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

United States District Court, D. Maryland

August 22, 2019

TRUSTEES OF THE NATIONAL AUTOMATIC SPRINKLER INDUSTRY WELFARE FUND, Plaintiffs,
v.
AMIGO FIRE PROTECTION, LLC, Defendant.

          REPORT AND RECOMMENDATION

          TIMOTHY J. SULLIVAN, UNITED STATES MAGISTRATE JUDGE

         This Report and Recommendation addresses the Motion for Entry of Default Judgment (“Motion”) (ECF No. 12) filed by Plaintiffs, National Automatic Sprinkler Industry Welfare Fund, National Automatic Sprinkler Local 669 UA Education Fund, National Automatic Sprinkler Industry Pension Fund, the International Training Fund, and Road Sprinkler Fitters Local Union 669 Work Assessments and Extended Benefit Fund (hereinafter, the “Funds”). Defendant Amigo Fire Protection, LLC (“Amigo”) has not filed a response, and the time for doing so has passed. See Loc. R. 105.2(a). On July 8, 2018, in accordance with 28 U.S.C. § 636 and pursuant to Local Rule 301.6, Judge Chuang referred this case to me for a report and recommendation on the Funds' Motion. (ECF No. 13.) I find that a hearing is unnecessary in this case. See Fed. R. Civ. P. 55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that the Funds' Motion be granted.

         I. FACTUAL AND PROCEDURAL HISTORY

         In this case, the Funds filed suit against Amigo under the Employee Retirement Security Act of 1974, as amended, (“ERISA”), 29 U.S.C. §§ 1132 and 1145, and Section 301 the Labor- Management Relations Act, 29 U.S.C. § 185(a), to recover amounts owed to the Funds under the terms of a Collective Bargaining Agreement (“CBA”) (ECF No. 1.) Amigo was personally served with the Complaint and summons (see ECF No. 5), but it did not file an answer or responsive pleading within the requisite time period. On April 25, 2019, the Funds moved for the Clerk's entry of default (ECF No. 8), and the Clerk entered default against Amigo on April 29, 2019. (ECF No. 10.) On April 30, 2019, the Funds filed the Motion, to which Amigo has not responded.

         II. LEGAL ANALYSIS

         A. Standard for Entry of Default Judgment

         In determining whether to award a default judgment, the Court accepts as true the well-pleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780-81 (4th Cir. 2001); United States ex rel. Durrett-Sheppard Steel Co. v. SEF Stainless Steel, Inc., No. RDB-11-2410, 2012 WL 2446151, at *1 (D. Md. June 26, 2012). Nonetheless, the Court must consider whether the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law. Ryan, 253 F.3d at 780. Although the Fourth Circuit has a “strong policy that cases be decided on the merits, ” United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment “is appropriate when the adversary process has been halted because of an essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005). If the Court determines that liability is established, the Court must then determine the appropriate amount of damages. CGI Finance, Inc., v. Johnson, No. ELH-12-1985, 2013 WL 1192353, at *1 (D. Md. March 21, 2013). The Court does not accept factual allegations regarding damages as true, but rather must make an independent determination regarding such allegations. Durrett-Sheppard Steel Co., 2012 WL 2446151 at *1.

         Rule 55 of the Federal Rules of Civil Procedure provides that “[i]f, after entry of default, the Plaintiff's Complaint does not specify a ‘sum certain' amount of damages, the court may enter a default judgment against the defendant pursuant to Fed.R.Civ.P. 55(b)(2).” A plaintiff's assertion of a sum in a complaint does not make the sum “certain” unless the plaintiff claims liquidated damages; otherwise, the complaint must be supported by affidavit or documentary evidence. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012). Rule 55(b)(2) provides that “the court may conduct hearings or make referrals . . . when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.” The Court is not required to conduct an evidentiary hearing to determine damages, however; it may rely instead on affidavits or documentary evidence in the record to determine the appropriate sum. See, e.g., Mongue v. Portofino Ristorante, 751 F.Supp.2d 789, 795 (D. Md. 2010).

         B. Liability

         ERISA provides 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. ERISA further provides that employers who fail to make timely contributions are liable in a civil action for unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable attorney's fees and costs, and any other relief the Court deems appropriate. 29 U.S.C. § 1132(a), (g).

         The following facts are taken from the Complaint (ECF No. 1) and the Funds' Memorandum in support of their Motion (ECF No. 12-1) and the exhibits attached thereto. The Funds allege that they are multiemployer employee pension benefit plans within the meaning of 29 U.S.C. § 1002(3). (ECF No. 1 ¶ 2.) The Funds are established and maintained pursuant to the provisions of Restated Agreements and Declarations of Trust and the CBA between Road Sprinkler Fitters and Apprentices Local Union No. 669 (the “Union”) and Amigo. (Id.)

         On May 18, 2016, Amigo executed a Letter of Intent (ECF No. 12-5) in which it designated Road Sprinkler Fitters Local Union 669 of the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada (“Local 669”) as its exclusive representative for collective bargaining regarding pay, wages, hours, and other terms and conditions of employment. (ECF No. 12-4 at 1.) On March 31, 2017, Amigo and Local 669 executed a Project Agreement (ECF No. 12-6) for work performed at an airport in New Orleans. Pursuant to the Project Agreement, Amigo and Local 669 mutually agreed to be bound to the terms and conditions of the CBA between the National Fire Sprinkler Association, Inc. and Local 669, which was effective from April 1, 2016 through March 31, 2021 (ECF No. 12-7).

         The CBA established terms and conditions of employment for certain of Amigo's employees. (ECF No. 1 ¶ 4.) Under the CBA, Amigo agreed to pay the Funds certain sums of money for each hour worked by employees covered by the CBA at the New Orleans airport job. (Id. ¶ 5.) The CBA also bound Amigo to the Declarations of Trust establishing the Funds (“Trust Agreements”) (ECF Nos. 12-8, 12-9, 12-10, 12-11 & 12-12). Among other things, the Trust Agreements provided that the Trustees of the Funds have discretion to adopt rules and procedures concerning payments to the Funds, audits, liquidated damages, and to enforce the collection of delinquent contributions. (See ECF No. 12-4 at 2.) Pursuant to the authority delegated to them by the Trust Agreements, the Trustees of the Funds adopted the Guidelines for Participation in the Sprinkler Industry Trust Funds (“Guidelines”) (ECF No. 12-13). A copy of the Guidelines was mailed to Amigo. (ECF Nos. 12-4 at 2 & 12-14.)

         Amigo failed to make its required contributions to the Funds for the months of May 2018 through August 2018. (ECF No. 12-4 at 3.) Amigo transmitted remittance reports to the Funds for these months, but it did not pay the required contributions. (Id.) Accordingly, ...


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