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Teamsters Local 639 Employers Health Trust v. Boiler & Furnace Cleaners, Inc.

United States District Court, D. Maryland

December 19, 2016

TEAMSTERS LOCAL 639 EMPLOYERS HEALTH TRUST et al, Plaintiffs,
v.
BOILER & FURNACE CLEANERS, INC., Defendant.

          MEMORANDUM OPINION

          Theodore D. Chuang, Judge

         This case alleging payments owed 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 in part and denied in part.

         BACKGROUND

         Plaintiffs are the Teamsters Local 639 Employers Health Trust ("Health Fund"), the Teamsters Local 639 Employers Pension Trust ("Pension Fund"), and their respective trustees. The Health Fund is an employee welfare benefit plan and multiemployer plan, as those terms are defined in the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461 (2012). See Id. § 1002(1), (3), (37)(A). The Pension Fund is an employee pension benefit plan and multiemployer plan, as those terms are defined in ERISA. See Id. § 1002(2), (3), (37)(A). Defendant Boiler & Furnace Cleaners, Inc. ("Boiler & Furnace Cleaners"), a company engaged in an industry affecting commerce, is an employer for purposes of ERISA. See Id. § 1002(5).

         Boiler & Furnace Cleaners is required to make regular contributions to the Health Fund and Pension Fund pursuant to its current collective bargaining agreement ("CBA") with the Drivers, Chauffeurs and Helpers Local Union No. 639 ("Union") and was also required to make regular contributions under prior CBAs with the Union. The current CBA covers the period from October 16, 2014 through October 15, 2017; the previous CBA covered the period from October 16, 2013 through October 15, 2014; and another prior CBA covered the period from October 16, 2010 through October 15, 2013. By the terms of these agreements, Boiler & Furnace Cleaners must make contributions to the Health Fund and Pension Fund at rates specified in the CBAs for each hour or portion thereof for which an employee actually performed work.

         The CBAs also provide that Boiler & Furnace Cleaners agrees to be bound by the Agreement and Declaration of Trust for each of the Health Fund and the Pension Fund ("Trust Agreements"). The Trust Agreements provide that an employer who fails to pay timely the amounts required by the CBAs must pay 10 percent of the amount due in liquidated damages and 1.5 percent of the amount due in interest. The Trust Agreements 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 and costs, as well as additional liquidated damages of 10 percent of the amount due.

         On October 7, 2015, Plaintiffs filed this action, alleging that Boiler & Furnace Cleaners has been delinquent in making its required payments to the Health Fund and the Pension Fund. Specifically, the Complaint asserted that Boiler & Furnace Cleaners failed to pay an unspecified amount in contributions, liquidated damages, and interest for the month of August 2015 and that the employer owes liquidated damages and interest for prior late payments for certain months from July 2013 through July 2015. Plaintiffs also claim that Boiler & Furnace Cleaners owes liquidated damages of $4, 341.19 and interest of $334.71 to the Health Fund, as well as liquidated damages of $7, 198.80 and interest of $257.18 to the Pension Fund, for late payments for certain months from July 2013 through July 2015. In addition, they seek attorney's fees and costs.

         Boiler & Furnace Cleaners was served with the Complaint on October 9, 2015 but has failed to file a timely responsive pleading. The Clerk entered default against Boiler & Furnace Cleaners on April 6, 2016. To date, Boiler & Furnace Cleaners has not responded to that default or to the Plaintiffs' Motion for Default Judgment.

         DISCUSSION

         The Motion for Default Judgment seeks an order entering judgment against Boiler & Furnace Cleaners for liquidated damages and interest for "late payments for certain months from June 2013 through February 2016, " Mot. Default J. Aff. Nichelle Grey ¶¶ 10-11, ECF No. 10-2, as well as attorney's fees and costs. In addition, Plaintiffs request that the Court "enter a permanent injunction requiring Defendant to remit its contributions to the Health Fund and Pension Fund in a timely manner." Mem. Supp. Mot. Default J. at 8, ECF No. 10-1. Plaintiffs state in their Motion that since the filing of the Complaint, Boiler & Furnace Cleaners has paid its contributions for the month of August 2015.

         I. Legal Standard

         Pursuant 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). Under 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 (D. Md. 2002). The United States Court of Appeals for 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 (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 his rights.").

         In 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, 780-81 (4th Cir. 2001). However, it remains for the court to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id; see also 10A Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure ยง 2688 (3d ed. 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 ...


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