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Trustees of National Automatic Sprinkler Industry Welfare Fund v. All-State Fire Protection, Inc.

United States District Court, D. Maryland

November 29, 2016

TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER INDUSTRY WELFARE FUND, TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER LOCAL 669 UA EDUCATION FUND, TRUSTEES OF THE NATIONAL AUTOMATIC SPINKLER INDUSTRY PENSION FUND, TRUSTEES OF THE SPRINKLER INDUSTRY SUPPLEMENTAL PENSION FUND, TRUSTEES OF THE INTERNATIONAL TRAINING FUND, TRUSTEES OF THE METAL TRADES WELFARE FUND and TRUSTEES OF THE METAL TRADES PENSION FUND, Plaintiffs,
v.
ALL-STATE FIRE PROTECTION, INC. and RAYMOND S. GIBLER, Defendants.

          MEMORANDUM OPINION

          THEODORE D. CHUANG, UNITED STATES DISTRICT JUDGE

         This case alleging unpaid contributions under a collective bargaining agreement 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.

         BACKGROUND

         Plaintiffs ("collectively, "Trustees") are the trustees of the National Automatic Sprinkler Industry Welfare Fund, National Automatic Sprinkler Local 669 UA Education Fund, National Automatic Sprinkler Industry Pension Fund, Sprinkler Industry Supplemental Pension Fund, International Training Fund, Metal Trades Welfare Fund, and Metal Trades Pension Fund (collectively, "NASI Funds"), as that term is defined in the Employee Retirement Income Security Act ("ERISA"). See 29 U.S.C. § 1002(3) (2012). Defendant All-State Fire Protection, Inc. ("All-State"), a Colorado corporation that conducts business as a contractor or subcontractor in the sprinkler industry, is an "employer in an industry affecting commerce, " as defined in ERISA. See 29 U.S.C. § 1002(5), (12). Defendant Raymond S. Gibler ("Gibler"), a citizen of Colorado, is All-State's President.

         All-State is required to make regular contributions to the NASI Funds pursuant to (1) a Collective Bargaining Agreement ("CBA") between the Road Sprinkler Fitters Local Union No. 669 (the "Union") and various employers, including All-State; (2) the Restated Agreements and Declarations of Trust establishing the NASI Funds (the "Trust Agreements"); and (3) the Guidelines for Participation in the NASI Funds (the "Guidelines"). By the terms of these agreements, All-State must make contributions to the NASI Funds "for each hour of work by employees performing installation of automatic sprinkler systems" at rates specified in the CBA. Compl. ¶ 5, ECF No. 1.

         The Trust Agreements and the Guidelines provide that an employer who fails to pay timely the amounts required by the CBA must pay liquidated damages assessed as follows: (1) If payment is not received by the 15th day of the month, 10 percent of the amount due will be assessed; (2) an additional 5 percent is added if payment is not received by the last working day of the month; and (3) an additional 5 percent is added if payment is not received by the 15th day of the following month. The Guidelines further specify that if the Trustees must initiate a legal action to compel payment of delinquent contributions, the employer also becomes liable for attorney's fees, costs, and interest on the unpaid contributions from the date of delinquency through the date of payment at a rate of 12 percent per annum.

         All-State employed individuals covered by the CBA during the period from May 2013 through the present. The Trustees allege that All-State has been delinquent in making its required regular contributions to the NASI Funds. The Complaint alleges that All-State has failed to make complete contributions for the months of December 2015, January 2016, February 2016, March 2016, and April 2016, with a total amount due of $160, 530.49. In addition, All-State owes certain liquidated damages because its payments have not been timely. All-State's contributions for the months of September 2015 and November 2015, and the partial contributions paid for December 2015 and January 2016, were paid late. All-State's contributions for February 2016 and March 2016, which have not yet been paid, are past due. Pursuant to the liquidated damages provisions of the Trust Agreements, All-State owes $59, 528.57 in liquidated damages assessed on its late contributions. Finally, All-State owes interest on the unpaid contributions.

         In addition to its unpaid contributions, All-State owes additional funds stemming from its breach of a settlement agreement previously reached with the Trustees relating to unpaid contributions from before June 2015. From May 2013 through June 2015, All-State experienced significant difficulty in making the required benefit contributions to the NASI Funds. As a result, the NASI Funds and All-State entered into a Settlement Agreement and Promissory Note (the "Settlement Agreement") allowing for payment over time of all amounts owed. The Settlement Agreement required the payment of a principal amount of $390, 704.07 by All-State to the NASI Funds in monthly installments over a period of 28 months, plus interest (the "Settlement Payments"). Pursuant to the Settlement Agreement, the Trustees agreed to waive liquidated damages in the amount of $233, 268.12 contingent upon (1) All-State making each and every one of the scheduled payments as they came due under the Settlement Agreement and (2) All-State remaining current with its regular monthly contributions under the CBA and Trust Agreements. Gibler executed the Settlement Agreement on behalf of All-State and committed himself as guarantor for all amounts owed by All-State to the NASI Funds, including future contributions owed to the Funds during the 28-month period of the Settlement Agreement.

         All-State defaulted on the terms of the Settlement Agreement by failing to make its regular contributions to the NASI Funds and by failing to make the Settlement Payments due May 1, 2016. Pursuant to the terms of the Settlement Agreement, All-State is in default, and Defendants therefore owe $520, 102.88 for remaining Settlement Payments and reinstated liquidated damages.

         On May 12, 2016, the Trustees filed their Complaint in this case seeking (1) $520, 102.88 as owed under the terms of the Settlement Agreement; (2) $160, 530.49 for contributions owed from December 2015 through April 2016; (3) $59, 528.57 in liquidated damages assessed on late contributions for the months of September 2015 and November 2015 through March 2016; (4) all contributions and liquidated damages that became due between the date of filing through the date of judgment; and (5) interest, attorney's fees, and costs. The Trustees further assert that Gibler, as guarantor of both the amounts owed under the Settlement Agreement and the regular contributions owed during the period of the Settlement Agreement, is jointly and severally liable with All-State.

         On June 17, 2016 Defendants All-State and Gibler ("Defendants") were served with the Complaint. Neither Defendant has filed a responsive pleading. On August 12, 2016, the Trustees filed a Motion for Clerk's Entry of Default and a Motion for Default Judgment. A default was entered against both Defendants on September 28, 2016. To date, neither Defendant has responded to that default or to the Trustees' Motion for Default Judgment.

         DISCUSSION

         The Motion for Default Judgment seeks an order entering Judgment against the Defendants for past-due contributions, amounts owed under the Settlement Agreement, liquidated damages, interest, attorney's fees, and costs. In addition, the Trustees assert that "[subsequent to the filing of this action, the amount owed by the Defendants to the [NASI Funds] has changed" because All-State paid its partial contributions due for the months of January 2016 and February 2016, but it failed to make contributions for May 2016 and June 2016. See Mem. Supp. Mot. Def. J. at 1, ECF No. 9-1. The Trustees thus adjust their damages claim to seek (1) $466, 327.44 as owed under the Settlement ...


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