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Trustees of National Automatic Sprinkler Industry Welfare Fund v. Marion Fire Sprinkler & Alarm, Inc.

United States District Court, D. Maryland

December 27, 2018

TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER INDUSTRY WELFARE FUND, et al., Plaintiffs,
v.
MARION FIRE SPRINKLER & ALARM, INC., Defendant.

          REPORT AND RECOMMENDATION

          Honorable Gina L. Simms United States Magistrate Judge

         This Report and Recommendation addresses the “Motion for Entry of Default Judgment” filed by Trustees of the following: (a) the National Automatic Sprinkler Industry Welfare Fund; (b) the National Automatic Sprinkler Industry Pension Fund; (c) the Sprinkler Industry Supplemental Pension Fund; and (d) the International Training Fund (collectively, “Plaintiffs”). (ECF No. 8).[1] Plaintiffs brought this action under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1132 and 1145, (“ERISA”) to recover delinquent contributions and related relief from Marion Fire Sprinkler & Alarm, Inc. (“Defendant”).

         Pursuant to 28 U.S.C. § 636, and Local Rule 301, the Honorable Theodore D. Chuang referred this matter to me to author a report and to make recommendations. I do not believe that a hearing is necessary. L.R. 105.6. As set forth more fully below, I ultimately recommend that Plaintiffs' motion for default judgment be GRANTED, and that damages be awarded as set forth herein.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Background: The Collective Bargaining Agreement and the Collective Funds

         Plaintiffs, the Trustees, are authorized collection fiduciaries and agents for the four funds (the “Collective Funds”). The facts, as set forth by Plaintiffs, are that on February 11, 2014, [2] the Defendant entered into a Collective Bargaining Agreement (“Agreement”) with the Sprinkler Fitters and Apprentices Local Union No. 268, St. Louis, Missouri, of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada (“Local Union No. 268”). Pursuant to that Agreement, all the Defendant's current and future employees would become members of Local Union No. 268 as a condition of their employment. (ECF No. 8-5). The Agreement was signed by the Defendant's President, Andrew J. Allen, and by Michael R. Mahler, Business Manager, on behalf of Local Union No. 268. (ECF No. 8-4).

         According to the “Guidelines for Participation in the Sprinkler Industry Trust Funds” (the “Guidelines”), the Defendant was required to submit to the Trustees of the Collective Funds monthly reports of the hours worked by all covered employees. (ECF No. 8-10). It is from those reports that the Trustees determine the amount of contributions owed by the Defendant. (ECF No. 8-3). The Agreement contains several articles requiring the Defendant's participation in and contribution to the Collective Funds. (ECF No. 8-5). The Agreement's articles that are germane to this case are set forth immediately below.

         The first of the Agreement's financial obligations concerns the health and welfare of Defendant's employees. Article 14 stipulates that a health and welfare fund was established for the participation of Defendant's employees covered under the Agreement. (ECF 8-5). In addition, Article 14 requires the Defendant to contribute a predetermined amount of money for each hour worked by all its employees. (Id.).[3] This fund is called the National Automatic Sprinkler Industry Welfare Fund. (ECF No. 8-6).

         The next financial obligation pertains to contributions to the National Automatic Sprinkler Industry Pension Fund. (ECF No. 8-7). Pursuant to Article 15, the parties agreed that each contractor member would contribute a predetermined amount per hour for all hours worked by all covered employees. (ECF No. 8-5).[4]

         The third financial obligation of the Agreement concerns contributions to an international training fund. Article 19 provides that, to carry out the functions of the International Training Fund, a contractor member is required to contribute ten cents per hour for all hours worked by all covered employees to the national office for the fund. (ECF No. 8-5).[5] Those monies are then forwarded from the Trustee of the International Training Fund to a fund called the “United Association International Training Fund.” (Id.).

         The fourth financial obligation relates to contributions to a supplemental pension fund. Pursuant to Article 22 of the Agreement, the Defendant agreed that a supplemental pension fund, ultimately called the “Sprinkler Industry Supplemental Pension Fund, ” was established for all covered employees. (ECF Nos. 8-5; 8-8). Defendant acknowledged that, by executing the Agreement, it was joining in and subscribing to the “Declaration of Trust” and any future amendments governing the supplemental pension fund. (Id.).[6]

         The terms outlining the due date for the reports and contributions to the Collective Funds are set forth within the Guidelines. (ECF Nos. 8-3; 8-10). The Defendant is to provide its reports, as well as its contributions to the Collective Funds, by no later than the “15th of the month following the month in which the work was performed” or 15 days following the end of the preceding month. (ECF No. 8-10). If the Plaintiffs did not timely receive the report and contributions, then the Defendant is advised of the delinquency, and interest of 12% per annum would be assessed on any late contributions to the Collective Funds. (Id.). If the contributions are more than 60 days late, liquidated damages, correlated to the number of days that a payment was delinquent, are called for. (Id.).[7]

         B. Procedural Background

         On March 14, 2018, Plaintiffs filed a Complaint against the Defendant alleging a breach of the Agreement and seeking to collect unpaid contributions due to the Collective Funds, as well as liquidated damages, accrued interest, court costs, and reasonable attorney's fees. (ECF No. 1).

         On April 17, 2018, Plaintiffs served the Complaint on the Defendant. (ECF No. 5). An affidavit completed by a private process server describes the date and time that Defendant's Resident Agent, Andrew Allen, was served with the summons, Complaint, and supporting documentation. (ECF No. 5). The executed summons was returned and filed with the Court on June 13, 2018. (Id.). The Defendant did not file an Answer or otherwise respond within the 21-day period provided for by the Federal Rules of Civil Procedure (“Fed.R.Civ.P.”), which was May 8, 2018. (ECF No. 6). On June 20, 2018, the Honorable Theodore D. Chuang ordered Plaintiffs to file and serve a Motion for Clerk's Entry of Default within seven days, or to show cause as to why such motion would be inappropriate. (ECF No. 6).

         On June 27, 2018, Plaintiffs filed a “Motion for Clerk's Entry of Default.” (ECF No. 7). That same day, Plaintiffs filed a “Motion for Entry of Default Judgment.” (ECF No. 8). In support of their motion, Plaintiffs appended many documents: (1) the Agreement; (2) the Guidelines; (3) Restated Trust Agreements establishing each of the relevant Collective Funds; (4) a spreadsheet containing the outstanding contributions owed to the Collective Funds; (5) a declaration from the Assistant Fund Administrator of the Collective Funds, John P. Eger; and (6) a declaration and summary from Charles W. Gilligan, Esq., regarding attorney's fees and costs. (ECF Nos. 8-3; 8-6 through 8-13). On July 2, 2018, the Clerk of the Court entered default against the Defendant. (ECF No. 9).

         II. DISCUSSION

         A. Def ...


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