United States District Court, D. Maryland, Southern Division
TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER INDUSTRY WELFARE FUND et al., Plaintiffs,
J.A. FIRE PROTECTION, INC. et al., Defendants.
J. HAZEL United States District Judge
Defendants' failure to answer or otherwise defend in this
action, the Clerk of the Court entered default against
Defendants on September 7, 2018. Pursuant to Fed.R.Civ.P.
55(b), Trustees of the National Automatic Sprinkler Industry
Welfare Fund, Trustees of the National Automatic Sprinkler
Local 669 UA Education Fund, Trustees of the National
Automatic Sprinkler Industry Pension Fund, Trustees of the
Sprinkler Industry Supplemental Pension Fund, Trustees of the
Metal Trades Welfare Fund, Trustees of the Metal Trades
Pension Fund and Trustees of the International Training Fund
(collectively, “Plaintiffs” or “NASI
Funds”), then filed a motion for default judgment with
supporting declarations and exhibits. ECF No. 8. No. hearing
is necessary. See Loc. R. 105.6 (D. Md. 2016). For
the following reasons, Plaintiffs' Motion will be
NASI Funds are “employee benefit plans” as that
term is defined in the Employee Retirement Income Security
Act (“ERISA”), 29 U.S.C. § 1002(3). ECF No.
1 ¶ 1. The NASI Funds are established and maintained
according to provisions of the Restated Agreements and
Declarations of Trust (“Restated Agreements”) and
the collective bargaining agreements between Sprinkler
Fitters Local Union No. 669 and Defendant J.A. Fire
Protection, Inc. (J.A. Fire). Id. The NASI Funds are
administered at 8000 Corporate Drive, Landover, Maryland
J.A. Fire is a corporation existing under the laws of the
State of Indiana with offices located in Indiana. ECF No. 1
¶ 2. Defendant operates as a contractor or subcontractor
in the sprinkler industry, and at all times relevant to the
action was and is an employer in an industry affecting
commerce as defined by ERISA, 29 U.S.C. §§ 1002(5),
(9), (11), (12) and (14), the Labor-Management Relations Act
(LMRA), 28 U.S.C. §§ 142(1), (3) and 152(2), the
Multi-Employer Pension Plan Amendments of 1980, 29 U.S.C.
§ 1001(a). See Id. Defendant Patricia Abrams is
the President of Defendant J.A. Fire and an Indiana resident.
ECF No. 1 ¶ 3.
allege that Defendant J.A. Fire entered into a Collective
Bargaining Agreement with Road Sprinkler Fitters Local Union
No. 669, which, in turn, bound it to the Trust Agreements and
Guidelines for Participation in the NASI Funds executed
between the Union and the National Fire Sprinkler
Association. ECF No. 1 ¶ 5-6; see also ECF Nos.
8-7-8-14 (agreements and guidelines between Defendant J.A.
Fire and Local Union 669). Under the terms of the Restated
Agreements, when an employer fails to submit the required
contributions and file the properly completed report forms,
the NASI Funds are permitted to determine the amount of the
employer's delinquency using the following formula:
[T]he amount of the delinquency [is] the greater of (a) the
average of the monthly payments or reports submitted by the
Employer for the last three (3) months for which payments or
reports were submitted, or (b) the average of the monthly
payments or reports submitted by the Employer for the last
twelve (12) months for which payments or reports were
submitted . . . .
ECF No. 8-4 ¶ 13; see also ECF No. 8-7 at 26.
The trust agreements further provide that an employer who
fails to timely pay required contributions under the
collective bargaining agreement is obligated to pay
liquidated damages pursuant to the following calculations:
(1) If payment is not received . . . by the 15th of the
month, 10% of the amount [owed] is assessed.
(2) An additional 5% is added if payment is not received . .
. by the last working day of the month in which payment was
(3) An additional 5% is added if payment is not received by
the 15th of the month following the month in which payment
ECF No. 8-4 ¶ 16.
J.A. Fire experienced difficulty making the required benefit
contributions, and, in response to these difficulties, the
NASI Funds and Defendants entered a settlement agreement and
promissory note allowing Defendants to make systematic
payment over time of all amounts owed to the NASI Funds. ECF
No. 1 ¶ 8; ECF No. 8-4 ¶ 9. The principal amount
owed pursuant to the settlement agreement was $165, 958.85,
and liquidated damages had accrued to $113, 202.85. ECF No. 1
¶ 8; ECF No. 8-4 ¶ 9; ECF No. 11-3 ¶ 3. Under
the terms of the settlement, Defendants were permitted to pay
the principal amount in monthly installments over twenty-four
months. Id. Liquidated damages were waived,
contingent upon Defendants remaining current on their
payments under the settlement agreement and in all future
monthly contributions owed during the duration of the
settlement. ECF No. 1 ¶ 8. Defendant Abrams also agreed
to “personally guarantee all terms of” the
settlement agreement. ECF No. 8-4 ¶ 10; ECF No. 11-3
¶ 10. Per the settlement, Defendants agreed that
“in the event of a lawsuit to enforce payment of the
Promissory Note and/or the terms of the Agreement, ”
Defendants would be “jointly and severally liable to
pay costs and attorneys' fees.” ECF No. 11-3 ¶
commenced this action on June 8, 2018, alleging that
Defendants had defaulted on the terms of the settlement
agreement by failing to pay contributions to the NASI Funds
for the months of March through April 2018 and by failing to
submit required reports for these months per the terms of the
Collective Bargaining Agreement. ECF No. 1 ¶ 11; see
also ECF No. 8-4 at ¶ 11-12. In the Complaint,
Plaintiffs sought to recover $84, 714.88-the projected
delinquency for these months calculated based on the terms
(described above) of the Restated Agreement-and $16, 733.02
in liquidated damages assessed on late contributions. ECF No.
1 ¶ 13-15. They also sought “costs, interest, and
reasonable attorneys' fees assessed pursuant to 29 U.S.C.
§ 1132(g) . . .” and the trust agreements and