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National Electrical Benefit Fund v. Eley Electrical Contractors, LLC

United States District Court, D. Maryland

July 18, 2018

NATIONAL ELECTRICAL BENEFIT FUND, Plaintiff,
v.
ELEY ELECTRICAL CONTRACTORS, LLC, Defendant.

          MEMORANDUM OPINION AND ORDER

          Paula Xinis United States District Judge

         Pending before the Court is Plaintiff National Electrical Benefit Fund's motion for default judgment, ECF No. 7. Defendant Eley Electrical Contractors, LLC, has not filed a response or entered its appearance, and the time for doing so has passed. See Loc. R. 105.2.a. For the foregoing reasons, National Electrical Benefit Fund's motion for default judgment is GRANTED.

         I. BACKGROUND

         Plaintiff National Electrical Benefit Fund (“NEBF”) is a multi-employer “employee pension benefit plan” as that term is defined under the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1132 et seq. See ECF No. 1 at ¶ 4; see also 29 U.S.C. § 1002(2). Defendant Eley Electrical Contractors, LLC (“Eley Electrical”) is an employer as defined by ERISA. 29 U.S.C. § 1002(5); ECF No. 1 at ¶ 5. Pursuant to a collective bargaining agreement with International Brotherhood of Electrical Workers Local 98 (“IBEW Local 98”), Eley Electrical is bound to all terms and conditions of the Restated Employees Benefit Agreement and Trust for the National Electrical Benefit Fund (“Trust Agreement”), which governs NEBF administration. ECF No. 1 at ¶¶ 6- 7.

         Pursuant to the Trust Agreement, Eley Electrical must regularly contribute to the NEBF on behalf of all covered employees. ECF No. 1 at ¶ 6. If Eley Electrical fails to make required contributions, the Trust Agreement authorizes NEBF to take all necessary action to recover the delinquent contributions. ECF No. 1 at ¶ 18; see also ECF No. 7-2 at 5-12.

         On November 27, 2017, NEBF filed suit, alleging that Eley Electrical breached the terms of the Trust Agreement and owes unpaid delinquent contributions for work performed by its covered employees from January 1, 2014, through December 31, 2016. ECF No. 1 at ¶ 9. Eley Electrical did not answer the Complaint, and on February 15, 2018, the Clerk of the Court entered default pursuant to Federal Rule of Civil Procedure 55(a). ECF No. 6. On February 27, 2018, NEBF filed the pending motion for default judgment. ECF No. 7.

         II. DISCUSSION

         Federal Rule of Civil Procedure 55(b) governs default judgments, which may be entered “[i]f the plaintiff's claim is for a sum certain or a sum that can be made certain by computation, ” and the defendant is in default for failing to appear. Fed.R.Civ.P. 55(b)(1). For “all other cases, ” in which the sum is neither certain nor ascertainable through computation, Rule 55(b)(2) provides that “the party must apply to the court for a default judgment.” The Court may then “conduct hearings or make referrals - preserving any federal statutory right to a jury trial - when, to enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other matter.” Whether to enter a default judgment rests within the Court's sound discretion. SEC v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005) (citing Dow v. Jones, 232 F.Supp.2d 491, 494 (D. Md. 2002)).

         Although “the Fourth Circuit has a ‘strong policy that cases be decided on the merits, '” Disney Enters. v. Delane, 446 F.Supp.2d 402, 405 (D. Md. 2006) (quoting United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993)), “default judgment is available when the ‘adversary process has been halted because of an essentially unresponsive party.' ” Id. (quoting Lawbaugh, 359 F.Supp.2d at 421); see also Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987) (upholding a default judgment awarded where the defendant lost its summons and did not respond within the proper period); Disney Enters., 446 F.Supp.2d at 405- 06 (finding appropriate the entry of default judgment where the defendant had been properly served with the complaint and did not respond, despite repeated attempts to contact him).

         When considering whether to grant default judgment, the Court takes as true all well-pleaded factual allegations in the complaint, other than those pertaining to damages. Fed.R.Civ.P. 8(b)(6); Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (“The defendant, by his default, admits the plaintiff's well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established.” (citation and internal quotation marks omitted)); see Fed. R. Civ. P. 8(b)(6) (“An allegation - other than one relating to the amount of damages - is admitted if a responsive pleading is required and the allegation is not denied.”).

         III. DISCUSSION

         ERISA requires 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: see also 29 U.S.C. § 1132(g) (providing that employers who fail to timely make contributions are liable in a civil action for inter alia, unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable attorneys' fees, and costs of the action). ERISA therefore “ ‘provide[s] trustees of multiemployer benefit plans with an effective federal remedy to collect delinquent contributions.' ” Int'l Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F.Supp.2d 680. 685-86 (D. Md. 2013) (quoting Laborers Health & Welfare Trust Fund for Northern Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 541 (1988)).

         Taking the well-pleaded facts of the Complaint as true, NEBF has established that Eley Electrical was required as an employer to make contributions under the CBA and Trust Agreement. NEBF has also established that Eley Electrical failed to make such contributions, in violation of 29 U.S.C. § 1145. See ECF No. 1. Default judgment as to liability is thus GRANTED.

         Having determined liability, NEBF is authorized by statute, 29 U.S.C. § 1132(g), to collect as damages the amount of the delinquent contributions, plus ten percent interest; liquidated damages in the amount of twenty percent of the delinquent contributions; costs of the audit; and attorneys' fees and costs. See 29 U.S.C. ยง 1132(g). However, on a motion for default judgment, damages may be awarded only if ...


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