United States District Court, D. New Jersey
TRUSTEES OF THE IBEW LOCAL 351 PENSION FUND, ET AL., Plaintiffs,
E & J ELECTRICAL CONTRACTOR, LLC, Defendant.
MEMORANDUM AND ORDER
G. SHERIDAN, U.S.D.J.
matter comes before the Court on Plaintiffs Trustees of the
IBEW Local 351 Pension Fund, IBEW Local Union No. 351, IBEW
Local 351 Surety Fund, IBEW Local 351 Welfare Fund, IBEW
Local 351 Joint Apprenticeship and Training Committee, and
South Jersey Electrical Workers Temporary Disability Fund
(collectively, "Plaintiffs"), Motion for Default
Judgment against Defendant E & J Electrical Contractor,
LLC. ("Defendant") (ECF No. 7).
and Defendant are parties to an "Inside Agreement"
which established certain fringe benefit contributions that
were to be made to Plaintiffs by Defendant on behalf of
eligible members who have worked for Defendant. (Compl., ECF
No. 1, at ¶ 16). Through the Inside Agreement, Defendant
agreed to abide by the terms of an Agreement and Declaration
of Trust ("Trust Agreement"), as well as a
Collection Policy. (Id. at ¶ 17). The Trust
Agreement required that fringe benefit contributions be made
for eligible members on a timely basis. (Id.)
allege that Defendant has paid delinquent contributions of
$68, 601.73, which represents the payroll period of September
1, 2011 through March 31, 2012, but has failed to remit
contributions to the funds for the benefit of its employees.
(Id. at ¶ 18). Further, Plaintiffs allege that
Defendant has failed and refused to pay the delinquent
penalties in the amount of $3, 713.83 required by the Inside
Agreement, Trust Agreement, and Collection Policy, for the
payroll period of September 1, 2011 through March 31, 2012.
(Id. at ¶ 19).
February 27, 2018, Plaintiffs filed a Complaint in the United
States District Court for the District of New Jersey alleging
that Defendant failed to make $3, 713.83 in delinquent
penalties as required by the Inside Agreement, Trust
Agreement, and Collection Policy. On March 2, 2018, Defendant
was served with the Summons and Complaint. On March 29, 2018,
after Defendant failed to answer or otherwise respond to the
Complaint, Plaintiffs requested that the Clerk enter default
against Defendant pursuant to Fed.R.Civ.P. 55(a). On that
same date, the Clerk entered default against Defendant. On
May 15, 2018, Plaintiffs filed the instant Motion for Default
Judgment seeking payment of delinquent penalties in the
amount of $3, 713.83, including liquidated damages in the
amount of $742.77, attorneys' fees in the amount of
$976.50, and costs in the amount of $459.99.
Rule of Civil Procedure 55 governs the entry of default and
default judgment. Under Rule 55(a), "[w]hen a party
against whom a judgment for affirmative relief is sought has
failed to plead or otherwise defend, and that failure is
shown by affidavit or otherwise, the clerk must enter the
party's default." Fed.R.Civ.P. 55(a). Thereafter,
the movant can apply to the court for a default judgment.
Fed.R.Civ.P. 55(b)(2). "The threshold issue in opening a
default judgment is whether a meritorious defense has been
asserted." Hritz v. Woma Corp., 732 F.2d 1178,
1181 (3d Cir. 1984). "[A] meritorious defense is
presumptively established when the 'allegations of
defendant's answer, if established on trial would
constitute a complete defense to the action."'
Id. (quoting Tozer v. Charles A. Krause Milling
Co., 189 F.2d 242, 244 (1951)).
considering a motion for default judgment, a court must
exercise sound judicial discretion. See Harad v. Aetna
Cas. & Sur. Co., 839 F.2d 979, 982 (3d Cir. 1988).
The Third Circuit has identified three factors courts should
consider when weighing whether to enter a default judgment:
"(1) whether the party subject to default has a
meritorious defense, (2) the prejudice suffered by the party
seeking default, and (3) the culpability of the party subject
to default." Doug Brady, Inc. v. N.J. Bldg. Laborers
State Wide Funds, 250 F.R.D. 171, 177 (D.N.J. 2008)).
However, the Third Circuit has repeatedly stated its strong
preference that cases be disposed of on the merits, and
required that district courts determine whether any sanction
short of a default judgment would be effective. See
Hritz, 732 F.2d at 1181.
instant matter, Defendant was served with summons and
complaint on March 2, 2018. Since then, Defendant has not
filed any responsive pleading or otherwise responded in any
way to the Complaint. Here the Court is concerned about the
punitive nature of the relief sought because Defendant has
satisfied the delinquent contributions of $68, 601.73.
support of their Motion for Default Judgment, Plaintiffs
submit the Declaration of their attorney who indicates that
the Inside Agreement provides for interest, liquidated
damages and imposition of attorney's fees owned on and
collection of delinquent contributions. See Decl. of
Feehan, ECF No. 7-1, at ¶ 8, see also ECF No.
7, Ex. B. After reviewing the Plaintiffs' submissions,
the declaration does not specifically set forth the reason or
justification for imposition of such alleged damages when the
delinquent fees have been paid. To me, some common sense must
dictate whether the suit, and the request to impose damages
in the amount of $5, 893.09 is reasonable. Here, the
satisfaction of the amount owned without litigation outweighs
the reasonableness of this action. As such, the Court will
impose judgment for delinquent penalty, but deny liquidated
damages, cost of suit and legal fees.
matter having come before the Court on Plaintiffs' Motion
for Default Judgment against Defendant E & J Electrical
Contractor, LLC (ECF No. 7); and the Court having carefully
reviewed and taken into consideration the submissions of the
parties, as well as the arguments and exhibits therein
presented, and for good cause shown, and for all of the
foregoing reasons, IT IS on this 23rd day of January, 2019,
ORDERED that Plaintiffs' Motion for
Default Judgment (ECF No. 7) is GRANTED; and
it is further
that Judgment is entered against Defendant Phillipsburg
Marble Company, ...