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Electrical Workers Pension Plan, Local 103 v. Herold

United States District Court, D. Massachusetts

September 4, 2019

ELECTRICAL WORKERS PENSION PLAN, LOCAL 103, IBEW, and MICHAEL P. DONOVAN, as Administrator of the Electrical Workers Pension Plan, Local 103, IBEW, Plaintiffs,
v.
DONALD R. HEROLD, Jr., Defendants.

          MEMORANDUM AND ORDER ON PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT

          ALLISON D. BURROUGHS U.S. DISTRICT JUDGE.

         This is an action brought by Electrical Workers Pension Plan, Local 103, IBEW (the “Plan”) and Michael P. Donovan, Administrator of the Pension Plan (“Donovan” and, together with the Plan, “Plaintiffs”) pursuant to the Employee Retirement Income Security Act (“ERISA”) and federal common law to recover more than $50, 000 in misappropriated pension funds and associated costs. [ECF No. 11 (“Amended Complaint” or “Am. Compl.”) ¶ 1]. Currently pending before the Court is Plaintiffs' motion for a default judgment following Donald R. Herold, Jr.'s (“Defendant”) failure to appear or otherwise defend this action. [ECF No. 19]. Upon the request of the Court, the motion for default judgment was supplemented with additional briefing. [ECF No. 21]. For the following reasons, Plaintiffs' motion for a default judgment [ECF No. 19] is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         The Court summarizes the salient facts alleged in the Amended Complaint and accepts all well-pleaded facts as true for purposes of this Memorandum and Order. See Conetta v. Nat'l Hair Care Ctrs., Inc., 236 F.3d 67, 76 (1st Cir. 2001). Charles Harmon was a participant in the Plan who retired in 1988 and began receiving monthly retirement benefits. [Am. Compl. ¶ 6]. Upon his death in 1994, his widow, Jo Ann Harmon, began receiving monthly benefits as a surviving spouse, which were deposited directly into her bank account. [Id. ¶¶ 7-8]. Mrs. Harmon died on October 8, 2012. [Id. ¶ 9]. The Plan was not notified of her death and sent monthly benefits to Mrs. Harmon's account until August 2017, which totaled $54, 511.57. [Id. ¶¶ 11, 14]. The Social Security Administration's Death Master File, which the Plan checks monthly, did not reflect Mrs. Harmon's death. [Id. ¶ 12]. The Plan learned of her death through a death audit conducted by a commercial service in August 2017. [Id. ¶ 13].

         On May 21, 2018, Plaintiffs brought this action against a “John Doe” defendant because they did not know who had misappropriated the pension funds. [ECF No. 1 ¶¶ 16-19]. Plaintiffs sought and received a subpoena from the Court to obtain bank records identifying who had control over Mrs. Harmon's account, which was where the monthly benefits had been deposited. [Am. Compl. ¶ 16]. The account records identified Defendant, who is Mrs. Harmon's son, as the person who controlled the account and had withdrawn funds from the account. [Id. ¶¶ 16, 17].

         On April 12, 2019, after two extensions of time to serve the complaint were allowed by the Court, Plaintiffs filed the Amended Complaint naming Donald R. Herold, Jr. as the defendant. See [ECF Nos. 5, 7, 9-11]. Defendant was served on April 2, 2019, and his answer was due on April 23, 2019. See [ECF No. 12]. On May 16, 2019, the clerk entered a default as to Donald R. Herold, Jr. [ECF No. 15]. On June 17, 2019, Plaintiffs filed a motion for default judgment. [ECF No. 19]. Attached to Plaintiffs' motion for default judgment was a letter from Defendant stating:

I am unable to get council [sic] either from legal aid or paying myself. I do not know how to proceed other than to say I am guilty. I would like to [r]epay this lawsuit. However, as you will see from my income and expenses [b]elow I cannot pay up front what the plaintiff would like. And between legal [f]ees and interest I may be not able to repay [i]t all. Therefore, I must rely on the court's decision.

[ECF No. 19-3 at 5]. Defendant did not respond to the motion for default judgment.

         II. DISCUSSION

         Pursuant to Rule 55(b), a plaintiff seeking a default judgment “must apply to the court” if the amount of damages claimed is not a “sum certain.” Fed.R.Civ.P. 55(b). The Court must first assure itself that it has both subject matter jurisdiction and personal jurisdiction over the action. Plasterers' and Cement Masons' Local 40 Pension Fund v. Capital Curbing Corp., No. 09-cv-00236-WES-DLM, 2010 WL 1424722, at *2 (D.R.I. Mar. 12, 2010), adopted by 2010 WL 1376293 (D.R.I. Apr. 6, 2010). Once satisfied that jurisdiction is proper, the Court reviews the well-pleaded facts alleged in the complaint to determine whether they state a claim for which relief may be granted. Ramos-Falcon v. Autoridad de Energia Electrica, 301 F.3d 1, 2 (1st Cir. 2002). Finally, if the Court finds that the complaint states a claim, it calculates damages. See G. & C. Merriam Co. v. Webster Dictionary Co., 639 F.2d 29, 34 n.7 (1st Cir. 1980).

         A. Jurisdiction

         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, 2010 WL 1424722, at *2.

         This Court has subject matter jurisdiction over the ERISA claim pursuant to 29 U.S.C. § 1132(e)(1). See 29 U.S.C. § 1132(e)(1) (“[T]he district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought by . . . a . . . fiduciary . . . .”). The Court also has subject matter jurisdiction over the conversion claim pursuant to 28 U.S.C. § 1367 because the claim is closely related to and part of the same case or controversy as the ERISA claim. See 28 U.S.C. § 1367 (“[I]n any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy . . . .”).

         The Court has personal jurisdiction over Defendant. “Any 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.” Plasterers' and Cement Masons' Local 40 Pension Fund, 2010 WL 1424722, at *3 (footnote omitted) (quoting Cent. States, Se. & Sw. Areas Pension Fund v. Phencorp Reinsurance Co., 440 F.3d 870, 875 (7th Cir. 2006)). “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. Med. Ctr. v. C & M Corp., 16 F.Supp.2d 110, 111 (D. Mass. 1998) (citing United Elec. & Mach. Workers of Am. v. 163 Pleasant St. Corp., 960 F.2d 1080, 1085-86 (1st Cir. 1992)). “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, Defendant resides in North Carolina. [Am. Compl. ΒΆ 4]. A return of service was filed on April 12, ...


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