Unite Here Retirement Fund v. Angelo of Mulberry Street Inc.

Background

The Unite Here Retirement Fund and the trustees of the fund sued Angelo of Mulberry Street Inc. under the Employee Retirement Income Security Act (ERISA) for failing to pay withdrawal liability. The plaintiffs alleged that Angelo permanently stopped its covered operations and therefore completely withdrew from the retirement plan. They also alleged that Angelo failed to provide information requested in writing to help the fund assess withdrawal liability.

Angelo was served but did not appear or file a responsive pleading. The Clerk certified Angelo’s default. The plaintiffs moved for default judgment and served the motion and supporting papers.

Liability

Before entering a default judgment, the court must determine whether the complaint’s well-pleaded allegations establish liability as a matter of law. The court treated those allegations as true for purposes of liability because of Angelo’s default, but it separately required the plaintiffs to substantiate the damages they sought.

The court held that the plaintiffs stated an ERISA claim for withdrawal liability. The complaint and attached exhibits supported allegations that the plan existed, Angelo withdrew from it, the plaintiffs calculated the amount owed, notified Angelo, and demanded payment. The court also held that the plaintiffs stated a claim based on Angelo’s failure to provide reasonably related information within 30 days after the written request.

The court held that the plaintiffs did not state a claim that Angelo was under common control with the John Doe defendants. The plaintiffs alleged no facts about ownership establishing membership in a commonly controlled group and did not allege that the other defendants received notice. The court therefore denied default judgment as to any John Doe defendant.

Damages and fees

The court found no need for a separate hearing to determine damages because the plaintiffs’ affidavits and documents established the amounts with reasonable certainty. It awarded:

- $3,543,628 in unpaid withdrawal liability; - $404,268.89 in interest, calculated under the plan’s interest rate from the payment due date; - $708,725.60 in liquidated damages, representing 20 percent of the unpaid withdrawal liability; and - $983 in costs.

The court did not award attorney’s fees because the plaintiffs did not provide contemporaneous time records or other information supporting the reasonableness of the requested fees. The request for attorney’s fees was denied without prejudice and with leave to renew. Any renewed request had to be filed within 30 days after the order.

Disposition

The opinion states that the motion for default judgment was granted in part. The conclusion states that the plaintiffs’ motion was granted and identifies the monetary awards, while separately stating that attorney’s fees were denied without prejudice to renewal. The Clerk was directed to enter judgment, close the motion, and mark the case closed.