United States District Court, E.D. Virginia, Alexandria Division
BOARD OF TRUSTEES, SHEET METAL WORKERS' NATIONAL PENSION FUND, et al., Plaintiffs,
JTL AIR CONDITIONING & REFRIGERATION, INC., et al., Defendants.
REPORT & RECOMMENDATION
MICHAEL S. NACHMANOFF UNITED STATES MAGISTRATE JUDGE.
matter comes before the Court on plaintiffs' Motion for
Default Judgment Pursuant to Fed.R.Civ.P. 55(b) (Dkt. No.
Having reviewed the record and the pleadings, the undersigned
Magistrate Judge recommends entering default judgment in the
Funds' favor for the reasons that follow.
February 12, 2019, the Funds filed the instant action against
defendants JTL Air Conditioning & Refrigeration, Inc.
(“JTL Air”) and JTL Mechanical Services, Inc.
(“JTL Mechanical”) to collect delinquent
contributions, liquidated damages, audit testing fees,
interest, late fees, and attorney's fees and costs.
Compl. (Dkt. No. 1) ¶¶ 38-57. On February 14, 2019,
a summons was executed on Shari Vance, who was designated by
law to accept service of process on JTL Mechanical, and on
March 13, 2019, a summons was served on Jeff Lane, who was
designated by law to accept service of process on behalf of
JTL Air (Dkt. No. 3). Under Fed.R.Civ.P. 12(a), a responsive
pleading was due twenty-one (21) days after delivery of the
pleadings; however, defendants failed to file a responsive
pleading in a timely manner. On April 9, 2019, the Funds
filed a Request for Clerk's Entry of Default (Dkt. No.
4), which the Clerk of Court filed on April 11, 2019 (Dkt.
on April 23, 2019, the Funds filed a Motion for Default
Judgment Pursuant to Fed.R.Civ.P. 55(b) (Dkt. No. 7), along
with a Brief in Support of Plaintiffs' Motion for Default
Judgment (Dkt. No. 8) and a Notice of Hearing on
Plaintiffs' Motion for Default Judgment (Dkt. No. 9). The
Funds' motion was supported with three declarations from
Kenneth Anderson, Jr., Marcus Braswell, and Diana M. Bardes
(Dkt. Nos. 8-1 through 8-3). On May 17, 2019, counsel for the
Funds appeared at the hearing on their motion for default
judgment and no one appeared on behalf of defendants (Dkt.
following facts are established by the Complaint and the
memorandum in support of the Funds' motion for default
judgment, as well as by the supporting declarations.
ITI are employee benefit plans within the meaning of Sections
3(1)-(3) of the Employee Retirement Income Security Act of
1974, as amended, (“ERISA”), 29 U.S.C. §
1002(1)-(3), as well as multiemployer plans within the
meaning of Section 3(37)(A) of ERISA, Id. at §
1002(37)(A). Compl. (Dkt. No. 1) ¶¶ 5-6. They are
also jointly administered trust funds established pursuant to
Section 302(c)(5), (6) of the Labor Management Relations Act
of 1947, as amended, (“LMRA”), 29 U.S.C. §
186(c)(5), (6). Id. SMOHIT is a joint
labor-management health and safety organization within the
meaning of 29 U.S.C. § 186(c)(9). Id. at ¶
7. Lastly, NEMIC is a labor management committee within the
meaning of the LMRA, 29 U.S.C. § 186(c)(9). Id.
at ¶ 8. The Funds are administered in Fairfax, Virginia.
Id. at ¶¶ 5-8. At all relevant times,
defendants have been employers “engaged in an industry
affecting commerce.” Id. at ¶¶
10-11. Defendants are incorporated in Florida. Id.
employed at least one employee represented for the purposes
of collective bargaining by the Local Union 32 of the Sheet
Metal Workers' International Association, a labor
organization representing employees in an industry affecting
commerce. Id. at ¶ 12. JTL Air is a signatory
to a collective bargaining agreement with Local 32 (the
“Agreement”), which requires JTL Air to submit
monthly remittance reports and fringe benefit contributions
to the Funds for all hours worked or paid on behalf of its
covered employees. Id. at ¶ 13. Pursuant to the
Agreement, JTL Air is further obligated to abide by the terms
and conditions of the Trust Agreements establishing the Funds
(“Trust Documents”). Id. at ¶ 20.
JTL Mechanical is not a signatory to the Agreement,
“JTL Mechanical is an alter ego of JTL Air and/or
constitutes a single employer with JTL Air and thus is
obligated to contribute to the Funds for covered
employees.” Id. at ¶ 14. Specifically,
defendants were incorporated in Florida and share “an
interrelation of operations, common management, centralized
control of labor relations, business purpose, equipment,
customers, and common ownership.” Id. at
¶¶ 15-17. JTL Mechanical was specifically
established to evade JTL Air's obligations under the
Agreement. Id. at ¶ 18. Accordingly, as an
alter ego, JTL Mechanical is bound to the Agreement and is
jointly and severally liable for JTL Air's obligations
arising from the Agreement. Id. at ¶ 19.
owed to the Funds are based on separate remittance reports,
which is a self-reporting system that relies on the honesty
and accuracy of employers in reporting hours worked and paid
as well as in reporting owed contributions. Id. at
¶ 21. Without such reports, the Funds are unable to
determine the entire amount of monthly contributions due to
the Funds or the employees' eligibility for benefits.
Id. at ¶ 22. Pursuant to the Trust Documents,
the Funds may audit a contributing employer for the purpose
of assuring the accuracy of the reports and that the employer
remitted the appropriate amount of contributions to the
Funds. Id. at ¶ 24.
to Sections 502 and 515 of ERISA, 29 U.S.C. §§ 1132
and 1145, the Agreement, the Trust Documents, and Section 301
of the LMRA, 29 U.S.C. § 185, if JTL Air fails to timely
submit the contractually required remittance reports and
contribution payments, and the Funds file a lawsuit to
recover the unpaid contributions, JTL Air is required to pay
the following amounts:
a. Interest on the delinquent contributions at a rate of
.0233% per day, compounded daily;
b. Liquidated damages equal to the greater of: fifty dollars
($50.00) or ten percent (10%) of the contributions due for
each month of contributions that the Company fails to pay
within 30 days after the due date, but pays before any
lawsuit is filed;
c. Liquidated damages equal to the greater of interest on the
delinquent contributions at the above rate or liquidated
damages equal to twenty percent (20%) of the delinquent
contributions owed upon commencement of litigation; and
d. The attorneys' fees and costs incurred by the Funds in
pursuing the delinquent amounts, including the attorneys'
fees and costs in this action.
Id. at ¶ 25.
Funds bring this action under Sections 502(a)(3), (d)(1),
(g)(2) and 515 of ERISA, 29 U.S.C. §§ 1132(a)(3),
(d)(1), (g)(2) and 1145, and under Section 301(a) of LMRA, 29
U.S.C. § 185. Id. at ¶ 1. The Funds allege
three counts against defendants seeking owed payments
pursuant to an audit conducted from October 2014 through
December 2015 (Count I), payments based on estimated
remittance reports for January 2016 ...