United States District Court, E.D. Missouri, Eastern Division
GREATER ST. LOUIS CONSTRUCTION LABORERS WELFARE FUND, et al., Plaintiffs,
INNOVATIVE CONCRETE, LLC, Defendant.
MEMORANDUM AND ORDER
CAROL E. JACKSON, District Judge.
This matter is before the Court on plaintiff's motion for default judgment, pursuant to Fed.R.Civ.P. 55(b)(2). Plaintiffs also seek an order compelling an audit. The defendant has not responded, and the time allowed for doing so has expired.
Plaintiffs bring this action to collect delinquent fringe benefit contributions pursuant to Section 301 of the Labor Management Relations Act of 1974 (LMRA), as amended, 29 U.S.C. § 185, and pursuant to Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. § 1132. Plaintiffs are four employee benefit plans (the Pension, Welfare, Vacation, and Training funds), their trustees (collectively, the plans), and Local Union Nos. 42, 53, and 110 of the Laborers International Union of North America (the Union). Defendant Innovative Concrete, LLC is an employer in an industry affecting commerce within the meaning of the LMRA and ERISA. Plaintiffs allege that defendant failed to make timely contributions to the plans as required under the terms of a collective bargaining agreement.
I. Procedural History
Plaintiffs filed the instant case on August 4, 2014. Service was achieved on defendant on August 6, 2014. The defendant filed an answer on October 9, 2014. The Court issued a Case Management Order, and the matter proceeded to discovery. The deadline for dispositive motions was February 20, 2015, but none was filed. The case is set for a bench trial on July 27, 2015.
Defense counsel moved to withdraw on April 21, 2015. The Court granted the motion on May 4, 2015. Because a corporation cannot represent itself in a civil action, Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 857 (8th Cir. 1996), the Court also ordered defendant to retain new counsel no later than June 5, 2015. The Court warned defendant that if new counsel did not file an entry of appearance by that date, the Court might impose sanctions, including striking defendant's answer and entering default judgment. Defendant was sent a copy of that Order by certified mail on May 6, 2015. Yet, defendant has not responded to the Order; no new counsel has entered an appearance on its behalf.
On June 10, 2015, plaintiffs moved for entry of default and for default judgment. The Clerk of Court entered default against defendant on June 11, 2015. Despite having been given ample opportunity to do so, defendant has not responded. The Court will therefore strike defendant's answer. See SSM Managed Care Org., L.L.C. v. Comprehensive Behavioral Care, Inc., No. 4:12-CV-2386-CAS, 2014 WL 241920, at *1 (E.D. Mo. Jan. 22, 2014) (striking a corporate defendant's answer and entering default judgment where the corporation had "fail[ed] to comply with a court order to obtain counsel" (citation omitted)).
II. Legal Standard
Pursuant to Fed.R.Civ.P. 55, default judgment is appropriate when "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...." Granting default judgment is within a district court's discretion. See Weitz Co., LLC v. MacKenzie House, LLC, 665 F.3d 970, 977 (8th Cir. 2012).
When a party defaults, "the factual allegations of a complaint (except those relating to the amount of damages) are taken as true, but it remains for the court to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law.'" Murray v. Lene, 595 F.3d 868, 871 (8th Cir. 2010) (quoting 10A Charles Alan Wright et al., Federal Practice and Procedure: Civil § 2688, at 63 (3d ed. 1998)). "The court may conduct hearings or make referrals... when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter." Fed.R.Civ.P. 55(b)(2). However, where "the findings and judgment regarding damages in the instant case are capable of being computed on the basis of facts of record'... the district court need not hold an evidentiary hearing on the issue of damages." Taylor v. City of Ballwin, Mo., 859 F.2d 1330, 1333 (8th Cir. 1988) (quoting Pope v. United States, 323 U.S. 1, 12 (1944)).
ERISA provides that employers shall make contributions when required by the terms of a collective bargaining agreement. 29 U.S.C. § 1145. Employers who fail to make the required contributions may be liable for the unpaid contributions, liquidated damages, interest, attorneys' fees, and costs. Id. § 1132(g)(2).
On April 20, 2012, defendant agreed to be bound by the terms of a collective bargaining agreement between the Site Improvement Association and the Union (the Agreement), effective retroactively from March 1, 2009 through March 1, 2014. [Doc. #18-5]. The Agreement required defendant to provide notice of termination to the Union in advance of the end of the Agreement, or defendant would be bound to any renewed agreement between the Union and the Site Improvement Association. Defendant did not provide notice of termination, and the Site Improvement Association and the Union negotiated a new agreement that is effective from March 1, 2014 through March 1, 2019 (the Renewed Agreement). [Doc. #18-6] Accordingly, defendant is bound to the Renewed Agreement.
The Agreement and the Renewed Agreement both require defendant to make contributions to the funds for each hour worked by employees covered by the Agreement or the Renewed Agreement. Id. §§ 5.03-10. Failure to make timely contributions subjects defendant to liquidated damages equal to 20% of the unpaid contribution, interest, accounting costs, court costs, and attorneys' fees. Id. §§ 5.10-11. Plaintiffs are also authorized to audit defendant's payroll and ...