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Trustees of Heating, Piping and Refrigeration Pension Fund v. Clean Air Mechanical, Inc.

United States District Court, D. Maryland

November 30, 2018

CLEAN AIR MECHANICAL, INC., et al., Defendants.



         I. Introduction

         Plaintiffs, Steamfitters Local Union 602 and the trustees of eight multiemployer benefit and trust funds, filed suit against Defendants Clean Air Mechanical, Inc. (“CAM”), CAM's alleged owner, James Hardesty Jr., and Clean Air Building Services, LLC (“CABS”), alleging, inter alia, various violations of Defendants' contribution and reporting obligations under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., and breach of fiduciary duty. Now before the Court are three motions filed by Plaintiffs: a motion for leave to amend their complaint (Mot. Amend, ECF No. 60); an unopposed motion to compel Defendants CAM and Hardesty Jr. to respond to discovery requests (Mot. Compel, ECF No. 63); and a motion for a show cause order with respect to CAM's failure to comply with the local rule requiring corporate defendants to enter an appearance of new counsel within thirty days of their counsel's withdrawal (Mot. Show Cause, ECF No. 69 (citing Local R. 101.2 (D. Md. 2016))). No. hearing is required. See Local R. 105.6 (D. Md. 2016). For the reasons set forth below, the Court will grant Plaintiffs' motions.

         II. Procedural Background

         Plaintiffs filed a Complaint on December 14, 2017, seeking unpaid fund contributions, liquidated damages, and other forms of relief, including an order permitting a payroll audit to determine the amount of damages owed by Defendants. (Compl. at 14-15, ECF No. 1.) After initial failures to answer or otherwise respond, the Clerk entered default against all Defendants on February 12, 2018. (ECF No. 17.) Plaintiffs then moved for partial default judgment against CABS on their claim for an order to permit a payroll audit. (ECF No. 18.) CABS opposed the motion and filed a motion to dismiss for insufficient service. (ECF Nos. 20 and 21.) Eventually, the entry of default was vacated (ECF No. 24), and both CABS's motion to dismiss and Plaintiffs' motion for partial default judgment were withdrawn by the parties (ECF Nos. 32 and 33).

         In July 2018, this Court issued a scheduling order setting pretrial deadlines. (ECF No. 46.) Under that Order, motions to amend the pleadings were due by August 6, 2018, and discovery was set to close on November 5, 2018. (Id. at 2.) Discovery was later extended until January 2019 in light of the pending motions addressed by this ruling. (ECF No. 66.)

         On July 18, 2018, shortly after issuance of the scheduling order, counsel for CAM and Hardesty Jr. filed a motion to withdraw. (ECF No. 50.) Exhibits attached to counsel's motion indicated that both Defendants were provided with the seven-day notice required by Local Rule 101.2 and advised that, as a corporate Defendant, CAM could not appear pro se under Local Rule 101.2(b). (ECF No. 50-1.) The Court granted counsel's motion (ECF No. 51) and, following its usual practice, mailed notice of the withdrawal, including a copy of Local Rule 101.2, to Hardesty Jr. (ECF No. 52). To date, no counsel has appeared on behalf of CAM or on behalf of Hardesty Jr. On November 28, 2018, Plaintiffs filed a motion asking the Court to order CAM to show cause why default should not be entered against it for failure to enter an appearance of counsel as required by Local Rule 101.2(b). (ECF No. 69.)[1]

         According to the motions and supporting exhibits currently before the Court, Plaintiffs served requests for discovery, including interrogatories and requests for production, upon all Defendants on July 10, 2018. (Local Rule 104.7 Certificate ¶ 3, ECF No. 63-2 [hereinafter “Certificate”].) Defendants CAM and Hardesty Jr. did not respond or object to these requests, before or after the withdrawal of their counsel. (Id. at ¶ 4.) After multiple attempts to confer with them (id. at ¶¶ 4-8), Plaintiffs filed a motion to compel, which also sought an award of attorneys' fees. (Mot. Compel Mem. Supp. at 3, ECF No. 63-1.) No. response in opposition was filed.

         CABS responded to Plaintiffs' discovery requests on August 17, 2018. (See Discovery Responses, Reply Mot. Amend Exhs. A and B, ECF Nos. 62-1 and 62-2.) Based on CABS's responses, Plaintiffs moved for leave to amend their Complaint and add Diane Hardesty, CABS's owner and the mother of Hardesty Jr., as an individual defendant in the case. (Mot. Amend Mem. Supp. at 1, 3, ECF No. 60-3.) CABS opposed the motion. (ECF No. 61.)

         III. Analysis

         A. Motion to Amend

          When a party seeks to amend a pleading after the expiration of deadlines contained in a scheduling order, it must satisfy the requirements of both Rule 16(b)(4) and Rule 15(a)(2). Cook v. Howard, 484 Fed.Appx. 805, 814-15 (4th Cir. 2012) (per curiam) (applying a two-prong test); United States v. Hartford Accident & Indemnity Co., Civ. No. JKB-14-2148, 2016 WL 386218, at *5 (D. Md. Feb. 2, 2016) (same).

         Under Rule 16, a motion to modify a scheduling order may be granted only upon a showing of “good cause.” Fed.R.Civ.P. 16(b)(4). The burden to demonstrate good cause rests on the moving party. Hartford Accident & Indemnity, 2016 WL 386218, at *5. Good cause exists if “deadlines cannot reasonably be met despite the party's diligence.” Cook, 484 Fed.Appx. at 815 (quoting 6A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 1522.2 (3d ed. 2010)). Courts consider “whether the moving party acted in good faith, the length of the delay and its effects, and whether the delay will prejudice the non-moving party.” Elat v. Ngoubene, 993 F.Supp.2d 497, 520 (D. Md. 2014) (citing Tawwaab v. Va. Linen Serv., Inc., 729 F.Supp.2d 757, 768-69 (D. Md. 2010)). Modification should not be permitted where the movant “has not acted diligently” to comply with the schedule. Cook, 484 Fed.Appx. at 815 (quoting 6A Wright & Miller § 1522.2).

         Rule 15 permits amendment “with the opposing party's written consent or with the court's leave, ” which should be “freely [granted] when justice so requires.” Fed.R.Civ.P. 15(a)(2). Leave to amend should be denied “only where it would be prejudicial, there has been bad faith, or the amendment would be futile.” Nourison Rug Corp. v. ...

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