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National Electrical Benefit Fund v. Greer Electric Co., Inc.

United States District Court, D. Maryland

August 4, 2017

NATIONAL ELECTRICAL BENEFIT FUND, Plaintiff,
v.
GREER ELECTRIC COMPANY, INC., Defendant.

          REPORT AND RECOMMENDATION

          Timothy J. Sullivan United States Magistrate Judge

         This Report and Recommendation addresses the Motion for Default Judgment (“Motion”) (ECF No. 11) filed by Plaintiff National Electrical Benefit Fund (“NEBF”). Defendant Greer Electric Company, Inc. (“Greer”) has not filed a response, and the time for doing so has passed. See Loc. R. 105.2(a). On July 7, 2017, in accordance with 28 U.S.C. § 636 and pursuant to Local Rule 301.6, Judge Chuang referred this case to me for a report and recommendation on NEBF's Motion. (ECF No. 12.) I find that a hearing is unnecessary in this case. See Fed. R. Civ. P. 55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that NEBF's Motion be granted.

         I. FACTUAL AND PROCEDURAL HISTORY

         In this case, NEBF filed suit against Greer under the Employee Retirement Security Act of 1974, as amended, (“ERISA”), 29 U.S.C. § 1132(e), to recover delinquent pension fund contributions and related relief. (ECF No. 1.) Greer was personally served with the Complaint and summons but did not file an answer or responsive pleading within the requisite time period. On March 14, 2017, NEBF moved for the Clerk's entry of default (ECF No. 7), and the Clerk entered default against Greer on March 28, 2017 (ECF No. 10). On March 30, 2017, NEBF filed the Motion, to which Greer has not responded.

         II. LEGAL ANALYSIS

         A. Standard for Entry of Default Judgment

         In determining whether to award a default judgment, the Court accepts as true the well-pleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001); United States ex rel. Durrett-Sheppard Steel Co. v. SEF Stainless Steel, Inc., No. RDB-11-2410, 2012 WL 2446151, at *1 (D. Md. June 26, 2012). Nonetheless, the Court must consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012) (citing Ryan, 253 F.3d at 790). Although the Fourth Circuit has a “strong policy that cases be decided on the merits, ” United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment “is 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). If the Court determines that liability is established, the Court must then determine the appropriate amount of damages. CGI Finance, Inc., v. Johnson, No. ELH-12-1985, 2013 WL 1192353, at *1 (D. Md. March 21, 2013). The Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. Durrett-Sheppard Steel Co., 2012 WL 2446151 at *1.

         Rule 55 of the Federal Rules of Civil Procedure provides that “[i]f, after entry of default, the Plaintiff's Complaint does not specify a ‘sum certain' amount of damages, the court may enter a default judgment against the defendant pursuant to Fed.R.Civ.P. 55(b)(2).” A plaintiff's assertion of a sum in a complaint does not make the sum “certain” unless the plaintiff claims liquidated damages; otherwise, the complaint must be supported by affidavit or documentary evidence. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012). Rule 55(b)(2) provides that “the court may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.” The Court is not required to conduct an evidentiary hearing to determine damages, however; it may rely instead on affidavits or documentary evidence in the record to determine the appropriate sum. See, e.g., Mongue v. Portofino Ristorante, 751 F.Supp.2d 789, 795 (D. Md. 2010).

         B. Liability

         ERISA provides that “[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. ERISA further provides that employers who fail to make timely contributions are liable in a civil action for unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable attorney's fees and costs, and any other relief the Court deems appropriate. 29 U.S.C. § 1132(a), (g).

         In the Complaint, NEBF alleges that it is a multiemployer employee pension benefit plan within the meaning of 29 U.S.C. § 1002(2). Greer is an employer that has agreed to participate in the NEBF pursuant to collective bargaining agreements with the International Brotherhood of Electrical Works Local Union 602 (“Collective Bargaining Agreements”). (Id. ¶ 6.) Pursuant to the Collective Bargaining Agreements, Greer is required to submit contributions to the NEBF on behalf of Greer's covered employees. (Id.) In addition to its obligations under the Collective Bargaining Agreements, Greer is also bound to the terms and conditions of the Restated Employees Benefit Agreement and Trust for the NEBF (“Trust Agreement”). (Id. ¶ 7.) Notwithstanding its obligations, NEBF has failed to make the contributions required by the Collective Bargaining Agreements and the Trust Agreement to the NEBF for its covered employees. (Id. ¶ 8.) NEBF alleges that Greer owes $6, 887.49 in delinquent contributions in connection with work performed by Greer's covered employees between March 2014 and December 2014. (Id. ¶ 9.) Despite its demands for payment, Greer remains delinquent in its payment obligations. (Id. ¶ 10.) Accepting as true the unchallenged allegations of the Complaint, NEBF has established Greer's liability for failure to pay the contributions as required by the Collective Bargaining Agreements and the Trust Agreement.

         C. Damages

         Having determined that NEBF has established Greer's liability, it is now appropriate to determine the damages to which NEBF is entitled. The damages NEBF seeks in its Motion are appropriate under Rule 54(c) so long as “the record supports the damages requested.” See Laborers' Dist. Council Pension v. E.G.S., Inc., No. WDQ-09-3174, 2010 WL 1568595, at *3 (D. Md. Apr. 16, 2010). Here, NEBF has provided sufficient evidence to support its claim for damages in the amount of $13, 493.10.

         In support of its claim for damages, NEBF submits the affidavit of Angel Losqaudro (“Losquadro”). (ECF No. 11-1.) Losquadro is the Director of the NEBF's Audit and Delinquency Department and is familiar with the allegations of the Complaint and the facts of this case. (Id. ¶¶ 1-2.) Under the Trust Agreement, which Losquadro incorporates into the affidavit (id. at 4-12), NEBF may recover interest on delinquent contributions at a rate of ten percent, liquidated damages in the amount of twenty percent of the delinquent contributions, audit costs, and attorney's fees and costs incurred in collecting delinquent contributions. (Id.) As discussed above, these damages are allowed under ERISA. 29 U.S.C. § 1132(g). Losquadro states that an audit of Greer's books and records conducted in August 2015 revealed that Greer failed to submit a total of $8, 957.14 in contributions for work performed by its covered employees in 2014. (ECF No. 11-1 ¶ 4.) Greer subsequently paid a total of $2, 069.64 toward the delinquent contributions, leaving an outstanding balance of $6, 887.49 for the year 2014. (Id. ΒΆ 5.) In addition, NEBF seeks interest on the delinquent contributions in the amount of $2, 515.13, the calculation of which is set forth in Exhibit ...


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