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Ufcw Local One Pension Fund, and Its Trustees Frank C. Deriso, John P. Barrett v. Natoli Independent Retailers

October 9, 2012

UFCW LOCAL ONE PENSION FUND, AND ITS TRUSTEES FRANK C. DERISO, JOHN P. BARRETT, ROBERT BOEHLERT, ERIC GLATHAR, KRISTINE WYDRO, AND RAYMOND WARDYNSKI; AND UFCW LOCAL ONE HEALTH CARE FUND, AND ITS TRUSTEES FRANK C. DERISO, JOHN P. BARRETT, ROBERT BOEHLERT, ERIC GLATHAR, KRISTINE WYDRO, AND RAYMOND WARDYNSKI, PLAINTIFFS,
v.
NATOLI INDEPENDENT RETAILERS, INC., DOING BUSINESS AS GREAT AMERICAN --CINCINNATUS, DEFENDANT.



MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

Plaintiffs UFCW Local One Pension Fund ("Pension Fund") and UFCW Local One Health Care Fund ("Health Fund"), along with Fund Trustees Frank C. DeRiso, John P. Barrett, Robert Boehlert, Eric Glathar, Kristine Wydro, and Raymond Wardynski (collectively, "Plaintiffs") brought this action against Defendant Natoli Independent Retailers, Inc. doing business as Great American -- Cincinnatus ("Defendant") to collect delinquent payments to a multiemployer pension plan pursuant to the Employee Retirement Income Security Act ("ERISA"). Dkt. No. 1 ("Complaint") at 1-2. After Defendant failed to answer, Plaintiffs filed a Request for entry of default on June 11, 2012. Dkt. No. 5. The Clerk of the Court executed a Certificate of default on June 12, 2012. Dkt. No. 6. Presently before the Court is Plaintiffs' Motion for default judgment, filed on July 13, 2012. Dkt. No. 7 ("Motion"). For the reasons that follow, Plaintiffs' Motion is granted.

II. BACKGROUND

Plaintiffs allege in the Complaint that both the Pension Fund and Health Fund are multiemployer benefit plans within the meaning of §§ 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3) and 1002(37), and are intended to provide retirement and health benefits, respectively, to eligible employees. Compl. ¶¶ 2, 7. Plaintiffs further allege that the United Food and Commercial Workers District Local One ("Union") and Defendant were parties to collective bargaining agreements ("agreements") obligating Defendant to make certain contributions to both the Pension Fund and the Health Fund. Id. ¶¶ 13, 28.

According to Plaintiffs, Defendant failed to make required contributions to the Pension Fund for the months of June 2008 through October 2008, December 2008, March 2009 through September 2009, and December 2009 through March 2010, and owes the Pension fund $7,083.86 in delinquent contributions for this period. Id. ¶ 17. Payroll audits conducted for calendar years 2008 and 2009 determined that Defendant owed an additional $992.55 and $266.14, respectively, in delinquent contributions to the Pension Fund. Id. ¶¶ 19-20. On April 18, 2011, counsel to the Pension Fund sent a demand letter notifying Defendant that it failed to pay delinquent contributions and interest for the period January 2008 through March 2010. Id. ¶ 21.

The Board of Trustees of the Pension Fund determined that Defendant effected a "complete withdrawal" pursuant to ERISA § 4203 on April 15, 2010, when Defendant ceased all of its operations covered by the Pension Fund. Id. ¶ 22. On June 10, 2011, the Pension Fund notified Defendant that, as a result of that determination, Defendant owed "withdrawal liability" in the amount of $60,022.00 and provided an installment payment schedule with the first payment due July 1, 2011. Id. ¶ 23.

Defendant did not submit the first installment payment by the July 1, 2011 due date. Id. ¶ 24. On September 29, 2011, the Pension Fund advised Defendant that it was delinquent in its "withdrawal liability" payment and would be in default if it did not pay within sixty days. Id. ¶ 25. On December 28, 2011, the Pension Fund advised Defendant that because the Pension Fund had not received payment within sixty days, Defendant was in default. Id. ¶ 26.

Plaintiffs also allege that Defendant failed to pay required contributions to the Health Fund for the months of December 2009 through March 2010 and owes the Fund $9,654 in delinquent contributions for that period. Id. ¶ 32. Further, in May 2010, the Health Fund conducted a payrull audit for calendar year 2009 and determined that Defendant owed $256.00 in delinquent contributions to the Fund. Id. ¶ 34. On April 18, 2011, counsel to the Health Fund sent a demand letter notifying Defendant that it owed the Health Fund delinquent contributions and interest for the months of January 2009 through March 2010. Id. ¶ 35.

According to Plaintiffs, Defendant owes the Pension Fund $60,022.00 for withdrawal liability, $8,341.75 for delinquent contributions, $4,959.63 for interest, and $13,672.35 for liquidated damages. Mot. at 2. Plaintiffs claim that Defendant owes the Health Fund a total of $13,759.07, including $9,910.00 for delinquent contributions, $1,867.07 for interest, and $1,982.00 for liquidated damages. Id. Plaintiffs also seek a total of $6,791.99 for attorneys' fees and costs. Id.

III. DISCUSSION

A. Standard of Review

After the clerk has filed an entry of default against a party that has failed to plead or otherwise defend, a court may enter default judgment upon application of the opposing party. FED. R. CIV. P. 55(b). Default judgment is an extreme sanction, and decisions on the merits are favored. Meehan v. Snow, 652 F.2d 274, 277 (2d Cir.1981). However, default judgment is ordinarily justified when a party fails to respond after having received proper notice. See Bermudez v. Reid, 733 F.2d 18, 21 (2d Cir. 1984). After an entry of default has been entered, all of the well-pleaded allegations in a complaint pertaining to liability are deemed true. See Transatlantic Marine Claims Agency, Inc. v. Ace Shipping Corp., 109 F.3d 105, 108 (2d Cir. 1997) (recognizing that the factual allegations in the complaint, except those relating to damages, are deemed true after default).

However, a court cannot take allegations in a complaint regarding damages as true. Credit Lyonnais Sec. (USA), Inc., v. Alcantara, 183 F.3d 151, 154-155 (2d. Cir. 1999). After establishing liability, a court must conduct an inquiry to ascertain the amount of damages with reasonable certainty. Transatlantic, 109 F.3d at 111. To determine the amount of damages in the context of a default judgment, "the court may conduct such hearings or order such references as it deems necessary and proper." FED. R. CIV. P. 55(b)(2). However, "it [is] not necessary for the District Court to hold a hearing, as long as it ensured that there [is] a basis for the damages specified in the default judgment." Fustok v. ContiCommodity Serv., Inc., 873 F.2d 38, 40 (2d Cir. 1989); see Action S.A. v. Marc Rich & Co., Inc., 951 F.2d 504, 508 (2d Cir.1991) (a full evidentiary hearing was not necessary where district judge was "inundated with ...


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