United States District Court, D. Maryland
INTERNATIONAL PAINTERS AND ALLIED TRADES INDUSTRY PENSION FUND, et al. Plaintiffs,
ROYAL INTERNATIONAL DRYWALL & DECORATING, INC., et al. Defendants.
Stephanie A. Gallagher United States District Judge.
pending is a Motion for Default Judgment (“the
Motion”) filed by Plaintiffs International Painters and
Allied Trades Industry Pension Fund (“Fund” or
“Pension Fund”) and Tim D. Maitland
“Plaintiffs”) against Defendants Royal
International Drywall & Decorating, Inc., Buckingham
Builders Corporation, Buckingham Development, LLC, Darwan
Brothers Investments, LLC, Darwan Enterprises of Shorewood,
LLC, Darwan Land Development, Inc., Royal American Homes,
Inc., Hysam Darwan, and Al Darwan (collectively
“Defendants”), ECF 32. Defendants did not file an
opposition, and the deadline to do so has now passed.
See Loc. R. 105.2(a) (D. Md. 2018). I have reviewed
Plaintiffs' Motion and the accompanying attachments. No
hearing is necessary. See R. 105.6. For the reasons
discussed below, Plaintiffs' Motion for Default Judgment
will be DENIED.
facts recited herein are derived from the Complaint, the
Motion, and the attached exhibits. The Pension Fund is a
trust fund comprised of trustees for the International
Painters and Allied Trades Industry Pension Plan, a
“multiemployer plan” within the meaning of the
Employee Retirement Income Security Act of 1974
(“ERISA”). ECF 1, ¶ 4; see 29
U.S.C. §§ 1002(2), (3), (37), 1301(a)(3) (2012). On
November 28, 2018, Plaintiffs filed a Complaint in this
Court, alleging that Defendants failed to pay incurred
withdrawal liability to the Pension Fund. ECF 1.
Specifically, Plaintiffs allege that Defendant Royal
International Drywall & Decorating, Inc. (“the
Contributing Business”), was a contributing business to
the Pension Fund. Id. ¶ 7. Plaintiffs further
allege that the other named corporate Defendants were under
common control with the Contributing Business, and
accordingly share liability as a single employer pursuant to
29 U.S.C. § 1301(b). Id. ¶¶ 7-13.
Plaintiffs allege that the two individual defendants were
former owners and trustees of the corporate Defendants.
Id. ¶¶ 14-15. Plaintiffs allege that the
Contributing Business effected a complete withdrawal from the
pension plan, as defined by 29 U.S.C. § 1383, in 2006,
thereby incurring withdrawal liability to the Pension Fund.
Id. ¶ 18. On November 24, 2017, the Pension
Fund demanded payment of the withdrawal liability by sending
a letter (the “Notice Letter”) to “Royal
International & Decorating, c/o Hysam Darwan, 5S524
Eugenia Drive, Naperville, IL, 60540.” ECF 1-11. After
the Notice Letter containing the demand was sent, the
Contributing Business did not pay the withdrawal liability,
and did not request review of the determination or seek
arbitration on a timely basis. ECF 1, ¶¶ 20, 21.
were served, by alternative service, with the summons and
Complaint on June 10, 2019. ECF 10 to 18. After Defendants
failed to file Answers or otherwise defend, Plaintiffs filed
a Motion for Entry of Default, ECF 19, on July 12, 2019,
which the Clerk granted on July 15, 2019, ECF 20 to 29.
Plaintiffs thereafter filed the instant Motion for Judgment
by Default, ECF 32, on September 27, 2019. In support of
their motion, Plaintiffs attached the Declaration of
Maitland, the Administrator of the Pension Fund, ECF 32-5,
and the Declaration of James E. Goodley, Esq., counsel to the
Pension Fund, ECF 32-8. Maitland's affidavit alleged
that, as of September 26, 2019, the Contributing Business
owed the Pension Fund $188, 496.00 in unpaid withdrawal
liability, $16, 196.27 in interest, and $37, 699.20 in
liquidated damages. ECF 32-5, ¶¶ 11-13; ECF 32-7.
Goodley's affidavit supported a request for
attorneys' fees and costs in the amount of $19, 632.25.
ECF 32-10, ¶ 3.
STANDARD FOR DEFAULT JUDGMENT
reviewing Plaintiffs' Motion, the Court accepts as true
the well-pleaded factual allegations in the complaint as to
liability. Ryan v. Homecomings Fin. Network, 253
F.3d 778, 780 (4th Cir. 2001). However, it remains for the
Court to determine whether these unchallenged factual
allegations constitute a legitimate cause of action.
Id. at 780-81; see also 10A Wright, Miller,
& Kane, Federal Practice and Procedure § 2688.1 (3d
ed. Supp. 2010) (“Liability is not deemed established
simply because of the default . . . . [T]he court, in its
discretion, may require some proof of the facts that must be
established in order to determine liability.”).
Court determines that liability is established, it must then
determine the appropriate amount of damages. Ryan,
253 F.3d at 780-81. The Court does not accept factual
allegations regarding damages as true, but rather must make
an independent determination regarding such allegations.
See Credit Lyonnais Sec. (USA), Inc. v. Alcantara,
183 F.3d 151, 155 (2d Cir. 1999); Monge v. Portofino
Ristorante, 751 F.Supp.2d 789, 794-95 (D. Md. 2010). In
so doing, the Court may conduct an evidentiary hearing.
Fed.R.Civ.P. 55(b)(2). The court may also make a
determination of damages without a hearing so long as there
is an adequate evidentiary basis in the record for an award.
See Monge, 751 F.Supp.2d at 795; Adkins v.
Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (“The
court need not make this determination [of damages] through a
hearing, however. Rather, the court may rely on detailed
affidavits or documentary evidence to determine the
appropriate sum.”); see also Trs. of the Nat'l
Asbestos Workers Pension Fund v. Ideal Insulation, Inc.,
Civil No. ELH-11-832, 2011 WL 5151067, at *4 (D. Md. Oct. 27,
2011) (determining that, in a case of default judgment
against an employer, “the Court may award damages
without a hearing if the record supports the damages
requested”); Pentech Fin. Servs., Inc. v.
Old Dominion Saw Works, Inc., Civ. No. 6:09cv00004, 2009
WL 1872535, at *2 (W.D. Va. June 30, 2009) (concluding that
there was “no need to convene a formal evidentiary
hearing on the issue of damages” after default judgment
where plaintiff submitted affidavits and electronic records
establishing the amount of damages sought); JTH Tax, Inc.
v. Smith, Civil No. 2:06CV76, 2006 WL 1982762, at *3
(E.D. Va. June 23, 2006) (“If the defendant does not
contest the amount pleaded in the complaint and the claim is
for a sum that is certain or easily computable, the judgment
can be entered for that amount without further
the court must (1) determine whether the unchallenged facts
in Plaintiffs' Complaint constitute a legitimate cause of
action, and, if they do, (2) make an independent
determination regarding the appropriate amount of damages and
the appropriate injunctive relief.
Defendant's Liability under ERISA and Contract
collect withdrawal liability, a plan sponsor must follow the
requirements of 29 U.S.C. § 1399(b)(1) (Supp. III 2015),
which requires, “As soon as practicable after an
employer's complete or partial withdrawal, the plan
sponsor shall notify the employer of the amount of the
liability and the schedule for liability payments, and demand
payment in accordance with the schedule.” Although
Plaintiffs allege, in their Complaint, that they complied
with § 1399, ECF 1, ¶¶ 26-27, the factual
record does not reflect compliance. First, there is serious
question as to whether the plan sponsor sent its demand
“as soon as practicable after an employer's
complete or partial withdrawal” as the statute
requires. Plaintiffs' Complaint itself dates the
Contributing Business's complete withdrawal to 2006,
id. ¶ 18, and Plaintiffs provide no explanation
for the decade-plus delay in their attempt to send the
required notice and demand.
and more importantly, the Complaint fails to establish how
the November 14, 2017 letter, sent to an address not
associated with either the Contributing Business or its owner
of record, constituted effective notice. In the Complaint,
which was filed approximately one year after the Notice
Letter, the Eugenia Drive address was not listed for either
“Royal International Drywall & Decorating” or
“Hysam Darwan.” Instead, the Complaint listed
“5S524 Eugenia Drive” as the address for
Buckingham Builders Corporation, an entity which had been
dissolved since March 11, 2011, and for Al Darwan. ECF 1 at
1-2; ECF 32-9 at 2 (indicating Buckingham Builders
Corporation's involuntary dissolution). Al Darwan was
not, in any of the relevant paperwork, listed as an owner and
trustee of the Contributing Business. See ECF 1,
¶ 14 (“Defendant Hysam Darwan (‘Hysam')
is a former owner and trustee for the benefit of creditors
and owner of Contributing Business, Buckingham Builders,
Darwan Brothers, and Darwan Enterprises.”); ECF 32-9 at
14-15 (corporate paperwork reflecting the agent and president
of the Contributing Business as “Hysam Darwan”).
while service upon one member of a control group can render
effective notice upon all others in the control group,
see McDonald v. Centra, Inc.,946 F.2d 1059, 1062
(4th Cir. 1991), the Complaint fails to establish how any
Control Group member here received effective notice. In fact,
Plaintiffs' Motion for Alternative Service, ECF 8,
highlights the inadequacy of the purported notice. On June 4,
2019, Plaintiffs filed a declaration from a process server
who tried to serve “Defendants Al Darwan and Buckingham
Builders Corporation” at 5S524 Eugenia Drive,
Naperville, IL 60540 on December 23, 2018 and December 28,
2018. ECF 8-4, ¶ 4. Service was not effected, and
“[a] neighbor informed the process server that
Defendant Al Darwan had moved at least four months prior and
a mail carrier confirmed the same.” Id. The
phrase “[a]t least four months prior” does not
indicate whether the Eugenia Drive address was valid for Al
Darwan or Buckingham Builders Corporation in November, 2017,
when the Notice Letter was sent. The corporate records for
Buckingham Builders Corporation show ...