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Trustees of National Automatic Sprinkler Industry Welfare Fund v. 715 Fire Protection LLC

United States District Court, D. Maryland

April 4, 2019

TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER INDUSTRY WELFARE FUND, et al. Plaintiffs,
v.
715 FIRE PROTECTION, LLC, et al. Defendants.

          MEMORANDUM OPINION

          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, and Trustees of the International Training Fund’s (“NASI Funds” or “Plaintiffs”) Motion for Default Judgment. ECF No. 8. Defendants 715 Fire Protection, LLC, (“715 Fire Protection”), Matthew Jungbluth, and Sarah Jungbluth have not filed a response or entered their appearance, and the time for doing so has passed. See Loc. R. 105.2.a. For the following reasons, NASI Funds’ request for this Court to enter default judgment in the amount of $176,003.11 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). Plaintiff 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 715 Fire Protection. ECF No. 1 ¶ 1. Defendant 715 Fire Protection is a contractor or subcontractor in the sprinkler industry and at all times was an “employer in an industry affecting commerce” as defined in the Labor-Management Relations Act, 29 U.S.C. §§ 142(1), (3), 152(2); ERISA, 29 U.S.C. §§ 1002(5), (9), (11), (12), (14); and the Multi-Employer Pension Plan Amendments of 1980, 29 U.S.C. § 1001(a). Id. ¶ 2. Defendant Matthew Jungbluth is the President of 715 Fire Protection. Id. ¶ 3. Defendant Sarah Jungbluth is the Registered Agent of 715 Fire Protection. Id. at 1.

         Plaintiffs entered into a CBA with 715 Fire Protection on April 23, 2015. ECF No. 1 ¶ 6; ECF No. 8-5. The CBA required 715 Fire Protection to submit reports and pay to Plaintiffs certain contributions for each hour worked by certain of 715 Fire Protection’s employees under the CBA. ECF No. 1 ¶ 6–8. The CBA covered certain of 715 Fire Protection’s employees from August 2015 through the filing of the Complaint. Id. ¶ 8; see also ECF No. 8-6 (extending the relevant terms of the CBA).

         715 Fire Protection had difficulty making the required benefit contributions owed to Plaintiffs. ECF No. 1 ¶ 9. In response, the Nasi Funds and 715 Fire Protection entered into a Settlement Agreement and a Promissory Note (“settlement documents”) on April 5, 2018. Id.; ECF No. 8-15. The settlement documents provided for the payment of the principal amount of $45,692.76 by 715 Fire Protection to NASI Funds in ten monthly installments. ECF No. 1 ¶ 9. This amount reflected contributions owed on behalf of employees performing work during the periods of August 2015 through December 2016 and December 2017 through February 2018, as well as for prior amounts owed. ECF No. 8-15 at 2. The settlement documents waived $24,416.77 in liquidated damages contingent upon 715 Fire Protection making the monthly payments under the settlement, filing all the monthly reports, and paying all future monthly contributions to the NASI Funds as they became due. Id. ¶ 3. Individual Defendants Matthew and Sarah Jungbluth agreed personally to guarantee the payments under the settlement documents, including but not limited to payment of the principal amount owed and future amounts that may become due during the duration of the Settlement Agreement. ECF No. 1 ¶ 10.

         Defendant 715 Fire Protection defaulted on the terms of the settlement documents by failing to make contributions between February 2018 and September 2018 and by failing to make the necessary settlement payments on June 15 and July 15, 2018. ECF No. 1 ¶ 11; ECF No. 8-4 ¶ 13.

         On August 1, 2018, NASI Funds filed this action against Defendants, seeking to recover contributions and liquidated damages due and unpaid by Defendants under the terms of the CBA and Trust Agreements, as well as amounts due under the settlement documents, plus accrued interest, costs, and attorneys’ fees. See ECF No. 1 at 7. After the filing of this action, 715 Fire Protection submitted remittance reports for the months of February to August 2018 but did not make any payments to the Funds. ECF No. 8-4 ¶ 14.

         On September 6, 2018, Plaintiffs properly served 715 Fire Protection and Matthew and Sarah Jungbluth. ECF Nos. 4–6. Defendants failed to respond to the Complaint or otherwise contest the claims. On November 19, 2018 NASI Funds moved for Entry of Default and Default Judgment against Defendants under Federal Rule of Civil Procedure 55(b). ECF Nos. 7–8. On November 28, 2018, the Clerk entered default pursuant to Federal Rule of Civil Procedure 55(a). ECF No. 9. The Court now grants Plaintiffs’ Motion for Default Judgment.

         II. STANDARD OF REVIEW

         Federal Rule of Civil Procedure 55 governs defaults and default judgments and provides that default must be entered “[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.” Fed. R. Civ. P. 55(a). The court may then enter default judgment at the plaintiff’s request and after notice is given to the defaulting party. Fed. R. Civ. P. 55(b)(2). Although courts maintain “a strong policy that cases be decided on the merits,” United States v. Schaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), the court may exercise its discretion in granting default judgment when the “adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F. Supp. 2d 418');">359 F. Supp. 2d 418, 421 (D. Md. 2005).

         When considering the propriety of default judgment, the court takes as true the well-pleaded factual allegations of the complaint, other than those pertaining to damages. 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 Balt. Line Handling Co. v. Brophy, 771 F. Supp. 2d 531');">771 F. Supp. 2d 531, 544 (D. Md. 2011). A complaint that avers bare legal conclusions or “naked assertion[s] devoid of further factual enhancement,” is insufficient to award default judgment. Russell v. Railey, No. DKC 08–2468, 2012 WL 1190972, at *3 (D. Md. Apr. 9, 2012) (quoting Iqbal, 556 U.S. at 678); see, e.g., Balt. Line Handling Co., 771 F. Supp. 2d at 545 (“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; Monge v. Portofino Ristorante, 751 F. Supp. 2d 789, 794–95 (D. Md. 2010).

         III. ...


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