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Trustees of National Elevator Industry Pension v. 1st Priority Elevator Co.

United States District Court, E.D. Pennsylvania

December 4, 2017

TRUSTEES OF THE NATIONAL ELEVATOR INDUSTRY PENSION, ET AL.
v.
1ST PRIORITY ELEVATOR COMPANY, ET AL.

          MEMORANDUM

          R. BARCLAY SURRICK, J.

         Presently before the Court is Plaintiffs' Motion for Default Judgment. (ECF No. 5.) For the following reasons, the Motion will be granted.

         I. BACKGROUND

         In this ERISA action, Plaintiffs, which include Trust Funds for the National Elevator Industry (“NEI Funds”), seek to collect delinquent employee benefit fund contributions from Defendant 1st Priority Elevator Company and 1st Priority Elevator's owner and officer, Mauline Williams (the “Individual Defendant”).[1] Plaintiffs request the outstanding contributions due, as well as interest and liquidated damages on those payments.

         The Complaint alleges that on September 22, 2003, 1st Priority Elevator and the International Union of Elevator Constructors (the “Elevator Union”) entered into a Collective Bargaining Agreement (“CBA”) establishing the terms and conditions of employment for the elevator workers employed by 1st Priority Elevator. (Compl. ¶ 5, ECF No. 1.) Pursuant to the CBA, 1st Priority Elevator was bound by the terms and conditions of the Declarations of Trust (referred to as the “Trust Agreements” in the Complaint) associated with each of the NEI Funds. (Id. ¶ 7.) Pursuant to the Declarations of Trust, 1st Priority Elevator was obligated to file monthly reporting forms with the Plaintiff NEI Funds and to submit contributions that correspond to the total number of hours worked by covered 1st Priority Elevator employees. (Id. ¶¶ 6, 7.) These contributions finance the NEI Funds and provide pension, medical, and educational benefits to the Union employees. (Default Mem. 1, ECF No. 4.) As a result, the NEI Funds are third party beneficiaries to the CBA. (Id.)

         Plaintiffs allege in the Complaint that an audit conducted by the Trustees revealed that for the period January 1, 2012 through May 31, 2014, 1st Priority Elevator owes $37, 627.17 in additional contributions and interest.[2] Additional interest that has accrued since the time of the audit totals $3, 320.75. (Default Mem. 4.) The Declarations of Trust also provide that when an employer fails to pay the amounts required by the CBA on time, the Fund Trustees may seek liquidated damages in the amount of 20 percent, interest, costs, and attorneys' fees associated with the collection of the delinquent contributions. (Compl. ¶ 11.) The liquidated damages amount associated with these delinquent contributions totals $7, 132.64. (Default Mem. 4-5.) Plaintiffs also seek audit fees in the amount of $3, 862.00, and additional interest in the amount of $80.66 for the late payment of contributions for the months of February, March, May, and June 2017. (Id. at 4.) Finally, Plaintiffs seek attorneys' fees in the amount of $1, 437.50 and costs in the amount of $670, for having to bring this lawsuit. (Id. at 12.)

         The Complaint was filed on July 12, 2017. Defendants were served with the Complaint on July 28, 2017. (ECF No. 2.) Defendants failed to file an Answer, or otherwise plead or defend this action. On August 8, 2017, the Clerk of the Court entered default against Defendants. (ECF No. 5.) On August 31, 2017, Plaintiffs filed this Motion for Default Judgment. Defendants have not responded to the Motion and no attorney has entered an appearance on behalf of Defendants.

         II. DISCUSSION

         In determining 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.3d 154, 164 (3d Cir. 2000) (citation omitted). We are satisfied that all of these factors weigh in favor of entering default judgment.

         Plaintiffs 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 1st Priority Elevator that are due under the CBA and the Declarations of Trust. See 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 1st Priority Elevator, 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 1st Priority Elevator fails to make contributions in violation of the CBA, the Court may award:

(A) the unpaid contributions;
(B) interest on the unpaid ...

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