      Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 1 of 11



                                  UNITED STATES DISTRICT COURT
                                  FOR THE DISTRICT OF COLUMBIA



 SERVICE EMPLOYEES INTERNATIONAL
 UNION NATIONAL INDUSTRY PENSION
 FUND, et al.,
                                                                          Civil Action No. 13-1350
            Plaintiffs,                                                           KBJ/DAR
            v.

 CRYSTAL CLEANING SYSTEMS, INC.,

            Defendant.


                                  REPORT AND RECOMMENDATION

        Plaintiffs, an employee pension benefit plan administered in the District of Columbia and

the individual Trustees of that plan, bring this action under the Employee Retirement Income

Security Act (“ERISA”) and the Labor Management Relations Act (“LMRA”) “to collect

contractually required remittance reports, unpaid collectively bargained contributions, and

interest owed by the Defendant.” Complaint (Document No. 1) ¶ 1. This action was referred to

the undersigned United States Magistrate Judge for full case management, see 02/04/2014

Minute Order, following the Clerk’s entry of default as to Defendant, see Default (Document No.

6); see also 11/25/2013 Minute Order (directing Plaintiffs either to move for default judgment or

to file a stipulation of dismissal).

        Pending for consideration by the undersigned is Plaintiffs’ Motion for Default Judgment

(Document No. 7). The undersigned conducted a hearing on Plaintiffs’ motion on February 27,

2014, at which Plaintiffs introduced evidence of the damages claimed, see Hearing Exhibit 1.1

        1
            The undersigned has provided the exhibit to the assigned United States District Judge.
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 2 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   2

Following the hearing, Plaintiffs, in accordance with the undersigned’s order, filed a

supplemental memorandum addressing their request for attorneys’ fees. See Plaintiffs’

Supplemental Brief in Support of Motion for Default Judgment (“Supplemental Memorandum”)

(Document No. 11). Upon consideration of Plaintiffs’ motion, the memoranda in support

thereof, the evidence presented, and the entire record herein, the undersigned will recommend

that the court grant Plaintiffs’ motion and enter default judgment against Defendant.


BACKGROUND

        Plaintiff Service Employees International Union National Industry Pension Fund

(“Fund”) is an “employee pension benefit plan” and “multiemployer plan” as defined by ERISA,

and “a jointly administered trust fund established pursuant to” the LMRA, which is administered

in the District of Columbia. Complaint ¶ 4. The Fund provides pension benefits to eligible

employees. Id. The individual Plaintiffs are authorized Trustees of the Fund, and fiduciaries as

defined by ERISA, who administer the Fund for its beneficiaries. Id. ¶ 5. Defendant Crystal

Cleaning Systems, Inc. is an employer which was a party to collective bargaining agreements

with the Service Employees International Union, Local 1877 (“Union”) for its employees at

certain work sites at which it provided janitorial services. Id. ¶¶ 8-9; Declaration of Kenneth J.

Anderson, Jr. (“Declaration”) (Document No. 7-1) ¶ 4.

        Defendant and the Union entered into a collective bargaining agreement on November 6,

2006, under which Defendant was required to make monthly contributions to the Fund for

covered employees. See Declaration ¶¶ 4, 6; Declaration, Exhibit A at 10. Initially, Defendant

was required to contribute $0.15 an hour “for each hour worked by employees to the [Fund].”

Declaration, Exhibit A at 10. The rate increased to $0.25 an hour effective July 1, 2007. Id.
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 3 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   3

Beginning July 1, 2008, the rates were established based on the employees’ “length of service”;

Defendant was required to contribute $0.30 an hour for employees of one year, $0.40 an hour for

employees of two years, and $0.50 an hour for employees of three years. Id. at 10-11. The

parties renewed their collective bargaining agreement through three agreements – titled “Janitor I

Agreement,” “Janitor II Agreement,” and “Janitor III Agreement” – effective November 1, 2009.

Declaration ¶ 4; see also Complaint, Exhibit 1. Each of the three agreements established the rate

at which Defendant was required to contribute to the Fund for covered employees – $0.30 an

hour under the Janitor I Agreement, $0.40 an hour under the Janitor II Agreement, and $0.50 an

hour under the Janitor III Agreement. Complaint, Exhibit 1 at 3, 10, 17.

        Each agreement included an appendix, setting forth the terms of Defendant’s participation

in the Fund. The appendices provided, in pertinent part, that Defendant’s “[c]ontributions shall

be transmitted together with a remittance report containing such information, in such manner,

and on such form as may be required by the Fund or their designee.” Declaration, Exhibit A at

23; Complaint, Exhibit 1 at 6, 13, 20. The terms further provided that Defendant “agrees to be

bound by the provisions of the Agreement and Declaration of Trust establishing the Fund . . . and

by all resolutions and rules adopted by the Trustees pursuant to the powers delegated to them by

that agreement, including collection policies . . . .” Declaration, Exhibit A at 23; Complaint,

Exhibit 1 at 7, 14, 21.

        The Agreement and Declaration of Trust (“Fund Agreement”) reiterates the requirement

that employers submit reports and contributions to the Fund, and sets forth the authority of the

Fund’s Trustees to develop rules and regulations governing the Fund’s operation. Complaint,

Exhibit 2 at 2, 5. In accordance with the terms of the collective bargaining agreements and the
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 4 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.        4

Fund Agreement, Trustees of the Fund promulgated policies concerning collection of delinquent

contributions. Declaration ¶ 9; Complaint, Exhibit 3. The Fund’s Statement of Policy for

Collection of Delinquent Contributions stipulates that an employer that is delinquent in its Fund

contributions shall be liable for interest, calculated from the date the contributions were due until

the payment is received, at a rate of 10 percent per annum; liquidated damages, after a legal

action is commenced, at 20 percent of the delinquent contributions; reasonable attorneys’ fees

and costs incurred.2 Declaration ¶¶ 10-11; Complaint, Exhibit 3 at 8-9 (Section 5).

         In addition to the required contributions and the charges for late-paid contributions,

employers were required to pay surcharges to the Fund as a result of the Fund’s “critical status”

in 2009 through 2013. Declaration ¶ 12. Because of its critical status, the Fund established a

Rehabilitation Plan, in accordance with the Pension Protection Act of 2006, which imposed

surcharge payments equal to five percent of an employer’s contributions in November 2009, and

10 percent of its contributions for each month beginning in December 2009. Declaration ¶ 13;

Complaint, Exhibit 4; see generally 29 U.S.C. § 1085. Under the statute, failures to pay these

surcharges are treated as delinquent contributions. § 1085(e)(7)(B). Defendant was notified of

the Fund’s critical status, as well as the Rehabilitation Plan and required surcharges, through

annual letters. Declaration ¶¶ 12-13; Complaint, Exhibit 4; Complaint, Exhibit 5.


         2
           The Fund’s policy stipulates that “[t]he obligations to pay interest, liquidated damages and fees chargeable
under this policy are contractual in nature and independent of the provisions of ERISA Section 502(g).” Complaint,
Exhibit 3 at 9. Section 502(g) provides, in pertinent part, that “in any action under this subchapter by a fiduciary for
or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the
court shall award the plan (A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an amount equal
to the greater of (i) interest on the unpaid contributions, or (ii) liquidated damages provided for under the plan in an
amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the
amount determined by the court under subparagraph (A), (D) reasonable attorney’s fees and costs of the action, to be
paid by the defendant, and (E) such other legal or equitable relief as the court deems appropriate.” 29 U.S.C. §
1132(g)(2).
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 5 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   5

        Plaintiffs contend that beginning in 2007, in contravention of the parties’ agreements,

Defendant failed to submit required remittance reports, failed to pay required contributions and

surcharges, and failed to pay interest and liquidated damages that it had accrued on late-paid

contributions. Declaration ¶ 14; see also Hearing Exhibit 1. Defendant “became inactive” in the

Fund effective March 1, 2013. Declaration ¶ 4.

        After unsuccessfully attempting to collect the outstanding amounts from Defendant,

Complaint ¶ 27, Plaintiffs initiated this matter. In October 2013, the court observed that

Defendant’s responsive pleading was overdue, and ordered that it be filed by a date certain.

10/17/2013 Minute Order. Defendant failed to respond, and Plaintiffs sought entry of default.

The Clerk of Court entered default (Document No. 6) on November 15, 2013. In accordance

with an order of the court, see 11/25/2013 Minute Order, Plaintiffs then moved for default

judgment pursuant to Federal Rule of Civil Procedure 55(b)(2).


APPLICABLE STANDARD

        Rule 55 of the Federal Rules of Civil Procedure provides that “[w]hen a party against

whom a judgment for affirmative relief is sought has failed to plead or otherwise defend . . . the

clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). After the Clerk’s entry of default, the

party may then move for entry of default judgment by the court. Fed. R. Civ. P. 55(b)(2). “The

determination of whether default judgment is appropriate is committed to the discretion of the

trial court.” Fanning v. C & L Serv. Corp., 297 F.R.D. 162, 166 (D.D.C. 2013) (quoting Int’l

Painters & Allied Trades Indus. Pension Fund v. Auxier Drywall, LLC, 531 F. Supp. 2d 56, 57

(D.D.C. 2008)) (internal quotation marks omitted). The defendant “must be considered a totally

unresponsive party and its default plainly wilful, reflected by its failure to respond to the
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 6 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   6

summons and complaint, the entry of default, or the motion for default judgment.” ITPE Pension

Fund v. Stronghold Sec., LLC, No. 13-0025, 2014 WL 702580, at *1 (D.D.C. Feb. 25, 2014)

(citations omitted) (quoting another source) (internal quotation marks omitted). “The standard

for default judgment is satisfied where the defendant makes no request to set aside the default

and no suggestion that it has a meritorious defense.” Id. (citations omitted) (quoting another

source); see also C & L Serv. Corp., 297 F.R.D. at 166.

        “Entry of default by the Clerk of Court establishes the defaulting party’s liability for the

well-pleaded allegations of the complaint.” C & L Serv. Corp., 297 F.R.D. at 166 (citation

omitted). Unless the amount of damages is a sum certain, the court must make an “independent

determination” and has “considerable latitude” in awarding a sum of damages. Id.; see also ITPE

Pension Fund, 2014 WL 702580, at *1. The party moving for default judgment “must prove its

entitlement to the amount of monetary damages requested using detailed affidavits or

documentary evidence on which the court may rely.” C & L Serv. Corp., 297 F.R.D. at 166

(citation omitted). The court may also conduct a hearing in order to determine the appropriate

amount of damages. See id. (citing Fed. R. Civ. P. 55(b)(2)).


DISCUSSION

        Plaintiffs aver that “[j]urisdiction is conferred upon this Court” by 29 U.S.C. §§ 185(c),

1132(e), (f); 28 U.S.C. § 1331, and that “[v]enue is proper under” 29 U.S.C. § 1132(e)(2)

because the Fund is administered in the District of Columbia. Complaint ¶¶ 2, 3. Plaintiffs filed

Proof of Service (Document No. 4) indicating that the individual designated to accept service on

behalf of the corporate Defendant was served with the summons in this matter on September 18,

2013. Defendant has not filed an answer to Plaintiffs’ complaint, no appearance has been entered
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 7 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   7

on Defendant’s behalf, and the Clerk of Court has entered default. Accordingly, the undersigned

“adopts the well-pleaded allegations in the complaint as findings of fact regarding this matter.”

See C & L Serv. Corp., 297 F.R.D. at 167. Plaintiffs are thus entitled to default judgment for

Defendant’s failure to remit certain monthly reports, required contributions, interest charges,

liquidated damages, and surcharges. See Complaint ¶ 22.

        With respect to damages, Plaintiffs seek monetary relief for damages that they are able to

calculate, and equitable relief for the damages that they are unable to calculate. See Plaintiffs’

Memorandum in Support of Motion for Default Judgment (“Memorandum”) (Document No. 7)

at 9. In support of their request, Plaintiffs have provided the declaration of Kenneth J. Anderson,

Jr., the Fund’s Contribution Compliance Manager, who “maintain[s] the Fund’s records,

determine[s] whether participating employers have satisfied their obligations to make timely

contributions to the Fund, and assist[s] in efforts to collect delinquent contributions from

participating employers . . . .” Declaration ¶ 2. Plaintiffs also submitted documentary exhibits in

the form of copies of the parties’ agreements and tables detailing the amounts owed, paid, and

outstanding. The undersigned thus finds that Plaintiffs have established their entitlement to the

requested relief, as outlined below.


        Monetary damages for unpaid contributions, surcharges, interest, and liquidated
        damages

        Under the Janitor I Agreement, Defendant owes $647.89 in contribution payments,

$2,362.37 in surcharges, $1,039.03 in interest on late paid contributions, $2,528.12 in liquidated

damages for late paid contributions, and additional interest that continues to accrue at a rate of 10

percent until payments have been made. Declaration ¶¶ 19-24; see also Hearing Exhibit 1.
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 8 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.    8

Under the Janitor II Agreement, Defendant owes $1,813.78 in surcharges, $864.06 in interest on

late paid contributions, $1,901.28 in liquidated damages for late paid contributions, and

additional interest that continues to accrue until payments have been made. Declaration ¶¶ 27-

31; see also Hearing Exhibit 1. Under the Janitor III Agreement, Defendant owes $7,163.52 in

surcharges, $2,595.03 in interest on late paid contributions, $6,933.05 in liquidated damages for

late paid contributions, and additional interest that continues to accrue until payments have been

made. Declaration ¶¶ 34-38; see also Hearing Exhibit 1.3


        Attorneys’ fees and costs

        Plaintiffs are also entitled to $3,216 in attorneys’ fees and $450 in costs that they incurred

in this matter. See Supplemental Memorandum at 2. The undersigned finds that Plaintiffs have

demonstrated the reasonableness of their requested attorneys’ fees through a declaration of their

counsel, in which they set forth the rates of their counsel, and through invoices in which they

outline the hours billed by their counsel. See Declaration of Diana M. Bardes in Support of

Motion for Default Judgment and Attorneys’ Fees and Costs (Document No. 11-1); id., Exhibit

A. In support of their request for costs, Plaintiffs provide an invoice documenting the court’s

filing fee and a process server fee that they incurred while litigating this matter. See id., Exhibit

A.


        Equitable relief

        Plaintiffs aver that they are unable to calculate the amount due and owing for the months


        3
            There appears to be a typographical error with respect to Plaintiffs’ request for interest on late paid
contributions under the Janitor III Agreement. Compare Declaration ¶ 35, with Hearing Exhibit 1. The undersigned
relies on the calculation illustrated in Hearing Exhibit 1.
       Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 9 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   9

in which Defendant failed to submit a remittance report, and thus seek an order requiring

Defendant to conduct an accounting of past-due contributions, submit the outstanding remittance

reports, and pay the due and owing amounts. Memorandum at 5. Plaintiffs request that the court

retain jurisdiction over this matter pending Defendant’s compliance with the court’s order. Id. at

9. The undersigned finds that Plaintiffs are entitled to their requested relief. “ERISA authorizes

the court to provide for other legal or equitable relief as the court deems appropriate.” Int’l

Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., 239 F. Supp. 2d 26,

31 (D.D.C. 2002) (citing 29 U.S.C. § 1132(g)(2)(E)); see also Serv. Emps. Int’l Nat’l Indus.

Pension Fund v. Delta Window Cleaning Co., No. 12-00847, 2012 WL 3322368, at *2 (D.D.C.

Aug. 14, 2012) (granting the plaintiffs’ “request to enter a permanent injunction ordering

defendant to submit its delinquent remittance reports, conduct an accounting on all past-due

contributions, and pay all amounts due and owing to the Fund in accordance with its Agreement

with the Fund and the Fund’s governing documents”).

         Under the 2006 agreement, “Defendant failed to provide any reports or contributions for

the entire effective period . . . from April 2007 through October 2009.” Declaration ¶ 15.

Defendant failed to submit reports and contributions under the Janitor I Agreement for October

2012, December 2012, January 2013, and February 2013. Declaration ¶ 18; see also Hearing

Exhibit 1. Defendant failed to submit reports and contributions for August 2012, October 2012,

December 2012, January 2013, and February 2013 under the Janitor II Agreement. Declaration ¶

26; see also Hearing Exhibit 1. Finally, Defendant failed to submit reports and contributions

under the Janitor III Agreement for October 2012, December 2012, January 2013, and February

2013. Declaration ¶ 33; see also Hearing Exhibit 1. For these months, Defendant owes
      Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 10 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   10

contributions, interest, liquidated damages, and surcharges, in accordance with the rates set forth

in the respective agreements. See Declaration ¶¶ 16, 18, 26, 33.


CONCLUSION

        For all of the foregoing reasons, it is, this 13th day of June, 2014,

        RECOMMENDED that Plaintiffs’ Motion for Default Judgment (Document No. 7) be

GRANTED, and that judgment be entered against Defendant in the amount of $28,913.47, plus

additional interest at a rate of 10 percent that continues to accrue until payment is received, to

account for:4

        (1) $647.89 in delinquent contributions;

        (2) $4,498.12 in interest on late-paid contributions;

        (3) $11,362.45 in liquidated damages;

        (4) $11,339.67 in surcharges;

        (5) $3,666 in attorneys’ fees and costs; and it is

        FURTHER RECOMMENDED that the court order Defendant to conduct an accounting

of unpaid contributions, submit outstanding remittance reports, and pay the corresponding

contributions and related charges that are due and owing to the Fund.



                                                                                    /s/
                                                                       DEBORAH A. ROBINSON
                                                                       United States Magistrate Judge



        4
           The total amount also accounts for previous overpayments of contributions by Defendant in the amount of
$101.80 and $2,498.86. Declaration ¶¶ 31, 38. In addition, the undersigned has not added the additional interest to
date into the total amount, as it continues to accrue.
      Case 1:13-cv-01350-KBJ-DAR Document 12 Filed 06/13/14 Page 11 of 11



Service Employees International Union National Industry Pension Fund, et al. v. Crystal Cleaning Systems, Inc.   11



      Within fourteen days, any party may file written objections to this report and
recommendation. The objections shall specifically identify the portions of the findings and
recommendations to which objection is made and the basis of each such objection. In the
absence of timely objections, further review of issues addressed herein may be deemed
waived.
