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International Painters and Allied Trades Industry Pension Fund v. Baker-Clouse Construction Services, LLC

United States District Court, Fourth Circuit

November 5, 2013

INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, ET AL
v.
BAKER-CLOUSE CONSTRUCTION SERVICES, LLC

REPORT AND RECOMMENDATION

SUSAN K. GAUVEY, Magistrate Judge.

This matter comes before the Court upon motion by Plaintiffs, International Painters and Allied Trades Industry Pension Fund ("Pension Fund" or "Fund"), and Fund trustee Gary J. Meyers ("Meyers"), in their official capacity as fiduciaries on behalf of the International Painters and Allied Trades Industry Pension Plan ("Pension Plan"), the Finishing Trades Institute f/k/a the International Union of Painters and Allied Trades Joint Apprenticeship and Training Fund ("FTI"), and the Painters and Allied Trades Labor Management Cooperation Initiative ("LMCI"), for an entry of default judgment against Defendant, Baker-Clouse Construction Services, LLC ("Company" or "Defendant"), pursuant to Federal Rule of Civil Procedure 55(b)(2) for failure to appear, answer, plead, or otherwise defend in this matter. (ECF No. 5).

Plaintiffs move under sections 515 and 502(g)(2) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1145, 1132(g)(2)(A)-(D), and section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a), for unpaid contributions, liquidated damages, interest, and attorneys' fees and costs incurred by the Pension Fund pursuant to the collective bargaining agreement (CBA) between Defendant and Glaziers, Architectural Metal & Glass Workers Local Union 1786 ("Union"). (ECF No. 7-2, 7-5).

This case has been referred to the undersigned magistrate judge in accordance with 28 U.S.C. § 636 and Local Rule 301 and 302, to review a default judgment and/or make recommendations concerning damages. (ECF No. 8).

I. Default Judgment Standard

Federal Rule of Civil Procedure 55(b)(2) authorizes courts to enter a default judgment against a properly served defendant who fails to file a timely responsive pleading.

In deciding whether to grant a motion for default judgment, the Court must first consider the following three factors: (1) whether the plaintiff will be prejudiced if default is not granted, (2) whether the defendant has a meritorious defense, and (3) whether the defendant's delay was the result of culpable misconduct. Emcasco Ins. Co. v. Sambrick , 834 F.2d 71, 73 (3rd Cir.1987); see also Smith v. Bounds , 813 F.2d 1299 (4th Cir.1987) (relying on these factors in determining whether a default judgment merited reconsideration).

The Court must also determine whether plaintiff has alleged legitimate causes of action. In reviewing plaintiffs' Motion for Entry of a Default Judgment, the Court accepts as true the well-pleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network , 253 F.3d 778, 780-81 (4th Cir.2001). It however remains for the Court to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id .; see also 10A WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE § 2688 (3rd ed. Supp.2010) ("[L]iability is not deemed established simply because of the default... and the Court, in its discretion, may require some proof of the facts that must be established in order to determine liability.").

If the Court determines that liability is established, it must then determine the appropriate amount of damages. Ryan , 253 F.3d at 780-81. Unlike factual allegations as to liability, the Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. Credit Lyonnais Secs. (USA), Inc.v. Alcantara , 183 F.3d 151, 154 (2nd Cir.1999). In so doing, the Court may conduct an evidentiary hearing. FED. R. CIV. P. 55(b)(2). The Court can also make a determination of damages without a hearing so long as there is an adequate evidentiary basis in the record for the award. See, e.g., Stephenson v. ElBatrawi , 524 F.3d 907, 917 n. 11 (8th Cir.2008) ("Foregoing an evidentiary hearing may constitute an abuse of discretion when the existing record is insufficient to make the necessary findings in support of a default judgment."); Adkins v. Teseo , 180 F.Supp.2d 15, 17 (D.D.C.2001) (finding that a court need not make determination of damages following entry of default through hearing, but rather may rely on detailed affidavits or documentary evidence to determine the appropriate sum).

II. Preliminary Factors

The Clerk of Court having filed entry of default on August 7, 2013 (ECF No. 6), the undersigned concludes that the procedural requirements for entry of default judgment have been met. Moreover, because the defendant has failed to file any responsive pleadings or otherwise show cause as to why default should not be granted, the Court is "not in a position to judge whether any delay was the result of culpable misconduct." Sambrick , 834 F.2d at 73. Further, defendant's failure to appear deprived plaintiffs of any other means of vindicating their claim and plaintiffs would be prejudiced if default is not granted.

III. Discussion

A. ERISA and LMRA Claims

Plaintiffs bring the instant action under the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), 29 U.S.C. §§ 1132, and the Labor Management Relations Act, as amended ("LMRA"), 29 U.S.C. § 185. (ECF No. 1). They move to collect unpaid contributions, liquidated damages, interest, attorneys' fees, and costs that they allege are owed to the fund as a result of the defendant's failure to make timely contributions per the Labor Agreement with the Union. (ECF No. 7-2).

1. Standing

LMRA § 301 provides for federal jurisdiction over suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce. 29 U.S.C. § 185(a). The Fund and Gary J. Meyers have standing to bring this suit as authorized fiduciaries and agents for the intended beneficiaries of the CBA; the Pension Plan, FTI, and LMCI. Int'l Painters & Allied Trades Indus. Pension Fund v. Empire Glass, Paint & Mirror, Inc., 2012 WL 3233532 (D. Md. Aug. 3, 2012) (internal citations omitted).

ERISA Section 502(a)(3) provides that a civil action may be brought by a "participant, beneficiary or fiduciary" to "obtain appropriate equitable relief... to redress... violations or... to enforce any provisions" of the statute or terms of the plan. 29 U.S.C. § 1132(a)(3). An individual is a fiduciary under ERISA to the extent the person "exercises any discretionary authority or control respecting management of [a] plan or control respecting management or disposition of its assets." 29 U.S.C. § 1002(21)(A). This action is brought by the authorized fiduciaries of two employee benefit plans (Pension Plan and FTI) and one employee management committee (LMCI), all of which claim to be entitled to relief as intended third-party beneficiaries of the CBA between the ...


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