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Local Union No. 98 International Brotherhood of Electrical Workers, et al. v. Riverview Electrical Construction

October 17, 2011

LOCAL UNION NO. 98 INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS, ET AL.
v.
RIVERVIEW ELECTRICAL CONSTRUCTION, ET AL.



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

MEMORANDUM

This is an action brought by trustees of various multi-employer benefit and trust funds of Local Union No. 98 International Brotherhood of Electrical Workers (the "Funds") to recover amounts they are owed under the Employee Retirement Income Security Act ("ERISA"). The defendants Riverview Electrical Construction, Inc. ("REC") and its principals, Patricia Flanagan, Timothy Flanagan, and Thomas Flanagan, have not appeared or defended in this action. The Funds have moved for entry of default judgment. For the reasons that follow, the Court will grant the motion.

I. Procedural History

The Funds filed this action on March 17, 2010 under

ERISA to recover money owed to certain union employee benefit funds pursuant to a multi-employer collective bargaining agreement between Local Union No. 98 and the Philadelphia Division of the Penn-Del-Jersey Chapter of the National Electrical Contractors Association ("Commercial Agreement").*fn1 The complaint asserts claims against REC as an employer and against the Flanagans as employers or, in the alternative, as ERISA fiduciaries.

The defendants never answered the complaint and the Clerk of Court entered their default on September 13, 2010. On November 24, 2010, the defendants moved for default judgment under Federal Rule of Civil Procedure 55(b), which the Court denied without prejudice because the plaintiffs failed to provide sufficient information to support the amounts they claimed in unpaid contributions, interest, and penalties.

The plaintiffs filed their instant Amended Motion for Default Judgment on April 7, 2011 and voluntarily rescinded the allegations of Counts II-IV which sought to hold the individual defendants personally liable as ERISA employers. Their instant motion relies solely on a fiduciary theory of liability under ERISA Section 409, 29 U.S.C. § 1109(a), and seeks contributions and withholdings only for the months of April 2009, May 2009, and June 2009. Attached to the amended motion is the affidavit of Debra Gerber ("Gerber Aff."), an employee of a firm responsible for maintaining an accounting of the values of monthly contributions and withholdings that REC was required to remit to Local 98 and its funds pursuant to the Commercial Agreement.

On September 29, 2011, the Court held a hearing on the motion, and the plaintiffs presented evidence regarding the amounts owed to the plans and the sources of the figures the Funds claim are due and owing. The plaintiffs supplemented that showing by filing an Appendix of Exhibits on October 11, 2011.

II. Factual Background*fn2

The plaintiffs are trustees of the Funds, established pursuant to Sections 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3),(37). REC is a corporation engaged in the business of providing electrical services. Patricia Flanagan was President and owner of REC, and Timothy and Thomas Flanagan were owners and acting principals of REC. REC was a party to the Commercial Agreement, and thus obligated to furnish monthly reports to Local 98 regarding the names of its member employees, the hours they worked, and their gross earnings. The operative Commercial Agreement between Local 98 and REC was effective from May 1, 2006 through April 20, 2010. Compl. ¶¶ 5-14, Ex. 1 § 1.01.

A. The Funds

The Commercial Agreement, in accordance with the trust agreements establishing the Funds, required REC to remit monthly payments to the following funds relevant to the instant motion:

(1) the Health & Welfare Fund; (2) the Pension Fund; (3) the JATF; (4) the Vacation Fund; and (5) the Deferred Income/Profit Sharing Fund.*fn3 Gerber Aff. ¶¶ 5, 8, 11, 14, 17. The Commercial Agreement also provides for liquidated damages to be paid on all delinquent contributions in the amount of 10% of the total contributions owing, and interest at the rate of 2% per month until full payment has been received. Compl. Ex. 1 § 3.09(b).

REC failed to remit payment for any of these funds in the months of April, May, and June 2009. The total amounts owing to each fund are as follows:

Health & Welfare $10066.55

Pension 6855.88 Vacation 2445.75 JATF 1109.20 Deferred Income 7687.80 -----------------------------------Total $28165.18 Gerber Aff. ΒΆΒΆ 5-19. Pursuant to the Commercial Agreement, $2,816.52 in liquidated damages and $2,372.03 in interest (2% per ...


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