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Engineers Joint Welfare, Pension, Supplemental Unemployment Benefit and Training Funds v. Reape

June 9, 2008

ENGINEERS JOINT WELFARE, PENSION, SUPPLEMENTAL UNEMPLOYMENT BENEFIT AND TRAINING FUNDS, BY DANIEL P. HARRIGAN, AS ADMINISTRATOR; CENTRAL PENSION FUND OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS AND PARTICIPATING EMPLOYERS, BY MICHAEL R. FANNING, AS CHIEF EXECUTIVE OFFICER; AND INTERNATIONAL UNION OF OPERATING ENGINEERS LOCAL UNION NO. 106, BY DANIEL J. MCGRAW, AS BUSINESS MANAGER, PLAINTIFFS,
v.
RONALD REAPE D/B/A ATS MANAGEMENT CONSTRUCTION, DEFENDANT.



The opinion of the court was delivered by: Scullin, Senior Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiffs commenced this action on December 22, 2006. See Dkt. No. 1. On January 13, 2007, Plaintiffs served the summons and complaint in this action upon Defendant by personally delivering a copy of the same to Ronald Reape. See Affidavit of Jennifer A. Clark, sworn to August 30, 2007 ("Clark Aff."), at ¶ 5 & Exhibit "B" attached thereto. The time within which Defendant could answer or otherwise move as to the complaint expired on February 2, 2007. See id. at ¶ 7. On February 15, 2007, Plaintiffs filed and the Clerk of the Court entered a Notice of Default against Defendant for failure to plead or otherwise respond to the complaint. See id. at ¶ 8 & Exhibit "C" attached thereto.

Defendant is a party to collective bargaining agreements with the International Union of Operating Engineers, Local No. 106 ("Agreement"). Pursuant to the Agreement, Defendant must remit fringe benefit contributions and dues deductions to Plaintiffs for all hours that any of its covered employees work. Furthermore, the rules and regulations of Plaintiff Funds' Board of Trustees and the terms and conditions of Plaintiff Funds' Agreements and Declarations of Trust and the Collection Policy bind Defendant. The Agreements and Declarations of Trust, the Collection Policy, and Sections 515 and 502(g) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. § 1145, 1132(g)(2), require Defendant, if it is delinquent in remitting contributions and deductions, to pay interest, the greater of interest or liquidated damages, costs and fees of collection and attorney's fees. See Affidavit of Robert J. Jones, sworn to August 24, 2007 ("Jones Aff."), at ¶ 7 & Exhibits "A" & "B" attached thereto; Affidavit of Daniel P. Harrigan, sworn to August 27, 2007 ("Harrigan Aff."), at ¶ 9; Affidavit of Michael R. Fanning, sworn to August 20, 2007 ("Fanning Aff."), at ¶ 6.

Plaintiffs' first, third, and fourth causes of action seek judgment for $6,428.24 in fringe benefit contributions and dues deductions with regard to the hours that covered employees worked during the month of November 2005 and during the period of May 2006 through August 2006, together with interest and liquidated damages, plus attorney's fees and costs. See Clark Aff. at ¶ 9 & Exhibit "A" attached thereto at ¶¶ 25, 41, 63. In addition, Plaintiffs' second and fifth causes of action seek judgment for $108.82 in interest and $346.47 in liquidated damages plus "any and all additional contributions and deductions that become due following commencement of the action or are determined to be due whether arising before or after commencement of the action," costs and fees of collection and attorney's fees. See id. at ¶ 14 & Exhibit "A" attached thereto at ¶¶ 30, 71.

Currently before the Court is Plaintiffs' motion for entry of a default judgment, pursuant to Rule 55 of the Federal Rules of Civil Procedure, against Defendant.

II. DISCUSSION

A. Standard of Review

When a court considers a motion for the entry of a default judgment, it must "accept[] as true all of the factual allegations of the complaint . . . ." Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d Cir. 1981) (citations omitted). However, the court cannot construe the damages alleged in the complaint as true. See Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 155 (2d Cir. 1999) (citations omitted). Rather, the court must "conduct an inquiry in order to ascertain the amount of damages with reasonable certainty." Id. (citation omitted). This inquiry "involves two tasks: [1] determining the proper rule for calculating damages on such a claim, and [2] assessing plaintiff's evidence supporting the damages to be determined under this rule." Id. Finally, in calculating damages, the court "need not agree that the alleged facts constitute a valid cause of action . . . ." Au Bon Pain, 653 F.2d at 65 (citation omitted).

Section 1145 of Title 29 of the United States Code provides that

[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 U.S.C. § 1145.

If an employer violates § 1145, 29 U.S.C. § 1132(g)(2) provides that,

[i]n any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is ...


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