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Steamfitters Union, Local 420 Welfare Fund v. Megrant Corp.

United States District Court, E.D. Pennsylvania

November 30, 2017

STEAMFITTERS UNION, LOCAL 420 WELFARE FUND, ET AL.
v.
MEGRANT CORPORATION, ET AL.

          MEMORANDUM

          R. BARCLAY SURRICK, J.

         Presently before the Court is Plaintiffs' Motion for Default Judgment. (ECF No. 6.) For the following reasons, the Motion will be granted.

         I. BACKGROUND

         In this action, Plaintiffs include Local Union No. 420 of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (the “Union”) and various trust funds.[1] Plaintiffs bring this action to collect delinquent employee benefit fund contributions from Defendant Megrant Corporation, and Megrant's owners and officers, Defendants Farid Mirian and Jasmine Mirian (the “Individual Defendants”).

         The Complaint alleges that the Union is the exclusive representative of all Megrant employees for purposes of collective bargaining. (Compl. ¶ 7, ECF No. 1.) On March 20, 2017, Jasmine Mirian executed a Project Labor Agreement (“PLA”), under which Megrant agreed to be bound by the collective bargaining agreement between the Union and the Mechanical Contractors Association of Eastern Pennsylvania, Inc. (the “CBA”) for Megrant's work on the NYC MTA/Long Island Railroad Wantagh Station Project. (Id. ¶ 11.) Under the CBA, Defendants were required to submit monthly reports to Plaintiffs documenting the hours worked and compensation paid to the employees working under the CBA. (Id. ¶ 12.) Defendants were also required to remit payment based on the hours worked and compensation paid on behalf of Megrant employees. (Id.) Between March 15, 2017 and June 6, 2017, Megrant employed Union members, but failed to submit any reports or contributions to the Plaintiffs due under the CBA. After Plaintiffs filed the Complaint, Defendants submitted remittance reports that showed a total of $67, 479.68 in contributions that were due for work performed under the CBA. (Mot. Default ¶ 7, ECF No. 6.) Those delinquent payments have accrued interest and liquidated damages pursuant to the CBA and ERISA. (Id. ¶¶ 8-9.)

         The Complaint was filed on July 17, 2017. Defendants were served with the Complaint on August 1, 2017. (ECF Nos. 2, 3, 4.) Defendants have failed to file an Answer, or otherwise plead or defend this action. On September 12, 2017, the Clerk of the Court entered default against Defendants. (ECF No. 5.) On September 28, 2017, Plaintiffs filed this Motion for Default Judgment. It has been two months and Defendants have not responded to the Motion for Default Judgment. Nor has any attorney entered an appearance on their behalf.

         II. DISCUSSION

         To determine whether a default judgment is warranted, courts in this circuit weigh three factors: (1) prejudice to the plaintiff if default is denied; (2) whether the defendant's delay is due to culpable conduct; and (3) whether the defendant appears to have a litigable defense. Chamberlain v. Giampapa, 210 F.2d 154, 164 (3d Cir. 2000) (citation omitted). All the Chamberlain factors weigh in favor of entering default judgment here.

         Plaintiff will be prejudiced if the default is denied. Plaintiffs will be required to make payments to its union members despite its inability to collect contributions from Megrant that are due under the CBA. Nat'l Elec. Benefit Fund v. FJM Elec. Constr., LLC, No. 13-3057, 2015 WL 6750726, at *2 (E.D. Pa. Nov. 5, 2015) (finding that plaintiff union would have been prejudiced if default judgment were denied because it was still required to make vested payments to participants even if the employer failed to make the required contributions).

         In addition, Defendants' culpability is evident from the fact that they failed to make contributions or respond in any way to Plaintiffs' claims despite being put on notice. See New Jersey Bldg. Laborers' Statewide Pension Fund & Trustees Thereof v. Belmont Contracting Corp., No. 13-507, 2014 WL 3731267, at *2 (D.N.J. July 25, 2014) (finding that the defendant “is culpable because it has been served with notice of this action, but has failed to properly participate”).

         Finally, Defendants do not appear to have a litigable defense. With respect to Megrant Corporation, Section 1145 of ERISA requires that “[e]very employer who is obligated to make contributions to a plan or under the terms of a collectively bargained agreement . . . make such contributions in accordance with the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. In the event that an employer such as Megrant fails to make contributions in violation of the CBA, the Court may award:

(A) the unpaid contributions;
(B) interest on the unpaid contributions;
(C) an amount equal to the ...

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