Iron Workers National Pension Plan v. Samuel Grossi & Sons, Inc.

• Court: District Court, District of Columbia
• Decided: November 12, 2020
• Docket: Civil Action No. 2020-1204
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

IRON WORKERS NATIONAL PENSION PLAN, et al.,

Plaintiffs, No. 20-cv-1204 (DLF) v.

SAMUEL GROSSI & SONS, INC.,

Defendant.

MEMORANDUM OPINION

Before the Court is the plaintiffs’ Motion for Partial Default Judgment. Dkt 8. For the

reasons that follow, the Court will grant the motion.

I. BACKGROUND

The plaintiffs, the Iron Workers National Pension Plan and related parties, bring this suit

under Section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, and Sections 502

and 515 of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1132,

1145. The plaintiffs had entered into collective bargaining agreements and trust agreements with

the defendant, employer Samuel Grossi & Sons. Compl. ¶ 24, Dkt. 1. 1 The plaintiffs allege that

Samuel Grossi & Sons failed to meet its obligations under those agreements, id., and seek

damages for delinquent contributions and dues remissions as well as an accounting of Samuel

Grossi & Sons’ corporate books and records. See generally Compl.

1On a motion for default judgment following the entry of default, courts construe the well- pleaded allegations of the complaint as admitted. Boland v. Elite Terrazzo Flooring, Inc., 763 F. Supp. 2d 64, 68 (D.D.C. 2011). The plaintiffs filed their complaint on May 8, 2020. Id. Samuel Grossi & Sons was

served with the complaint and summons on May 15, 2020. Proof of Service, Dkt. 3-1. Because

it did not answer or otherwise respond to the complaint within the time period required by

Federal Rule of Civil Procedure 12, the plaintiffs requested an entry of default. Dkt. 5. The

plaintiffs also delivered a copy of their request for default to Samuel Grossi & Sons. Dkt. 6. The

Clerk of Court then entered default on August 10, 2020. Dkt. 7. On August 27, 2020, the

plaintiffs moved this Court to enter a partial default judgment under Rule 55(b)(2) of the Federal

Rules of Civil Procedure. Dkt. 8. The plaintiffs again delivered a copy of their motion to

Samuel Grossi & Sons. Proof of Service, Dkt. 9. The motion is now ripe for review.

II. LEGAL STANDARD

The Federal Rules of Civil Procedure empower district courts to enter default judgment

against a defendant who fails to defend its case. Fed. R. Civ. P. 55(b)(2); Keegel v. Key West &

Caribbean Trading Co., 627 F.2d 372, 375 n.5 (D.C. Cir. 1980). Although courts generally

favor resolving disputes on their merits, default judgments are appropriate “when the adversary

process has been halted because of an essentially unresponsive party.” Mwani v. bin Laden, 417

F.3d 1, 7 (D.C. Cir. 2005) (quotation marks omitted).

Obtaining a default judgment is a two-step process which “allows the defendant the

opportunity to move the court to set aside the default before the court enters default judgment.”

Carpenters Labor-Mgmt. Pension Fund v. Freeman-Carder LLC, 498 F. Supp. 2d 237, 240 n.1

(D.D.C. 2007). First, the plaintiff must request that the Clerk of Court enter default against a

party who has failed to plead or otherwise defend. Fed. R. Civ. P. 55(a). The Clerk’s entry of

default establishes the defendant’s liability for the well-pleaded allegations in the

complaint. Boland v. Providence Constr. Corp., 304 F.R.D. 31, 35 (D.D.C. 2014). Second, the

2 plaintiff must apply to the court for a default judgment. Fed. R. Civ. P. 55(b). At that point, the

plaintiff “must prove his entitlement to the relief requested using detailed affidavits or

documentary evidence on which the court may rely.” Ventura v. L.A. Howard Constr. Co., 134

F. Supp. 3d 99, 103 (D.D.C. 2015) (internal quotation marks and alterations omitted). “[T]he

defendant’s default notwithstanding, the plaintiff is entitled to a default judgment only if the

complaint states a claim for relief.” Jackson v. Corr. Corp. of Am., 564 F. Supp. 2d 22, 27

(D.D.C. 2008) (quoting Descent v. Kolitsidas, 396 F. Supp. 2d 1315, 1316 (M.D. Fla. 2005)).

When ruling on a motion for default judgment, a court “is required to make an

independent determination of the sum to be awarded.” Fanning v. Permanent Sol. Indus., Inc.,

257 F.R.D. 4, 7 (D.D.C. 2009) (internal quotation marks omitted). In that inquiry, the court has

“considerable latitude.” Ventura, 134 F. Supp. 3d at 103 (internal quotation marks omitted).

The court may conduct a hearing to determine damages, Fed. R. Civ. P. 55(b)(2), but is not

required to do so “as long as it ensures that there is a basis for the damages specified in the

default judgment,” Ventura, 134 F. Supp. 3d at 103 (internal quotation marks and alterations

omitted).

III. ANALYSIS

Due to the Clerk’s entry of default in this case, the defendants are deemed liable for the

well-pleaded allegations in the complaint, Providence Constr., 304 F.R.D. at 35, including the

allegations that “Samuel Grossi & Sons breached the [collective bargaining agreement], in

violation of § 515 of ERISA, 29 U.S.C. § 1145, and breached the described Plan and Trust

Agreements.” Compl. ¶ 24. With liability established, the Court must determine the amount

owed by the defendants.

3 “ERISA provides that the court, after granting judgment in favor of a multiemployer

plan, must award the amount of unpaid contributions, the interest on unpaid contributions,

reasonable attorney’s fees and costs and other relief the court deems appropriate.” Carpenters,

498 F. Supp. 2d at 241 (citing 29 U.S.C. § 1132(g)(2)). “The unpaid contributions, interest, and

liquidated damages generally are considered sums certain pursuant to the calculations mandated

in ERISA and the parties’ agreements.” Flynn v. Mastro Masonry Contractors, 237 F. Supp. 2d

66, 70 (D.D.C. 2002) (internal quotation marks omitted).

The plaintiffs itemize these sums as follows:

• Delinquent contributions: $493,430.68

• Attorney’s fees: $12,425.00

• Other legal costs: $1,014.60

• Accounting costs: $2,151.75

• Total: $509,022.03

Pls.’ Mem. in Supp. at 3, Dkt. 8-1.

Samuel Grossi & Sons was required, pursuant to the agreements between the parties, to

make contributions to the pension fund based on the number of hours worked by bargaining unit

employees. Compl. ¶ 13. In particular, it was required to contribute $2.85 per hour worked from

August 1, 2017 to August 1, 2018, id. ¶ 14; id. Exh. A, $2.95 per hour worked from August 1,

2018 through August 1, 2019, id. ¶ 15; id. Exh. B, and $3.00 per hour worked from August 1,

2019 to August 1, 2020. Id. ¶ 15. Despite this obligation, from the period of January 1, 2017

through December 31, 2019, Samuel Grossi & Sons made no contributions. Id. ¶ 19. Patrick H.

Reid, a certified public accountant, calculated the total sum of delinquent contributions for this

period. Reid Aff., Dkt. 8-3. He sought to conduct a review of the outstanding obligations, but

4 Samuel Grossi & Sons ignored his requests. Id. ¶ 5. Without a review of Samuel Grossi &

Sons’ books and records, Reid relied on the employer’s reported hours for the same bargaining

unit of employees to a sister pension plan. Id. ¶ 7. Reid then multiplied the number of reported

hours for the relevant period by the amount Samuel Grossi & Sons was obligated to pay for each

period. Id. ¶ 8. Thus, he calculated that the total principal amount to which the plaintiffs are

entitled is $493,430.68. Id.

In addition to the unpaid contributions, the plaintiffs seek attorney’s fees and costs.

ERISA directs that a court “shall award the plan” “reasonable attorney’s fees and costs of the

action” when “a judgment in favor of the plan is awarded.” 29 U.S.C. § 1132(g)(2). “When

awarding attorneys’ fees, federal courts have a duty to ensure that claims for attorneys’ fees are

reasonable.” Swedish Hosp. Corp. v. Shalala, 1 F.3d 1261, 1265 (D.C. Cir. 1993). And in

general, “the fee applicant bears the burden of establishing entitlement to an award and

documenting the appropriate hours expended and hourly rates.” Hensley v. Eckerhart, 461 U.S.

424, 437 (1983). Here, the plaintiffs request $12,425 in attorney’s fees, in addition to $1,014.60

in additional legal costs. However, the plaintiffs have failed to provide any explanation for this

amount. They have provided neither the number of hours billed nor the hourly rate that this

amount reflects. “The usual method of calculating reasonable attorney’s fees is to multiply the

hours reasonably expended in the litigation by a reasonable hourly fee, producing the ‘lodestar’

amount.” Bd. of Trs. of Hotel & Rest. Employees Local 25 v. JPR, Inc., 136 F.3d 794, 801 (D.C.

Cir. 1998). Where the plaintiff has provided neither the number of hours worked nor the hourly

fee charged, the Court is unable to determine whether the hours expended, the hourly rate, or the

ultimate sum requested is reasonable, as required by ERISA. See 29 U.S.C. § 1132(g)(2)

(stating that the Court shall provide “reasonable attorney’s fees and costs of the action”).

5 Compare Boland v. Hetrick, 277 F. Supp. 3d 112, 121 (D.D.C. 2017) (noting that the plaintiffs

provided multiple declarations and “an attorney’s fees chart that provides a summary of the tasks

performed, the hours spent on each task, and who performed each task”). In addition to

contemporaneous billing records, the plaintiffs should provide an affidavit which explains “the

extent of each biller’s legal experience in order to inform a comparison to the prevailing market

rates,” and “additional evidence of prevailing market rates such as the Laffey Matrix or the U.S.

Attorney’s Office Matrix, which the D.C. Circuit has ‘previously said litigants may rely upon

when seeking fees.’” Serv. Employees Int’l Nat’l Indus. Pension Fund v. Tandem Dev. Grp.,

LLC, 274 F. Supp. 3d 1, 6 (D.D.C. 2017) (quoting Role Models Am., Inc. v. Brownlee, 353 F.3d

962, 970 (D.C. Cir. 2004)). “Absent such information, the Court cannot determine at this time

whether the proposed hourly rates are reasonable.” Id. Thus, the Court is unable to grant

attorney’s fees and costs at this time. However, the Court will grant the accounting fee, which

has been supported by an affidavit. See Reid Aff. ¶ 11.

Finally, the plaintiffs also seek equitable relief in the form of an order “compelling

Samuel Grossi to submit their books, records and the outstanding fringe benefit reports for the

period of January 1, 2020, thru [sic] the present for review and copying within ten (10) days

from the date of the order so that Plaintiffs can determine if there are additional outstanding

contributions and damages owed.” Pls.’ Mem. in Supp. at 4. Samuel Grossi & Sons is required

to submit to an examination of its books and records pursuant to its agreement with the plaintiffs.

See Compl., Exh. D (Amended and Restated Agreement and Declaration of Trust) § 9.04, Dkt. 8-

7 (“The Trustees shall have the authority to audit the payroll books and records of a Participating

Employer, either directly or through a qualified public accountant, as they may deem necessary

in the administration of the Trust Fund.”); id. (“[T]he Participating Employer involved shall

6 make available . . . its payroll books and records.”). The agreement further specifies that:

“[s]uch books and records shall include: (a) all records which the Participating Employer may be

required to maintain under Section 209(a)(1) of ERISA, and (b) time cards, payroll journals,

payroll check registers, cancelled payroll checks, copies of the employer’s federal, state, and

local payroll tax reports, and all other documents and reports that reflect the hours and wages, or

other compensation, of the employees or from which such can be verified.” Id. The plaintiffs

allege that they need to audit Samuel Grossi & Sons’ books and records to determine the amount

of delinquent funds owed for the period beginning on January 1, 2020.

Section 502 authorizes the Court to grant “such other legal or equitable relief as the court

deems appropriate.” 29 U.S.C. § 1132(g)(2)(E). “This provision allows the court to construct

appropriate remedies which may include an injunction requiring a defendant to permit, and

cooperate with, an audit of its books and records.” Carpenters, 498 F. Supp. 2d at 242 (internal

quotation marks omitted). This equitable relief is often awarded when the defendant “has

demonstrated no willingness to comply with either its contractual or statutory obligations or to

participate in the judicial process.” Id. (citing Int’l Painters & Allied Trades Industry Pension

Fund v. Newburgh, 468 F. Supp. 2d 215, 218 (D.D.C. 2007)). Given Samuel Grossi & Sons’

default, as well as the underlying facts of this case, Samuel Grossi & Sons’ has neither

participated in the judicial process nor complied with statutory or contractual obligations. The

audit of its books and records, as described in the agreement between the parties, is therefore

necessary to make an accounting of Samuel Grossi & Sons’ outstanding contributions. Thus,

pursuant to the Court’s discretionary authority under Section 502 of ERISA, the Court will grant

the equitable relief requested by the plaintiffs. See Boland v. Yoccabel Const. Co., 293 F.R.D.

13, 20–21 (D.D.C. 2013) (granting the plaintiffs’ request that the “defendant be directed to

7 comply with its obligations to submit all required reports and to make all contributions due”

because the request reiterates the defendant’s existing contractual obligations and because the

defendant persistently breached these obligations).

CONCLUSION

For the foregoing reasons, the plaintiffs’ motion for partial default judgment is granted.

A separate order consistent with this decision accompanies this memorandum opinion.

________________________ DABNEY L. FRIEDRICH United States District Judge November 12, 2020