Operating Engineers Health And Welfare Trust Fund v. Edgecombe Crane LLC

Background

The plaintiffs are employee benefit plans and their trustees. They sued Edgecombe Crane LLC for unpaid and late-paid benefit contributions allegedly required by bargaining and trust agreements. Those agreements required contributions based on hours worked by or paid to Edgecombe’s employees and provided for interest, liquidated damages, attorney fees, audit fees, and other collection expenses.

Legal standard and analysis

Under Federal Rule of Civil Procedure 55, a clerk must first enter default before the court may decide whether to enter a default judgment. The court considered the factors used to evaluate such a request, including prejudice to the plaintiffs, the apparent strength of their claims, the sufficiency of the complaint, the amount at stake, the likelihood of factual disputes, whether Edgecombe’s failure to respond was excusable, and the preference for decisions on the merits.

The court found that federal jurisdiction existed under the Employee Retirement Income Security Act (ERISA) and the Labor Management Relations Act. It also found that Edgecombe had been properly served through its registered agent. The court concluded that ERISA required an employer bound by a collective bargaining agreement to make contributions according to that agreement. Because the agreements provided for liquidated damages and the plaintiffs showed that unpaid contributions existed when the lawsuit was filed, the court found that the plaintiffs had established their entitlement to unpaid contributions, interest, liquidated damages, reasonable attorney fees, and costs.

The court accepted the plaintiffs’ supporting declarations, calculations, pay stubs, and other documents. It also allowed claims for contributions that became delinquent after the lawsuit was filed, explaining that requiring a new lawsuit for each later delinquency would undermine ERISA’s goals. The agreements called for liquidated damages of 20 percent after litigation began and interest at 10 percent per year on delinquent contributions.

Relief and disposition

The court granted the plaintiffs’ motion for default judgment. It awarded $47,063.06 for delinquent payments, $18,109.50 in reasonable attorney fees, and $559.58 in costs, for a total judgment of $65,732.14 against Edgecombe Crane, LLC. Judge Richard Seeborg also vacated the hearing set for July 31, 2025.