United States District Court, D. Maryland
INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, et al., Plaintiffs,
NEW HAVEN GLASS & MIRROR COMPANY, LLC, Defendant.
REPORT AND RECOMMENDATION
TIMOTHY J. SULLIVAN, Magistrate Judge.
This Report and Recommendation addresses the Motion for Entry of Default Judgment ("the Motion") (ECF Nos. 10 & 11) filed by Plaintiffs International Painters and Allied Trades Industry Pension Fund ("Pension Fund") and Daniel R. Williams, a fiduciary on behalf of the Pension Fund, Political Action Together Fund, Finish Trades Institute f/k/a International Union of Painters and Allied Trades Joint Apprenticeship and Training Fund, and the Painters and Allied Trades Labor Management Cooperation Initiative (collectively, the "Plaintiffs" or the "Funds") against Defendant New Haven Glass & Mirror Company, LLC d/b/a New Haven Glass & Mirror d/b/a New Haven Glass and Mirror ("New Haven"). New Haven has not filed a response, and the time for doing so has passed. See Loc. R. 105.2(a). On January 15, 2015, in accordance with 28 U.S.C. § 636 and Local Rule 301, Judge Hollander referred this case to me for a report and recommendation on Plaintiffs' Motion. (ECF No. 12.) I find that a hearing is unnecessary in this case. See Fed.R.Civ.P. 55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that Plaintiffs' Motion be granted.
I. FACTUAL AND PROCEDURAL HISTORY
In this case, the Plaintiffs filed suit against New Haven under the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132(g)(2) and 1145. (ECF No. 1.) New Haven was personally served with the Complaint and summons but did not file an answer or responsive pleading within the requisite time period. On October 15, 2014, Plaintiffs moved for the Clerk's entry of default (ECF No. 5), and the Clerk entered default against New Haven on the same day (ECF No. 6). On January 12, 2015, Plaintiffs filed the Motion, to which New Haven has not responded. ( See ECF Nos. 10 & 11.)
II. LEGAL ANALYSIS
A. Standard for Entry of Default Judgment
In determining whether to award a default judgment, the Court accepts as true the wellpleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001); United States ex rel. Durrett-Sheppard Steel Co. v. SEF Stainless Steel, Inc., No. RDB-11-2410, 2012 WL 2446151, at *1 (D. Md. June 26, 2012). Nonetheless, the Court must consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012) (citing Ryan, 253 F.3d at 790). Although the Fourth Circuit has a "strong policy that cases be decided on the merits, " United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment "is appropriate when the adversary process has been halted because of an essentially unresponsive party." S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005). If the Court determines that liability is established, the Court must then determine the appropriate amount of damages. CGI Finance, Inc., v. Johnson, No. ELH-12-1985, 2013 WL 1192353, at *1 (D. Md. March 21, 2013). The Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. Durrett-Sheppard Steel Co., 2012 WL 2446151 at *1.
Rule 55 of the Federal Rules of Civil Procedure provides that "[i]f, after entry of default, the Plaintiff's Complaint does not specify a sum certain' amount of damages, the court may enter a default judgment against the defendant pursuant to Fed.R.Civ.P. 55(b)(2)." A plaintiff's assertion of a sum in a complaint does not make the sum "certain" unless the plaintiff claims liquidated damages; otherwise, the complaint must be supported by affidavit or documentary evidence. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012). Rule 55(b)(2) provides that "the court may conduct hearings or make referrals... when, to enter or effectuate judgment, it needs to... determine the amount of damages." The Court is not required to conduct an evidentiary hearing to determine damages, however; it may rely instead on affidavits or documentary evidence in the record to determine the appropriate sum. See, e.g., Mongue v. Portofino Ristorante, 751 F.Supp.2d 789, 795 (D. Md. 2010).
Section 301 of the LMRA, 29 U.S.C. § 185, provides that suits alleging violations of a contract between an employer and a labor organization "may be brought in any district court of the United States having jurisdiction of the parties, without respect to the amount in controversy or without regard to the citizenship of the parties." Section 515 of ERISA, 29 U.S.C. § 1145, mandates that employers subject to a multi-employer plan or collective bargaining agreement "shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement."
In this case, New Haven has a number of obligations under its collective bargaining agreements ( see ECF Nos. 11-4, 11-5, 11-6 & 11-7). New Haven is required to make full and timely payment on a monthly basis of the contributions it owes to the Funds. ( See ECF Nos. 11-5 at 15 & 11-6 at 7.) New Haven is also required to file monthly remittance reports with the Funds detailing the employees and work for which contributions are required under its collective bargaining agreements. ( See ECF No. 11-5 at 15-16.) When requested to do so by the Funds, New Haven must furnish all necessary books and records concerning its obligations to the Funds under the collective bargaining agreements so that the Funds may conduct an audit. ( See ECF No. 11-5 at 16.) New Haven is also required to pay the cost of such an audit if the result of the audit indicates that New Haven is delinquent in its obligations, or otherwise in violation of the International Painters and Allied Trades Industry Pension Fund Trust Agreement. ( Id. ) In addition, New Haven is required to pay liquidated damages, interest, and the Funds' costs of litigation including attorney's fees that occur as a consequence of New Haven's failure to comply with its statutory and contractual obligations. ( See ECF No. 11-6 at 7-8.) Finally, New Haven resolved a delinquency for the period of February 2013 through September 2013 by signing a Settlement Agreement and Promissory Note ("Settlement Agreement"). ( See ECF Nos. 1 ¶ 19 & 11-10.) The terms of the Settlement Agreement provide that New Haven owed the Funds $15, 622.69 as of October 28, 2013 for the designated period, and that it would pay the Funds a total of $13, 048.32 in 18 consecutive monthly installments. ( Id. )
Accepting as true the well-pleaded factual allegations of the Complaint, New Haven's liability is readily established. New Haven "failed to pay amounts due under the Labor Contracts, Trust Agreements and Plan from January 2011 through March 2014." (ECF No. 1 ¶ 24.) An audit conducted for this period revealed a "substantial delinquency" in New Haven's reporting and remission of hours worked, which adversely affected the Funds. ( Id. ¶¶ 25-26.) In addition, New Haven failed to make the all of the payments to the Funds required by the Settlement Agreement. ( Id. ¶ 28.) Finally, New Haven has failed to pay the Funds the amount owed to them as a result of its violation of its statutory and contractual obligations. ( Id. ¶ 31.) Accepting these factual allegations as true, I conclude that the Plaintiffs have established that they are entitled to relief on their claims. Because the Plaintiffs have stated legitimate causes of action, I find that they are entitled to a default judgment against New Haven. I recommend that the Court grant the Plaintiffs' Motion for Default Judgment with respect to New Haven's liability.
Having determined that the Plaintiffs have established New Haven's liability, it is now appropriate to determine the damages to which they are entitled. Generally, an evidentiary hearing is required to determine an award of damages, even in the case of a defendant's default. See Laborers' Dist. Council Pension v. E.G.S., Inc., No. WDQ-09-3174, 2010 WL 1568595 (D. Md. Apr. 16, 2010). However, the Court may award damages "if the record supports the damages requested." Id. at *3 (collecting ...