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Gambino v. Radiant Electric, LLC

United States District Court, D. Massachusetts

December 21, 2017

RICHARD P. GAMBINO, et al., Plaintiffs,



         Plaintiffs filed this action on behalf of employee benefit funds seeking to recover unpaid contributions and other amounts due under the applicable employee benefit plans and collective bargaining agreement. Defendant Radiant Electric, LLC (“Radiant”), an employer participating in the plans, has defaulted, having failed to appear or otherwise defend in this action. [ECF No. 9]. Currently pending before the Court is Plaintiffs' amended motion for a default judgment against Radiant. [ECF No. 15]. For the following reasons, the motion is GRANTED.

         I. BACKGROUND

         Following the entry of a default, “the facts alleged in the complaint are taken as true.” Plasterers' and Cement Masons' Local 40 Pension Fund v. D & M Concrete Finishing, No. 12-256, 2013 WL 2432420, at *1 (D.R.I. June 4, 2013) (quoting Queally v. Estate of Hoviss, No. 10-002, 2011 WL 6026593, at *1 (D.R.I. Dec. 2, 2011)); see Franco v. Selective Ins. Co., 184 F.3d 4, 9 n.3 (1st Cir. 1999) (defaulted party is “taken to have conceded the truth of the factual allegations in the complaint as establishing the grounds for liability as to which damages will be calculated”). Accordingly, the following summary of facts is drawn from the Plaintiffs' complaint, with certain details sourced from the supplemental documentation submitted in support of the amended motion for additional context.

         Plaintiffs are the administrators of employee welfare and pension benefit plans for the International Brotherhood of Electrical Workers Local 103 (“Union”), each of which meets the definition of a “multiemployer plan” under the Employee Retirement Income Security Act of 1974 (“ERISA”).[1] [ECF No. 1 at ¶¶ 3-8, 11] (“Complaint”); [ECF No. 16 at 2]. Radiant and the Union are also parties to a collective bargaining agreement [ECF No. 1-2] (“CBA”)[2] that requires Radiant to make monthly contributions to the Funds, based on the hours worked by Radiant's covered employees, and to deduct and remit working dues to the Union. Compl. ¶¶ 11-14. In August 2016, Plaintiffs engaged an independent firm to conduct an audit of Radiant for the period of January 1, 2013 through December 31, 2015. Id. ¶ 17. The auditor compared Radiant's remittance reports with its payroll and other internal records detailing the number of hours worked by Radiant's employees. [ECF No. 16-6 at 1-2]. The audit showed that Radiant underreported the number of hours worked and it consequently failed to remit working dues and make principal benefit contributions in the amount of $46, 648.44. Compl. ¶¶ 17-18; [ECF No. 1-3 at 6].

         On September 13, 2016, the auditor submitted its findings to Radiant, and, shortly thereafter, Plaintiffs sent a notice to Radiant, followed by a written demand, requesting payment of the amounts owed to the Funds. Compl. ¶¶ 19-20. Ultimately, Plaintiffs filed the instant complaint asserting two claims: violation of Section 515 of ERISA, 29 U.S.C. § 1145, for failing to make all contributions owed, and violation of the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185, for breaching the CBA. Id. ¶¶ 21-29.

         On March 13, 2017, a proof of service was returned, showing that Radiant had been served at its headquarters in New Hampshire. [ECF No. 5]; see [ECF No. 18] (letter from Plaintiffs' counsel affirming proper service of process on Radiant). On April 4, 2017, the deadline expired for Radiant to respond to the Complaint. Plaintiffs then filed a motion for the entry of a default against Radiant pursuant to Fed.R.Civ.P. 55(a), and the clerk entered a default on June 15, 2017. [ECF No. 9]; see [ECF Nos. 12, 13] (return receipts following delivery to Radiant of the notice of default).

         One month later, Plaintiffs moved for the entry of a default judgment pursuant to Fed.R.Civ.P. 55(b)(1). [ECF No. 10]. The Court scheduled a hearing on the motion and explained that because the damages sought did not constitute a sum certain, Plaintiffs' motion was not reviewable under Rule 55(b)(1). The Court stated that it would nevertheless consider the motion under Rule 55(b)(2). [ECF No. 14] (citing KPS & Assocs., Inc. v. Designs By FMC, Inc., 318 F.3d 1, 1920 (1st Cir. 2003)). On November 29, 2017, Plaintiffs filed an amended motion for a default judgment with supplemental briefing and documentation. [ECF Nos. 15, 16]. The Court held the hearing on the amended motion on December 6, 2017. [ECF No. 17]. Radiant did not attend the hearing and has not appeared at any point in this action.


         A. Jurisdiction

         As an initial matter, the Court “has an affirmative duty to assure itself that it has jurisdiction over both the subject matter and the parties” before entering a default judgment. Plasterers' and Cement Masons' Local 40 Pension Fund v. Capital Curbing Corp., No. 09-236, 2010 WL 1424722, at *2 (D.R.I. Mar. 12, 2010), aff'd and adopted, 2010 WL 1376293 (D.R.I. Apr. 6, 2010). Because ERISA and LMRA are federal statutes, the Court has subject matter jurisdiction over Plaintiffs' claims pursuant to 28 U.S.C. § 1331. Id.; see United Elec, Radio and Mach. Workers of America v. 163 Pleasant Street Corp., 960 F.2d 1080, 1085 (1st Cir. 1992) (citing 29 U.S.C. §§ 185(c), 1132(e)(1) as “establishing subject matter jurisdiction under LMRA and ERISA, respectively”). As to personal jurisdiction, “[a]ny district court in which a plaintiff brings an action under Title I of ERISA will have personal jurisdiction over the defendant, if the defendant is properly served and has sufficient minimum contacts with the United States.” Capital Curbing Corp., 2010 WL 1424722, at *3 (quoting Central States, Southeast & Southwest Areas Pension Fund v. Phencorp Reinsurance Co., Inc., 440 F.3d 870, 875 (7th Cir. 2006)); see United Elec, 960 F.2d at 1085 (where the court has federal question subject matter jurisdiction, “the Constitution requires only that the defendant have the requisite ‘minimum contacts' with the United States, rather than with the particular forum state (as would be required in a diversity case)”). “Furthermore, sufficient contacts exist whenever the defendant is served within the sovereign territory of the United States pursuant to a federal statute or civil rule.” Univ. of Mass. Medical Ctr. v. C & M Corp., 16 F.Supp.2d 110, 111 (D. Mass. 1998) (citing United Elec, 960 F.2d at 1085-86). “ERISA provides for nationwide service of process, and [Fed. R. Civ. P. 4(k)(1)(C)] constitutes the mechanism for exercising such extraterritorial service.” Id. at 112. Here, a return of service was filed on March 23, 2017 and Plaintiffs' counsel subsequently affirmed by letter to the Court that Radiant was served with a summons and a copy of the Complaint. [ECF Nos. 5, 18]; see Blair v. City of Worcester, 522 F.3d 105, 111 (1st Cir. 2008) (“A return of service generally serves as prima facie evidence that service was validly performed.”). “By virtue of the fact that [Radiant] was lawfully served within the United States pursuant to a federal statute, under the law of this circuit, this Court has personal jurisdiction over [Radiant].” C & M Corp., 16 F.Supp.2d at 112 (citing United Elec, 960 F.2d at 1085-86). Thus, the Court has both subject matter jurisdiction and personal jurisdiction over this action.

         B. Liability and Damages

         On a motion for a default judgment, the Court considers “all well-pleaded factual allegations as true . . . to determine whether [the complaint] alleges a cause of action.” Ramos-Falcon v. Autoridad de Energia Electrica, 301 F.3d 1, 2 (1st Cir. 2002). Here, Plaintiffs “have adequately pleaded that [Radiant's] failure to contribute to the Funds and to remit dues to [the Union] are violations of the [benefit plans] and CBA, and [are] thus violations of ERISA [and] the LMRA.” D & M Concrete Finishing, 2013 WL 2432420, at *2. Because Radiant has not responded to the entry of a default against it, the entry of a default judgment is now appropriate. Id.

         “While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof . . . .” KPS & Assocs., Inc., 318 F.3d at 19 (quoting Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974)). In relevant part, ERISA provides that in an action to enforce an ...

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