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Trustees of The Stone v. Capital Building Corporation

United States District Court, Fourth Circuit

January 17, 2014

TRUSTEES OF THE STONE AND MARBLE MASONS OF METROPOLITAN WASHINGTON D.C., HEALTH AND WELFARE TRUST FUND, et al., Plaintiffs,
v.
CAPITAL BUILDING CORPORATION, Defendant.

REPORT AND RECOMMENDATIONS

STEPHANIE A. GALLAGHER, Magistrate Judge.

This Report and Recommendations addresses the Motion for Entry of Default Judgment (ECF No. 8, as supplemented by ECF No. 13) filed by Plaintiffs, Trustees of the Stone and Marble Masons of Metropolitan Washington, D.C., Health and Welfare Trust Fund, Pension Trust Fund, and Apprenticeship Fund (collectively "Plaintiffs") against the Defendant, Capital Building Corporation ("Capital Building"). Capital Building has not filed an opposition, and its deadline has now passed. Judge Quarles referred this case to me to review Plaintiffs' Motion and to make recommendations concerning damages, pursuant to 28 U.S.C. § 301 and Local Rule 301.6. (ECF No. 9). I have reviewed Plaintiffs' Motion and accompanying exhibits. (ECF No. 8, 13). No hearing is deemed necessary. Local Rule 105.6 (D. Md. 2011). For the reasons discussed below, I respectfully recommend that Plaintiffs' Motion (ECF No. 8, as supplemented by ECF No. 13) be GRANTED and that damages be awarded as set forth herein.

I. BACKGROUND

The Plaintiffs in this action are Trustees of the Stone and Marble Masons of Metropolitan Washington, D.C. Pension, Health and Welfare, and Apprenticeship Funds. Compl. ¶ 1. Capital Building, a Virginia corporation, entered into a Collective Bargaining Agreement ("CBA") with Bricklayers and Allied Craftworkers Local No. 1, a union representing stone and marble masons employed in the metropolitan area of Washington, D.C. The CBA requires Capital Building to make monthly contribution payments to the Pension, Health and Welfare, Apprenticeship, and several other Funds at a set rate, per hour, per union employee. See Pls.' Mot. Ex. 1, at 7. Contribution payments are due no later than the 25th day of the month following the month in which wages are paid. Id. The CBA further provides that Capital Building's failure to make timely payments will result in an assessment of liquidated damages, interest, and attorneys' fees. Id.

The CBA also binds Capital Building to the terms and conditions of several Agreements and Declarations of Trust ("Trust Agreements"), which establish the Pension, Health and Welfare, and Apprenticeship Funds. See Compl. ¶¶ 10-11; Pls.' Mot. Ex. 1, at 6. The Trust Agreements govern employer contributions to the Funds, and provide that, "[e]ach Employer shall contribute to the Fund the amount required by or specified in the Collective Bargaining Agreement..." Pls.' Mot. Exs. 2-4. In addition to contribution payments, the Trust Agreements require employers to submit monthly contribution reports, "which shall specify for each Employee, his name, social security number, hours for which contributions are due and such other pertinent information as may be required by the Trustees." Id. An employer is considered "delinquent" under the Trust Agreements when the employer fails to submit contribution payments and reports on the date specified in the CBA, or within twenty-five days of the end of the month in which the contribution obligation was incurred. Id. A delinquent employer is liable "as liquidated damages and not as a penalty, for twenty percent (20%) of the amount of the delinquent contribution..." Id. The Trust Agreements also provide that a delinquent employer is liable for interest on unpaid contributions in the amount of one percent per month, calculated from the date when the employer was designated delinquent, to the date when the outstanding obligations are actually paid to the Funds. Id.

On April 30, 2013, Plaintiffs filed suit against Capital Building, alleging that from March, 2012 through April, 2013, Capital Building failed to make full and timely employee benefit contributions to the Funds, and failed to timely submit contribution reports, in violation of the CBA and Trust Agreements. Compl. ¶¶ 6, 12; Pls.' Mot. 1-2. Capital Building subsequently submitted the outstanding contribution reports and made partial, late contribution payments, which were credited to the balance owed. Pls.' Mot. 2. Plaintiffs now seek the remaining balance of delinquent contributions for each fund and pass-through entity, and liquidated damages plus interest for the Health and Welfare and Pension Funds only. Id. at 2-4. Plaintiffs also seek attorneys' fees and costs in the amount of $9, 302.25. See Pls.' Supp. Mot. 6, ECF No. 13. Plaintiffs demand judgment in the amount of $90, 029.71, which includes $69, 687.62 for unpaid contributions, $14, 308.74 for liquidated damages, and $6, 033.35 for interest. Id. at 5-7. Plaintiffs also seek equitable relief in the form of a full accounting from Capital Building of all amounts due to Plaintiffs, and an injunction barring Capital Building from failing to make contribution payments, and from failing to submit contribution reports. Id. at 7-8.

II. STANDARD FOR DEFAULT JUDGMENT

In reviewing Plaintiffs' Motion for Entry of 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 (3d 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, the court must then determine the appropriate amount of damages. Ryan, 253 F.3d at 780-81. The court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. See, e.g., Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 (2d 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 an award. See, e.g., Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (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); see also Trustees of the Nat'l Asbestos Workers Pension Fund v. Ideal Insulation Inc., Civil No. ELH-11-832, 2011 WL 5151067, at *4 (D. Md. Oct. 27, 2011) (determining, in a case of default judgment against an employer, "the Court may award damages without a hearing if the record supports the damages requested."); Pentech Fin. Servs. Inc. v. Old Dominion Saw Works, Inc., Civ. No. 6:09cv00004, 2009 WL 1872535, at *2 (W.D. Va. June 30, 2009) (concluding that there was "no need to convene a formal evidentiary hearing on the issue of damages" after default judgment where plaintiff submitted affidavits and electronic records establishing the amount of damages sought); JTH Tax, Inc. v. Smith, No. 2:06CV76, 2006 WL 1982762, at *3 (E.D. Va. June 23, 2006) ("If the defendant does not contest the amount pleaded in the complaint and the claim is for a sum that is certain or easily computable, the judgment can be entered for that amount without further hearing.").

In sum, (1) the court must determine whether the unchallenged facts in Plaintiffs' Complaint constitute a legitimate cause of action, and, if they do, (2) the court must make an independent determination regarding the appropriate amount of damages and the appropriate injunctive relief.

III. DISCUSSION

A. Defendant's Liability

Plaintiffs have brought this suit pursuant to § 301 of the Labor Management Relations Act ("LMRA"), as amended, 29 U.S.C. § 185. § 301 of the LMRA provides in relevant part that:

Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce as defined in this chapter, or between any such labor organizations, may be brought in any district court of the United States having jurisdiction of the parties, without respect ...

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