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Trustees of National Asbestos Workers Medical Fund v. Wrap It Up Construction, LLC

United States District Court, D. Maryland

October 25, 2018

TRUSTEES OF THE NATIONAL ASBESTOS WORKERS MEDICAL FUND ET AL., Plaintiffs,
v.
WRAP IT UP CONSTRUCTION, LLC, Defendant.

          REPORT AND RECOMMENDATIONS

          Stephanie A. Gallagher United States Magistrate Judge.

         This Report and Recommendations addresses the Motion for Default Judgment (ECF No. 10, as revised by ECF No. 14) filed by the Plaintiffs, Trustees of the National Asbestos Workers Medical Fund (the “Medical Fund”) and Trustees of the National Asbestos Workers Pension Fund (the “Pension Fund”) (collectively the “Funds”) against Defendant Wrap It Up Construction, LLC (“Defendant”). [ECF Nos. 10, 14]. The Defendant has not filed an opposition, and its deadline has now passed. On September 10, 2018, Judge Chuang referred this case to me to review Plaintiffs' motion and to make recommendations concerning damages. [ECF No. 12]. I find that no hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the reasons discussed below, I recommend that Plaintiffs' revised motion be GRANTED, that damages be awarded as set forth herein, and that this case be CLOSED.

         I. BACKGROUND

         The Plaintiffs in this action are two trustees of multiemployer plans, under the Employee Retirement Income Security Act (“ERISA”). Am. Compl. ¶ 2. The Defendant currently employs, and has employed, individuals who are represented by the Asbestos Workers Local Union No. 46 (“the Union”). Am. Compl. ¶¶ 2-3, 6. On April 30, 2017, the Defendant entered into a Collective Bargaining Agreement (“CBA”) with the Union. Pls.'s Revised Mot. Ex. B. The CBA requires the Defendant to contribute fixed amounts “for each employee and transmit [the amounts] in his/her name to the National Asbestos Workers Medical Fund and the National Asbestos Workers Pension Fund” (collectively “the Funds”). Id.

         The CBA also binds the Defendant to the terms and conditions of several Declarations of Trust (“Trust Agreements”). Pls.'s Revised Mot. Exs. B, C, D.[1] The Trust Agreements require the Defendant to submit monthly contribution payments and contribution reports, which identify the employees for whom payments have been made and the hours that the employees worked. Pls.'s Revised Mot. Exs. C, D. The Trust Agreements state that if the employer fails to submit timely contributions and contribution reports to the Funds, liquidated damages will be assessed in an amount equal to the greater of $20 per delinquency or 20% of the amount of the contribution or contributions due. See Id. The Medical Fund Trust Agreement allows Plaintiffs to assess the rate of interest upon the employer's failure to promptly submit contributions at 1 ½% per month. Pls.'s Revised Mot. Ex. C. The Pension Fund Trust Agreement allows Plaintiffs to assess the rate of interest at 8% per annum or double interest, as provided in the Employment Retirement Income Security Act of 1974 (“ERISA”). Pls.'s Revised Mot. Ex. D.

         The Trust Agreements further require the employer to permit a “qualified representative to conduct an audit of the payroll, wage and other records of any Employer to permit the Trustees to determine whether such Employer is making full payments to the Fund in the amounts required by the Collective Bargaining Agreement.” Pls.'s Revised Mot. Exs. C, D. If the Board of Trustees files suit against the employer for a delinquency owed to the Funds, the Trust Agreements provide that the employer in default must pay “[a]ll reasonable expenses incurred by the Fund in enforcing the payment of contributions and other amounts due, including but not limited to, reasonable attorneys' fees, accountants' or auditor's fees, as provided in this Trust, and court costs shall be added to the obligation of the defaulting Employer in addition to the amount of contributions due and the liquidated damages and interest provided for above.” Id.

         On June 25, 2018, the Plaintiffs filed suit against the Defendant for the Defendant's failure to comply with the terms of the CBA and Trust Agreements. Am. Compl. ¶¶ 4-14. Defendant failed to respond to Plaintiffs' Complaint. On August 30, 2018, Plaintiffs filed a Motion for Entry of Default with the Clerk's Office, which was granted on September 6, 2018. [ECF Nos. 9, 11]. The instant motion followed, and was revised on September 28, 2018, following an inquiry from this Court. [ECF Nos. 10, 13, 14]. The Plaintiffs allege that Defendant failed to pay complete contributions to the Funds in the amount of $66, 436.30 for work performed during the months December 2017 and January 2018. Pls.'s Revised Mot. ¶ 1. The Plaintiffs also allege that Defendant untimely submitted its contribution payments for work performed during the months of August, 2017, through February, 2018, resulting in an assessment of $18, 504.41 in liquidated damages and $12, 260.18 in interest. Compl. ¶¶ 9-14; Pls.'s Revised Mot. ¶ 2. The Plaintiffs also seek attorneys' fees and costs in the amount of $2, 302.50. Pls.'s Revised Mot. ¶ 3.

         II. STANDARD OF REVIEW

         In reviewing the Plaintiffs' Motion for Default Judgment, the court accepts as true the well-pleaded factual allegations in the complaint as to liability. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001). It, however, remains for the court to determine whether these unchallenged factual allegations constitute a legitimate cause of action. Id.; see also 10A Wright, Miller & Kane, Federal Practice and Procedure § 2688 (3d ed. Supp. 2010) (“[L]iability is not deemed established simply because of the default . . . and the court, in its discretion, may require some proof of the facts that must be established in order to determine liability.”).

         If the court determines that liability is established, the court must then determine the appropriate amount of damages. Ryan, 253 F.3d at 780-81. The court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. See, e.g., Credit Lyonnais Secs. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 (2d Cir. 1999). In so doing, the court may conduct an evidentiary hearing. Fed.R.Civ.P. 55(b)(2). The court can also make a determination of damages without a hearing so long as there is an adequate evidentiary basis in the record for an award. See, e.g., Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (court need not make determination of damages following entry of default through hearing, but rather may rely on detailed affidavits or documentary evidence to determine the appropriate sum); see also Trs. of the Nat'l Asbestos Workers Pension Fund v. Ideal Insulation Inc., Civil No. ELH-11-832, 2011 WL 5151067, at *4 (D. Md. Oct. 27, 2011) (determining, in a case of default judgment against an employer, “the Court may award damages without a hearing if the record supports the damages requested.”); Pentech Fin. Servs. Inc. v. Old Dominion Saw Works, Inc., Civ. No. 6:09cv00004, 2009 WL 1872535, at *2 (W.D. Va. June 30, 2009) (concluding that there was “no need to convene a formal evidentiary hearing on the issue of damages” after default judgment where plaintiff submitted affidavits and electronic records establishing the amount of damages sought); JTH Tax, Inc. v. Smith, No. 2:06CV76, 2006 WL 1982762, at *3 (E.D. Va. June 23, 2006) (“If the defendant does not contest the amount pleaded in the complaint and the claim is for a sum that is certain or easily computable, the judgment can be entered for that amount without further hearing.”).

         In sum, (1) the court must determine whether the unchallenged facts in Plaintiffs' Complaint constitute a legitimate cause of action, and, if they do, (2) the court must make an independent determination regarding the appropriate amount of damages.

         III. DISCUSSION

         A. Defendant's Liability

         The Plaintiffs have brought this suit pursuant to § 301 of the Labor Management Relations Act (“LMRA”), as amended, 29 U.S.C. § 185. ...


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