United States District Court, E.D. Pennsylvania
CARPENTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY, et al., Plaintiffs,
SALVADORA YAMILETH MARROQUN REYES, et al. Defendants.
J. PAPPERT, J.
Carpenters Joint Apprentice Committee, Carpenters Political
Action Committee of Philadelphia and Vicinity, Northeast
Regional Council of Carpenters, Interior Finish Contractors
Association of Delaware Valley, John Ballantyne and various
Benefit Funds (collectively “Plaintiffs”) sued
Salvadora Yamileth Marroquin Reyes, doing business as Y &
F Campos Construction, and Francisco Campos (collectively
“Defendants”). The Plaintiffs allege the
Defendants failed to pay contributions pursuant to the
parties' Collective Bargaining Agreement
(“CBA”), in violation of the Labor Management
Relations Act (“LMRA”) and Employee Retirement
Income Security Act (“ERISA”). (Compl. at 6-8,
ECF No. 1.) Neither Defendant pled nor otherwise defended the
lawsuit, and the Clerk of Court entered default on January 3,
2018. (ECF No. 5.) The Plaintiffs moved for default judgment
on February 12, 2018 (ECF No. 6), and seek unpaid
contributions, interest, liquidated damages, audit costs,
attorneys' fees and costs, and equitable relief. The
Court grants the Motion in part and denies it in part for the
reasons that follow.
consequence of “the entry of a default judgment is that
the factual allegations of the complaint, except those
relating to the amount of damages, will be taken as
true.” Comdyne I, Inc. v. Corbin, 908 F.2d
1142, 1149 (3d Cir. 1990) (citations and internal question
marks omitted). The Court need not, however, accept the
moving party's legal conclusions. Id.; see
also DirecTV, Inv. V. Asher, No. 03-1969, 2006 WL
680533, at *1 (D.N.J. Mar. 14, 2006) (citing 10 A Wright
& Miller, Federal Practice and Procedure, §
2688, at 58-59 (3d ed. 1998)).
allege that Campos and Reyes were owners of an unincorporated
business, Y & F Campos Construction (“the
Company”). (Compl., ¶¶ 11-13.) Campos signed
a CBA with the Plaintiffs on behalf of the Company, listing
himself as the owner. (Compl., Ex. 1 (“CBA”) at
60, ECF No. 1-4; Mot., Ex. 1 (“Letushko Decl.”),
¶ 8, ECF No. 6-4.) The CBA imposes certain obligations
on the Company, including: (1) payment of contributions for
work performed by the Company's employees; (2) reporting
contributions and deductions for all work performed by those
employees; and (3) payment of interest, liquidated damages,
audit costs and attorneys' fees and costs if the Company
is delinquent in making payments required by the CBA. (CBA,
Art. 19, §§ 2, 4(A), 5, 6(B).) The CBA also
provides that the Plaintiffs may audit the Company's
records to ensure compliance with the agreed upon payment
obligations. (Id., Art. 19, § 11.)
Letushko, Plaintiffs' collections manager, audited the
Company's records for the time period from February to
November 2017 and found that the Company owed the Plaintiffs
at least $3, 063.46 in unpaid contributions. (Letushko Decl.,
¶ 15.) Based on this audit, Letushko also determined
that the Company owed $111.22 in accrued interest on the
unpaid contributions, $306.35 in liquidated damages, and an
audit fee of $250.00. (Id.) The Plaintiffs sent
letters to Campos on May 5 and October 16, 2017, requesting
an audit of the Defendants' records to verify the
accuracy of contributions and demanding payment of delinquent
contributions. (Compl., Exs. 6, 7.) Despite repeated demands,
the Defendants failed to comply with an audit or pay the
amounts due. (Mot. at 4.)
55(b)(2) authorizes a court to enter a default judgment
against a properly served defendant who fails to file a
timely responsive pleading. See Anchorage Assocs. v. V.I.
Bd. of Tax Review, 922 F.2d 168, 177 n.9 (3d Cir. 1990).
Three factors guide whether default judgment should be
granted: (1) prejudice to the plaintiff if default judgment
is denied; (2) whether the defendants appear to have a
litigable defense; and (3) whether the defendants' delay
is due to culpable conduct. Chamberlain v. Giampapa,
210 F.3d 154, 164 (3d Cir. 2000) (citing United States v.
$55, 518.05 in U.S. Currency, 728 F.2d 192, 195 (3d Cir.
of the Chamberlain factors supports entry of default
judgment. First, denying the motion will prejudice the
Plaintiffs. “Considerable delays, ” especially
those that might “stretch on indefinitely, ” are
sufficient to show prejudice to the plaintiff. Grove v.
Rizzi 1857 S.P.A., No. 04-2053, 2013 WL 943283, at *2
(E.D. Pa. Mar. 12, 2013). The Defendants failed to answer or
otherwise respond, compelling the Plaintiffs to seek a
default judgment. See, e.g., Moody Nat'l FFI
Meadowlands Mt, LLC v. Gager, No. 12-2124, 2013 WL
622128, at *10 (D.N.J. Jan 24, 2013); see also
Carpenters Health & Welfare Fund v. Bold & Clauss
Constr., Inc.., No. 05-4858, 2006 WL 782051, at *2 (E.D.
Pa. Mar. 23, 2006) (noting prejudice arising from delinquent
contributions to multiemployer plans). Further, it does not
appear that the Defendants have a litigable defense; courts
in this district have considered the failure to respond to
the Complaint to suggest a lack of a litigable defense.
See, e.g., Serv. Employees Int'l Union Local
32BJ District 36 v. ShamrockClean Inc., No. 17-5380,
2018 WL 1124270, at *2 (E.D. Pa. Feb. 26, 2018); Joe Hand
Promotions, Inc. v. Yakubets, 3 F.Supp.3d 261 (E.D. Pa.
2011). Finally, the Defendants' failure to “engage
[ ] in the litigation process” constitutes
“culpable conduct with respect to the entry of a
default judgment-indeed, for the Court to conclude otherwise
would be to reward the recalcitrant or the oppositional and
uncooperative.” E. Elec. Corp. of N.J. v. Shoemaker
Constr. Co., 657 F.Supp.2d 545, 554 (E.D. Pa. 2009);
see also Bricklayers & Allied Craftworkers Local 1 of
PA/DE v. WaterControl Servs., Inc., No. 09-3935, 2012 WL
3104437, at *6 (E.D. Pa. July 30, 2012). The Defendants were
served with the Complaint and put on notice as to their
obligation to file a responsive pleading. (ECF Nos. 3 &
4.) The “equities of the situation and the need for
efficacious resolution of controversies” thus weigh in
favor of entering default judgment. Summit Tr. Co. v.
Paul Ellis Inv. Assocs., LLC, No. 12-6672, 2013 WL
3967602, at *4 (E.D. Pa. Aug. 2, 2013) (quoting Hritz v.
Woma Corp., 732 F.2d 1178, 1181 (3d Cir. 1984)).
seek, pursuant to both the LMRA and ERISA, unpaid
contributions along with interest, liquidated damages and
attorneys' fees and costs for violations of the CBA. 29
U.S.C. § 185; 29 U.S.C. § 1145. Plaintiffs also
seek audit costs and ask the Court to compel the Defendants
to submit to an additional audit. (Mot. at 6-7, 14-18.)
Section 301 of the LMRA “creates a federal cause of
action for breach of a [CBA].” Bricklayers,
175 F.Supp.3d at 493 (citing 29 U.S.C. § 185); see
also Caterpillar Inc. v. Williams, 482 U.S. 386, 394
(1987) (“Section 301 governs claims founded directly on
rights created by collective-bargaining agreements, and also
claims substantially dependent on analysis of a
collective-bargaining agreement.”) (internal quotations
omitted). Although the LMRA confers a federal cause
of action, “liability is determined by an analysis of
the CBA itself.” Bricklayers, 175 F.Supp.3d at
493 (citing Rosen v. Hotel & Rest. Emp. &
Bartenders Union of Phila., Bucks, Montgomery & Delaware
Cntys., Pa., 637 F.2d 592, 597 (3d Cir. 1981)).
counsel has submitted a certification for the amount due,
which includes $3, 063.46 in unpaid contributions at the time
the suit commenced. See (Ex. 4, ECF No. 1-8;
Letushko Decl. ¶¶ 9, 15(a)). Plaintiffs also seek
interest on the unpaid contributions at the rate provided by
the CBA, which requires that the interest be calculated in
accordance with ERISA, incorporating the rate prescribed
under 26 U.S.C. § 6621(a). See (Art. 19, §
6(B)). Plaintiffs are entitled to four percent interest on
the unpaid contributions, compounded monthly, from the date
the contributions were due until the time this suit
commenced. See United Auto. Workers Local 259 Soc. Sec.
Dep't v. Metro Auto Ctr., 501 F.3d 283, 289 (3d Cir.
2007) (interpreting claim for interest on unpaid
contributions under ERISA to include interest “on
contributions unpaid at the time the suit is filed.”);
see also ShamrockClean, 2018 WL 1124270 at *2
(awarding 4% interest rate as prescribed by 26 U.S.C. §
6621(a)). The contributions were due March 2017, and the
Plaintiffs commenced suit in November of that year.
Accordingly, Plaintiffs are entitled to $93.14 in interest ...