alleges that an individual is “responsibil[e] for determining which of the company’s creditors would be paid or in what order’ ... or otherwise enjoyed authority or control over [ ] management,” the individual is a fiduciary. Finkel
Here, the factual allegations in the complaint, combined with uncontroverted documentary evidence submitted by plaintiffs, establish that Moulton was a fiduciary under ERISA and breached his fiduciary duty. See Au Bon Pain Corp. v. Artect, Inc.,
III. DEFAULT JUDGMENT: DAMAGES
“ ‘[W]hile a party’s default is deemed to constitute a concession of all well pleaded allegations of liability, it is not considered an admission of damages.’ ” Cement & Concrete Workers Dist. Council Welfare Fund v. Metro Found. Contractors, Inc.,
The defendants first challenge the damages entered against them for failing to account for “out of trade hours”—that is, hours worked for which contributions were not required. Though defendants assert that the contract envisions the possibility of “out of trade hours,” their analysis ends there. The defendants’ submissions fail to identify even a single piece of documentary evidence that out of trade hours were worked and, if so, how many and by whom. Absent such documentary evidence (or even an allegation that such evidence exists), there is no justification for reversing the district court, nor is there any justification for requiring a hearing on this issue.
The individual defendant also contends that the district court erroneously awarded liquidated damages, excessive interest, and attorney’s fees against him. On this point, we agree with the individual defendant. While it is clear that under 29 U.S.C. § 1132, the corporate defendant is liable for unpaid contributions, interest, liquidated damages provided under the plan,
As we have previously explained, liquidated damages do not serve to make good to the plan any losses and do not “constitute ‘appropriate equitable relief as recognized by the common law of trusts.” Diduck v. Kaszycki & Sons Contractors, Inc.,
Prejudgment interest, on the other hand, can constitute appropriate equitable or remedial relief under 29 U.S.C. § 1109(a). Yet, in order for the district court to grant such relief against a fiduciary in his individual capacity, it is required to articulate the reasons justifying such an award and the interest rate chosen. See Henry v. Champlain Enters., Inc.,
Similarly, while the district court may award attorney’s fees, see 29 U.S.C. 1132(g)(1), .absent any specific analysis from the district court explaining why attorney’s fees are justified against the individual defendant in this case, a meaningful review is forestalled. See Henry,
CONCLUSION
Accordingly, the district court’s order denying defendants’ motion to vacate the default entered against them is AFFIRMED. The district court’s entry of a default judgment against the corporate defendant for $662,135.21 is also AFFIRMED. The default judgment against Moulton in his individual capacity is VACATED and the case is REMANDED to the district court for further proceedings in accordance with this Opinion.
Notes
. Although SEC v. McNulty and several other cases cited in this opinion address the standard for vacating a default judgment under Rule 60(b) of the Federal Rules of Civil Procedure rather than the standard for voiding an entry of default under Rule 55(c), there is no practical difference on this appeal. See American Alliance Ins. Co. v. Eagle Ins. Co.,