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International Painters and Allied Trades Industry Pension Fund v. SRI Construction

United States District Court, D. Maryland

October 10, 2019

INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND et al Plaintiffs,
v.
SRI CONSTRUCTION, et al Defendants.

          REPORT AND RECOMMENDATIONS

          J. MARK COULSON, UNITED STATES MAGISTRATE JUDGE

         This Report and Recommendation's addresses the Complaint for Confession of Judgment that Plaintiff International Painters and Allied Trades Industry Pension Fund et al (“Plaintiffs”) filed against Defendants SRI Construction LLC and Guru Switzoor (collectively, the “Defendants”). (ECF No. 1). On September 6, 2019 in accordance with 28 U.S.C § 636 and Local Rules 303 and 203, Judge Russell referred this case to me to review Plaintiff's Complaint for Judgment by Confession. (ECF No. 2). For the reasons herein, I recommend that the Clerk of Court enter the confessed judgment.

         I. BACKGROUND

         The International Painters and Allied Trades Industry Pension Fund (“Plaintiff” or “Funds”) are trust funds established under 29 U.S.C. § 185(c)(5). (ECF No. 1 at 2). Its trustees are the “named fiduciary, ” “plan administrator, ” and “plan sponsor, ” and each is an individual fiduciary within the meaning of 29 U.S.C. § 1102(a), (16), (21), for the International Painters and Allied Trades Industry Pension Plan (“Pension Plan”). Id. The Pension Plan is a “multiemployer plan, ” “employee benefit plans, ” and “employee benefit pension plans” as within the meaning of 29 U.S.C. § 1102(37), 1002(2), and (3). Id. The Fund and Tim D. Maitland (“Maitland”) are authorized collection fiduciaries and agents for the Pension Plan and sue on behalf of the Pension Plan. Id. Defendant SRI Construction (“SRI”) is a New York limited liability corporation and an employer in an in industry affecting commerce within the meaning of 29 U.S.C. § 152(2), (6), and (7), and § 1002(5), (11), and (12). (ECF No. 1 at 3). Defendant, Guru Switzoor, is an individual and an owner, officer, agent, or managing agent of SRI. Id. Switzoor executed a Promissory Note and Personal Guarantee and is personally liable to the Pension Fund for the debts and obligations of SRI. Id.

         SRI was bound to a collective bargaining agreement (“CB A”) with the International Union of Painters and Allied Trades, District Council 9 (“Union, ”) which required the payment of fringe benefit contributions and wage deductions to the Fund for hour worked or wages earned by covered workers. Id. at 3. On October 16, 2017, to resolve the $180, 336.22 debt owed by SRI to Plaintiff (for the period of July 2014 through April 2015), SRI and Switzoor entered into a Settlement Agreement, Promissory Note, and Warrant of Attorney to Confess Judgment. Id. ¶ 11. In accordance with the terms and conditions of the Agreement, Plaintiffs agreed to conditionally waive $27, 995.28 in liquidated damages owed by SRI, as long as SRI complied with the terms of the agreement. (Id. ¶ 12; ECF No. 1-3 at 2). This would have resulted in a balance of $152, 340.94 (“Settlement Sum”). Id. The terms and conditions of the Note required Defendants to submit to Plaintiffs fifteen monthly installment payments commencing on November 15, 2017, with the final payment to occur on or before January 15, 2019. (ECF No. 1 ¶ 13).

         Defendants defaulted on the Note by failing to submit the third through fifteenth installments. Id. ¶ 15. In addition, the terms and conditions required SRI to cooperate with a payroll compliance audit by the Fund (by producing specified documents within sixty days of executing the agreement), which they failed to do. Id. ¶ 16. Plaintiff filed a Complaint in this Court requesting a Confession of Judgment on September 6, 2019. (ECF No. 1). At this time, neither Plaintiffs nor their counsel had received the requested payments. Id. ¶ 15. Plaintiffs contend that under the Agreement the following amounts are owed:

Total Debt

$180, 336.22

Payments Received

-$3, 256.13

Post-agreement interest on the declining balancing of Total Debt (8% per annum) compounding monthly through 8/30/2019

$17, 750.64

Attorneys' Fees and Costs (10/13/17 through 7/31/2019)

$13, 671.51

Total

$208, 502.24

(ECF No. 1-8 at 1).

         II. LEGAL STANDARD

         In effect, a Judgment by Confession is a private admission to liability for debt without trial and allows the entry of a judgment on the admission or confession without the formality, time, or expense, involved in an ordinary proceeding.[1] Local Rule 108.1 requires that a plaintiff seeking the entry of a confessed judgment file a Complaint, accompanied by:

1. [T]he written instrument that
(a) authorizes the confessed judgment; and
(b) entitles the plaintiff to a claim for liquidated damages; 2. [A]n affidavit of the plaintiff or someone on behalf of the plaintiff, stating:
(a) the circumstances under which the defendant executed the written instrument;
(b) the age and education of the defendant, if known;
(c) the amount due under the written instrument; and
(d) the defendant's post office address (including the street address if needed to effect mail delivery).

Int'l Painters v. Kosson Glass, Inc., 2016 WL 7383354, at *1 (D. Md. Dec. 21, 2016) (citing Loc. R. ...


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