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

United States District Court, D. Maryland

May 15, 2019

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


          James K. Bredar Chief Judge.

         In this suit, the Plaintiffs, Steamfitters Local Union 602 and the trustees of eight multiemployer benefit and trust funds, seek unpaid contributions, liquidated damages, and equitable relief against Defendants Clean Air Mechanical, Inc. ("CAM"), Clean Air Building Services, LLC ("CABS"), James Hardesty Jr., and Diane Hardesty, for alleged violations of contribution and reporting obligations under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., and for breach of fiduciary duty. This Court previously ordered entry of default against all Defendants for failure to plead or otherwise defend under Federal Rule of Civil Procedure 55(a). (ECF No. 76.)

         Now pending before the Court is Plaintiffs' unopposed motion to voluntarily dismiss Count VI of the Complaint and for default judgment on all other counts. (ECF No. 78.) The Court finds no need for an evidentiary hearing. See Fed. R. Civ. P. 55(b)(2) (granting discretion to the court to hold hearings if needed to enter or effectuate judgment); Local R. 105.6 (D. Md. 2018). For the reasons set forth below, Plaintiffs' motion will be GRANTED.

         I. Background

         There are nine plaintiffs in this suit. Plaintiff Steamfitters Local Union No. 602 is an . unincorporated labor organization operating under a collective bargaining agreement (CBA). (Am. Compl. ¶ 9, ECF No. 72.) Plaintiffs divide the eight multiemployer funds into two groups: six "Benefit Fund Plaintiffs," and two "Trust Fund Plaintiffs."[1] (Id. ¶¶ 1-8; M.D.J. Mem. at 2, ECF No. 78-1.) The Benefit and Trust Funds are financed by employer contributions required by the CBA and their respective Declarations of Trust. (Am. Compl. ¶ 29.)

         Defendant CAM, a corporation performing contracting and subcontracting work in pipefitting, steamfitting, and HVAC services in Maryland, is owned by Defendant Hardesty Jr. (Id. ¶¶ 10-11, 17, 28.) Defendant CABS, a limited liability company also performing contracting and subcontracting work in the same industries in Maryland, is owned by Defendant Diane Hardesty, who is Hardesty Jr.'s mother. (Id. ¶¶ 12-13, 15, 63.) Defendant Diane Hardesty never appeared or filed an answer in this case. Defendants CAM, Hardesty Jr., and CABS all initially appeared and participated in early stages of litigation. CAM and Hardesty Jr. ceased participating in August 2018 and failed to respond to any discovery requests, even after this Court granted a motion to compel. (ECF No. 71.) CABS provided minimal discovery early in the discovery period but ceased participating in defense of the suit in November 2018. CAM and CABS have been without counsel, in violation of Local Rule 101.2(b) (D. Md. 2018), for nine and five months, respectively. (ECF No. 51; ECF No. 68.) CAM, CABS, and Hardesty Jr. violated orders to show cause why sanctions, including default judgment, should not be imposed. (ECF No. 71; ECF No. 74.) Having concluded on this record of non-responsiveness and non-compliance that the Defendants abandoned defense of the suit, the Court entered default under Rule 55(a) against all Defendants on January 23, 2019. (ECF No. 76.)

         Plaintiffs thereafter moved for default judgment under Rule 55(b)(2) on Counts I, II, III, IV, V, VII, and VII of the Amended Complaint. Plaintiffs provided the required written notice of the motion on or about February 21, 2019.[2] (ECF No. 78-5.) No. Defendant opposed the motion.

         II. Legal Standard for Entry of Default Judgment

         After entry of default under Rule 55(a), the opposing party may move for default judgment. Fed.R.Civ.P. 55(b)(2); Home Port Rentals, Inc. v. Ruben, 957 F.2d 126, 133 (4fh Cir. 1992). Entry of default against a defendant does not alone entitle a plaintiff to judgment as of right:

'The defendant, by [its] default, admits the plaintiffs well-pleaded allegations of fact. . . [but] is not held ... to admit conclusions of law. In short, ... a default is not treated as an absolute confession by the defendant of [its] liability and of the plaintiffs right to recover.' The court must... determine whether the [conceded facts] support the relief sought in [the] action.

Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (quoting Nishimatsu Constr. Co., Ltd. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)); see also 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2685 (2016). Courts have discretion to decline to enter default judgment based on the circumstances and the interest of justice. See, e.g., Trs. of Plumbers & Pipefitters Nat'l Pension Fund v. R.E. Petersen Inc., Civ. No. HAR 93-2494, 1994 WL 149633, at *1 (D. Md. Feb. 16, 1994) (quoting Tolson v. Hodge, 411 F.2d 123, 130 (4th Cir. 1969)) (discussing the "extensive line of cases" preferring merits-based resolutions); 10A Wright, Miller & Kane § 2685 (collecting cases).

         III. Analysis

         No circumstantial considerations weigh against the propriety of default judgment in this case. Given Defendants' failure to participate in development of the factual record or legal theories to oppose Plaintiffs' claims and their repeated violation of this Court's orders and rules, the Court concludes both that a full, merits-based disposition is impracticable and that default judgment in this case would not be improper. ERISA creates an independent right of action for multiemployer plans to enforce contribution requirements provided in collective bargaining agreements. Bakery & Confectionery Union & Indus. Int'l Pension Fund v. Ralph's Grocery Co., 118 F.3d 1018, 1021 (4th Cir. 1997). It would be contrary to this central purpose if employers could evade those very obligations simply by refusing to participate in litigation seeking to enforce them.

         Plaintiffs seek voluntary dismissal of Count VI of the Amended Complaint, which alleged breach of fiduciary duty against Hardesty Jr. (M.D.J. Mem. at 25.) That request will be granted. The Court will now consider whether Plaintiffs made an adequate ...

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