Trs. of Nat'l Elec. Benefit Fund v. Integrity Gen. Eng'g Contractors, Inc.

• Decision Date: 07 January 2020
• Docket Number: Civil Action No. 8:19-cv-01360-PX
• Parties: TRUSTEES OF THE NATIONAL ELECTRIC BENEFIT FUND, et al., Plaintiff, v. INTEGRITY GENERAL ENGINEERING CONTRACTORS, INC, Defendant.
• Court: U.S. District Court — District of Maryland

TRUSTEES OF THE NATIONAL ELECTRIC BENEFIT FUND, et al., Plaintiff, v. INTEGRITY GENERAL ENGINEERING CONTRACTORS, INC, Defendant.

Civil Action No. 8:19-cv-01360-PX

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND

January 7, 2020

MEMORANDUM OPINION

Pending before the Court is Plaintiffs Trustees of the National Electrical Benefit Fund ("NEBF") and Trustees of the National Electric Annuity Plan's ("NEAP's") Motion for Default Judgment. ECF No. 7. Defendant Integrity General Engineering Contractors, Inc, ("Integrity") has not filed a response or entered its appearance, and the time for doing so has passed. See Loc. R. 105.2.a. For the following reasons, NEBF and NEAP's request for this Court to enter default judgment is granted. NEBF is awarded judgment in the amount of $4,831.44 and NEAP is awarded judgment in the amount of $7,159.16.

I. Background

The following facts are taken from the Complaint and accepted as true. Plaintiffs are fiduciaries for NEBF and NEAP. ECF No. 1 ¶ 2. NEBF is a multiemployer pension plan and NEAP is a multiemployer benefit plan as these terms are defined in section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA"). See 29 U.S.C. § 1002(2); ECF No. 1 ¶¶ 4-5. NEBF is a "defined benefit plan" and NEAP is a "defined contribution plan." ECF No. 1 ¶¶ 4-5; see 29 U.S.C. § 1002(34), (35).

Integrity, an employer engaged in an industry affecting commerce under ERISA, 29 U.S.C. § 1002(5), has entered into a collective bargain agreement ("CBA") that requires it to submit contributions to NEBF and NEAP on behalf of those employees who are covered by the CBA. ECF No. 1 ¶¶ 7, 8, 12. Specifically, Integrity is bound by the terms and conditions of the Restated Employees Benefit Agreement and Trust for the NEBF (the "NEBF Trust Agreement") and the Agreement and Trust for the National Electrical Annuity Plan (the "NEAP Trust Agreement"). Id. ¶¶ 12, 18. Yet, according to two 2018 audits, Integrity has failed to make all required contributions to the NEBF and NEAP and is delinquent in the amounts of $2,655.20 and $4,236.70, respectively. ECF No. 1 ¶¶ 13-14, 19-20.

On May 8, 2019, NEBF and NEAP filed this action against Integrity, seeking to recover contributions and liquidated damages due and unpaid under the terms of the CBA and Trust Agreements, plus accrued interest, costs, and attorneys' fees. ECF No. 1. Plaintiffs properly served Integrity on Mary 14, 2019. ECF No. 6-1. Integrity failed to answer or otherwise respond to the Complaint or contest Plaintiffs' claims. Plaintiffs thereafter moved simultaneously for entry of default pursuant to Rule 55(a) of the Federal Rules of Civil Procedure and for default judgment, ECF Nos. 6-7, and the Clerk entered default five days later, ECF No. 8.

II. Standard of Review

Pursuant to Federal Rule of Civil Procedure 55(a), "[w]hen 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). Thereafter, the court may enter default judgment at the plaintiff's request and with notice to the defaulting party. Fed. R. Civ. P. 55(b)(2). A plaintiff, however, is not automaticallyentitled to default judgment simply because the defendant has not responded. Whether to enter default judgment is left to the sound discretion of the court. See, e.g., Choice Hotels Int'l, Inc. v. Jai Shree Navdurga, LLC, No. DKC 11-2893, 2012 WL 5995248, at *1 (D. Md. Nov. 29, 2012); see also Choice Hotels Int'l, Inc. v. Austin Area Hospitality, Inc., No. TDC-15-0516, 2015 WL 6123523, at *1 (D. Md. Oct. 14, 2015).

Although the United States Court of Appeals for the Fourth Circuit has announced a "strong policy" in favor of deciding cases on their merits, United States v. Schaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), default judgment may be appropriate when a party is unresponsive, S.E.C. v. Lawbaugh, 359 F. Supp. 2d 418, 421 (D. Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C. Cir. 1980)); see Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th Cir. 1987) (upholding a default judgment award where the defendant lost its summons and did not respond within the proper period); Disney Enterprises, Inc. v. Delane, 446 F. Supp. 2d 402, 405-06 (D. Md. 2006) (finding appropriate the entry of default judgment where the defendant had been properly served with the complaint and did not respond, despite repeated attempts to contact him).

With respect to liability, the Court takes as true all well-pleaded facts in the complaint. Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001); see Fed. R. Civ. P. 8(b)(6) ("An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied."). The court applies the pleading standards announced in Ashcroft v. Iqbal, 556 U.S. 662 (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) in the context of default judgments. See, e.g., Balt. Line Handling Co. v. Brophy, 771 F. Supp. 2d 531, 544 (D. Md. 2011); Russell v. Railey, No. DKC-08-2468, 2012 WL 1190972, at *2-3 (D. Md. Apr. 9, 2012); United States v. Nazarian, No.DKC 10-2962, 2011 WL 5149832, at *2-3 (D. Md. Oct. 27, 2011); Bogopa Serv. Corp. v. Shulga, No. 3:08cv365, 2009 WL 1628881, at *1-2 (W.D.N.C. June 10, 2009). A complaint that avers bare legal conclusions or "naked assertion[s] devoid of further factual enhancement," is insufficient to award default judgment. See, e.g., Balt. Line Handling Co., 771 F. Supp. 2d at 544 (internal quotation marks omitted) ("The record lacks any specific allegations of fact that 'show' why those conclusions are warranted.").

If the complaint avers sufficient facts from which the court may find liability, the court next turns to damages. See Ryan, 253 F.3d at 780-81. Damages are circumscribed by that which is requested in the complaint. See Fed. R. Civ. P. 54(c) ("A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings."). The damages request must be supported by evidence introduced either at a hearing or by affidavit or other record evidence. See id.; Lawbaugh, 359 F. Supp. 2d at 422; see, e.g., Monge v. Portofino Ristorante, 751 F. Supp. 2d 789, 794-95 (D. Md. 2010).

III. Analysis

A. Liability

ERISA requires 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; see also 29 U.S.C. § 1132(g) (providing that employers who fail to timely make contributions are liable in a civil action for, inter alia, unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable attorneys' fees, and costs of the action). ERISA "provide[s] trustees of multiemployer benefit plans with an effective federal remedy to collect delinquentcontributions." Int'l Painters & Allied Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F. Supp. 2d 680, 685-86 (D. Md. 2013) (quoting Laborers Health & Welfare Tr. Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 541 (1988)). The United States Court of Appeals for the Fourth Circuit has held that "a multiemployer plan can enforce, as written, the contribution requirements found in the controlling documents." Bakery & Confectionery Union & Indus. Int'l Pension Fund v. Ralph's Grocery Co., 118 F.3d 1018, 1021 (4th Cir. 1997).

Taking the well-pleaded facts in the Complaint as true, Plaintiffs have established that Integrity was required to make employer contributions to the NEBF and the NEAP. Plaintiffs also established that Integrity failed to make such contributions in violation of 29 U.S.C. § 1145. ECF No. 1. Defendant is thus liable for the payment of amounts owed to each fund. Default judgment in the amount of unpaid contributions is appropriate.

B. Damages

As to damages, Plaintiffs by statute may collect (1) delinquent contributions, (2) liquidated damages assessed on the late contributions, (3) interest at the rate provided in 29 U.S.C. § 1132(g), (4) attorneys' fees and costs, and (5) other legal or equitable relief the Court deems appropriate. See 29 U.S.C. § 1132(g).

In support of their damages request, Plaintiffs submit the relevant CBA and Trust Agreements, ECF Nos. 7-2 at 8-63; an affidavit of Brian Killian, the Manager of the Audit and Delinquency Departments of both NEAP and NEBF, ECF No. 7-2 at 1-4; and separate audits of the award amount, ECF Nos. 7-2 at 65-81. As for attorneys' fees and costs, Plaintiffs submit the affidavit of Jennifer Bush Hawkins, the attorney assigned to this case. ECF No. 7-1. Because this evidence is sufficient for the Court to ascertain allowable damages and the requestedamounts are consistent with the damages sought in the Complaint, the Court will award damages without a hearing and rely on the affidavits and other evidence in the record to determine the appropriate amount. See, e.g., Monge, 751 F. Supp. 2d at 794-96.

1. Unpaid Contributions

Pursuant to the audits conducted in 2018, Integrity owes NEBF $2,655.20 in unpaid contributions for the months of January 2017 through July 2019 and owes NEAP $4,236.70 for the months of February 2017 to July 2019. ECF No. 7-2 at 3, 83-84, 86-87. Based on this evidence, the Court awards these amounts in unpaid contributions.

2. Liquidated Damages

Both the NEBF and the NEAP Trust Agreements provide that an employer's failure to pay timely contributions under the CBA triggers payment of liquidated damages in an amount equal to twenty percent (20%) of the delinquency. ECF No. 1 ¶¶ 27, 28; ECF No. 7-2 at 55, 62. The Court has reviewed the delinquent payment amounts and the penalties assessed as...