United States District Court, W.D. New York
ROCHESTER LABORERS' WELFARE-S.U.B. FUND by Robert Brown as Chairman, and Daniel Hogan as Secretary, et al., Plaintiffs,
JOURNEE CONSTRUCTION, INC., et al., Defendants.
DECISION AND ORDER
G. LARIMER UNITED STATES DISTRICT JUDGE.
the Rochester Laborers' Welfare-S.U.B. Fund, Rochester
Laborers' Pension Fund, Rochester Laborers Annuity Fund,
Rochester Laborers' Apprentice and Training Fund, and the
International Union of North America, Local Union No. 435,
(collectively “plaintiffs”) by their principals,
commenced this action against defendants Journee
Construction, Inc. and its officer Orville P. Dixon
(“defendants”) to enforce the provisions of a
collective bargaining agreement (“CBA”). This
action is brought pursuant to Section 1132 of the Employee
Retirement Income Security Act, 29 U.S.C. §1001 et seq.,
and the Labor Management Relations Act, 29 U.S.C. §185
et seq. Plaintiffs seek a money judgment against defendants,
including compensatory and liquidated damages, interest,
costs and attorneys' fees, for failure to timely remit
fringe benefit contributions and deductions that were owed to
the plaintiffs under the CBA, and for breach of fiduciary
duty by the individual defendant. (Dkt. #1).
were served with process on or about April 18, 2015 (Dkt. #4)
but failed to timely appear or to answer the complaint. The
Clerk entered an initial Entry of Default on July 16, 2015.
(Dkt. #7). Plaintiffs moved for a default judgment pursuant
to Fed. R. Civ. Proc. 55(b)(2) on December 2, 2015. (Dkt.
#8). Defendants appeared for the first time on or about
January 4, 2016, opposing the motion for default judgment and
seeking to vacate the entry of default and extend their time
to answer the complaint. (Dkt. #14). On July 12, 2016, (Dkt.
#17) the Court denied the motion for default judgment,
vacated the entry of default, and allowed defendants until
July 27, 2016 to answer the complaint. Defendants failed to
file an answer, and on August 22, 2016, the Clerk filed a
second Entry of Default. (Dkt. #19).
now move, once again, for a default judgment pursuant to Fed.
R. Civ. Proc. 55(b)(2). Plaintiffs seeks $51, 844.12, plus
interest, in damages against Journee, and $31, 753.93, plus
interest, in damages against Dixon. (Dkt. #31). For the
reasons set forth below, that motion is granted.
ALLEGATIONS IN THE COMPLAINT
to the complaint, between September 2013 through March 2014,
Journee performed work for plaintiffs under a Project Labor
Agreement (“PLA”). The PLA incorporated the
plaintiffs' CBA, which set forth the rates at which
Journee was required to remit contributions and deductions to
the plaintiffs. The PLA and CBA provided that if
contributions were not timely remitted, Journee would be
responsible to pay, inter alia, the amount due, plus interest
and liquidated damages. They further provided that in the
event that Journee violated its obligations, it would be
liable for audit fees related to plaintiffs' attempts to
collect the debt.
appears to be no dispute that defendants did not timely
remit, and have never paid, a portion of the contributions
and deductions owed to the plaintiffs under the CBA.
Plaintiffs allege that they are entitled to the full amount
of unpaid contributions, plus interest, liquidated damages,
costs and attorneys' fees. Plaintiffs have also asked
that Journee be ordered to provide its books and records for
the period of March 24, 2014 to date, and that Journee be
required to pay for additional auditing to be performed to
cover that time period, in order to assess what additional
damages may have accrued.
FOR DEFAULT JUDGMENT
in order to secure a default judgment, a party must first
secure the clerk's entry of default by demonstrating, by
affidavit or in some other manner, that the opposing party is
in default. See Fed. R. Civ. Proc. 55(a);
J&J Sports Prods. v. Bimber, 2008 U.S. Dist.
LEXIS 39174 at *2 (W.D.N.Y. 2008). Once a default has been
entered, the Court will accept as true the allegations of the
complaint that establish the defendant's liability, and
will carefully scrutinize those relating to the amount of
damages. Id., 2008 U.S. Dist. LEXIS 39174 at *3-*4
(citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty
Corp., 973 F.2d 155, 158 (2d Cir. 1992)).
Clerk has entered defendants' default and plaintiffs have
shown that they are entitled to judgment against defendants.
However, the Court cannot merely accept at face value that
plaintiffs are entitled to the particular relief they seek.
Rather, “judgment against a defaulting party should be
granted only after careful examination of the moving
party's claim by the district court. . . . Indeed, a
defendant's default does not in itself warrant a court in
entering a default judgment [because] there must be a
sufficient basis in the pleadings for the judgment
entered.” Bianco v. Seaway Indus. Services,
Inc., 2004 U.S. Dist. LEXIS 7368 at *4 (W.D.N.Y. 2004)
(quoting Enron Oil Corp. v. Masonori Diakuhara, 10
F.3d 90, 95-96 (2d Cir.1993)). Furthermore, the Second
Circuit cautions that “defaults are generally
disfavored and are reserved for rare occasions, ” and
when there is doubt as to the propriety of default relief,
“the doubt should be resolved in favor of the
defaulting party.” Enron Oil Corp., 10 F.3d 90
at 96. The Court, therefore, must evaluate the merits of
plaintiffs' claims and the relief they seek. See
Wagstaff-el v. Carlton Press Co., 913 F.2d 56, 57 (2d
reviewed the allegations in the complaint, as well as the
terms of the underlying agreements, in detail. I accept as
true plaintiffs' allegations that Journee has failed to
remit the required fringe benefit contributions and
deductions owed to plaintiffs, and that Dixon's failure
to fulfill his fiduciary duty to oversee timely payment
resulted in a loss of investment income to plaintiffs. I have
examined plaintiffs' documentary evidence in support of
their claims, including copies of the CBA and PLA, affidavits
supporting plaintiffs' calculations of amounts due,
interest and liquidated damages, affidavits supporting the
claimed prior audit costs, and affidavits concerning
attorneys' fees and costs, all of which substantiate the
plaintiffs' damages claims.
response to plaintiffs' instant motion, defendants freely
acknowledge that “funds were owed” (Dkt. #36 at
3; Dkt. #36-1 at ¶11), but dispute the amount, alleging
that some of the funds sought are for non-union employees to
whom contributions could be paid directly.
submissions are unaccompanied by supporting evidence in
admissible form, and fail to credibly challenge
plaintiffs' claims or their damages calculations. To the
extent that defendants claim that the six employees at issue
signed waivers agreeing to receive their contributions
directly, they have made no showing that they met the
conditions necessary under the PLA to avoid the payment of
contributions to the plaintiffs (e.g., that defendants paid
the contributions to the employees in cash, or remitted
contributions to the defendants' own bona fide employee
plans). (Dkt. #31, Kuntz Aff., ¶¶11-12). I am
convinced that plaintiffs have established their claims that
the defendants failed to make the required contributions and
that plaintiffs are entitled to default judgment on those
claims, along with interest, liquidated damages, costs and
attorneys' fees, pursuant to the CBA's Trusts and
Collections Policy. I have reviewed the plaintiffs'
application for attorneys fees, including time records, and
find that the lodestar rate requested, which averages
$300/hour of senior counsel time and $165/hour of paralegal
time, is reasonable and consistent with prevailing rates in
the community for attorneys of comparable skill and
experience. See e.g., Dunda v. Aetna Life Ins.
Co., 2016 U.S. Dist. LEXIS 125946 (W.D.N.Y. 2016)
(hourly rate of $320/hour for experienced counsel in an ERISA
case is reasonable and appropriate). The Court also ...