United States District Court, D. Maryland
TRUSTEES OF THE NATIONAL ASBESTOS WORKERS MEDICAL FUND, and TRUSTEES OF THE NATIONAL ASBESTOS WORKERS PENSION FUND, Plaintiffs,
STOTTS MECHANICAL INSULATION, INC., Defendant.
THEODORE D CHUANG UNITED STATES DISTRICT JUDGE.
case is before the Court on a Motion for Default Judgment.
Having reviewed the Complaint, the Motion, and the supporting
documents, the Court finds no hearing necessary. See
D. Md. Local R. 105.6. For the following reasons, the Motion
for Default Judgment is GRANTED.
are the trustees ("Trustees") of the National
Asbestos Workers Medical Fund ("Medical Fund") and
the National Asbestos Workers Pension Fund ("Pension
Fund") (collectively, the "Asbestos Funds"),
as that term is defined in the Employee Retirement Income
Security Act ("ERISA"). See 29 U.S.C.
§ 1002(3) (2012). Defendant Stotts Mechanical
Insulation, Inc. ("Stotts") is an employer engaged
in an industry affecting commerce, as defined in ERISA.
See 29 U.S.C. §§ 1002(5), (12). Stotts is
required to make regular contributions to the Asbestos Funds
pursuant to (1) two Collective Bargaining Agreements
("CBAs") between the Insulation Contractors
Association of Local # 50, the International Association of
Heat and Frost Insulators and Allied Workers Local Union #
50, and various employers, including Stotts; and (2) two
trust agreements ("Trust Agreements"), one
establishing the Medical Fund and the other establishing the
Pension Fund. By the terms of these agreements, an employer
must submit monthly reports detailing the hours worked by all
covered employees and make the corresponding contributions to
the Asbestos Funds by the 15th day of the following month. If
an employer fails to submit reports of actual hours worked,
contributions are determined based on the greater of (1) the
average of the monthly payments or reported figures actually
submitted for the last three months for which payments or
reports were submitted, or (2) the average of the monthly
payments or reported figures submitted for the last 12 months
for which payments or reports were submitted. If an employer
makes its contributions late or fails to make contributions
entirely, it is subject to interest on the unpaid balance and
to liquidated damages. These enhanced damages begin to accrue
only after a 10-day grace period. The Medical Fund trust
agreement provides that interest may be assessed at either 8
percent from the due date to the date of payment, 1.5 percent
per month, or at the rate provided for in ERISA. The Pension
Fund trust agreement provides that interest may be assessed
at 8 percent from the due date to the date of payment or at
the rate provided for in ERISA. The Trust Agreements both
provide that liquidated damages will be assessed at the rate
of 20 percent of the outstanding balance or the amount of 20
dollars, whichever is greater. The Trust Agreements also
provide that the employer will be liable for all reasonable
costs and attorney's fees that the Trustees incur in
attempting to recover delinquent contributions.
failed to make its full contributions to the Asbestos Funds
for the amounts due in March 2014, the period from July 2014
to September 2014, March 2015, and May 2015. Those incomplete
or missed payments left Stotts $12, 559.39 in arrears on its
required contributions. Stotts also failed to submit reports
or pay contributions for the months of April 2015, July 2015,
and August 2015. Based on the average of the reports Stotts
submitted for March, May, and June 2015, Stotts owes the
Asbestos Funds $30, 951.71 in unpaid contributions for April,
July, and August 2015. In addition to these missed payments,
Stotts was late on payments it made, whether for the full or
a partial amount due, for the following months: September
2013, October 2013, January to May 2014, and July 2014 to
September 16, 2015, the Trustees filed a Complaint seeking
the monies owed under the terms of the CBAs and the Trust
Agreements, specifically (1) $43, 511.10 in unpaid
contributions; (2) $6, 896.40 in interest on the missed and
delinquent payments to the Medical Fund, calculated at a rate
of 1.5 percent per month; (3) $3, 484.14 in interest on the
missed and delinquent payments to the Pension Fund,
calculated at a rate of 8 percent from the due date to the
date of payment; (4) $15, 814.96 in liquidated damages on the
missed and delinquent payments to the Pension Fund; and (5)
reasonable attorney's fees and costs incurred in efforts
to recover the delinquent contributions. The Complaint also
seeks an award "[f]or all contributions, liquidated
damages and interest which become due subsequent to the
filing of this action through the date of Judgment."
Compl. at 5.
October 16, 2015, Stotts was served with the Complaint and
failed timely to file a responsive pleading. On November 24,
2015, the Trustees filed a Motion for Clerk's Entry of
Default and a Motion for Default Judgment. In that Motion,
the Trustees revised the damages sought to include unpaid
contributions and associated enhanced damages for September
and October 2015. The Clerk entered default against Stotts on
November 30, 2015. To date, Stotts has not responded to that
default or to the Trustees' Motion for Default Judgment.
to Federal Rule of Civil Procedure 55(a), "[w]hen a
party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must
enter the party's default." Fed.R.Civ.P. 55(a).
Pursuant to Rule 55(b)(2), after a default has been entered
by the clerk, the court may, upon the plaintiffs application
and notice to the defaulting party, enter a default judgment.
Fed R. Civ. P. 55(b)(2). A defendant's default does not,
however, automatically entitle the plaintiff to entry of a
default judgment; rather, that decision is left to the
discretion of the court. United States v.
Moradi, 673 F.2d 725, 727 (4th Cir. 1982)
("[T]rial judges are vested with discretion which must
be liberally exercised, in entering [default] judgments and
in providing relief therefrom."); Dow v.
Jones, 232 F.Supp.2d 491, 494-95 (D. Md. 2002). The
Fourth Circuit has a "strong policy that cases be
decided on their merits, " United States v.
Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir.
1993), but default judgment may be appropriate "when the
adversary process has been halted because of an essentially
unresponsive party." S.E.C. v.
Lawbaugh, 359 F.Supp.2d 418, 421-22 (D. Md. 2005);
see H. F. Livermore Corp. v. Aktiengesellschaft
Gebruder Loepfe, 432 F.2d 689, 691 (D.C. Cir. 1970)
("[T]he default judgment must normally be viewed as
available only when the adversary process has been halted
because of an essentially unresponsive party. In that
instance, the diligent party must be protected lest he be
faced with interminable delay and continued uncertainty as to
reviewing a Motion for Default Judgment, the court accepts as
true the well-pleaded factual allegations in the complaint
relating to liability. Ryan v. Homecomings Fin.
Network, 253 F.3d 778, 780 (4th Cir. 2001). The court
must determine whether the allegations support the relief
sought. See Id. To do so, the court may conduct an
evidentiary hearing, see Fed. R. Civ. P. 55(b)(2),
or may dispense with a hearing if there is an adequate
evidentiary basis in the record from which to calculate an
award. See Pope v. United States, 323 U.S.
1, 12 (1944) ("It is a familiar practice and an exercise
of judicial power for a court upon default, by taking
evidence when necessary or by computation from facts of
record, to fix the amount which the plaintiff is lawfully
entitled to recover and to give judgment accordingly.").
Rule 54(c) limits the type of judgment that may be entered
based on a party's default: "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). Thus,
where a complaint specifies the amount of damages sought, the
plaintiff is limited to entry of a default judgment in that
amount. In re Genesys Data Techs., Inc., 204 F.3d
124, 132 (4th Cir. 2000).
requires that any employer obligated to make contributions to
a qualifying benefit fund must "make such contributions
in accordance with the terms and conditions" of the
parties' agreements. 29 U.S.C. § 1145. Because
Stotts has failed to appear or otherwise defend, the Court
accepts as true the well-pleaded factual allegations in the
Complaint. Ryan, 253 F'.3d at 780. Those
allegations establish that Stotts was obligated by the terms
of the CBAs and the Trust Agreements to provide timely
reports of hours worked by covered employees and to make
corresponding timely contributions to the Asbestos Funds. The
allegations further establish that Stotts failed to make
payments in full for the months of March 2014, July 2014 to
September 2014, March 2015, and May 2015 and that Stotts
failed to submit reports or pay contributions for the months
of April 2015, July 2015, and August 2015. Lastly, the
allegations establish that Stotts made late payments for the
following months: September 2013, October 2013, January to