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Trustees of National Automatic Sprinkler Industry Welfare Fund v. First Responder Fire Protection Corp.

United States District Court, D. Maryland, Southern Division

June 13, 2017

TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER INDUSTRY WELFARE FUND, et a/., Plaintiffs,
v.
FIRST RESPONDER FIRE PROTECTION CORP., Defendant.

          MEMORANDUM OPINION

          GEORGE J. HAZEL United States District Judge

         Pursuant to Fed.R.Civ.P. 55(b). 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 Sprinkler Industry Pension Fund. Trustees of the Sprinkler Industry Supplemental Pension Fund, and Trustees of the International Training Fund (collectively. "Plaintiffs" or "NASI Funds"), have filed a Motion for Default Judgment, with supporting declarations and exhibits. ECF No. 6. Defendant First Responder Fire Protection Corp. has not filed a response. No hearing is necessary to resolve the Motion. See Focal Rule 105.6 (D. Md. 2016). For the reasons that follow. Plaintiffs* Motion is granted.

          I. BACKGROUND

         The NASI Funds are multiemployer "employee benefit plans" as that term is defined in the Employee Retirement Income Security Act ("ERISA"). 29 U.S.C. § 1002(3). ECF No. 1 ¶ 2. The NASI Funds are established and maintained according to provisions of the Restated Agreements and Declarations of Trust ("Declarations of Trust") and collective bargaining agreements between the Sprinkler Fitters Local Union Nos. 483. 669. 709 (the "Unions") and Defendant. Id.; see also ECF Nos. 6-4 through 6-18 (collective bargaining agreements): ECF Nos. 6-19 through 6-23 (trust agreements for NASI funds). Defendant First Responder Fire Protection Corp. is a California corporation with offices located in California. ECF No. 1 ¶ 3. Defendant transacts business as a contractor or subcontractor in the sprinkler industry, and is an employer in an industry affecting commerce as defined by ERISA. 29 U.S.C. §§ 1002(5). (9). (11). (12) and (14) and by the Labor-Management Relations Act (LMRA). 28 U.S.C. §§ 142(1). (3) and 152(2). Id.

         Plaintiffs allege that Defendant entered into agreements with the Unions, which, in turn, bound them to the collective bargaining agreements executed between the Unions and the National Fire Sprinkler Association. ECF No. 1 ¶ 4; see also ECF Nos. 6-4 through 6-9 (agreements between Defendant and Local Union 669); ECF Nos. 6-10 through 6-14 (agreements between Defendant and Local Union 483); ECF Nos. 6-15 through 6-18 (agreements between Defendant and Local Union 709). Pursuant to these documents. Defendants were obligated to pay certain contributions to the NASI Funds for each hour worked by a covered employee. ECF No. 1 ¶ 5: see also ECF No. 6-3 ¶ 9. Plaintiffs further allege that from 2012 through the present. Defendant employed individuals that are covered under the collective bargaining agreements. ECF No. 1 ¶ 6.

         In addition to requiring contributions to the NASI Funds, the collective bargaining agreements also bound Defendants to the respective Declarations of Trust, as well as Guidelines for Participation in the NASI Funds (collectively. "Trust Agreements'"). Id. ¶ 7: see also ECF No. 6-3 ¶ 10. Under the terms of the Collective Bargaining Agreements. Trust Agreements and the Guidelines, the Trustees for the NASI Funds have the authority to conduct an audit of Defendant's payroll records to determine the accuracy of their contributions to the funds. ECF No. 1 ¶ 8; see also ECF Nos. 6-19 through 6-23 (trust agreements of the NASI funds, authorizing the Trustees to conduct audits).

         According to the Complaint. Defendant has failed to cooperate with the Funds' auditor's attempts to conduct an audit of Defendant's books and wage records for January 1. 2012 through the period of the audit. Id. ¶¶ 9-10. Specifically. John Eger. Assistant Fund Administrator of the NASI Funds, attested in a declaration that Defendant has not complied with their obligation, pursuant to the above referenced collective bargaining agreements, trust agreement and guidelines, to "submit to the NASI Funds the records that were requested by the NASI Fund's auditor." ECF No. 6-3 ¶¶ 13, 15. Plaintiffs request that the Court enforce the terms of the above referenced agreements by ordering Defendant to permit an audit of its wages and payroll records. ECF No. 1 ¶ 13. They also request that the Court enter Judgment against Defendant for the amount determined to be owed by the audit, plus liquidated damages, interest from the date of delinquency to the date of payment, costs and reasonable attorney's fees, pursuant to 29 U.S.C. § 1132(g). and the above-referenced agreements. Id. Finally. Plaintiffs request Judgment against Defendant for all expenses, including accountant's fees, related to the audit and attempted audit. again pursuant 29 U.S.C. § 1132(g), and the above-referenced agreements. Id.

         Plaintiffs initiated the present action on August 17. 2016. ECF No. 1. and served Defendant via private process server on September 1, 2016. ECF No. 4. The time for Defendant to respond to Plaintiffs" Complaint expired on September 22. 2016. See Fed. R. Civ. P. 12(a)(l)(A)(i). On October 11. 2016. Plaintiffs moved for Clerk's Entry of Default and for Default Judgment. ECF Nos. 5 & 6. An Order of Default was entered against Defendant on November 4. 2016. ECF No. 7. To date, no response from Defendant has been received by this Court.

         II. STANDARD OF REVIEW

         '"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. Savannah 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 "ft]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[.]" hi. (citing S.E.C. v. Lawhaugh. 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." Id. at 422. 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 v. Teseo. 180 F.Supp.2d 15, 17 (D.D.C. 2001) (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) C'[O]n default judgment, the Court may only award damages without a hearing if the record supports the damages requested.").

         III. DISCUSSION

         A. Liability

         Here, the NASI Funds claim that Defendant breached their collective bargaining agreements by failing to comply with the auditor's requests. "ERISA and LMRA authorize parties to enforce the provisions of their collective bargaining agreements." Trustees of the Nat. Asbestos Workers Pension Fund v. Ideal Insulation Inc.. No. CIV. ELH-11-832, 2011 WL 5151067. at *3 (D. Md. Oct. 27. 2011) (internal quotation omitted); see also 29 U.S.C. § 185(a) and 29 U.S.C. § 1132(a)(1)(B). The Complaint, and the materials submitted in support of Plaintiffs' Motion for Default Judgment, which included the aforementioned Declaration of John Eger, Assistant Fund Administrator of the NASI Funds, and the relevant collective bargaining and trust agreements, taken as true, establish that Defendant was required to make contributions to the NASI funds and was bound to the trust agreements establishing each fund, which authorized the Trustees to conduct an audit to determine the accuracy of their contributions. ECF No. 1 ¶¶ 5-8; see also ECF No. 6-3 ¶¶ 9-11. In his declaration, Mr. Eger states that Defendant was required to provide the NASI Fund's auditor with the requested records, but have not done so.[1] ECF No. 6-3 ΒΆΒΆ 12-15. This failure by Defendant is thus a breach of the collective bargaining agreements they agreed to ...


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