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Ballard v. Rcm Construction, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

June 26, 2015

JOHN BALLARD, Trustee, and MID CENTRAL OPERATING ENGINEERS HEALTH AND WELFARE FUND, Plaintiffs,
v.
RCM CONSTRUCTION, INC., Defendant.

REPORT AND RECOMMENDATION PLAINTIFFS' REQUEST FOR DEFAULT JUDGMENT AND PERMANENT INJUNCTION [DOC. 29]

DENISE K. LaRUE, District Judge.

Plaintiffs, an employee-benefit fund of the International Union of Operating Engineers Local Union No. 103 and one of the fund's trustees, sued Defendant, an employer, for violating the terms of a collective bargaining agreement by failing to make required contributions to the fund based on hours worked by its union employees. After Defendant failed to plead or otherwise defend, default was entered against it. Plaintiffs now move for entry of final judgment and issuance of a permanent injunction. The district judge referred the matter to this magistrate judge for preparation of a recommended disposition. Order Referring Motion [doc. 34]. This report and recommendation, consisting of the following recommended findings of facts and conclusions of law, fulfills that reference

1. Plaintiffs, Mid Central Operating Engineers Health and Welfare Fund and one of its trusteed, John Ballard, filed their Complaint on November 1, 2013. [Doc. 1.] The Clerk issued summons for defendant RCM Construction, Inc., in care of its registered agent, John M. Raef, on November 4, 2013. [Doc. 3.] Proof of service, showing personal delivery of the summons on Mr. Raef on March 6, 2014, was filed on August 29, 2014. [Docs. 5, 8, 10, and 11.]

2. Also on August 29, 2014, Plaintiffs moved for Clerk's entry of default, under Fed.R.Civ.P. 55(a). [Doc. 12.] Defendant did not respond to Plaintiffs' motion and the Clerk entered Defendant's default on September 22, 2014, finding that it had failed to plead or otherwise defend in this action. [Doc. 14.]

3. On Plaintiffs' motion, [doc. 15], the Court ordered a representative of Defendant to appear and produce in open court on November 18, 2014 specified records showing the work history of Defendant's employees for the period from March, 2014, through the date of production. [Doc. 16.] When Defendant failed to appear, an order to show cause was issued to Defendant to appear, by its highest officer, on December 18, 2014, to show cause why it should not be held in contempt for its non-compliance with the order to appear and produce. [Docs. 19 and 20.] When Defendant failed to appear at the show-cause hearing, another order to show cause was issued directly to John Raef, Defendant's registered agent, ordering him to appear before the Court on January 15, 2015, to show cause why he failed to comply with the previous order to show cause and warning him that a failure personally to appear as ordered would result in the issuance of a body attachment to the United States marshal to bring him before the Court. [Docs. 22 and 23.] On Plaintiffs' motion, [doc. 24], the show-cause hearing was continued to February 17, 2015, [doc. 25].

4. At the February 17, 2015 show-cause hearing, Plaintiffs reported that Defendant had produced all of the records and information that they had been seeking, which would permit them to seek judgment for a sum certain. Mr. Raef had telephoned the Court to advise that he was snowed-in out-of-state and could not appear for the hearing. [Doc. 32.]

5. On February 26, 2015, Plaintiffs filed the present motion for entry of judgment and issuance of a permanent injunction, [doc. 29], which they supported with affidavits by the fund's Bookkeeping Supervisor, [doc. 29-1], and Plaintiffs' counsel, [doc. 29-2], and by a brief in support of the injunction, [doc. 30]. Plaintiffs also submitted proposed findings of facts and conclusions of law in support of their requested permanent injunction. [Doc. 31.]

6. Defendant has not responded to, or otherwise defended against, Plaintiffs' motion for entry of judgment and issuance of permanent injunction.

7. An entry of default does not establish liability per se; rather, a defaulted defendant is deemed to have admitted a complaint's well-pleaded facts respecting liability. A defaulted defendant may yet challenge, and a court has the responsibility to determine, whether the well-pleaded factual allegations state plausible and legally-cognizable claims. A defaulted defendant is not deemed to have admitted a plaintiff's legal theories or merely conclusory assertions. Fed.R.Civ.P. 8(b)(6); Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994); Dundee Cement Co. v. Howard Pipe & Concrete Products, Inc., 722 F.2d 1319, 1323 (7th Cir. 1983); Wright, Miller, & Kane, Federal Practice and Procedure: Civil, § 2688, p. 63 (3rd ed. 1998). The standard for determining the legal sufficiency of allegations is provided by, e.g., Fed.R.Civ.P. 8; Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); and the statutory or common law governing the particular causes of action.

A defaulted defendant is not deemed to have admitted a plaintiff's factual allegations respecting damages and may fully litigate the issue of damages. Fed.R.Civ.P. 8(b)(6); In re Catt, 368 F.3d 789, 793 (7th Cir. 2004); United States v. Mucci, 879 F.2d 1488, 1497 (7th Cir. 1989).

Regardless of the nature of the asserted claims, neither a plaintiff nor a defaulted defendant has a constitutional, statutory, or rule-based right to a jury trial on the issue of damages. It is within a court's discretion to determine the type of hearing that is appropriate in the circumstances of a particular case. Fed.R.Civ.P. 55(b)(2); Olcott v. Delaware Flood Co., 327 F.3d 1115, (10th Cir. 2003); Matter of Dierschke, 975 F.2d 181, 185 (5th Cir. 1992); Adriana International Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir. 1990); Wright, Miller, & Kane, Federal Practice and Procedure: Civil 3d § 2688, p. 69 (1998); Moore's Federal Practice § 55.32[2][e], p. 55-49 (3rd ed. 2011).

8. The Complaint contains the following well-pleaded allegations:

a. Plaintiff Mid Central Operating Engineers Health and Welfare Fund ("Fund") is a mutli-employer benefit plan that qualifies as an employee-benefit plan under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1002(1), (2), (3), and (21), and § 1132, and that qualifies as a mutli-employer plan under ERISA, 29 U.S.C. § 1002(37). The Fund maintains its office and principal place of business in Terre Haute, Indiana. Complaint ¶ 2.

b. The Fund also acts as collection agent for the (1) Central Pension Fund of the International Union of Operating Engineers and Participating Employers ("Pension Fund") and (2) the International Union of Operating Engineers Local Union No. 103's Apprenticeship and Training Fund ("Apprenticeship & Training Fund"), both of which also qualify as employee-benefit plans. Id.

c. Plaintiff John Ballard is a trustee of the Fund and a fiduciary within the meaning of ERISA, 29 U.S.C. § 1002(21). He brings this suit on behalf of the participants and trustees of the Fund. Id., ¶ 3.

d. Defendant RCM Construction, Inc., is an Indiana corporation with its principal place of business in Gaston Indiana. It is an employer and a party-in-interest in an industry affecting commerce as defined under ERISA, 29 U.S.C. § 1002(5), (11), (12), and (14), and § 1059. Id., ¶¶ 4 and 5.

e. Defendant is a party to, and has agreed to abide by, the terms of collective bargaining agreements between itself and the International Union of Operating Engineers Local Union No. 103 ("Union"). The agreements require Defendant to make contributions to the Fund on behalf of its eligible employees. Id., ¶¶ 6 and 7.

f. Defendant (1) has failed to make timely contributions to the Fund; (2) is, thereby, in violation of ERISA, 29 U.S.C. § 1145; and (3) has failed to perform obligations under the collective bargaining ...


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