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Local Union No. 98 International Brotherhood of Electrical Workers v. Eastern Electric Corp. of New Jersey

September 25, 2009

LOCAL UNION NO. 98 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, ET AL., PLAINTIFFS,
v.
EASTERN ELECTRIC CORP. OF NEW JERSEY, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Tucker, J.

MEMORANDUM

Presently before this Court is Defendants' Motion to Vacate Default Judgment (Doc. 15), and Plaintiff's Response thereto (Doc. 16). For the reasons stated below, the Court will deny Defendants' Motion.

FACTUAL BACKGROUND

Plaintiffs bring this action as a result of Defendants' alleged failure to remit applicable contributions and withholdings payable to Plaintiffs pursuant to a collective bargaining agreement. Plaintiffs consist of both multi-employer benefit and pension funds established pursuant to various federal statutes, and trustees of these funds authorized to initiate this action. Defendant Eastern Electric Corporation of New Jersey ("Eastern Electric") is a limited liability company for profit engaged in providing electrical services to the public, and the remaining Defendants served as Presidents for this entity during the relevant time period.

Defendant Eastern Electric is a party to the multi-employer Commercial Agreement between Plaintiffs and the Philadelphia Division of the Penn-Del-Jersey Chapter, National Electrical Contractor's Association. Pursuant to the Commercial Agreement, participating employers, such as Eastern Electric, are required to make a variety of monthly payments to Plaintiffs and contributions to the various multi-employer benefit funds. Plaintiffs allege that Defendants were responsible for ensuring that the contributions were disbursed, and that Defendants failed to remit contributions pursuant to the Commercial Agreement.

Plaintiffs now seek past due contributions, penalties, and interest due to the various multi-employer benefit funds, as well as costs and reasonable attorney's fees incurred.

PROCEDURAL BACKGROUND

On August 7, 2008, Plaintiffs initiated this action with the filing of a complaint in the United States District Court for the Eastern District of Pennsylvania. The summons and complaint were also served on Defendants on August 7, 2008. Defendants did not file an answer to the complaint between the months of August 2008 and January 2009. In response to an order to status issued by this Court on February 6, 2009, Plaintiffs served Defendants with a waiver of service of service of process on February 12, 2009, rendering April 13, 2009 the deadline for the filing of an answer.

On April 22, 2009, Defendants had not filed an answer to Plaintiffs' complaint. This Court sent a letter to Plaintiffs advising that a Motion for Default Judgment be filed on or before May 8, 2009. Between the months of April 2009 and August 2009, Defendants failed to file an answer to Plaintiffs' complaint.

On August 3, 2009, Plaintiffs filed a Motion for Default Judgment. This Court granted Plaintiffs' Motion on August 5, 2009, and scheduled a hearing to assess damages for September 24, 2009. Defendants then filed their first responsive document, an Opposition to Plaintiffs' Motion for Default Judgment, on August 5, 2009. Defendants also filed a Motion for Reconsideration of the Order Entering Default Judgment on August 14, 2009. This Court denied Defendants' Motion on August 18, 2009. Defendants responded with a Motion to Vacate Default Judgment on September 9, 2009.

LEGAL STANDARD

Fed. R. Civ. P. 55(c) provides that "the court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b). Rule 60(b) states in pertinent part that "on motion and just terms, the court may relieve a party from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence; (3) fraud, misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; or (6) any other reason that justifies relief.

It is well established that the decision to set aside a default judgment is addressed to the sound discretion of the court, and should not be disturbed on review unless the district court has abused its discretion. Tozer v. Charles A. Krause Milling Co., 189 F.2d 242, 244 (3d Cir. 1951). The United States Court of Appeals for the Third Circuit has articulated three factors that a district court must consider when deciding whether to vacate a default judgment. Under the standard, the district court must determine whether (1) the plaintiff will be thereby prejudiced; (2) the defendant has a meritorious defense, and (3) the default was the result of defendant's culpable conduct. Harad v. Aetna Cas. & Sur. Co., 839 F.2d 979, 981 (3d Cir. 1988). The second prong of this standard is considered a threshold issue, however, defendants are not entitled to have a default judgment automatically set aside upon allegations of a meritorious defense. See Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984); see also Harad, 839 F.2d at 982. Instead, defendants must demonstrate with ...


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