United States District Court, S.D. New York
TRUSTEES OF THE NEW YORK CITY DISTRICT COUNCIL OF CARPENTERS PENSION FUND, WELFARE FUND, ANNUITY FUND, and APPRENTICESHIP, JOURNEYMAN RETRAINING, EDUCATIONAL AND INDUSTRY FUND, and TRUSTEES OF THE NEW YORK CITY CARPENTERS RELIEF AND CHARITY FUND, Plaintiffs,
VINTAGE TILE AND FLOORING, INC. and VINTAGE FLOORING N TILE OF NY, INC., Defendants.
OPINION & ORDER
KATHERINE B. FORREST, District Judge.
On August 13, 2014, plaintiffs Trustees of the New York City District Council of Carpenters Pension Fund, Welfare Fund, Annuity Fund, and Apprenticeship, Journeyman Retraining, Educational and Industry Fund, and Trustees of the New York City Carpenters Relief and Charity Fund (collectively, "the Funds" or "plaintiffs") filed this action against defendants Vintage Flooring and Tile, Inc. ("Vintage 1") and Vintage Flooring N Tile of NY, Inc. ("Vintage 2") (collectively, "defendants"), alleging failure to pay required contributions to a group of employee benefit plans pursuant to section 502(a)(3) of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended, 29 U.S.C. § 1132(a)(3), and section 301 of the Labor Management Relations Act of 1974 ("LMRA"), as amended, 29 U.S.C. § 185. (ECF No. 1 ("Compl.").) The Funds also alleged that Vintage 2 is the alter ego, successor, or predecessor of Vintage 1, or that Vintage 1 and Vintage 2 constitute a single employer, and that therefore Vintage 2 should be held jointly and severally liable with Vintage 1 for a previous judgment entered against Vintage 1 and sanctions entered against Vintage 1 for frustrating the enforcement of that judgment. (See Compl. ¶¶ 20, 23-27.)
Plaintiffs subsequently filed an amended complaint (the "Complaint") on December 18, 2014. (ECF No. 15 ("Am. Compl.").) The Funds served the summons and first amended complaint on Vintage 1 and 2 by personal service, at the office of the New York State Secretary of State, on December 24, 2014. (ECF Nos. 19-20.) Pursuant to Federal Rule of Civil Procedure 12(a)(1)(A)(i), the latest deadline for defendants to answer plaintiff's complaint was January 14, 2015.
Under Rule 55 of the Federal Rules of Civil Procedure, a court must follow a two-step process before entering default judgment. First, under Rule 55(a), the Clerk of Court must determine that the party against whom a judgment for affirmative relief is sought has failed to "plead or otherwise defend" itself, and then enter that party's default. See Fed.R.Civ.P. 55(a). Second, under Rule 55(b)(2), the party seeking affirmative relief must apply to the court for a default judgment. See Fed.R.Civ.P. 55(b)(2).
On February 13, 2015, the Funds obtained certificates of default against defendants. (ECF No. 21.) On April 24, 2015, the Funds filed a motion for default judgment, which the Funds served on defendants on April 24, 2015. (ECF Nos. 24-28.) On April 27, 2015, the Court ordered defendants to appear and show cause why default judgment should not enter against them at a hearing on May 26, 2015. (ECF No. 29.) The Funds served this order, and again served the default judgment materials on defendants on April 29, 2015. (ECF No. 30.) Defendants did not appear at the May 26, 2015 hearing, and have not appeared or sought to defend themselves at any time during this litigation.
For the reasons set forth below, the Court hereby enters default judgment against defendants.
Before entering a default judgment, the Court must review the complaint to determine whether plaintiff has stated a valid claim for relief. See, e.g., City of New York v. Mickalis Pawn Shop, LLC, 645 F.3d 114, 137 (2d Cir. 2011); Young-Flynn v. Wright, No. 05 Civ. 1488, 2007 WL 241332, at *24 (S.D.N.Y. Jan. 26, 2007) ("A default judgment is inappropriate where a plaintiff has failed to state a cause of action against the allegedly defaulting defendant, regardless of whether the defendant filed a prompt response, or any response at all.").
For the reasons set forth below, the Court finds that the facts alleged in the complaint support defendants' liability under ERISA § 515 and Vintage 2's liability for Vintage 1's obligations under the previous judgment.
In this case, the Funds assert two claims for relief: (1) defendants' violation of ERISA § 515, 29 U.S.C. § 1145, and (2) Vintage 2's joint and several liability for a separate judgment that plaintiffs previously obtained against Vintage 1. (Am. Compl. ¶¶ 9-27.)
1. ERISA § 515
ERISA § 515 provides that "every employer who is obligated to make contributions to a multiemployer plan... under the terms of a collectively bargained agreement shall... make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145. Upon a finding that an employer has violated § 515, the employer is liable for damages under ERISA § 502(g)(2). See 29 U.S.C. § 1132(g)(2).
a. Liability of Vintage 1
Here, the Funds have pleaded sufficient facts to establish Vintage 1's liability for a violation of ERISA § 515. First, the Funds allege that Vintage 1 entered into a collective bargaining agreement (the "CBA") with the District Council of New York City and Vicinity of the United Brotherhood of Carpenters and Joiners of America, AFL-CIO (the "Union") on November 24, 2008. (Am. Compl. ¶ 11; Declaration of Luke Powers, ECF No. 26 ("Powers Decl.") ¶¶ 2-3 & ex. A.) Second, the Funds allege that Vintage 1 was required to make "specified hourly contributions to the Funds in connection with all work performed in the trade and geographical jurisdiction of the Union, " and to furnish its books and payroll records upon request in order to conduct an audit and ensure compliance with required benefit fund contributions. (Am. Compl. ...