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Trustees of the Refrigeration v. R&M Air Solutions, LLC

United States District Court, D. New Jersey

September 28, 2017

TRUSTEES OF THE REFRIGERATION & AIR CONDITIONING SERVICE DIVISION (USA-NJ) PENSION FUND, WELFARE FUND, ANNUITY FUND and EDUCATION FUND, et al., Plaintiffs
v.
R&M AIR SOLUTIONS, LLC, Defendant.

          OPINION

          MADELINE COX ARLEO UNITED STATES DISTRICT JUDGE

         THIS MATTER comes before the Court on Plaintiff Trustees of the Refrigeration & Air Conditioning Service Division (UA-NJ) Pension Fund, Welfare Fund, Annuity Fund and Education Fund (the “Trustees”) and the New Jersey Committee Representing the United Association of Plumbers and Pipefitters of the United States and Canada's (the “Funds”) (together, “Plaintiffs”) motion for default judgment against Defendant R&M Air Solutions, LLC (“Defendant”) pursuant to Federal Rule of Civil Procedure 55(b). ECF No. 8. For the reasons set forth herein, the motion is GRANTED.

         I. Background

         This ERISA matter arises from Defendant R&M's alleged failure to remit payments to Plaintiffs in accordance with the terms of its Collective Bargaining Agreement (the “CBA”) between Plaintiff Funds and Defendant.

         Plaintiffs are trust funds established pursuant to the Labor Management Relations Act (“LMRA”) Section 302(c)(5), 29 U.S.C. § 186(c)(5), and are employee benefit plans established and maintained pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq. for the purpose of providing pension, welfare, annuity, and other benefits to eligible participants. Compl. ¶ 5, ECF No. 1. The Funds are authorized to sue in their own names pursuant to Section 502(d)(1) of ERISA, 29. U.S.C. § 1132(d)(1). Id. ¶ 6. The Trustees are fiduciaries of the Funds within the meaning of Section 3(21) of ERISA, 29 U.S.C. § 1002(21)(A) with respect to the collection of contributions due to the Funds. Id. ¶ 7.

         The Funds maintain their principal place of business in West Trenton, NJ. Id. ¶ 8. Defendant is a business located in Avenel, New Jersey. Id. ¶ 10. It is an employer within the meaning of ERISA, 29 U.S.C. § 1002(5). Id.

         At all relevant times, Defendant was a party to an Inside Agreement with one or more local unions or district councils affiliated with the Refrigeration & Air Conditioning Service Division (UA-NJ) Pension Fund, Welfare Fund, annuity Fund and Education Fund and the New Jersey Committee representing the United Association of Plumbers and Pipefitters of the United States and Canada (the “Union”). Id. ¶ 14. At all relevant times, Defendant was also a party to the Agreements and Declarations of Trust (“Trust Agreements”) that govern the Funds, as well as the Policy for Collection of Fringe Benefit Contributions (the “Policy”). Id. ¶ 15. Pursuant to ERISA, 29 U.S.C. § 1145, and the terms of the Inside Agreement, the Trust Agreements, and the Policy, Defendant agreed to: (1) remit fringe benefit contributions to the Funds in a timely manner; (2) submit monthly remittance reports to the Funds; (3) produce, upon request by the Funds, all books and records deemed necessary to conduct an audit of Defendant's records concerning its obligation to the Funds; (4) pay liquidated damages, interest, audit costs, and attorneys' fees expended by the Funds to collect any amounts due as a consequence of Defendant's alleged breach. Id. ¶ 16.

         Plaintiffs allege that Defendant has failed to remit the total amount of employee contributions that are due to the Funds on behalf of eligible employees for the period of July 1, 2016 through August 31, 2016. Id. ¶ 17. Plaintiffs allege that they have demanded payment from Defendant several times to no avail. Id. ¶ 18.

         Plaintiffs initiated this lawsuit on October 13, 2016, asserting ERISA violations and seeking damages for: (1) all contributions due and owing to the Funds; (2) interest on the delinquent contributions; and (3) liquidated damages. See Compl. ¶ 21. Plaintiffs also sought specific performance and attorneys' fees. Id. After Defendant failed to appear, the Clerk entered default on November 17, 2016. See ECF Text Order dated November 17, 2016. Plaintiffs then filed the instant motion for Default Judgment, seeking an award of $4, 733.63 in delinquent contributions, interest, and liquidated damages, and $1, 395.99 in attorneys' fees and costs for a total of $6, 129.62. Affidavit of Steven J. Bushinsky (“Bushinsky Aff.”) ¶¶ 9-15, ECF No. 8-1.

         II. Standard of Review

          “The district court has the discretion to enter default judgment, although entry of default judgments is disfavored as decisions on the merits are preferred.” Animal Sci. Prods., Inc. v. China Nat'l Metals & Minerals Imp. & Exp. Corp., 596 F.Supp.2d 842, 847 (D.N.J. 2008). Before entering default judgment, the Court must: (1) determine it has jurisdiction both over the subject matter and parties; (2) determine whether defendants have been properly served; (3) analyze the Complaint to determine whether it sufficiently pleads a cause of action; and (4) determine whether the plaintiff has proved damages. See Chanel, Inc. v. Gordashevsky, 558 F.Supp.2d 532, 535-36 (D.N.J. 2008); Wilmington Savings Fund Soc., FSB v. Left Field Props., LLC, No. 10-4061, 2011 WL 2470672, at *1 (D.N.J. June 20, 2011). Although the facts pled in the Complaint are accepted as true for the purpose of determining liability, the plaintiff must prove damages. See Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990).

         Additionally, prior to granting default judgment, the Court must make explicit factual findings as to: (1) whether the party subject to the default has a meritorious defense; (2) the prejudice suffered by the party seeking default judgment; and (3) the culpability of the party subject to default. Doug Brady, Inc. v. N.J. Bldg. Laborers Statewide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008).

         III. Analysis

         A. ...


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