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Einhorn v. Klayman Produce Co., Inc.

United States District Court, Third Circuit

December 16, 2013

WILLIAM J. EINHORN, ADMINISTRATOR OF THE TEAMSTERS PENSION TRUST FUND OF PHILADELPHIA AND VICINITY
v.
KLAYMAN PRODUCE CO., INC.

MEMORANDUM

R. BARCLAY SURRICK, J.

Presently before the Court is Plaintiff William J. Einhorn’s Motion for Default Judgment Pursuant to Fed.R.Civ.P. 55(b)(2). (ECF No. 4.) For the following reasons, Plaintiff’s Motion will be granted.

I. BACKGROUND

Plaintiff William J. Einhorn, Administrator of the Teamsters Pension Trust Fund of Philadelphia and Vicinity (the “Fund”), brings this action against Defendant Klayman Produce Co., Inc., alleging violations of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1381. (Compl. ¶ 1, ECF No. 1.) Plaintiff seeks to recover withdrawal liability, interest, liquidated damages, attorney’s fees and costs from Defendant. (Id. at ¶ 25c-d.)

The Teamsters Pension Trust Fund of Philadelphia and Vicinity is a multiemployer pension plan within the meaning of Section 3(37) of ERISA, 29 U.S.C. §1002(37), and an employee pension benefit plan within the meaning of Sections 3(2)(A) and (3) of ERISA, 29 U.S.C. §1002(2)(A)(3), which is established and maintained for the purpose of providing retirement and related benefits to eligible participants and beneficiaries, and subject to the withdrawal liability provisions of ERISA. (Compl. ¶ 6.) Plaintiff is the administrator of the Fund and is a fiduciary of the plan within the meaning of § 3(21)(A) of ERISA, 29 U.S.C. § 1002(21)(A). (Id. at ¶ 7.)

Defendant participated in and contributed to the plan pursuant to the terms of a collective bargaining agreement between itself and the International Brotherhood of Teamsters, Local Union No. 929. (Id. at ¶ 13.) On or about July 23, 2012, it was determined by the Fund that Defendant had affected a complete withdrawal from the plan during the 2012 plan year. (Id. at ¶ 15.) The Fund, by letter, demanded payment of Defendant’s withdrawal liability, which was computed as $317, 159.21, payable in 65 quarterly installments, commencing on September 21, 2012. (July 23 Ltr., Compl. Ex. B.) The Fund did not receive any payments, and on September 21, 2012, it sent a second letter demanding that Defendant make its required payments within sixty days. (Sept. 21 Ltr., Compl. Ex. C.)

Plaintiff states that Defendant did not request review of this matter and did not make any demands for arbitration. (Compl. ¶ 18.) Defendant failed and/or refused to make its required withdrawal liability payments to the Fund, and on November 28, 2012, the Fund sent a third letter notifying Defendant that it was in default. (Nov. 28 Ltr., Compl. Ex. D.) Plaintiff states that as of the filing of the instant Complaint, Defendant has not made any payments and calculates that Defendant owes withdrawal liability in the amount of $317, 159.21. (Compl. ¶¶ 21-22.)

On April 2, 2013, Plaintiff filed this Complaint to collect withdrawal liability under ERISA and other monetary relief. (Id. at ¶ 1.) The record reflects that Defendant, who was properly served with the Complaint and Summons on April 20, 2013 (ECF No. 2), has not appeared, answered, moved or otherwise responded. On June 6, 2013, default was entered against Defendant by the Clerk of Court based on Plaintiff’s request. (ECF No. 3.)

On July 19, 2013, Plaintiff filed this Motion for Default Judgment (Pl.’s Mot.), together with the Declaration of Matthew D. Areman, Esq. (Areman Decl.) and Memorandum of Law (Pl.’s Mem.). (ECF No. 4.) In addition to withdrawal liability in the amount of $317, 159.21, Plaintiff seeks $3, 240.00 in attorney’s fees, $606.20 in costs, $5, 550.28 in interest, and $63, 431.84 in liquidated damages. (Areman Decl. 4.) To date, Defendant has failed to answer, plead, or otherwise defend this action.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) provides that a district court may enter default judgment against a party when default has been entered by the Clerk of Court. Fed.R.Civ.P. 55(b)(2). The entry of a default by the Clerk of Court, however, does not automatically entitle the non-defaulting party to a default judgment. D'Onofrio v. Il Mattino, 430 F.Supp.2d 431, 437 (E.D. Pa. 2006) (citing Mwani v. bin Laden, 417 F.3d 1, 6 (D.C. Cir. 2005). In fact, judgment by default is generally disfavored. Budget Blinds, Inc. v. White, 536 F.3d 244, 258 (3d Cir. 2008). Nevertheless, the entry of default judgment is a matter within the sound discretion of the district court. Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3d Cir. 1984). Courts consider three factors when determining whether to enter default judgment against a defendant: “(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant’s delay is due to culpable conduct.” Chamberlain v. Giampapa, 210 F.3d 154, 164 (3d Cir. 2000). If a default judgment is entered, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Comdyne I, Inc. v. Corbin, Jr., 908 F.2d 1142, 1149 (3d Cir. 1999) (citing 10 Charles Alan Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 2688 at 444 (2d ed. 1983)).

III. DISCUSSION

A. Withdrawal Liability

Before deciding whether a default judgment is appropriate in this case, we must determine whether the Complaint establishes a legitimate cause of action against Defendant. Jimenez v. Rosenbaum-Cunningham, Inc., No. 07-1066, 2010 WL 1303449, at *4 (E.D. Pa. Mar. 31, 2010). Plaintiff’s argument for withdrawal liability is ...


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