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Trustees of the National Elevator Industry Pension v. Century Elevator

October 11, 2011

TRUSTEES OF THE NATIONAL ELEVATOR INDUSTRY PENSION, HEALTH BENEFIT, EDUCATIONAL, ELEVATOR INDUSTRY WORK PRESERVATION FUNDS, ET AL.
v.
CENTURY ELEVATOR, INC., ET AL.



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

MEMORANDUM

This is an action by trustees of various National Elevator Industry benefit and trust funds (the "Trust Funds") to recover unpaid contributions to an employer benefit fund, amounts found due in an audit, plus costs, interest, attorney's fees, and liquidated damages pursuant to the Employee Retirement Income Security Act ("ERISA"). Pending before the Court is the plaintiffs' motion for default judgment. As the defendants have yet to appear or defend in this action, the motion is unopposed. For the reasons that follow, the Court will grant the motion.

I. Procedural History

The trustees filed this action on June 10, 2011 against defendants Century Elevator, Inc. and John M. Powers. The complaint brings ERISA claims against Century Elevator to recover unpaid monthly contributions, amounts due from an audit, costs, interest, attorney's fees, and liquidated damages. The trustees also seek an injunction requiring timely reports and contributions to the Trust Funds. The complaint also brings a claim against John Powers for breach of fiduciary duty pursuant to section 409 of ERISA, 29 U.S.C. § 1109(a).

The record shows that although the defendants were duly served on June 17, 2011, they have not appeared, answered, moved, or otherwise responded to the complaint. On July 12, 2011, the Clerk of Court entered a default against the defendants. The plaintiffs now move for default judgment pursuant to Fed. R. Civ. P. 55(b).

II. Factual Background*fn1

The plaintiffs are trustees of the Trust Funds, which are multi-employer employee benefit plans established pursuant to sections 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3), (7). Century Elevator is a Massachusetts corporation transacting business as a contractor or subcontractor in the elevator industry. John Powers is Century Elevator's officer, president, and owner. Complaint ¶¶ 2-4.

Century Elevator, by its president John Powers, signed a Collective Bargaining Agreement ("CBA") with the International Union of Elevator Constructors (the "Union") on July 9, 2002. The CBA binds Century Elevator to the terms of the various agreements and declarations of trust establishing the Trust Funds, and amendments thereto (hereinafter the "Trust Agreements"). Complaint, Ex. 1 (hereinafter "CBA") §§ 3-7. Under the CBA and the Trust Agreements, Century Elevator is obligated to file monthly reporting forms with the trustees indicating the number of hours worked by employees covered by the CBA. For each hour worked, Century Elevator must pay certain sums of money at set hourly contribution rates into the Trust Funds. Id. §§ 3-7; Pls.' Resp. to Court Request for Prod. of Docs., Ex. 2 (hereinafter "Trust Agreements"), Eighth Amend., Art. VI ¶ 4. These contributions finance the Trust Funds and provide pension, medical, and educational benefits to the defendants' elevator constructor mechanics and apprentices.

The Trust Agreements state that if the trustees must file suit to collect amounts due to the Trust Funds, the trustees "shall seek liquidated damages in the amount of twenty percent (20%) of contributions due at the time the lawsuit is filed," as well as interest, costs, and attorney's fees. Trust Agreements, Eighth Amend., Art. VI ¶ 6. Under the Trust Agreements, interest on monies due will be at the rate charged by the Internal Revenue Service at the time of delinquency. Id. In addition, any participating employer may be audited. In the event an audit discloses unpaid contributions of five percent or more of contributions due during the audit period, the Trust Agreements provide for assessment of audit costs against the employer. Id., Eighth Amend., Art. VI ¶ 8.

Century Elevator reported but failed to remit contributions for the months of September 2010 and February through May 2011. Although the parties entered into a Settlement Agreement regarding the delinquent monthly contributions, a balance still exists in the amount of $35,212.89, plus interest. Mot. for Default Judgment, Ex. 2 ("Betts Aff.") ¶¶ 6-7. Furthermore, an audit of Century Elevator for the period of January 1, 2007 through March 31, 2009, revealed that Century Elevator owed under-reported contributions and interest, for which a balance of $4,896.74 exists. Id. ¶ 10. Lastly, Century Elevator owes interest for the late payment of contributions for the months of August 2010 through and including May 2011 in the amount of $499.30. Id. ¶ 11; id., Ex. 6 (Misc. Assessments Report).

III. Analysis

A. Counts I & II: Delinquent Contributions & Equitable Relief against Century Elevator Under section 1145 of ERISA, every employer who is obligated to make contributions to a multi-employer plan under the terms of the plan or under the terms of a collectively bargained agreement shall make such contributions in accordance with the terms of the plan or agreement. 29 U.S.C. § 1145. Section 1132(g)(2)(E) authorizes equitable relief in actions to enforce section 1145. See Trustees of the Nat'l Elevator Indus. Pension, Health Ben., Educ., Elevator Indus. Work Pres. Funds v. Gateway Elevator, Inc., No. 09-4206, 2011 WL 2462027, at *4 (E.D. Pa. June 21, 2011). Furthermore, ERISA provides that in any action by a fiduciary against delinquent employer contributors in which judgment in favor of the plan is awarded, the court shall award the plan:

(A) the unpaid contributions,

(B) interest on the unpaid ...


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