United States District Court, D. Maryland, Southern Division
J. HAZEL UNITED STATES DISTRICT JUDGE
National Electrical Benefit Fund (“Plaintiff” or
“NEBF”) brings this action against Defendant
Lighthouse Electric, Inc. (“Defendant”) under the
Employee Retirement Income Security Act of 1974
(“ERISA”), as amended by the Multiemployer
Pension Plan Amendments Act of 1980, 29 U.S.C. §§
1001 et seq. Following Defendant's failure to
answer or otherwise defend in this action, the Clerk entered
default against Defendant on March 26, 2019. ECF No. 7. Now
pending before the Court is Plaintiff's Motion for
Default Judgment against Defendant pursuant to Fed.R.Civ.P.
55(b). ECF No. 6. No. hearing is necessary. See Loc.
R. 105.6 (D. Md.). For the following reasons, Plaintiff's
Motion for Default Judgment is granted.
following facts are established by the Complaint, ECF No. 1,
and evidentiary exhibits in support of the Motion for Default
Judgment, ECF Nos. 6-1, 6-2. The NEBF is a multiemployer
employee pension benefit plan within the meaning of Section
3(2) of ERISA, 29 U.S.C. § 1002(2), which has been
established pursuant to an agreement entered into between the
International Brotherhood of Electrical Workers
(“IBEW”) and the National Electrical Contractors
Association (“NECA”). ECF No. 1 ¶ 4; ECF No.
6-2 ¶ 3. Employers agree to participate in the NEBF
pursuant to collective bargaining agreements with the IBEW or
one of its affiliated local unions. ECF No. 1 ¶ 4; ECF
No. 6-2 ¶ 3. The NEBF is administered at 2400 Research
Boulevard, Suite 500, Rockville, Maryland 20850-3238. ECF No.
1 ¶ 4.
states, upon information and belief, that Defendant is an
Illinois corporation whose business address and main place of
business is 35 Country Manor Lane, Orland Park, Illinois
60467. Id. ¶ 5. Defendant is an employer within
the meaning of Section 3(5) of ERISA, 29 U.S.C. §
1002(5), and is engaged in an industry affecting commerce.
times relevant to the action, Defendant was a signatory to
collective bargaining agreements (“Collective
Bargaining Agreements”) with IBEW Local Unions 134 and
461, the collective bargaining representatives of
Defendant's employees. Id. ¶ 6; ECF No. 6-2
¶¶ 4-6. The Collective Bargaining Agreements
obligated Defendant to submit contributions to the NEBF
through the NEBF's local collection agent on behalf of
employees covered by the Agreements. ECF No. 1 ¶ 6; ECF
No. 6-2 at 13, 16. Defendant was also bound to the terms and
conditions of the Restated Employees Benefit Agreement and
Trust (“Trust Agreement”), which governed
administration of the NEBF. ECF No. 1 ¶ 7; ECF No. 6-2
¶ 8; id. at 19-20, 38.
its obligations pursuant to the Collective Bargaining
Agreements and the Trust Agreement, Defendant has been
delinquent in making contributions to the NEBF on behalf of
its employees. ECF No. 1 ¶ 8; ECF No. 6-2 ¶ 9.
According to reports that Defendant prepared and submitted to
the NEBF's local collection agent, Defendant failed to
pay the NEBF at least $14, 855.48 in contributions between
May 2016 and December 2018, despite several demands from the
NEBF and its counsel. ECF No. 1 ¶¶ 9-10; ECF No.
6-2 at 50-51. Interest on the delinquent contributions at the
time the Complaint was filed was $1, 344.84, and liquidated
damages totaled $2, 971.10. ECF No. 1 ¶¶ 11-12; ECF
No. 6-2 at 50-51. By March 2019, interest on the reported
delinquent contributions was $1605.70. ECF No. 6-2 at 50-51.
according to a 2018 independent audit of Defendant's
books and records, Defendant owes the NEBF at least $478.22
in unpaid delinquent contributions for the period between
October 1, 2016 and June 30, 2017. ECF No. 1 ¶ 13; ECF
No. 6-2 ¶ 10. Defendant failed to submit the
contributions despite several demands for payment by the NEBF
and its counsel. ECF No. 1 ¶ 14; ECF No. 6-2 ¶
10-11. Interest on the delinquent contributions revealed by
the audit totals $113.85, while liquidated damages are
$95.64. ECF No. 1 ¶¶ 15-16; ECF No. 6-2 at 56. The
cost of the audit was $26.34. ECF No. 1 ¶ 17; ECF No.
6-2 at 56, 59-60.
asserts that the Trustees to the NEBF
(“Trustees”) will be required to provide benefits
to Defendant's employees upon retirement based on their
credited years of service, which includes the period in which
Defendant has failed to contribute. ECF No. 1 ¶ 18. The
Trust Agreement, pursuant to ERISA, authorizes the Trustees
to take all necessary actions to recover delinquent
contributions, interest on the delinquent contributions at
the rate of ten percent per annum, liquidated damages in an
amount of twenty percent of the delinquency, and all costs,
including attorneys' fees and audit expenses, incurred in
collecting the delinquency. Id. ¶ 22; ECF No.
6-2 ¶ 12.
filed the instant Complaint against Defendant on January 28,
2019. ECF No. 1. The Complaint seeks the total amount of
Defendant's known unpaid delinquent contributions,
interest on the delinquent contributions, liquidated damages,
the cost of the audit, and an award of attorney's fees
and costs, in addition to an order that interest will accrue
on all delinquent contributions at the rate of ten percent
per annum until paid in full. Id. at 5. Defendant
was served pursuant to Rule 4 of the Federal Rules of Civil
Procedure on February 10, 2019. ECF No. 4 at 1. An Answer was
due on or before March 4, 2019. ECF No. 6. No. Answer was
filed, Plaintiff moved for default on March 20, 2019, ECF No.
5, and the Clerk entered default against Defendant on March
26, 2019, ECF No. 7. Concurrent with its motion for entry of
default by the Clerk, Plaintiff filed the pending Motion for
Default Judgment. ECF No. 6.
STANDARD OF REVIEW
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, the clerk must
enter the party's default.” Fed.R.Civ.P. 55(a).
“A defendant's default does not automatically
entitle the plaintiff to entry of a default judgment; rather,
that decision is left to the discretion of the court.”
Educ. Credit Mgmt. Corp. v. Optimum
Welding, 285 F.R.D. 371, 373 (D. Md. 2012). Although
“[t]he Fourth Circuit has a ‘strong policy'
that ‘cases be decided on their merits, '”
Choice Hotels Int'l, Inc. v. Savannah Shakti
Corp., No. DKC-11-0438, 2011 WL 5118328, at *2 (D. Md.
Oct. 25, 2011) (citing United States v. Shaffer Equip.
Co., 11 F.3d 450, 453 (4th Cir. 1993)), “default
judgment may be appropriate when the adversary process has
been halted because of an essentially unresponsive
party[.]” Id. (citing S.E.C. v.
Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005)).
default, the well-pled allegations in a complaint as to
liability are taken as true, although the allegations as to
damages are not.” Lawbaugh, 359 F.Supp.2d at
422; see also Ryan v. Homecomings Fin. Network, 253
F.3d 778, 780 (4th Cir. 2001) (noting that “[t]he
defendant, by [its] default, admits the plaintiff's
well-pleaded allegations of fact, ” which provide the
basis for judgment). Upon a finding of liability,
“[t]he court must make an independent determination
regarding damages . . . .” Int'l Painters &
Allied Trades Indus. Pension Fund v. Capital Restoration
& Painting Co., 919 F.Supp.2d 680, 684 (D. Md.
2013). Federal Rule of Civil Procedure 54(c) limits the type
of judgment that may be entered based on a party's
default: “A default judgment must not differ in kind
from, or exceed in amount, what is demanded in the
pleadings.” While the Court may hold a hearing to prove
damages, it is not required to do so; it may rely instead on
“affidavits or documentary evidence in the record to
determine the appropriate sum.” Int'l Painters
& Allied Trades Indus. Pension Fund, 919 F.Supp.2d
at 684 (citing Monge v. Portofino Ristorante, 751
F.Supp.2d 789, 794-95 (D. Md. 2010)).