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National Electrical Benefit Fund v. Great Lakes Electrical Contractors, Inc.

United States District Court, D. Maryland

August 2, 2018

NATIONAL ELECTRICAL BENEFIT FUND, Plaintiff,
v.
GREAT LAKES ELECTRICAL CONTRACTORS, 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. 10) filed by Plaintiff National Electrical Benefit Fund (“NEBF”). Defendant Great Lakes Electrical Contractors, Inc. (“Great Lakes”) has not filed a response, and the time for doing so has passed. See Loc. R. 105.2(a). On May 14, 2018, 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 Great Lakes 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.) Great Lakes was personally served with the Complaint and summons (see ECF No. 5), but it did not file an answer or responsive pleading within the requisite time period. On March 27, 2018, NEBF moved for the Clerk's entry of default (ECF No. 7), and the Clerk entered default against Great Lakes on April 4, 2018 (ECF No. 8). On April 26, 2018, NEBF filed the Motion, to which Great Lakes 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. Ryan, 253 F.3d at 780. 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). (ECF No. 1 ¶ 4.) Great Lakes is an employer that has agreed to participate in the NEBF pursuant to collective bargaining agreements with several labor unions. (Id. ¶ 6.) Specifically, September 14, 1998, Great Lakes' representatives signed a Letter of Assent in which Great Lakes agreed to “comply with, and be bound by, all of the provisions contained” in an Inside Labor Agreement between the Lake County Division, Northeastern Illinois Chapter, NECA, Inc. and Local Union 150, IBEW, as well as “subsequent approved labor agreements.” (ECF No. 11-8.) Great Lakes entered into similar agreements on June 20, 2001 (regarding the Inside Labor Agreement between the Aurora Division, Northeastern Illinois Chapter, NECA, Inc. and Local Union 461) (ECF No. 11-10); June 25, 2001 (regarding the Inside Labor Agreement between Northeastern Illinois Chapter of NECA, Elgin Division and Local Union 117, IBEW) (ECF No. 11-2); and August 18 and 19, 2004 (regarding the Principal Labor Agreement and Communications Labor Agreement between the Electrical Contractors Assoc. of City of Chicago, NECA and Local Union 134, IBEW (ECF Nos. 11-6 & 11-4).[1] By signing the Letters of Assent and agreeing to “comply with, and be bound by, ” the terms of the relevant collective bargaining agreements, Great Lakes agreed to the following provision, which is contained in each of the collective bargaining agreements:

It is agreed that in accord with the Employees Benefit Agreement of the National Electrical Benefit Fund (NEBF) as entered into between the National Electrical Contractors Association and the International Brotherhood of Electrical Workers on September 3, 1946, as amended, and now delineated as the Restated Employees Benefit Agreement and Trust, that unless authorized otherwise by the NEBF the individual employers will forward monies to the NEBF's designated local collection agent an amount equal to 3% of the gross monthly labor payroll paid to, or accrued by, the employees in this bargaining unit, and a completed payroll report prescribed by the NEBF. The payment shall be made by check or draft and shall constitute a debt due and owing to the NEBF on the last day of each calendar month, which may be recovered by suit initiated by the NEBF or its assignee. The payment and the payroll report shall be mailed to reach the office of the appropriate local collection agent not later than fifteen (15) calendar days following the end of each calendar month.The individual Employer hereby accepts, and agrees to be bound by, the Restated Employees Benefit Agreement and Trust.

(ECF Nos. 11-3 at 25; 11-5 at 22-23; 11-7 at 27-28; 11-9 at 21; 11-11 at 22-23.)

         This term included in each of the collective bargaining agreements is consistent with Article 6 of the Restated Employees Benefit Agreement and Trust for the NEBF (“Trust Agreement”), which is referenced ...


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