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Welfare, Vacation and Apprentice Funds v. Contract Design & Development, LLC

United States District Court, D. Maryland

July 31, 2017

RODMAN LOCAL 201 PENSION, WELFARE, VACATION, AND APPRENTICE FUNDS,
v.
CONTRACT DESIGN & DEVELOPMENT, LLC

          MEMORANDUM OPINION

          DEBORAH K. CHASANOW United States District Judge.

         Presently pending and ready for resolution in this action arising under the Employee Retirement Security Act of 1974 (“ERISA”) is Plaintiffs' motion for default judgment. (ECF No. 10). The relevant issues have been briefed and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, Plaintiffs' motion will be granted in part and Defendant will be ordered to submit to an audit.

         I. Background

         Plaintiffs are trustees of various trust funds associated with the International Association of Bridge, Structural, Ornamental & Reinforcing Ironworkers Union No. 201 (“the Funds”). The Funds are employee benefit plans within the meaning of § 3(3) of ERISA. See 29 U.S.C. § 1002(3). Defendant Contract Design & Development, LLC is an employer engaged in an industry affecting commerce under ERISA. See 29 U.S.C. §§ 1002(5), (12). The Funds were established and are maintained pursuant to the Restated Agreements and Declarations of Trust (“the trust agreements”) and a collective bargaining agreement between Rodman Local No. 201 and Defendant.

         On October 21, 2016, Plaintiffs filed a complaint on behalf of the Funds alleging that Defendant breached the collective bargaining and trust agreements by failing to make contributions and submit contribution reports for October, November, and December, 2015. According to the complaint, Defendant was required to make contributions to the Funds for “each hour worked by employees of the Defendant performing work covered by the Collective Bargaining Agreement . . . .” (ECF No. 1 ¶ 11). Additionally, Defendant was obligated to submit forms every month reporting the amount of contributions due. The trust agreements provide that if an employer fails to make timely contributions, it must pay liquidated damages if payment is not postmarked by the last day of the month in which contributions are due. Plaintiffs further allege that Defendant was also obligated to remit employees' dues deducted from their pay to the Funds' third-party administrator. (Id. at ¶ 23).

         The Plaintiffs' complaint claims that Defendant failed to make any payments. In addition to the outstanding contributions, Plaintiffs seek employees' dues, liquidated damages and interest for late payments, as well as attorneys' fees and costs. Plaintiffs recite that they were made aware of the amounts due by a union member who previously worked for Defendant and provided Plaintiffs with his weekly payroll sheets. (ECF No. 10-4, p. 3, 4).

         Plaintiffs served the summons and complaint on Defendant on November 1, 2016. When Defendant failed to respond within the requisite time period, Plaintiffs moved for the entry of default. The clerk entered default against Defendant on January 3, 2017. (ECF No. 8). Plaintiffs filed the subject motion for entry of default judgment on February 2, 2017. (ECF No. 10).

         Plaintiffs Trustees of the Rodman 201 Pension, Welfare, Vacation and Apprentice Funds (“Rodman Funds”) seek default judgment in the amount of $4, 793.04 which consists of $3, 661.30 in contributions, liquidated damages of $366.13, and interest, at the time the motion was filed, of $765.61. (ECF No. 12).

         Plaintiff the Annuity Fund seeks $1, 234.52 representing unpaid contributions in the amount of $924.00, liquidated damages of $184.80, and interest, at the time the motion was filed, of $125.72. (ECF No. 10-6, p. 5).

         Plaintiffs also seek unremitted union dues in the amount of $421.20, attorneys' fees of $5, 556.75, and costs of $675.00.

         (ECF No. 10-1). Additionally, Plaintiffs move for an order directing Defendant to submit to a complete audit of its wage and payroll records for the period August 1, 2015 through the date of judgment.

         For the following reasons, Plaintiffs' motion will be granted in part and denied in part.

         II. Standard of Review

         Pursuant to Fed.R.Civ.P. 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.” Where a default has been previously entered by the clerk and the complaint does not specify a certain amount of damages, the court may enter a default judgment, upon the plaintiff's application and notice to the defaulting party, pursuant to Fed.R.Civ.P. 55(b)(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. See Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002); Lipenga v. Kambalame, 219 F.Supp.3d 517 (D.Md. 2016). The 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. ...


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