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Int'l Bhd. of Elec. Workers Local No. 43 Pension, Annuity and Health v. Kay-R Elec. Corp.; Kevin M. O'connor

January 19, 2011

INT'L BHD. OF ELEC. WORKERS LOCAL NO. 43 PENSION, ANNUITY AND HEALTH AND WELFARE FUNDS; CENT. NEW YORK JOINT APPRENTICESHIP AND TRAINING COMM. FOR THE ELEC. INDUS.; NAT'L ELEC. BENEFIT FUND; CENT. NEW YORK LABOR-MGMT. COOPERATION COMM.; NECA-IBEW NAT'L LABOR-MGMT. COOPERATION COMM. TRUST FUND; I.B.E.W. LOCAL UNION NO. 43; AND FINGER LAKES NEW YORK CHAPTER, NAT'L ELEC.CONTRACTORS ASS'N,*FN1 PLAINTIFFS,
v.
KAY-R ELEC. CORP.; KEVIN M. O'CONNOR, INDIVIDUALLY AND AS AN OFFICER OF KAY-R ELECTRIC CORP.; PHILLIP O'CONNOR, INDIVIDUALLY AND AS AN OFFICER OF KAY-R ELECTRIC CORP.; AND JEFFREY HANRETTY, INDIVIDUALLY AND AS AN OFFICER OF KAY-R ELECTRIC CORP., DEFENDANTS.



The opinion of the court was delivered by: Hon. Glenn T. Suddaby, United States District Judge

MEMORANDUM-DECISION and ORDER

Currently pending before the Court in this Employee Retirement Income Security Act ("ERISA") action filed by the seven above-captioned unions and union trust funds ("Plaintiffs") against Kay-R Electric Corporation, Kevin M. O'Connor, Phillip O'Connor and Jeffrey Hanretty, ("Defendants") is Plaintiffs' motion for partial default judgment. (Dkt. No. 24.) For the reasons stated below, Plaintiffs' motion is granted in part and denied in part without prejudice.

I. RELEVANT BACKGROUND

A. Plaintiffs' Complaint

Liberally construed, Plaintiffs' Complaint asserts the following claims against Defendants: (1) violation of 29 U.S.C. §1145; (2) violation of 29 U.S.C. §1104; (3) violation of 29 U.S.C. §1106; and (4) violation of 29 U.S.C. §1109.*fn2 (See generally Dkt. No. 1.) Generally, in support of those claims, Plaintiffs' Complaint alleges as follows: (1) Defendants failed to make contributions to various union pension plans; (2) Defendants failed to timely remit contributions and deductions; (3) Defendants impermissibly used the assets and interest of Plaintiffs' fiduciaries, participants and beneficiaries; and (4) Defendants have continuously failed to comply with their obligations to Plaintiffs, despite Plaintiffs' demand for compliance. (Id.)

B. Plaintiffs' Service of Complaint and Defendant Hanretty's Answer

On February 2, 2009, Plaintiffs properly served their Complaint on Defendants Kay-R Electric Corporation and Kevin O'Connor. (Dkt. No. 5, 6.) On February 5, 2009, Plaintiffs properly served their Complaint on Defendant Jeffrey Hanretty. (Dkt. No. 7.) On March 15, 2009, Defendant Hanretty filed an Answer to Plaintiffs' Complaint. (Dkt. No. 8.) On May 28, 2009, Plaintiffs served Defendant Phillip O'Connor by certified mail. (Dkt. No. 18.)*fn3

C. Clerk's Entry of Default Against Non-Answering Defendants

On May 21, 2009, after the deadline to file an Answer expired, Plaintiffs filed a request for entry of default against Defendants Kay-R Electric Corporation and Kevin O'Connor, who had yet to appear in this action. (Dkt. No. 14.) On that same day, a Clerk's entry of default was issued against these two Defendants, pursuant to Fed. R. Civ. P. 55(a). (Dkt. No. 15.)

On October 20, 2009, after the deadline to file an Answer expired, Plaintiffs filed a request for entry of default against Defendant Phillip O'Connor, who had yet to appear in this action. (Dkt. No. 21.) On October 22, 2009, a Clerk's entry of default was issued against this Defendant, pursuant to Fed. R. Civ. P. 55(a). (Dkt. No. 23.)

As of the date of this Decision and Order, Defendants Kay-R Electric Corporation, Kevin O'Connor and Phillip O'Connor (hereinafter "the defaulting Defendants") have not appeared and attempted to cure the entries of default. (See generally Docket Sheet.)

D. Plaintiffs' Motion for Partial Default Judgment and the Defaulting Defendants' Non-Response

On March 18, 2010, Plaintiffs filed a motion for partial default judgment against the defaulting Defendants, pursuant to Fed. R. Civ. P. 54(b) and 55(b). (Dkt. No. 24.)*fn4 As of the date of this Decision and Order, the defaulting Defendants have filed no response to that motion. (See generally Docket Sheet.)

Generally, in support of their motion for partial default judgment, Plaintiffs argue as follows: (1) a delay in allowing Plaintiffs to enforce their claim and to collect the debt may result in the debt being uncollectible; (2) Defendants Kevin O'Connor and Phillip O'Connor, as corporate officers and fiduciaries of Defendant Kay-R Electric Corporation, are individually liable for failing to deliver contributions; (3) the defaulting Defendants are contractually obligated to pay interest, liquidated damages and attorneys' fees and costs in connection with the late payment of contributions, regardless of whether those contributions are paid prior to or subsequent to commencement of a lawsuit; and (4) Plaintiffs are statutorily entitled to an award of the attorneys' fees and costs incurred in connection with the collection of the fringe benefit contributions and deductions. (Dkt. No. 24, ...


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