BRICKLAYERS AND ALLIED CRAFTWORKERS LOCAL 2, ALBANY, NEW YORK PENSION FUND, BY ITS ADMINISTRATOR, STEPHEN J. O'SICK; BRICKLAYERS AND ALLIED CRAFTWORKERS LOCAL 2, ALBANY, NEW YORK HEALTH BENEFIT FUND, BY ITS ADMINISTRATOR, STEPHEN J. O'SICK; BRICKLAYERS AND ALLIED CRAFTWORKERS LOCAL 2 ANNUITY FUND, BY ITS ADMINISTRATOR, STEPHEN J. O'SICK; BRICKLAYERS AND ALLIED CRAFTWORKERS LOCAL 2, ALBANY, NEW YORK EDUCATION & TRAINING FUND, BY ITS TRUSTEES, ROBERT MANTELLO, PASQUALE TIRINO, LUKE RENNA, MICHAEL SUPRENANT, J.D. GILBERT, THOMAS MARINELLO, TODD HELFRICH AND LAURA REGAN; BRICKLAYERS AND TROWEL TRADES INTERNATIONAL PENSION FUND, BY DAVID STUPAR, EXECUTIVE DIRECTOR; BRICKLAYERS AND ALLIED CRAFTWORKERS LOCAL 2, ALBANY, NEW YORK; AFLCIO, BY ROBERT MANTELLO, PRESIDENT, Plaintiffs-Appellees,
MOULTON MASONRY & CONSTRUCTION, LLC AND DUANE E. MOULTON, INDIVIDUALLY AND AS AN OFFICER OF MOULTON MASONRY & CONSTRUCTION, LLC, Defendants-Appellants,
Argued January 12, 2015
Appeal from an amended judgment entered on January 16, 2014, by the United States District Court for the Northern District of New York (Hurd, Judge), denying defendants' motion to vacate a default previously entered against them and granting plaintiffs' motion for a default judgment for $662,135.21 against defendants. We conclude that the district court did not abuse its discretion by entering a default against the defendants. We further conclude that the district court did not abuse its discretion by entering a default judgment for $662,135.21 against Moulton Masonry & Construction, LLC. The district court did, however, err by entering a default judgment against Duane Moulton in his individual capacity which included liquidated damages as well as prejudgment interest and attorney's fees without articulating a justification for doing so. Accordingly, the decision of the district court is AFFIRMED in part; VACATED and REMANDED in part for further proceedings in accordance with this Opinion.
JENNIFER A. CLARK (Daniel Kornfeld, on the brief), Blitman & King LLP, Syracuse, NY, for Plaintiffs-Appellees.
Brian M. Quinn, Tabner, Ryan and Keniry, LLP, Albany, NY, for Defendants-Appellants.
Before: KATZMANN, Chief Judge, KEARSE and RAGGI, Circuit Judges.
Defendants-Appellants Moulton Masonry & Construction, LLC (" the corporate defendant" ), and Duane E. Moulton (" the individual defendant" ), appeal from an amended judgment entered on January 16, 2014 by the United States District Court for the Northern District of New York (Hurd, J.). In that order, the district court denied defendants' cross-motion to vacate the default entered on April 24, 2013, and granted plaintiffs' motion for a default judgment against both defendants for $662,135.21. This amount--for which the defendants were held jointly and severally liable--accounts for $451,300.52 in withheld fringe benefit contributions and deductions, $104,628.81 in prejudgment interest through October 21, 2013, $99,203.93 in liquidated damages, and $7,001.95 in attorney's fees and costs. We AFFIRM the denial of the defendants' motion to vacate the entry of default. We further AFFIRM the entry of a default judgment for $662,135.21 against the corporate defendant. Because the district court erred in calculating the damages entered against the individual defendant, however, we VACATE the default judgment entered against the individual defendant and REMAND for further proceedings in accordance with this Opinion.
On July 13, 2009, Moulton Masonry & Construction, LLC, became a signatory to a collective bargaining agreement (" CBA" ) with the Bricklayers and Allied Craftworkers, Local 2 in Albany, New York (" the Union" ). Among other obligations, the CBA required the corporate defendant to make contributions to the Union's Pension, Health Benefit, Annuity, and Education and Training Funds, as well as to the Bricklayers & Trowel Trades International Pension Fund (" the plaintiff funds" ) and to remit deductions from the Union workers' paychecks to those funds in accordance with stipulated schedules. The CBA also required the corporate defendant to submit to an audit of its books upon request
and bound it to the Agreements and Declarations of the Trust as well as the Funds' Collection Policy. Duane Moulton, as the owner, officer, and shareholder of the corporate defendant, signed the CBA, reported the hours worked by union members to the plaintiff funds, and communicated with the auditor on the corporate defendant's behalf.
In the spring of 2012, the plaintiff funds initiated a payroll audit of the corporate defendant pursuant to the terms of the CBA. Moulton, however, failed to comply with repeated requests from the auditor. The plaintiff funds, therefore, instituted the present action in federal court. Moulton and the corporate defendant received the Summons and Complaint on February 27, 2013 and March 5, 2013 respectively. On March 28, 2013, the plaintiff funds' counsel received a letter from Raeann C. Johnson, an attorney in Corinth, New York, requesting an extension of time to file an answer on behalf of the corporate defendant. Although the plaintiff funds agreed to this request on March 29, 2013, neither the individual nor the corporate defendant ever filed an answer or other responsive pleading. As a result of this failure, on April 24, 2013, the plaintiff funds requested that the court enter a default and served a copy of that request on the defendants. The district court clerk entered the default on that same day.
Though the defendants continued to ignore the judicial proceedings, Moulton did begin to work with the plaintiffs' auditor--although the exact extent of that participation is disputed by the parties. On May 2 and May 7, 2013, the plaintiffs advised the defendants of the audit's preliminary findings. The plaintiffs represent that they served their first discovery requests on June 5, 2013. On June 16, 2013, the defendants acknowledged receipt of the audit, and after several e-mails from the auditor requesting a response, Moulton replied with five proposed revisions on July 1, 2013. These revisions were specific to individual employees and did not challenge the audit methodology or raise any concerns about " out of trade hours." On July 16, 2013, plaintiffs sent a letter to ...