Local Union 903 I.B.E.W. Health & Welfare Fund, et al v. MSH Properties, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
LOCAL UNION 903 I.B.E.W., 	)
HEALTH & WELFARE FUND, et al., 	)
)
Plaintiffs, 	)
)
v. 	) CIVIL ACTION 24-0420-WS-C
)
MSH PROPERTIES LLC, etc., 	)
)
Defendant. 	)
ORDER
This matter is before the Court on the plaintiffs' motion for default judgment.
(Doc. 22).
Entry of default must precede entry of default judgment, and “[b]efore a default
can be entered, … the party must have been effectively served with process.” 10 Charles
Alan Wright & Arthur R. Miller, Federal Practice & Procedure § 2682 at 14 (3rd ed.
1998). Default has previously been entered against the defendant, (Doc. 21), and the
Court prior to entry of default confirmed that the defendant was properly served with
summons and the amended complaint. (Docs. 18, 19).
“The defendant, by his default, admits the plaintiff’s well-pleaded allegations of
fact .... A default judgment is unassailable on the merits but only so far as it is supported
by well-pleaded allegations, assumed to be true.” Nishimatsu Construction Co. v.
Houston National Bank, 515 F.2d 1200, 1206 (5th Cir. 1975). Thus, “a default judgment
cannot stand on a complaint that fails to state a claim.” Chudasama v. Mazda Motor
Corp., 123 F.3d 1353, 1371 n.41 (11th Cir. 1997). Rather, “before entering a default
judgment for damages, the district court must ensure that the well-pleaded allegations of
the complaint ... actually state a cause of action and that there is a substantive, sufficient
basis in the pleadings for the particular relief sought.” Tyco Fire & Security, LLC v.
Alcocer, 218 Fed. Appx. 860, 863 (11th Cir. 2007) (emphasis omitted). The first
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amended complaint, (Doc. 14), sets forth all necessary allegations for the cause of action
alleged.
"While well-pleaded facts in the complaint are deemed admitted, plaintiffs'
allegations relating to the amount of damages are not admitted by virtue of default;
rather, the court must determine both the amount and the character of damages." Capitol
Records v. Carmichael, 508 F. Supp. 2d 1079, 1084 n.4 (S.D. Ala. 2007). "A court [on
entering default judgment] has an obligation to assure that there is a legitimate basis for
any damage award it enters ...." Anheuser Busch, Inc., v. Philpot, 317 F.3d 1264, 1266
(11th Cir. 2003); accord Hornady v. Outokumpu Stainless USA, LLC, 118 F.4th 1367,
1385 (11th Cir. 2024). Thus, the mere granting of default judgment does not establish the
plaintiffs' entitlement to any quantum of damages.
On default judgment, "[d]amages may be awarded only if the record adequately
reflects the basis for award via a hearing or a demonstration by detailed affidavits
establishing the necessary facts." Adolph Coors Co. v. Movement Against Racism and
the Klan, 777 F.2d 1538, 1544 (11th Cir. 1985) (internal quotes omitted). No hearing is
required "where all essential evidence is already of record ..., such that any additional
evidence would be truly unnecessary to a fully informed determination of damages."
Securities and Exchange Commission v. Smyth, 420 F.3d 1225, 1232 n.13 (11th Cir.
2005). Here, the declaration of Robert Bedinger and accompanying documents supplies
all essential evidence. (Docs. 22-1 to -8). As the record is sufficient to determine
damages, and as the plaintiffs do not request a hearing, none will be conducted.
"A default judgment must not differ in kind from, or exceed in amount, what is
demanded in the pleadings." Fed. R. Civ. P. 54(c). The motion for default judgment
seeks entry of a monetary judgment in favor of one plaintiff ("Health and Welfare Fund")
in the amount of $65,159.32 and in favor of the other plaintiff ("Pension Fund") in the
amount of $25,325.07. (Doc. 22 at 3-4). This represents: (1) unpaid contributions to
each fund for the months of August through December 2024; (2) liquidated damages of
10% on these unpaid contributions, as well as on the defendant's tardy contributions for
July 2024; and (3) interest on unpaid contributions from their due date (the 15th of the
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succeeding month) through January 31, 2025.1 Because these are among the forms and
time frames of relief demanded in the amended complaint, (Doc. 14 at 5-7), the requested
default judgment does not differ in kind from that demanded in the pleadings.
As to amount, the motion for default judgment seeks recovery by the Pension
Fund of one thin dollar more than either the amended complaint demands or the Bedinger
declaration supports. (Doc.22 at 3-4; Doc. 14 at 6; Doc. 22-1 at 3). In addition, all three
documents seek excessive interest with respect to the delayed July 2024 payment. That
payment was due on August 15 and was made on October 18, making it late by 64 days.
The amount due the Health and Welfare Fund on August 15 was $13,738.41, making the
daily interest accrual, at 8% per annum, $3.02.2 The amount due the Pension Fund on
August 15 was $5,045.97, making the daily interest accrual $1.11. Over a period of 64
days, interest accrual for the two plaintiffs totaled $193.28 and $71.04, respectively. The
plaintiffs' proposed figures of $502.86 and $184.70, respectively, must be
correspondingly reduced.3
For the reasons set forth above, and subject to the downward adjustments
described above, the plaintiffs' motion for default judgment is granted. Judgment shall
be entered accordingly by separate order.
DONE and ORDERED this 29th day of April, 2025.
s/ WILLIAM H. STEELE
UNITED STATES DISTRICT JUDGE
1 The plaintiffs' proposed order seeks interest through the date of judgment. (Doc. 22-9 at
4). Because the plaintiff's motion does not, such interest will not be awarded.
2 According to the plaintiffs' evidence, interest accrued only on the unpaid contribution
amount, and not on liquidated damages or on accrued interest. (Doc. 22-1 at 3).
3 It appears that the plaintiffs' figures stem from continuing to charge interest through
January 31, 2025 despite full payment on October 18, 2024.
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