U.S. District Court for W. District of NY grants plaintiff's motion

Where the defendant failed to respond to the plaintiffs' complaint, the U.S. District Court for the Western District of New York granted the plaintiffs' motion for default judgment.

In International Brotherhood of Electrical Workers Local Union No. 237, et al. v. Modern Tech Design & Services, Inc., Judge John T. Elfvin found the plaintiffs were entitled to default judgment since there was no genuine issue of fact that the defendant failed to follow the terms of the collective bargaining agreement. Consequently, the judge ordered the defendant to allow the plaintiffs to conduct an audit of its payroll books and awarded the plaintiffs attorney's fees.

The Parties, CBAs

The plaintiffs consisted of the International Brotherhood of Electrical Workers Local Union No. 237, several labor management trust funds and trustees of the funds. In November 2004, they filed a lawsuit against their employer, Modern Tech Design & Services, Inc.

Modern Tech was a member of the Niagara Division of the Western New York State Chapter of the National Electrical Contractors Association (NECA), which negotiates collective bargaining agreements with the union on behalf of its members. Modern Tech allegedly signed an agreement in October 1994 which authorized the NECA to be its collective bargaining representative with the union.

The plaintiffs alleged Modern Tech violated two collective bargaining agreements and the Employee Retirement Income Security Act (ERISA).

Under the two collective bargaining agreements, Modern Tech was required to: (1) pay monetary contributions to the fund for all the work performed by its employees who were covered by the collective bargaining agreements; (2) retain and pay the union membership contributions deducted from each union employee's wages; and (3) permit and cooperate with the funds and/or their agents in the conduct of audits of the company's books and records, including, but not limited to, all payroll books and records.

In 2003, the plaintiffs sent letters to Modern Tech in which they requested an audit of its payroll records. However, Modern Tech allegedly failed to cooperate with the audits resulting in the plaintiffs not knowing the amounts that Modern Tech owed them.

Motion For Default Judgment

In November 2004, the plaintiffs served a summons and complaint on Modern Tech. When Modern Tech failed to appear, the plaintiffs obtained an entry of default from the clerk on Jan. 5.

The plaintiffs subsequently filed a motion for default on March 10 in which they sought an order directing Modern Tech to: (1) permit and cooperate in the conduct of audits of its payroll books and records for the period of Sept. 1, 2000 through March 31, 2003; (2) pay them any additional fringe benefit contributions, union dues, interest and liquidated damages found due as a result of the audit; and (3) reimburse them for their costs and attorney's fees.

Court's Discussion, Rule 55

In reviewing the plaintiffs' motion for default judgment, the court referred to Rule 55 of the Federal Rules of Civil Procedure, which allows a motion for default to be granted against a party who has failed to plead or defend itself.

In addition, before granting a motion for default judgment, a court must determine whether the plaintiff's factual allegations are sufficient to state a claim for relief on each of the causes of action for which the plaintiff seeks judgment by default, see W.A.W. Van Limburg Stirum v. Whalen, 1993 US Dist. LEXIS 8898, at *8 (NDNY 1993).

After reviewing the collective bargaining agreements, the court determined the plaintiffs' motion for default judgment should be granted.

[P]ursuant to the collective bargaining agreements, defendant is obligated to allow plaintiffs and/or their agents to audit its payroll books and records to verify payments made to or due to plaintiffs for the period Sept. 1, 2000 through March 31, 2003 and to pay the reasonable costs and attorney's fees incurred by plaintiffs in an action to obtain an audit of defendant's payroll books and records and the costs of the audit itself, explained the court. In light of defendant's failure to answer the complaint, there is no genuine issue of material fact to be submitted to the court, see Joe Hand Promotions, Inc. v. Alba, 2002 WL 1484398, at *1 (SDNY 2002).

As a result, the court ordered Modern Tech to permit the plaintiffs to conduct an audit of the company's payroll books and records for the period Sept. 1, 2000 through March 31, 2003. The court also awarded attorney's fees to the plaintiffs in the amount of $3,590.

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