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National Electrical Benefit Fund v. Chester County Electric, Inc.

United States District Court, D. Maryland, Southern Division

August 10, 2017

NATIONAL ELECTRICAL BENEFIT FUND, Plaintiff,
v.
CHESTER COUNTY ELECTRIC, INC. Defendant.

          MEMORANDUM OPINION

          GEORGE J. HAZEL, UNITED STATES DISTRICT JUDGE.

         Plaintiff National Electrical Benefit Fund ("Plaintiff or "NEBF") brings this action against Defendant Chester County Electric, Inc. ("Defendant") 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's failure to answer or otherwise defend in this action, the Clerk entered default against Defendant on February 13, 2017. ECF No. 20. Now pending before the Court is Plaintiffs Motion for Default Judgment against Defendant pursuant to Fed.R.Civ.P. 55(b). ECF No. 6. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Plaintiffs Motion for Default Judgment is granted, and judgment is entered against Defendant in the amount of $20, 732.49.

         I. BACKGROUND

         The following facts are established by the Complaint, ECF No. 1, and evidentiary exhibits in support of the Motion for Default Judgment, ECF Nos. 6-1-6-4. The NEBF is a multiemployer employee pension benefit plan within the meaning of Section 3(2) of ERISA, 29 U.S.C. § 1002(2), which has been established pursuant to an agreement entered into between the International Brotherhood of Electrical Workers ("IBEW") and the National Electrical Contractors Association ("NECA"). ECF No. 1 ¶ 4; see ECF No. 6-3 at 1.[1] Employers agree to participate in the NEBF pursuant to collective bargaining agreements with the IBEW or one of its affiliated local unions. ECF No. 1 ¶ 4. The NEBF is administered at 2400 Research Boulevard, Suite 500, Rockville, Maryland 20850-3238. Id.

         Plaintiff states upon information and belief that Defendant Chester County Electric, Inc. is a Pennsylvania corporation whose business address and main place of business is 301 National Road, Suite 300, Exton, PA 19341. ECF No. 1 ¶ 5. Defendant is an employer within the meaning of Section 3(5) of ERISA, 29 U.S.C. § 1002(5), and is engaged in an industry affecting commerce. Id.

         At all times relevant to the action, Defendant was a signatory to collective bargaining agreements ("Collective Bargaining Agreements") with IBEW Local Union 380, now part of IBEW Local 98, the collective bargaining representatives for Defendant's employees. Id. ¶ 6. According to the Complaint, the Collective Bargaining Agreements obligated Defendant to submit contributions to the NEBF on behalf of employees covered by the Agreements. Id. Defendant was also bound to the terms and conditions of the Restated Employees Benefit Agreement and Trust ("Trust Agreement"), which governed administration of the NEBF. Id. ¶ 7. The Trust Agreement obligated Defendant, among other things, to file monthly payroll reports identifying employees and work covered under the Agreements, and contribute three percent of the gross wages paid to all such covered employees following the month in which the covered work was performed. Id. ¶ 8. The Trust Agreement also authorized the Trustees to take all necessary actions to recover delinquent contributions. ECF No. 1 ¶ 19; see ECF No. 6-3 at 7.

         Defendant allegedly failed to timely report or contribute to NEBF for work performed by Defendant's covered employees between December 2012 and July 2015.[2] See ECF No. 1 ¶¶ 9-10; ECF No. 6-4 at 1. Plaintiff discovered these omissions when Defendant filed reports for the aforementioned months in August 2015. Id. At that time, $13, 835.00 was owed.[3] Id. ¶ 13. Plaintiff has made several demands for payment from Defendant. Id. ¶ 12. Since then, Defendant has paid $1, 128.52 towards the unpaid contributions, leaving an outstanding balance of $12, 706.76.

         Plaintiff filed the instant Complaint against Defendant on November 30, 2016. ECF No. 1. Defendant's President, John Gleason, returned an executed Waiver of Service to Plaintiff on January 15, 2017. See ECF No. 4. An Answer from Defendant was due on or before January 30, 2017. Id. On February 23, 2017, with no answer having been filed, Plaintiff moved for default, and the Clerk entered default against Defendant on March 6, 2017. See ECF Nos. 5 and 7. Plaintiff now seeks default judgment against Defendant in the amount of 512, 706.76 in delinquent contributions; $4, 479.67 in interest accrued; $2, 767.06 in liquidated damages; and $779.00 in attorneys' fees and costs - for a total of $20, 732.49, pursuant to Section 502(g)(2) of ERISA, 29 U.S.C. § 1132(g)(2). ECF No. 6.

         II. STANDARD OF REVIEW

         "When 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 Mgml. 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 Shakli 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)).

         "Upon default, the well-pled allegations in a complaint as to liability are taken as true, although the allegations as to damages are not." Lawbaugh, 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. 1979)).

         III. ANALYSIS

         The Court has subject matter jurisdiction over this action pursuant to Section 502 of ERISA, 29 U.S.C. § 1132 and 1451(c). Venue is proper under 29 U.S.C. §§ 1132(e)(2), 1451(d), as the NEBF is administered in Rockville, Maryland. See Bd. of Trs., Sheet Metal Workers' Nat'l Pension Fund v. McD Metals, Inc., 964 F.Supp. 1040 (E.D. Va. 1997); Trustees of Nat. Automatic Sprinkler Indus. Pension Fund v. Best Automatic Fire Prot., Inc., 578 F.Supp. 94, 95 (D. Md. 1983).

         Under ERISA, "[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.. . make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145; see Bd. of Trustees, Sheet Metal Workers' Nat'lPension Fund v. Camelot Constr., Inc., No. 1:14-CV-161-LMB-TRJ, 2015 WL 13050031, at *3 (E.D. Va. Apr. 14, 2015). In the Complaint, Plaintiff alleges that Defendant was obligated under the terms of the Collective Bargaining Agreements and Trust Agreement to make contributions to NEBF, but failed to do so between December 2012 and July 2015, leaving an outstanding contribution balance of $12, 706.76. See ECF No. 1 at 3. The Affidavit of ...


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