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National Electrical Benefit Fund v. Allran/Hemmer Electric, LLC

United States District Court, D. Maryland, Southern Division

January 6, 2017



          GEORGE J. HAZEL United States District Judge.

         Pursuant to Fed.R.Civ.P. 55(b). Plaintiff National Electrical Benefit Fund ("NEBF") has filed a Motion for Default Judgment, with supporting declarations and exhibits, against Defendant Allran/llemmer Electric, LLC to enforce their rights under the Employee Retirement Income Security Act (''ERISA"). 29 U.S.C. § 1132 et seq. ECF No. 6. No hearing is necessary to resolve the Motion. See Loc. R. 105.6 (D. Md. 2016). For the reasons that follow. Plaintiffs Motion is granted.


         Plaintiff NEBF is a multi-employer "employee pension benefit plan" as that term is defined under ERISA. 29 U.S.C. § 1002(2). ECF No. 1 at ¶ 4. Defendant is an employer as defined by ERISA. 29 U.S.C. § 1002(5). and agreed to participate in the NEBF pursuant to a collective bargaining agreement with IBEW Local Union 26. the collective bargaining representative of Defendant's employees. Id. ¶ 5. 7. The collective bargaining agreement in turn binds Defendant to the terms and conditions of the Restated Employees Benefit Agreement and Trust for the National HIectrical Benefit Fund ("Trust Agreement"), which governs the administration of the NEBF. Id. ¶ 8.

         Pursuant to said agreement. Defendant is required to submit contributions to the NEBF on behalf of covered employees. Id. ¶ 7. If the Defendant fails to make the required contributions, the Trust Agreement authorizes the Trustees to take all necessary actions to recover the delinquent contributions. Id. ¶ 9. It also authorizes the Trustees to recover interest on the delinquent contributions at 10% per year; liquidated damages in an amount equal to 20% of the delinquency; and any associated collection costs such as audit and attorney fees. Id. ¶ 9; see ECF No. 6-3 at 7.[1]

         Plaintiff brings this action pursuant to § 1132(a)(3) of ERISA, which allows a fiduciary to enforce Defendant's obligations to contribute to plans such as the NEBF through a civil action. ECF No. I ¶ 17. Plaintiff alleges that audits of Defendant's books and records in 2014 and 2015 revealed that Defendant had underpaid NEBF by at least Si 1.595.49 for work performed by covered employees. Id. ¶ 10. Defendants paid a portion of their delinquent contributions, leaving an outstanding principal of $3, 954.99. Id. ¶ 10. Plaintiff also alleges that Defendants owe interest on the delinquent contributions in the amount of $1.995.18: liquidated damages of $2, 319.10; audit costs of $480.00 and attorney's fees and costs of $1, 535.40. Id. at ¶ 11-14; see also ECF No. 9 ¶ 9. Since the filing of the Complaint, the interest on the delinquent contributions has increased to $2, 094.72. ECF Nos. 6 ¶ 9 & 6-2 ¶ 8.

         Plaintiff initiated the present action on April 20. 2016, ECF No. 1. On June 8. 2016. Plaintiff filed a Motion for Clerk's Entry of Default, ECF No. 5. and an Order of Default was entered by the Clerk of the Court against Defendant on July 21. 2016. ECF No. 7. Plaintiff filed a Motion for Default Judgment on June 8. 2016, ECF No. 6, and upon request, provided the Court with supplemental affidavits on December 19. 2016 and January 3. 2017. ECF Nos. 9 & 11. To date. Defendant has failed to submit any pleadings to this Court regarding the claims at issue.

         Venue in this Court is proper as federal courts have jurisdiction over ERISA claims and the NEBF is administered within this district. See 29 U.S.C. § 1132(e)(2).


         "A defendant's default does not automatically entitle the plaintiff to entry of a default judgment: rather, that decision is left to the discretion of the court Choice Hotels Intern, . Inc. v. Savunnuh Shakti Carp., No. DKC-11-0438. 2011 WL 5118328 at * 2 (D. Md. Oct. 25. 2011) (citing Dow v. Jones. 232 F.Supp.2d 491, 494 (D. Md. 2002)). Although "[t]he Fourth Circuit has a 'strong policy' that 'cases be decided on their merits."" id. (citing United States v. Shaffer Equip. Co.. 11 F.3d 450. 453 (4th Cir.1993)). "default judgment may be appropriate when the adversary process has been halted because of an essentially unresponsive party[.]" Id. (citing S.E.C. v. Lawbaugh, 359 F.Supp.2d 418. 421 (D. Md. 2005)).

         "Upon default, the well-pled allegations in a complaint as to liability are taken as true, although the allegations as to damages are not." S.E.C. v. Lawbaugh, 359 F.Supp.2d 418. 422 (D. Md. 2005). Rule 54(c) of the Federal Rules of Civil Procedure 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." In entering default judgment, a court cannot, therefore, award additional damages "because the defendant could not reasonably have expected that his damages would exceed th[e] amount [plead in the complaint]." In re Genesys Data Techs., Inc., 204 F.3d 124, 132 (4th Cir. 2000). Where a complaint does not specify an amount, "the court is required to make an independent determination of the sum to be awarded." Adkins v. Teseo. 180 F.Supp.2d 15. 17 (D.D.C. 2001) (citing S.E.C. v. Management Dynamics. Inc., 515 F.2d 801. 814 (2nd Cir. 1975); An Bon Pain Corp, v. Arteet, Inc., 653 F.2d 61, 65 (2nd Cir. 1981)). While the Court may hold a hearing to prove damages, it is not required to do so: it may rely instead on "detailed affidavits or documentary evidence to determine the appropriate sum." Adkins. 180 F.Supp.2d at 17 (citing United Artists Corp. v. Freeman. 605 F.2d 854. 857 (5th Cir. 1979)): see also Laborers' District Council Pension, et al, v. E.G.S.. Inc., No. WDQ-09-3174. 2010 WL 1568595. at *3 (D. Md. Apr. 16. 2010) (M[0]n default judgment, the Court may only award damages without a hearing if the record supports the damages requested.").


         A. Liability

         In considering a Motion for Default Judgment, the Court accepts as true the well-pleaded factual allegations in the Complaint as to liability, but nevertheless "must determine whether [those] allegations . .. support the relief sought in th[e] action." Int 7 Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co..919 F.Supp.2d 680. 685 (D. Md. 2013) (citation and internal quotation marks omitted). In the Complaint. NEBF alleges that Defendant, in contravention of the Trust Agreement, underpaid NEBF by at least $11.595.49 for work performed by covered employees between January 2013 and December 2014. ECF No. 1 ¶ 10; ECF No. 6-2 ¶¶ 4-5.[2] The Affidavit of Angel Losquadro. Director of the Audit ...

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