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Trustees of Hawaii Sheet Metal Workers' Trust Funds v. Akua Air Conditioning LLC

United States District Court, D. Hawaii

December 3, 2019

TRUSTEES OF THE HAWAII SHEET METAL WORKERS' TRUST FUNDS, ET AL., Plaintiffs,
v.
AKUA AIR CONDITIONING LLC, CATHERINE A. BAITLON, AND CALBERT H. BAITLON, Defendants.

          FINDINGS AND RECOMMENDATION TO GRANT PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANTS AKUA AIR CONDITIONING LLC, CATHERINE A. BAITLON, AND CALBERT H. BAITLON

          Wes Reber Porter United States District Judge.

         Before the Court is Plaintiffs' Motion for Entry of Default Judgment against Defendants Akua Air Conditioning LLC, Catherine A. Baitlon, and Calbert H. Baitlon, filed on October 11, 2019 (Motion). See ECF No. 13. The Court found the Motion suitable for disposition without a hearing pursuant to Rule 7.1(c) of the Local Rules of Practice of the United States District Court for the District of Hawaii. See ECF No. 14. The Court FINDS AND RECOMMENDS that Plaintiffs' Motion be GRANTED.[1]

         BACKGROUND

         According to the Complaint, Defendant Akua Air Conditioning LLC (Akua) entered into an agreement to contribute and pay to Plaintiffs certain amounts for employee benefits for work performed by Defendant Akua's covered employees and to submit certain paperwork to Plaintiffs so that they could audit the amounts paid by Defendant Akua (Agreement). See ECF No. 1 ¶¶ 7, 8. The Agreement required contributions to be paid monthly. See id. ¶ 9. Plaintiffs claim that Defendant Akua failed to submit the required paperwork and failed to make the required contributions from October 2017 through June 2019. See id. ¶¶ 13-14, 16-17. Plaintiffs further allege that Defendant Akua may owe additional contributions, but those amounts are unknown because Defendant Akua has refused to submit the required reports. See id. ¶ 18. Plaintiffs request an order directing Defendant Akua to provide the required documentation to Plaintiffs and an award for unpaid contributions, interest, liquidated damages, and attorneys' fees and costs. See id. at 11-13.

         The Complaint also alleges that Defendants Catherine A. Baitlon and Calbert H. Baitlon (the Baitlon Defendants) executed a letter agreement, promissory notice, and guaranty for payment of all delinquencies owed to Plaintiffs by Defendant Akua on November 19, 2018. See id. ¶ 25. Plaintiffs allege that the Baitlon Defendants have defaulted on their payment obligations under the terms of the letter agreement, promissory notice, and guaranty. See id. ¶ 26. Plaintiffs request that the Court find that the Baitlon Defendants are jointly and severally liable to Plaintiffs under the guaranty for the amount owed to Plaintiffs by Defendant Akua. See id. ¶ 28.

         The Clerk entered default against all Defendants pursuant to Rule 55(a) of the Federal Rules of Civil Procedure on September 10, 2019. See ECF No. 11. This Motion followed.

         DISCUSSION

         Default judgment may be entered if the defendant has defaulted by failing to appear and the plaintiff's claim is for a “sum certain or for a sum which can by computation be made certain[.]” Fed.R.Civ.P. 55(b)(1), (2). The granting or denial of a motion for default judgment is within the discretion of the court. Haw. Carpenters' Trust Funds v. Stone, 794 F.2d 508, 511-12 (9th Cir. 1986). Default judgments are ordinarily disfavored, and cases should be decided on their merits if reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986).

         A. Jurisdiction

         Before considering the merits of default judgment, the Court has an affirmative obligation to determine whether it has subject matter jurisdiction over this action and personal jurisdiction over Defendant. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“To avoid entering a default judgment that can later be successfully attacked as void, a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place.”). Here, the Court has subject matter jurisdiction over Plaintiffs' federal claims under the Employee Retirement Income Security Act. See 29 U.S.C. §§ 1401(b)(1). The Court has personal jurisdiction over Defendants because Plaintiffs allege that Defendant Akua is a Hawaii corporation, that the Baitlon Defendants are Hawaii residents, and that all Defendants were properly served. See ECF Nos. 7-11.

         B. Default Judgment Factors

         Following a determination that jurisdiction is proper, the Court must consider whether default judgment is appropriate. The court should consider the following factors in deciding whether to grant a motion for default judgment:

(1) the possibility of prejudice to the plaintiff;
(2) the merits of plaintiff's substantive claim;
(3) the sufficiency of the complaint;
(4) the sum of money at stake in the action;
(5) the possibility of a dispute concerning ...

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