United States District Court, D. Maryland
TRUSTEES OF THE ELECTRICAL WELFARE TRUST FUND, et al., Plaintiffs,
CONTROL SPECIALTIES, LLC, Defendant.
REPORT AND RECOMMENDATION
Timothy J. Sullivan, United States Magistrate Judge.
Report and Recommendation addresses the “Second Amended
Motion for Entry of Default Judgment”
(“Motion”) (ECF No. 28) filed by Plaintiffs,
Trustees of the Electrical Welfare Trust Fund (“Welfare
Fund”), Trustees of the Electrical Workers Local No. 26
(“Local 26”) Pension Trust Fund (“Pension
Fund”), Trustees of the Local No. 26 Joint
Apprenticeship and Training Trust Fund (“Apprenticeship
Fund”), Trustees of the Local No. 26 Individual Account
Fund (“Account Fund”), Trustees of the Labor
Management Cooperation Committee, the Collection Agent for
the National Electrical Benefit Funds (“NEBF”)
and the Collection Agent for the Local No. 26, International
Brotherhood of Electrical Workers (“the Union”)
(collectively, the “Trustees” of their respective
“Funds”). Defendant Control Specialties, LLC
(“Defendant”) has not filed a response, and the
time for doing so has passed. See Loc. R. 105.2(a).
On July 31, 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 Plaintiffs'
Motion. (ECF No. 23.) 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 Plaintiffs' Motion be granted.
FACTUAL AND PROCEDURAL HISTORY
brought this action against Defendant 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.) Defendant was personally served with the
Complaint and summons but did not file an answer or
responsive pleading within the requisite time period. On June
15, 2017, Plaintiffs moved for the Clerk's entry of
default (ECF No. 9), and the Clerk entered default against
Defendant on July 15, 2017 (ECF No. 10). On September 15,
2017, Plaintiffs filed the Motion, to which Defendants have
Standard for Entry of Default Judgment
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.
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).
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).
Complaint, the Trustees allege that the Funds are
“multi-employer plans” within the meaning of 29
U.S.C. § 1002(2). (Id. ¶ 4.) The Trustees
are fiduciaries of the Plans within the meaning of 29 U.S.C.
§ 1002(21). (Id. ¶ 5.) Defendant is an
employer that has agreed to participate in the Funds pursuant
to a Collective Bargaining Agreement (“CBA”).
(Id. ¶ 6.) The CBA, which is between Defendant
and Local 26, International Brotherhood of Electrical
Workers, and the National Electrical Contractors Association,
Washington, D.C. Chapter, requires Defendant to “make
contributions to the Funds at specified rates, and binds
Defendant to the terms and conditions of the Agreements and
Declarations of Trust (‘Trust Agreements')
establishing the Funds.” (Id. ¶¶
9-10.) Notwithstanding its obligations, Defendant has failed
to make the contributions and to submit the reports to the
Funds required by the CBA and the Trust Agreements.
(Id. ¶ 12.) Plaintiffs have demanded payment by
the Defendant, but Defendant remains delinquent in its
payment obligations. (Id. ¶ 15.) Accepting as
true the unchallenged allegations of the Complaint,
Plaintiffs have established Defendant's liability for
failure to pay the contributions and to submit the reports as
required by the CBA and the Trust Agreements.
determined that Plaintiffs have established Defendant's
liability, it is now appropriate to determine the damages to
which Plaintiffs are entitled. The damages Plaintiffs seek in
the 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, Plaintiffs have provided sufficient
evidence to support their claim for damages in the amount of
support of their claim for damages, Plaintiffs submit the
affidavit of Michael McCarron (“McCarron”). (ECF
No. 28-2.) McCarron is the Accounting Manager of the
Accounting Department at the Local 26, IBEW-NECA Trust Fund
Office. (Id. ¶ 1.) In this role, McCarron is
responsible for “monitoring and maintaining records
with respect to monthly contribution reports, payments made
by participating electrical contractors, including those of
the Defendant, the determination of whether payments were
timely made and if not, the assessment of liquidated damages,
interest and legal fees” in accordance with the CBA and
the Trust Agreements. (Id. ¶ 2.) Pursuant to
the CBA and the Trust Agreements, unpaid or late contribution
payments are subject to a liquidated damages assessment in
the amount of 20% of the monthly contribution balance due.
(Id. ¶ 4.) In addition, interest is assessed on
unpaid and late-paid contributions at the annual rate of 7%.
(Id.) McCarron states that Defendant did not submit
monthly contribution reports for the month of June 2017, and
also failed to submit its contribution payment for that
month. (Id. ¶ 8.) As such, and “[i]n
accordance with the collections policies and procedures of
the Joint Trust Funds, ” McCarron determined that
Defendant's liability for the unpaid June 2017
contribution was $6, 873.78. (Id.) I recommend that