Trustees on Behalf of General Employees Trust Fund v. Aleph Maintenance, Inc.

Background

The Trust Fund sued Aleph Maintenance, Inc. under the Employee Retirement Income Security Act (ERISA), seeking unpaid employee-benefit contributions and related relief. The opinion states that Aleph was bound by collective bargaining agreements requiring health and welfare contributions for covered employees and compliance with the Trust Agreement. The Trust Agreement provided for 7% annual simple interest on unpaid contributions, liquidated damages, audit fees in certain circumstances, and attorney’s fees and costs.

The Trust Fund’s auditor requested payroll records for January 1, 2020, through December 31, 2023. Aleph did not respond to the audit requests. After an audit, the auditor identified $14,344.34 in underpaid contributions. Aleph did not dispute the findings and ultimately did not make the requested payments.

Default and Jurisdiction

Aleph was served through its registered agent but did not answer the operative complaint. The clerk entered default on August 8, 2025. Aleph did not formally appear or oppose the motion for default judgment, although the opinion states that Aleph had previously participated in the audit, attempted to negotiate a resolution, and appeared at an earlier hearing.

The court concluded that it had subject-matter jurisdiction under ERISA and the Labor Management Relations Act. It also found personal jurisdiction and venue proper and determined that service of process was adequate.

Default-Judgment Analysis

Applying the factors used to evaluate default-judgment requests, the court found that the Trust Fund would be prejudiced without a judgment, had sufficiently stated a valid ERISA claim, and had supported the requested damages. The court also found little likelihood of a factual dispute, no indication that Aleph’s default resulted from excusable neglect, and that these considerations outweighed the federal rules’ preference for decisions on the merits.

Recommended Damages

The court recommended awarding the following amounts:

- Unpaid contributions: $14,344.34 - Liquidated damages: $2,868.87 - Interest: $2,554.13 - Audit fees: $1,290.00 - Attorney’s fees: $19,251.00 - Costs: $1,546.86 - Total: $41,855.20

The recommended liquidated damages reflected 20% of the unpaid contributions. The court reduced the requested costs by excluding $510.27 for improper service attempts. It also reduced attorney’s fees by $4,380.00 for 14.6 hours of billing and applied an additional 10% reduction because of substantial overbilling concerns.

Disposition and Further Procedure

Judge Kandis Westmore recommended that the Trust Fund’s motion for default judgment be GRANTED IN PART AND DENIED IN PART. The matter was reassigned to a district judge because Aleph, having defaulted, had not consented to magistrate-judge jurisdiction. The Trust Fund was instructed to serve Aleph with the report and recommendation and file proof of service. Either party could object within 14 days after service, and the report warned that failing to object could waive the right to appeal the district court’s order.