United States District Court, D. Maryland, Southern Division
UNITED FOOD AND COMMERCIAL WORKERS UNIONS AND PARTICIPATING EMPLOYERS PENSION FUND, Plaintiff,
MAGRUDER HOLDINGS, INC., et al., Defendants.
J. HAZEL United States District Judge
United Food and Commercial Workers Unions and Participating
Employers Pension Fund (the "Fund") and its
Trustees brings this action against Defendants Magruder
Holdings, Inc. ("Magruder") and Fanaroff &
Steppa, LLC under the Employee Retirement Income Security Act
of 1974 ("ERISA"), as amended by the Multiemployer
Pension Plan Amendments Act of 1980. 29 U.S.C. §§
1001 et seq. Following Defendant Magrude's
failure to answer or otherwise defend in this action, the
Clerk entered default against Magruder on December 9. 2016.
ECF No. 20. Now pending before the Court is Plaintiffs Motion
for Default Judgment against Magruder pursuant to
Fed.R.Civ.P. 55. ECF No. 13. No hearing is necessary.
See Loc. R. 105.6 (D. Md. 2016). For the following
reasons, Plaintiffs Motion for Default Judgment is granted,
in part, and denied, in part. Judgment is entered against
Defendant Magruder in the total amount of $2, 760, 573.07.
Plaintiff shall re-submit its request for attorneys* fees and
costs, consistent with the Local Rules and Guidelines set
forth at Loc. R. 109 and Appendix B (D. Md. July 1. 2016).
following facts are established by the Complaint, ECF No. 1,
and by Plaintiffs . memorandum and exhibits in support of the
Motion for Default Judgment, ECF Nos. 13-16. The Fund is a
multiemployer pension plan within the meaning of Sections
3(37) and 4001(a)(3) of ERISA. 29 U.S.C. §§
1002(37) and 1301(a)(3). ECF No. 1 ¶ 4; ECF No. 15
¶ 2. The Trustees of the Fund are
"fiduciaries" with respect to the Fund, as defined
in Section 3(21)(A) of ERISA. 29 U.S.C. § 1002(21)(A).
and are collectively the "plan sponsor" within the
meaning of Section 4001(a)(10)(A)of ERISA, 29 U.S.C. §
l301(a)(10)(A). ECF No. 1 ¶3. Plaintiffs are authorized
to bring this action on behalf of the Fund, its participants,
and its beneficiaries for the purpose of collecting
withdrawal liability. See Id. ¶ 5 (citing
Sections 502(a)(3). 4221(b)(1). and 43Ol(a)(1) of ERISA. 29
U.S.C. §§ 1132(a)(3), 1401(b)(1), and 1451(a)(1)).
The Trustees administer the Fund at 4301 Garden City Drive,
Suite 201, Landover, Maryland, 20785. Id. ¶ 6;
ECF No. 15.¶ 2.
Magruder Holdings, Inc. is a Maryland corporation with its
principal place of business at 11820 Parklawn Drive. Suite
200, Rockville, Maryland 20852. and is a "trade or
business" within the meaning of ERISA §4001 (b)(1).
29 U.S.C. § 1301(b)(1). ECF No. 1 ¶ 8. Defendant
Magruder is an employer within the meaning of 29 U.S.C.
§152(2) and Section 3(5) of ERISA. 29 U.S.C. §
1002(5). and has been engaged in an industry affecting
commerce, within the meanings of Sections 3(11) and (12) of
ERISA. 29 U.S.C. §§ 1002(11) and (12). Id.
¶ 7. At all times relevant to the action, Magruder owned
and operated a chain of grocery stores in the Washington. DC.
metropolitan area, and employed employees represented for the
purposes of collective bargaining by the United Food and
Commercial Workers Union Local 400 (the "Union"), a
labor organization representing employees in an industry
affecting interstate commerce. Id. ¶ 12.
times pertinent to the action. Defendant Magruder was bound
by a collective bargaining agreement with the Union (the
"Agreement"). ECF No. 1 ¶ 13; ECF No. 15
¶ 5; see ECF No. 15-1 at 2-34. The Agreement
obligated Magruder to contribute to the Fund on behalf of
Magruder"s employees. ECF No. 1 ¶ 14; ECF No. 15
¶ 5. Additionally. Magruder was required to abide by the
terms and conditions of the Fund's Amended and Restated
Agreement and Declaration of Trust (the "Trust
Document") and to submit monthly reports and payments to
the Fund. ECF No. 1 ¶ 15; ECF No. 15 ¶ 6;
see ECF No. 15-2 at 2-20. In January 2013, the Fund
determined that Defendant Magruder was no longer contributing
to the Fund, and thus had effected a "complete
withdrawal" from the Fund, as defined in Section 4203 of
ERISA. 29 U.S.C. § 1383. ECF No. 1 ¶ 16; ECF No. 15
¶ 7. The Fund further determined that, as a result of
the complete withdrawal, the Magruder Controlled
Group had incurred withdrawal liability to the
Fund in the amount of $1, 980, 709.00. as determined under
Section 4201(b) of ERISA, 29 U.S.C. § 1381(b). ECF No. 1
¶ 18; ECF No. 15 ¶ 13.
about August 9, 2013. the Fund sent the Magruder Controlled
Group a revised Notice and Demand for payment of withdrawal
liability,  informing Magruder that its revised
withdrawal liability was $1, 980, 709.00, payable in a single
payment or sixty-one quarterly payments of $52, 996.00 and a
final payment of $13, 869.00. ECF No. 1 ¶¶ 22-23:
see ECF No. 15-5 at 2 8.
Magruder Controlled Group failed to pay the withdrawal
liability payments when due. ECF No. 1 ¶ 24. By letter
dated November 12. 2013, the Fund informed the Magruder
Controlled Group that it was in default, and that its
withdrawal liability would be accelerated pursuant to ERISA
Section 4219(c)(5)(A) of ERISA, 29 U.S.C. §
1399(c)(5)(A) and the Fund's Withdrawal Liability Rules.
Id. ¶ 25; ECF No. 15 ¶ 14; see
ECF No. 15-6 at 2-3. The Trustees declared the Magruder
Controlled Group to be in immediate default within the
meaning of Section 4219(c)(5)(A) of ERISA, 29 U.S.C. §
1399(c)(5)(A). and that the entire amount of the Magruder
Controlled Group's withdrawal liability, plus interest
accruing from August 28, 2013 through the date paid, and
liquidated damages of at least $396, 141.00. were now owed to
the Fund. ECF No. 1 ¶25.
filed the instant Complaint against Defendants Magruder
Holdings, Inc. and Fanaroff & Steppa. LLC, on August 17,
2016. ECF No. 1. Fanaroff & Steppa filed an Answer on
October 24, 2016. ECF No. 7. Following Defendant
Magruder's failure to answer or otherwise defend in the
action. Plaintiff filed a Motion for Clerk's Entry of
Default against Magruder on November 2. 2016. ECF No. 12; and
the Clerk entered default against Magruder on December 9.
2016. ECF No. 20. Plaintiff also concurrently filed a Motion
for Default Judgment. ECF No. 13, along with an accompanying
Memorandum and exhibits. ECF Nos. 14-16. Magruder has not
entered an appearance or otherwise defended in this matter,
and the time to respond to Plaintiffs Motion for Default
Judgment has passed. The Court has reviewed the record and
relevant authorities, and now grants the Motion for Default
Judgment for a total amount of $2, 760, 573.07 - representing
$1, 980, 709.00 in withdrawal liability. $383, 722.27 in
interest accrued, and $396, 141.80 in liquidated damages
pursuant to Section 502(g)(2) of ERISA. 29 U.S.C. §
1132(g)(2). However, because the request for attorneys'
fees and costs in the current amount of $18, 537.44 in
attorneys* fees and costs does not comply with the Local
Rules and Guidelines set forth at Loc. R. 109 and Appendix B.
Plaintiff shall be directed to re-submit this request.
STANDARD OF REVIEW
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).
"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."
Educ. Credit Mgmt. Corp. v. Optimum Welding. 285
F.R.D. 371. 373 (D. Md. 2012). Although ""[t]he
Fourth Circuit has a "strong policy" that
'cases be decided on their merits."" Choice
Hotels Intern.. Inc. v. Savannah Shakti Carp.. No.
DKC-11-0438. 2011 WL 5118328 at *2 (D. Md. Oct. 25, 2011)
(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)).
default, the well-pled allegations in a complaint as to
liability are taken as true, although the allegations as to
damages are not." Lawhaugh, 359 F.Supp.2d at
422; see also Ryan v. Homecomings Fin. Network. 253
F.3d 778. 780 (4th Cir. 2001) (noting that "[t]he
defendant, by [its] default, admits the plaintiffs
well-pleaded allegations of fact." which provide the
basis for judgment). Upon a finding of liability, "[t]he
court must make an independent determination regarding
damages . .." Int'l Painters &
Allied Trades Indus. Pension Fund v. Capital Restoration
& Painting Co., 919 F.Supp.2d 680. 684 (D. Md.
2013). Fed.R.Civ.P. 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." 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.
Court has subject matter jurisdiction over this action
pursuant to Section 502 of ERISA. 29 U.S.C. § 1132 and
1451(c). Personal jurisdiction and venue are proper under 29
U.S.C. §§ 1132(e)(2), 1451(d), as the Fund is
administered in Landover, Maryland. See Bd. of Trs.,
Sheet Metal Workers' Nat 7 Pension
Fund v. McD Metals. Inc..964 F.Supp. 1040 (E.D. Va.
1997); Trustees of Nat. ...