United States District Court, D. Maryland
INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, et al., Plaintiffs,
WILLIAMSPORT MIRROR & GLASS CO., Defendant.
STEPHANIE A. GALLAGHER, Magistrate Judge.
This Report and Recommendations addresses the Motion for Judgment by Default (ECF No. 8) filed by Plaintiffs International Painters and Allied Trades Industry Pension Fund ("Pension Fund"), the Painters and Allied Trades Labor Management Cooperation Initiative ("LMCI"), and Daniel R. Williams ("Williams") (collectively "Plaintiffs"). Defendant Williamsport Mirror & Glass Company ("Williamsport" or "Defendant") has not filed an opposition, and its deadline has now passed. On January 20, 2015, 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). No hearing is deemed necessary. See Local Rule 105.6 (D. Md. 2014). For the reasons discussed herein, I respectfully recommend that Plaintiffs' motion (ECF No. 8) be GRANTED and that damages be awarded as set forth herein.
On October 6, 2014, Plaintiffs filed a Complaint in this Court alleging that Williamsport failed to make contributions required under the Employee Retirement Income Security Act of 1974 ("ERISA") and governing contracts. Specifically, Plaintiffs allege that Williamsport employed members of local labor unions or district councils affiliated with the International Union of Painters and Allied Trades ("the Union") and agreed to abide by a Collective Bargaining Agreement ("CBA"). Complaint ¶¶ 12, 14. The CBA, along with the Agreement and Declaration of Trust of the Pension Fund ("Trust Agreement") established and maintained the Pension Fund. Complaint ¶¶ 13-14. The Pension Fund and Williams are authorized collection fiduciaries and agents for the International Painters and Allied Trades Industry Pension Plan, which is a "multiemployer plan, " "employee benefit plan, " and "employee benefit pension plan" as defined by ERISA. Complaint ¶¶ 4, 5, 8. The Pension Fund and Williams are also authorized collection fiduciaries and agents for the LMCI, an entity that performs certain employer association functions. Complaint ¶¶ 6, 9.
As a corporate employer utilizing Union employees, Defendant Williamsport agreed to abide by the terms of the CBA and the Trust Agreement. Complaint ¶¶ 12-13. Those obligations included (1) making full and timely payment on a monthly basis to the Pension Fund and LMCI as required by the CBA, Trust Agreement and plan documents; (2) filing monthly remittance reports with the Pension Fund detailing all the employees or work for which contributions were required under the CBA; (3) producing books and records for an audit upon request by the Pension Fund; and (4) paying liquidated damages, interest, audit costs, and litigation costs including attorneys' fees expended by the Pension Fund in collecting amounts due as a result of Williamsport's failure to comply with its contractual and statutory obligations. Complaint ¶ 14.
On or about February 4, 2014, the Pension Fund completed an audit of Williamsport's payroll records from January 1, 2009 through June 30, 2013. Complaint ¶ 15. On October 6, 2014, Plaintiffs filed a Complaint alleging that Williamsport failed to pay amounts due under the CBA in at least the sum of $94, 367.95. Complaint ¶ 22. The Complaint requests the sum certain amount "plus any additional amounts which become due and owing during the pendency of this litigation or as the result of an audit together with liquidated damages, interest and costs, including reasonable attorneys' fees incurred in this action or the collection or enforcement of any judgment, as provided in the Labor Contract and Trust Agreements." Complaint at p. 7(1). The Complaint also seeks damages in "at least the sum of $92, 464.94" under ERISA for monies owed to the Pension Fund, and asks the Court to award that sum "plus any additional amounts which may become due during the pendency of this lawsuit, together with interest at the rate(s) prescribed by 26 U.S.C. § 6621 from the due date for payment until the date of actual payment, liquidated damages equal to the greater of the interest on the unpaid contributions or liquidated damages provided by the documents governing the Pension Plan or statute, the cost of any audit and reasonable attorneys' fees and costs incurred in this action or the collection or enforcement of any judgment all as provided under the Trust Agreements, Plan Document, and 29 U.S.C. §1132(g)(2)." Complaint at pp. 5-6(1).
Williamsport was served with the summons and Complaint on October 20, 2014. (ECF No. 4). After Williamsport failed to file an Answer or otherwise defend, Plaintiffs filed a Motion for Entry of Default (ECF No. 5) on November 19, 2014, which the clerk granted on November 21, 2014. (ECF No. 6). Plaintiffs thereafter filed a Motion for Judgment by Default (ECF No. 8) on January 16, 2015, seeking a total award of $101, 908.40. In support of their motion, Plaintiffs attached the Affidavit of Vicki McGlone, the Delinquency Manager of the Pension Fund, (ECF No. 8-5), and Affidavit of Counsel, Matthew S. Hagarty, Esq. (ECF No. 8-10). Ms. McGlone's affidavit alleged that, as of November 30, 2014, Williamsport owed the Pension Fund $68, 800.51 in contributions, $6, 973.19 in interest, $13, 760.11 in liquidated damages, and $3, 479.66 in audit costs, and owed LMCI $1, 415.39 in contributions, $144.80 in interest, $283.08 in liquidated damages, and $71.01 in audit costs. (ECF No. 8-5). Mr. Hagarty's affidavit supported a request for attorneys' fees and costs in the amount of $6, 980.65. (ECF No. 8-10).
II. STANDARD FOR DEFAULT JUDGMENT
In reviewing Plaintiffs' Motion for Judgment by Default, 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 (4th Cir. 2001). It, however, remains for the court to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id. at 780-81; 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, it 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 Credit Lyonnais Sec. (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 may 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 Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) ("The court need not make this determination [of damages] through a hearing, however. Rather, the court 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 that, 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, Civil 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, the court must (1) determine whether the unchallenged facts in Plaintiffs' Complaint constitute a legitimate cause of action, and, if they do, (2) make an independent determination regarding the appropriate amount of damages and the appropriate injunctive relief.
a. Williamsport's Liability under ERISA and Contract Claims
Plaintiffs allege that Williamsport's failure to make its required contributions constitutes a breach of its contractual obligations, and therefore also constitutes a violation of Section 515 of ERISA and Section 185 of the ...