                               UNITED STATES DISTRICT COURT
                               FOR THE DISTRICT OF COLUMBIA

 JAMES BOLAND et al.,

                        Plaintiffs,

                        v.                          Case No. 14-cv-01943 (CRC)

 CACPER CONSTRUCTION CORP. et al.,

                        Defendants.

                             MEMORANDUM OPINION AND ORDER

       On November 19, 2014, trustees of two union pension funds brought an action under the

Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002 et seq., to recover

unpaid contributions to those funds from a defunct New York construction company and its

principal, Adam Kulig. Defendants never responded to the complaint, the Clerk’s entry of default,

or the Court’s Order to Show Cause why judgment should not be entered against them. Plaintiffs

moved on March 19, 2015 for an entry of default judgment against the company and Kulig. On

July 16, 2015, the Court issued an order granting Plaintiffs’ motion as to the company, but denying

their motion as to Kulig, noting that “liability for delinquent pension contributions ordinarily does

not extend to individual corporate officers.” Mem. Op. & Order 1.

       In a second effort to hold Kulig liable, Plaintiffs moved on August 13, 2015 to alter or

amend the judgment, claiming that the Court “misapprehen[ded] . . . the basis for [their] claim for

personal liability” against Kulig. Pls.’ Mot. Alter or Amend J. 1. Plaintiffs suggest that the Court

mistakenly understood them to argue that Kulig was “liable for delinquent pension contributions

simply by virtue of his status as a corporate owner or officer,” id., when they were actually arguing

that Kulig was liable “based on the uncontested and therefore conceded allegation that he continued

to carry on the business of Cacper Construction, beyond that necessary to wind up its affairs, after
the company was dissolved,” id. at 1–2. According to Plaintiffs, because “there is ample New York

caselaw holding a corporate owner personally liable in these circumstances, the Court’s July 16,

2015 judgment should [be] altered so as to include a default judgment against Kulig.” Id. at 2.

       If Plaintiffs intended to argue that Kulig had taken on Cacper Construction’s liability, under

New York law, as a result of entering into collective bargaining agreements on Cacper’s behalf

after it had dissolved, one would not know it from reading Plaintiffs’ Complaint or Motion for

Default Judgment. Indeed, Plaintiffs made only the conclusory allegation that “Kulig has continued

to carry on the business of Cacper Construction after October 26, 2011 beyond that necessary to

wind up its affairs.” Compl. ¶ 15. Plaintiffs never spelled out what Kulig did to carry on the

business of Cacper, making it difficult to determine whether his actions were or were not

“necessary to wind up [Cacper’s] affairs.” This perfunctory presentation on Plaintiffs’ part led the

Court to understand that Plaintiffs sought to hold Kulig “liable for delinquent pension contributions

simply by virtue of his status as a corporate owner or officer.” Pls.’ Mot. Alter or Amend J. 1.

       Nonetheless, based on the Court’s own review of the collective bargaining agreements

submitted by Plaintiffs with their complaint, it appears that Kulig did in fact operate Cacper

Construction in a manner beyond that necessary to wind up its affairs post-dissolution. And based

on the case law of New York—which Plaintiffs neglected to cite or reference anywhere in their

memorandum of support for their Motion for Entry of Default Judgment—the Court concludes that

Kulig is personally liable for the delinquent contributions. The Court will therefore amend its

judgment of July 16, 2015 so as to include a default judgment against Kulig in the full amount of

$31,367.22.

       I.      Background

       As detailed in the Court’s July 16, 2015 Memorandum Opinion and Order, Cacper

Construction Corp. is a dissolved New York corporation that employed members of the

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International Union of Bricklayers and Allied Craftworkers. Compl. ¶¶ 5, 7. The construction

company and the union entered into collective bargaining agreements that obligated Cacper to make

payments to the Bricklayers & Trowel Trades International Pension Fund (“IPF”) and the

International Masonry Institute (“IMI”). Id. ¶ 7. These contributions funded pensions and other

benefits to employees working under contracts negotiated by Bricklayer local unions and

employers. Stupar Decl. ¶ 3.

         The IPF and the IMI are “employee benefit plans” and “multiemployer plans” under ERISA.

With these designations come certain obligations. Pursuant to ERISA and the funds’ written

procedures governing the collection of employer contributions (“Collection Procedures”), Cacper

was required to submit monthly reports and payments to the IPF and IMI for covered employees.

Stupar Decl. Attach. 1, at 1. Because Cacper failed to make the required contributions, the trustees

were entitled to file suit to recover (1) 15 percent interest on those unpaid contributions; (2) an

additional assessment of 15 percent interest per year or 20 percent of the delinquent contributions,

whichever is higher; and (3) attorneys’ fees and other litigation costs. See id. at 1–2; accord 29

U.S.C. § 1132(g)(2) (A fiduciary may file suit “for or on behalf of a plan to enforce section 1145 of

this title”).

         Plaintiffs, trustees of the IPF and the IMI, alleged that Cacper failed to make payments

during various periods between September 2012 and June 2014. Compl. ¶ 11. Plaintiffs contended

that Adam Kulig, the owner, had continued operating the business—even though Cacper’s

corporate status was dissolved in 2011—and is liable for the debts and obligations of the company.

Id. ¶¶ 14–15. The defunct corporation and Kulig were properly served in February 2015. Pls.’

Mot. Default J. 1; Return Service Affs. (ECF Nos. 4, 6). Neither responded to the complaint, and

the Clerk of the Court entered default. Pls.’ Mot. Default J. 1–2. Plaintiffs moved for entry of

default judgment against both Cacper and Kulig. Id. at 2. They sought statutory and contractual

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contributions, interest, attorneys’ fees and costs, and an order directing Cacper to comply with its

obligations to the IPF and the IMI. In all, Plaintiffs sought $31,367.22 in damages for the pension

funds. Id. at 2.

        II.        Standard of Review

        Plaintiffs’ motion raises two issues: first, whether the Court may amend its judgment of July

16, 2015, and second, whether an entry of default judgment against Adam Kulig is appropriate.

This Court has the discretion to alter or amend its judgment pursuant to Federal Rule of Civil

Procedure 59(e). See Flynn v. Dick Corp., 565 F. Supp. 2d 141, 145 (D.D.C. 2008) (“The decision

to grant or deny a motion to alter or amend judgment is within the discretion of the district court.”),

order amended on reconsideration, 620 F. Supp. 2d 33 (D.D.C. 2009). The Court may choose to

exercise this discretion if, for instance, it has “misapprehended a party’s position.” Id.

        Plaintiffs’ quest for a default judgment involves a two-step procedure. See Lanny J. Davis

& Assocs. LLC v. Republic of Equatorial Guinea, 962 F. Supp. 2d 152, 161 (D.D.C. 2013). First, a

plaintiff must request that the Clerk of the Court enter default against a party who has “failed to

plead or otherwise defend.” Fed. R. Civ. P. 55(a). Second, a plaintiff must move for entry of a

default judgment. Fed. R. Civ. P. 55(b). Default judgment is available when “the adversary

process has been halted because of an essentially unresponsive party.” Boland v. Elite Terrazzo

Flooring, Inc., 763 F. Supp. 2d 64, 67 (D.D.C. 2011). “Default establishes the defaulting party’s

liability for the well-pleaded allegations of the complaint.” Id. After establishing liability, a court

must make an independent evaluation of the damages to be awarded, and it has “considerable

latitude in determining the amount of damages.” Id. Plaintiffs must “prove [their] entitlement” to

the relief requested using “‘detailed affidavits or documentary evidence’ on which the court may

rely.” Boland v. Providence Constr. Corp., 304 F.R.D. 31, 36 (D.D.C. 2014) (quoting Fanning v.

Permanent Solution Indus., Inc., 257 F.R.D. 4, 7 (D.D.C. 2009)).

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        III.    Analysis

        In light of Plaintiffs’ clarification that Kulig should be held personally liable under New

York law as a result of his actions after the dissolution of Cacper, the Court concludes that Federal

Rule of Civil Procedure 59(e) permits it to alter or amend its prior judgment, in which it declined to

enter default judgment against Kulig. Mem. Op. & Order 1. The Court must still determine

whether entry of default judgment against Kulig is appropriate and, if Kulig is liable, whether

Plaintiffs are entitled to the full amount of relief they request. The Court concludes that Kulig is

personally liable for Cacper’s breach of its duties under ERISA and the Collection Procedures and

that Plaintiffs are entitled to the full amount of relief requested.

                A.         Liability

        Plaintiffs filed suit in November 2014 to recover the damages prescribed by ERISA and the

Collection Procedures. Compl. ¶ 1. Cacper was served with the Summons and Complaint on

February 2, 2015, and Kulig was served with the Summons and Complaint on February 5, 2015.

Pls.’ Mot. Default J. 1; Return Service Affs. (ECF Nos. 4, 6). The Clerk of the Court declared

Cacper to be in default on February 26, 2015 and Kulig to be in default on March 4, 2015. Pls.’

Mot. Default J. 2. The Court mailed an Order to Show Cause why judgment should not be entered

for Plaintiffs to both Defendants on May 4, 2015. Neither Defendant has responded to the

Complaint, the Clerk’s entry of default, or the Court’s Order to Show Cause.

                        1. Cacper Construction Company’s Liability

        Because the Clerk of the Court has entered default, the Court accepts Plaintiffs’ well-pled

allegations as true to determine whether Defendants are liable and entry of default judgment is

appropriate. Elite Terrazzo Flooring, 763 F. Supp. 2d at 67. ERISA requires employers to make

contributions to multiemployer plans “in accordance with the terms and conditions of” the relevant

collective bargaining agreements. 29 U.S.C. § 1145. The IPF’s and IMI’s Collection Procedures

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specify that contributions are due “on or before the 15th day of the month” after the month in which

work was performed. Stupar Decl. Attach. 1, § 1.A.1. Plaintiffs submitted the declaration of David

F. Stupar, the Executive Director of the IPF and an authorized representative of the IMI, which set

forth in detail Cacper’s failure to make the required payments for various months between

September 2012 and June 2014. Stupar Decl. ¶¶ 9–10. As the Court held in its Memorandum

Opinion and Order of July 16, 2015 by failing to make these payments on time, Cacper became

liable for statutory and contractual damages. The Court may enter default judgment when a

defendant makes no request “to set aside the default” and gives no indication of a “meritorious

defense.” Fanning, 257 F.R.D. at 7. Cacper had not responded as of July 16, 2015 to the

Complaint since being served in February. The Court therefore concluded that entry of default

judgment against Cacper was appropriate. Mem. Op. & Order 1.

                       2. Adam Kulig’s Liability

       Kulig was also properly served and has not responded, and the Court now reconsiders

whether, in light of Plaintiffs’ clarification, default judgment against Kulig is appropriate.

Although “liability for delinquent pension contributions . . . does not [ordinarily] extend to an

individual corporate owner or officer,” Int’l Broth. of Painters & Allied Trades Union v. George A.

Kracher, Inc., 856 F.2d 1546, 1550 (D.C. Cir. 1988), the law of New York—where Cacper was

incorporated—may impose personal liability on Kulig if he took significant action on Cacper’s

behalf after Cacper had dissolved, see 80-02 Leasehold, LLC v. CM Realty Holdings Corp., 999

N.Y.S.2d 158 (2014).

       Plaintiffs support their assertion that “Kulig . . . continued to carry on the business . . .

after [it dissolved] beyond that necessary to wind up its affairs,” id., by providing copies of the

“collective bargaining agreements [signed by Kulig,] . . . which obligated Cacper Construction to

submit monthly reports and payments to the IPF and IMI on behalf of its covered employees.”

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Stupar Decl. ¶ 9. Kulig appears to have signed one of these agreements on December 13, 2012,

which purports to extend an earlier agreement from July 1, 2012 through June 30, 2015. Compl.

Ex. B. Kulig’s signature on this agreement indicates that he was conducting significant business on

behalf of Cacper well after it dissolved in October 2011 and that he was entering into contractual

obligations on the dissolved corporation’s behalf in his capacity as its owner and operator. The

Court therefore finds that Kulig entered into a contract on behalf of a dissolved corporation, in

addition to serving as an officer of that dissolved corporation.

       Under New York case law, a person purporting to act on behalf of a dissolved corporation

can be held personally liable for any liability that he caused the corporation to incur. For example,

in 80-02 Leasehold, LLC, a New York appeals court observed, “Upon dissolution, [a] corporation’s

legal existence terminates and it is prohibited from carrying on new business. . . . It retains a limited

de jure existence solely for the purpose of winding up its affairs.” Id. at 160. The court went on to

hold that “[a] person who purports to act on behalf of a dissolved corporation is personally

responsible for obligations incurred.” Id. at 160. This “liability is not limited to the person who

executes a contract on behalf of a dissolved corporation, but extends to the officers of the dissolved

corporation.” Id. Additionally, in a recent ERISA case, the U.S. District Court for the Eastern

District of New York held that a sole proprietor could be personally liable under a collective

bargaining agreement for ERISA obligations if that person “acted on behalf of a nonexistent

corporation.” LaBarbera v. Avaline Trucking Inc., No. 07–CV–4698 (NG)(SMG), 2009 WL

3497491, at *4 (E.D.N.Y. 2009). The court found that “by signing the [collective bargaining

agreement] and doing business on behalf of a nonexistent corporation, [a person] assume[s]

personal liability for the obligations the [collective bargaining agreement] imposes on” the

corporation. Id. Such a person, the court ruled, “qualifies as ‘an employer’ under [ERISA] and is

personally liable for plaintiffs’ claims pursuant to that statute.” Id.

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          Because a corporation’s legal existence terminates (except for very limited purposes) when

it is dissolved, and because Cacper appears to have been dissolved when at least one of the

agreements at issue here was signed, a person who entered into such an agreement on Cacper’s

behalf would be personally liable under New York law. Plaintiffs have asserted and provided

evidence to show that Kulig entered into an agreement on Cacper’s behalf under these

circumstances. As a result, because a default judgment against Cacper was appropriate in this case,

so too is a default judgment against Kulig. Having previously held that Plaintiffs are entitled to

$31,367.22 from Cacper Construction Corp., the full amount of relief requested, Mem. Op. & Order

5–7, the Court will enter judgment against Adam Kulig in the same amount.

          IV.    Conclusion

          For the foregoing reasons, it is hereby

          ORDERED that [13] Plaintiffs’ Motion to Alter or Amend Judgment is GRANTED. It is

further

          ORDERED that [12] the Order of July 16, 2015 is VACATED as to the dismissal of claims

against Defendant Adam Kulig. It is further

          ORDERED that Plaintiffs are awarded a monetary judgment against Adam Kulig in the

amount of $31,367.22.

          This is a final, appealable order.

          SO ORDERED.




                                                             CHRISTOPHER R. COOPER
                                                             United States District Judge

Date:      September 17, 2015



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