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Trustees of the National Automatic Sprinkler Industry Welfare Fund v. A& M Fire Protection

United States District Court, D. Maryland

January 31, 2019



          Paula Xinis United States District Judge

         Pending before the Court is Plaintiffs 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 International Training Fund, and Trustees of the Road Sprinkler Fitter and Apprentices Work Assessments and Extended Benefit Fund's (“NASI Funds” or “Plaintiffs”) Motion for Default Judgment. ECF No. 7. Defendant A&M Fire Protection, LLC, (“A&M” or “Defendant”) has not filed a response or entered its appearance, and the time for doing so has passed. See D. Md. Loc. R. 105.2.a. For the following reasons, NASI Funds' request for this Court to enter default judgment in the amount of $112, 873.65 is GRANTED.

         I. BACKGROUND

         The following facts are taken from the Complaint and accepted as true. ECF No. 1. Plaintiffs are multi-employer benefit plans as that term is defined in § 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1002(3). Plaintiffs' Funds are established and maintained according to the provisions of the Restated Agreements and Declarations of Trust (“Trust Agreements”) establishing the NASI Funds and the Collective Bargaining Agreement (“CBA”) between Road Sprinkler Fitters Local Union No. 669 (“the Union”) and Defendant. ECF No. 1 ¶ 2. Defendant A&M is a contractor or subcontractor in the sprinkler industry and at all times was an “employer in an industry affecting commerce” as defined in §§ 501(1), (3), 2(2) of the Labor-Management Relations Act, 29 U.S.C. §§ 142(1), (3) and 152(2); §§ 3(5), (9), (11), (12), (14) of ERISA, 29 U.S.C. §§ 1002(5), (9), (11), (12), (14); and § 3 of the Multi-Employer Pension Plan Amendments of 1980, 29 U.S.C. § 1001(a).

         The parties entered into a CBA on March 7, 2014. The CBA required Defendant to submit reports and pay to Plaintiffs' Funds certain contributions for each hour worked by certain of Defendant's employees covered under the CBA. ECF No. 1 ¶ 5. The CBA covered certain of Defendant's employees from February 2016 through the filing of the Complaint. ECF No. 1 ¶ 6. Defendant has failed to make contributions and submit reports for the months of March to May 2018, as required under the CBA. ECF No. 1 ¶ 8. Additionally, A&M's contributions owed on behalf of its employees covered under the CBA were late for the months of February, April, and October of 2016; January through June of 2017; August 2017; and February through April of 2018. ECF No. 1 ¶¶ 11-12.

         On June 15, 2018, NASI Funds filed this action against A&M, seeking to recover contributions and liquidated damages due and unpaid by Defendant under the terms of the CBA and Trust Agreements, plus accrued interest, costs, and attorneys' fees. ECF No. 1. Plaintiffs properly served A&M on July 27, 2018. ECF No. 5. A&M failed to answer or otherwise respond to the Complaint or contest Plaintiffs' claims. On October 29, 2018, the Clerk of the Court filed an entry of default pursuant to Rule 55(a) of the Federal Rules of Civil Procedure. ECF No. 6. NASI Funds then moved for Default Judgment against A&M on November 19, 2018, under Rule 55(b). ECF Nos. 6-7.


         Pursuant to Federal Rule of Civil Procedure 55(a), “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Thereafter, the court may enter default judgment at the plaintiff's request and with notice to the defaulting party. Fed.R.Civ.P. 55(b)(2). Plaintiff, however, is not automatically entitled to default judgment simply because the defendant has not responded. Whether to enter default judgment is left to the sound discretion of the court. See, e.g., Choice Hotels International, Inc. v. Jai Shree Navdurga, LLC, DKC 11-2893, 2012 WL 5995248, at *1 (D. Md. Nov. 29, 2012); see also Choice Hotels International, Inc. v. Austin Area Hospitality, Inc., TDC 15-0516, 2015 WL 6123523, at *1 (D. Md. Oct. 14, 2015).

         Although the United States Court of Appeals for the Fourth Circuit has announced a “strong policy” in favor of deciding cases on their merits, United States v. Schaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment may be appropriate when a party is unresponsive. S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)); see Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987) (upholding a default judgment award where the defendant lost its summons and did not respond within the proper period); Disney Enterprises, Inc. v. Delane, 446 F.Supp.2d 402, 405-06 (D. Md. 2006) (finding appropriate the entry of default judgment where the defendant had been properly served with the complaint and did not respond, despite repeated attempts to contact him).

         With respect to liability, the court takes as true all well-pleaded facts in the complaint. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001); see Fed. R. Civ. P. 8(b)(6) (“An allegation - other than one relating to the amount of damages - is admitted if a responsive pleading is required and the allegation is not denied.”). The court applies the pleading standards announced in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), in the context of default judgments. See, e.g., Balt. Line Handling Co. v. Brophy, 771 F.Supp.2d 531, 544 (D. Md. 2011); Russell v. Railey, No. DKC-08-2468, 2012 WL 1190972 at *2-3 (D. Md. Apr. 9, 2012); U.S. v. Nazarian, No. DKC-10-2962, 2011 WL 5149832 at *2-3 (D. Md. Oct. 27, 2011); Bogopa Serv. Corp. v. Shulga, No. 3:08cv365, 2009 WL 1628881, at *1-2 (W.D. N.C. June 10, 2009). A complaint that avers bare legal conclusions or “naked assertion[s] devoid of further factual enhancement, ” is insufficient to award default judgment. See, e.g., Balt. Line Handling Co., 771 F.Supp.2d at 544 (internal quotation marks omitted) (“The record lacks any specific allegations of fact that ‘show' why those conclusions are warranted.”).

         If the complaint avers sufficient facts from which the court may find liability, the court next turns to damages. See Ryan, 253 F.3d at 780-81. Damages are circumscribed by that which is requested in the complaint. See Fed. R. Civ. P. 54(c) (“A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.”). The damages request must be supported by evidence introduced either at a hearing or by affidavit or other records. See Fed. R. Civ. P. 54(c); Lawbaugh, 359 F.Supp.2d at 422. See, e.g., Monge v. Portofino Ristorante, 751 F.Supp.2d 789, 794-95 (D. Md. 2010).


         A. Liability

         ERISA requires 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; see also 29 U.S.C. § 1132(g) (providing that employers who fail to timely make contributions are liable in a civil action for, inter alia, unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable attorneys' fees, and costs of the action). ERISA therefore “provide[s] trustees of multiemployer benefit plans with an effective federal remedy to collect delinquent contributions.” Int'l Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F.Supp.2d 680, 685-86 (D. Md. 2013) (quoting Laborers Health & Welfare Trust Fund for Northern Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 541 (1988)). Further, the United States Court of Appeals for the Fourth ...

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