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St. Louis-Kansas City Carpenters Regional Council v. Joseph Construction, Inc.

United States District Court, E.D. Missouri, Eastern Division

November 3, 2016

ST. LOUIS-KANSAS CITY CARPENTERS REGIONAL COUNCIL, et al., Plaintiffs,
v.
JOSEPH CONSTRUCTION, INC. and RICKY ROACH Defendants.

          MEMORANDUM AND ORDER

          AUDREY G. FLEISSIG UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the motion (Doc. No. 7) of Plaintiffs St. Louis-Kansas City Carpenters Regional Council (the “Regional Council”); the Carpenters' Pension Trust Fund of St. Louis, the Carpenters' Welfare Trust Fund of St. Louis, the Carpenters' Vacation Trust Fund of St. Louis, and the Carpenters' Joint Training Fund of St. Louis (collectively, the “Funds”); and the trustees of each of the Funds (collectively, the “Trustees”), for default judgment.

         Plaintiffs bring this action to recover delinquent contributions owed to the Funds, which are employee benefit funds pursuant to the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132, by Defendant Joseph Construction, Inc. (“JCI”) (Count I). The Regional Council further alleges five separate counts of breach of contract (Counts II-VI) against JCI and its proprietor Ricky Roach (“Roach”) (collectively, the “Defendants”) based on their default on five separate promissory notes.

         Upon consideration of the motion and the applicable law, the Court will enter default judgment against Defendants as to all Counts of Plaintiffs' complaint.

         FACTS

         The Regional Council is a labor union for carpenters in Missouri, Southern Illinois, and the Kansas City metropolitan area of Kansas. The Funds affiliated with the Regional Council are multi-employer plans by which participating employers make contributions to separate trusts for pension, health and welfare, vacation, and training benefits for participating employees. The Trustees, as the joint board of trustees for each of the Funds, are plan sponsors and fiduciaries of the Funds. JCI is a St. Louis-based construction company; Roach is a proprietor of JCI.

         Plaintiffs filed suit on June 22, 2016, alleging that JCI failed and refused to make required contributions to the Funds in violation of ERISA Section 515, 29 U.S.C. § 1145, and of the collective bargaining agreement (“CBA”) by which Plaintiffs and JCI are bound. (Doc. No. 1.)

         The Regional Council further alleges that JCI and Roach have defaulted upon five promissory notes. From January to May of 2016, the Regional Council, as lender, issued a series of loans to JCI and Roach, as borrowers, which were memorialized in five promissory notes, each identical but for the loan date and the principal loan amount.[1]The loans were issued on the following dates and in the following amounts: (1) January 21, 2016: $572, 336.00; (2) January 21, 2016: $430, 051.17; (3) April 13, 2016: $158, 000.00; (4) April 13, 2016: $340, 000.00; and (5) May 16, 2016: $250, 560.00. Each note contains a Missouri choice-of-law provision. See, e.g., Doc. No. 1-1 at 2 (“This Note will be governed by, construed and enforced in accordance with federal law and the laws of the state of Missouri”). Each note also contains provisions describing what constitutes an event of default and how such an event affects the rights of the parties. The “Payment Default” term provides that it shall constitute an event of default under the note when the “[b]orrower fails to make any payment when due under this note.” Id. at 1. The “Union Status” term provides that it shall constitute an event of default under the note when the “[b]orrowers fail to remain in good standing with the Carpenter's Union or fail[] to remain current in fringe benefit payment on behalf of union members.” Id. An event of default triggers the lender's right to declare the entire unpaid principal balance and all accrued unpaid interest on the note immediately due. Id. at 2. Finally, each note requires that Defendants pay the Regional Council's attorneys' fees and costs incurred in collecting amounts due under the note. Id.

         The Regional Council alleges that Defendants have failed both to make payment as due on each note and to remain current in fringe benefit contributions, and have therefore defaulted upon their payment obligations under each note.

         On September 20, 2016, after Defendants failed to answer or otherwise defend against Plaintiffs' claims, the Clerk of the Court entered default against both Defendants. In their motion for default judgment, Plaintiffs seek damages from JCI on the ERISA claim (Count I), in the amount of $109, 374.06 for delinquent contributions, interest, and liquidated damages; and the Regional Council seeks from both Defendants damages on the breach of contract claims (Counts II-VI), in the amount of $572, 986.69 for the aggregated unpaid balances of the five promissory notes.[2] Plaintiffs also seek $1, 521.64 in attorneys' fees and costs in connection with this action. Plaintiffs filed an accompanying memorandum in support of their motion for default judgment, including affidavits and documentation supporting their request for damages, attorneys' fees, and costs.

         DISCUSSION

         Under Rule 55 of the Federal Rules of Civil Procedure, a court may enter default judgment for failure “to plead or otherwise defend.” Fed.R.Civ.P. 55(a); see also Pride Cleaning & Restoration, Inc. v. Cole, No. 4:16CV90 RLW, 2016 WL 5462810, at *1 (E.D. Mo. Sept. 28, 2016). “It is nearly axiomatic that when a default judgment is entered, facts alleged in the complaint may not be later contested.” Marshall v. Baggett, 616 F.3d 849, 852 (8th Cir. 2010). Upon entry of default, the allegations of the complaint are taken as true, except as to the amount of damages. Brown v. Kenron Aluminum & Glass Corp., 477 F.2d 526, 531 (8th Cir. 1973). It then “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).

         Damages are subject to a higher degree of proof than are other factual allegations in a complaint. Monsanto Co. v. Hargrove, No. 4:09-CV-1628 CEJ, 2011 WL 5330674, at *2 (E.D. Mo. Nov. 7, 2011) (“[W]hile factual allegations in the complaint are generally taken as true, those . . . relating to the amount of damages must be proven.”). A plaintiff must prove allegations pertaining to the amount of damages “to a reasonable degree of certainty.” Painters Dist. Council No. 2 v. Diversified Drywall Sys., Inc., No. 4:11-CV-1823 CEJ, 2012 WL 6740650, at *2 (E.D. Mo. Dec. 31, 2012) (citing Everyday Learning Corp. v. Larson, 242 F.3d 815, 818 (8th Cir. 2001)). Damages may be proven by a sworn affidavit and supporting documentation. SSM Managed Care Org., L.L.C. v. Comprehensive Behavioral Care, Inc., No. 4:12-CV-2386 CAS, 2014 WL 1389581, at *2-4 (E.D. Mo. Apr. 9, 2014) (granting default judgment and relying on affidavits of movant's attorney and executive officer as sufficient to establish attorneys' fees and costs, and damages from breach of facility provider agreement, respectively).

         Coun ...


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