Laborers' District Council Pension and Disability Trust Fund No. 2 et al v. Parkinson Construction Company, Inc.

Filing 20

REPORT AND RECOMMENDATIONS re 13 MOTION for Default Judgment as to Parkinson Construction Company, Inc. filed by Baltimore-Washington Construction and Public Employees, Laborers District Council Defined Contribution Retirement Plan, G eorge Maloney, Justin Meighan, Laborers' Joint Training Fund of Washington, D.C. and Vicinity, Laborers' District Council Health and Welfare Trust Fund No. 2. Objections to R&R due by 4/21/2014. Signed by Magistrate Judge Timothy J. Sullivan on 4/3/14. (dass, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Laborers’ District Council Pension and
Disability Trust Fund No. 2, et al.,
Plaintiffs,

:
:

v.

:

Parkinson Construction Company, Inc.,

:

Defendants.

Case No. WDQ-13-0294

:
REPORT AND RECOMMENDATION

This Report and Recommendation addresses the Motion for Default Judgment (ECF No.
13) filed by Plaintiffs, the Baltimore-Washington Construction and Public Employees, Laborers’
District Council Defined Contribution Retirement Plan; Laborers’ District Council Pension and
Disability Trust Fund No. 2; the Laborers’ District Council Health and Welfare Trust Fund No. 2
(the “Welfare Fund”); the Laborers’ Joint Training Fund of Washington, D.C. and Vicinity (the
“Training Fund”) (collectively, the “Funds”); Justin Meighan, Trustee; and George Maloney,
Trustee (collectively, the “Plaintiffs”), against Defendant Parkinson Construction Company, Inc.
(“Parkinson”), along with Plaintiffs’ supplemental filings in support to the Motion. (ECF Nos. 17
& 19). Parkinson has not filed a response, and the time for doing so has passed. See Loc. R.
105.2.a. On December 20, 2013, in accordance with 28 U.S.C. § 636 and Local Rule 301, Judge
Quarles referred this case to me (ECF No. 15) for a report and recommendation on Plaintiffs’
Motion for Default Judgment. I find that a hearing is unnecessary in this case. See Loc. R. 105.6.
For the reasons set forth below, I respectfully recommend that Plaintiffs’ Motion for Default
Judgment be GRANTED.

I.

FACTUAL AND PROCEDURAL HISTORY
On February 4, 2013, Plaintiffs filed an Amended Complaint1 (ECF No. 4) against

Parkinson under the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, and the
Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1132(g)(2) and 1145.
Plaintiffs allege that Parkinson refused to comply with the Funds’ payroll audit and “failed to
submit other contributions owed to the Funds.” (ECF Nos. 4 at 4 & 13 at 2). Plaintiffs claim that
these failures violate the collective bargaining agreement (“CBA”) to which Parkinson was a
party. (ECF No. 4 at 3). On February 26, 2013, the Court entered an order (ECF No. 8) granting
Plaintiffs’ Consent Motion to Stay, permitting the parties to conduct the audit at issue, and
allowing Parkinson to file an answer or other responsive pleading to the Amended Complaint
within 21 days of the stay being lifted. On October 24, 2013, the Court entered an order (ECF
No. 10) lifting the stay and directing Parkinson to file an answer or responsive pleading within
21 days. Parkinson did not file an answer or responsive pleading to the Amended Complaint.
Upon Plaintiffs’ request, the Clerk of the Court entered an Order of Default (ECF No. 14) on
December 19, 2013. Plaintiffs filed the Motion for Default Judgment on December 18, 2013 and,
consistent with the Court’s Orders (ECF Nos. 16 & 18), Plaintiffs filed supplements to the
Motion on January 2, 2014 (ECF No. 17) and March 31, 2014 (ECF No. 19). Parkinson still has
not filed any response.
Plaintiffs contend that Parkinson was a party to a CBA and certain trust agreements that
required Parkinson “to file timely monthly Employer Contribution Reports of hours worked by
covered employees and to make timely contributions to the Funds for each employee covered”
by the CBA. (ECF No. 4 at 3). The CBA and trust agreements also required Parkinson to “permit

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Plaintiffs filed their original Complaint (ECF No. 1) on January 28, 2013.
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the Funds to conduct audits of its records to ensure that all hours worked by covered employees
are properly reported to the Funds.” (ECF No. 4 at 3). Parkinson was selected for a payroll audit
by the Funds but “failed, neglected, omitted, and refused to schedule an audit.” (ECF No. 4 at 4).
After Plaintiffs filed their Amended Complaint, Parkinson ultimately agreed to comply with the
audit. (ECF No. 13 at 2). The audit revealed that Parkinson “had underreported its contributions
to the Funds by $31.73.” (ECF No. 13-1 at 2). Thereafter, Parkinson “paid the amounts found
due by the audit, [but] failed and refused to pay all other amounts owed to the Funds.” (ECF No.
13-1 at 3). Plaintiffs seek a default judgment against Parkinson, as well as damages for the costs
of the audit, liquidated damages and interest for Parkinson’s delinquent contributions, attorney’s
fees and costs, and post-judgment interest.
II.

DISCUSSION
A.

Standard for Entry of Default Judgment

In determining whether to award a default judgment, the court accepts as true the wellpleaded 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.
United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012)
(citing Ryan, 253 F.3d at 790). 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
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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. DurrettSheppard Steel Co., 2012 WL 2446151, at *1.
Rule 55 of the Federal Rules of Civil Procedure governs the entry of default judgment
and the determination of damages. “If, 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).” Sheppard Steel Co., 2012 WL 2446151, at *1. 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, and
may rely instead on affidavits or documentary evidence in the record to determine the
appropriate sum. See Mongue v. Portofino Ristorante, 751 F. Supp. 2d 789, 795 (D. Md. 2010).
B.

Liability

Section 301 of the LMRA, 29 U.S.C. § 185, provides that suits alleging violations of a
contract between an employer and a labor organization “may be brought in any district court of
the United States having jurisdiction of the parties, without respect to the amount in controversy
or without regard to the citizenship of the parties.” Section 515 of ERISA, 29 U.S.C. § 1145,
mandates that employers subject a multi-employer plan or collective bargaining agreement

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“shall, to the extent not inconsistent with law, make such contributions in accordance with the
terms and conditions of such plan or such agreement.”
According to the factual allegations contained in Plaintiffs’ Amended Complaint,
Parkinson was bound by the terms of a CBA and certain trust agreements. (ECF No. 4 at 3).
Parkinson refused to permit Plaintiffs to audit its records to “ensure that all hours worked by
covered employees are properly reported to the Funds,” as the trust agreements required. (ECF
No. 4 at 3-4). Such audits were expressly authorized by the Supreme Court in Central States,
Southeast & Southwest Areas Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985). In
addition, Parkinson failed “to file Reports with the Funds for any work month since August
2012, and . . . failed to make the required contributions to the Funds on behalf of its covered
employees and to pay the required liquidated damages and interest for work performed by its
covered employees during those months,” as required by the trust agreements. (ECF No. 4 at 45). Accepting these factual allegations as true, I conclude that Plaintiffs have established that
they are entitled to relief on their claims. Because Plaintiffs have stated a legitimate cause of
action, I find that Plaintiffs are entitled to a default judgment against Parkinson. I recommend
that the Court grant Plaintiff’s Motion for Default Judgment with respect to Parkinson’s liability.
C.

Damages

Having established Parkinson’s liability, ERISA allows Plaintiffs to recover liquidated
damages and interest owed to the Funds, as well as the attorney’s fees and costs incurred in this
litigation. See 29 U.S.C. § 1132(g)(2)(B)-(D). The Funds’ trust agreements require delinquent
contributing employers to pay liquidated damages and interest in the event that contributions are
not timely paid. (ECF Nos. 17-3 at 5, 17-4 at 11 & 19-1 at 2). The trust agreements also permit
the Funds to conduct audits (see ECF No. 17 at 4), and require an employer who is not compliant

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with the Funds’ request for an audit to pay the costs of the audit “regardless of whether or not the
audit reveals that the employer owes any additional amounts to the Funds.” (ECF No. 17 at 4).
In support of their claim for damages, Plaintiffs submit the Declaration of Jonathan G.
Rose, Esq. (ECF No. 13-1). Mr. Rose states that the costs of the audit amounted to $2,092.50.
Parkinson’s initial non-compliance with the Funds’ request for an audit permits the Funds to
assess the costs of the audit against Parkinson pursuant to the terms of the trust agreements.
(ECF No. 13-1 at 4). I recommend that the Court award Plaintiffs $2,092.50 to account for the
costs of the audit.
In addition to the costs of the audit, Plaintiffs state that Parkinson is liable to Plaintiffs for
liquidated damages and interest on delinquent contributions in the amounts of $1,020.81 to the
Welfare Fund and $197.60 to the Training Fund, for a total amount of $1,218.41. (ECF No. 13-1
at 4). To explain how Plaintiffs calculated these figures, Plaintiffs have submitted the
Declaration of R. Reneé Parenti (ECF No. 19-2). Ms. Parenti is the “Vice President and Account
Executive of Carday Associates, Inc., which serves as the Plan Administrator” to the Welfare
Fund, and “handles accounting matters, including processing employer reports and contributions
and maintaining records of delinquent contributions” for the Training Fund. (ECF No. 19-2 at 1).
Ms. Parenti’s Declaration states that liquidated damages in the amount of 15% are assessed for
delinquent contributions to the Welfare Fund, and that interest is assessed on late payments at the
rate of 10% per year. (ECF No. 19-2 at 1-2). Liquidated damages in the amount of 15% of the
amount owed or $20.00, whichever is greater, are assessed for delinquent contributions to the
Training fund, in addition to interest at the rate of 10% per year. Id. Ms. Parenti’s Declaration
goes on to explain how Plaintiffs calculated liquidated damages and interest on delinquent
contributions to the Welfare Fund and the Training Fund. (ECF No. 19-2 at 2-6). Having

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reviewed Ms. Parenti’s Declaration and Plaintiffs’ calculations, I find that Parkinson owes
liquidated damages and interest for delinquent contributions in the amount of $1,020.81 to the
Welfare Fund and $197.60 to the Training Fund. These liquidated damages and interest account
for Parkinson’s delinquent contributions during the months of May 2012, June 2012, July 2012
and August 2012. Id.
Accordingly, I recommend that the Court award the following damages to Plaintiffs: (1)
Plaintiffs’ audit costs in the amount of $2,092.50; (2) liquidated damages and interest to the
Welfare Fund in the amount of $1,020.81; (3) liquidated damages and interest to the Training
Fund in the amount of $197.60; and (4) post-judgment interest pursuant to 28 U.S.C. § 1961.
D.

Attorney’s Fees and Costs

Attorney’s fees and costs are available in an ERISA action. 29 U.S.C. § 1132(g)(2).
When a court enters judgment in favor of the plaintiff in an ERISA action for a plan to recover
unpaid contributions, it “shall award the plan . . . reasonable attorney’s fees and costs of the
action, to be paid by the defendant.” Id. In calculating an award of attorney’s fees, the court must
determine the lodestar amount, defined as a “reasonable hourly rate multiplied by hours
reasonably expended.” Grissom v. The Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008). The
Fourth Circuit has stated that a lower court’s
discretion should be guided by the following twelve factors: (1) the time and labor
expended; (2) the novelty and difficulty of the questions raised; (3) the skill
required to properly perform the legal services rendered; (4) the attorney’s
opportunity costs in pressing the instant litigation; (5) the customary fee for like
work; (6) the attorney’s expectations at the outset of the litigation; (7) the time
limitations imposed by the client or circumstances; (8) the amount in controversy
and the results obtained; (9) the experience, reputation and ability of the attorney;
(10) the undesirability of the case within the legal community in which the suit
arose; (11) the nature and length of the professional relationship between attorney
and client; and (12) attorneys’ fees awards in similar cases.

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Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). In addition, Appendix
B to this Court’s Local Rules (“Rules and Guidelines for Determining Attorneys’ Fees in Certain
Cases”) provides that lawyers admitted to the bar for five to eight years may reasonably bill
$165.00-250.00 per hour and lawyers admitted to the bar for fifteen years or more may
reasonably bill $275.00-400.00 per hour. These hourly rates serve only as guidelines in
determining the reasonableness of an attorney’s hourly rate.
Throughout this litigation, Plaintiffs have been represented by Jonathan G. Rose, Esq.
and Richard Siegel, Esq. Mr. Rose is a Partner with the law firm of Alston & Bird LLP who has
been admitted to the bar for more than fifteen years. Mr. Siegel is a Senior Associate with the
law firm of Alston & Bird LLP who has been admitted to the bar for more than five but fewer
than eight years. Mr. Rose claims 1.5 hours at an hourly rate of $410.00 for a total fee of
$615.00. (ECF No. 13-1 at 4). Mr. Rose states that he was required to communicate with
Parkinson about a potential resolution of this case, to meet with Mr. Siegel about the case, and to
review and revise his client’s submissions to the Court. I find that the time Mr. Rose spent on
this case is reasonable. Although Mr. Rose’s hourly rate exceeds the guidelines set forth in the
Local Rules, I find that 1.5 hours of Mr. Rose’s work at $410.00 per hour is reasonable for his
work in this case. I recommend that the Court award Plaintiffs attorney’s fees for Mr. Rose’
work in the amount of $615.00.
Mr. Siegel claims a total of 22.4 hours at an hourly rate of $395.00 per hour for a total fee
of $8,848.00. (ECF Nos. 13-1 at 4-5, 17 at 6 & 19 at 2). The work Mr. Siegel performed includes
compiling the information that served as the basis for the complaint, drafting the complaint,
responding to Parkinson’s contention regarding arbitration, coordinating the audit and reviewing
its results, preparing the Motion for Default Judgment, and responding to the Court’s requests for

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supplementation of the Motion for Default Judgment. Id. I find that the time Mr. Siegel spent on
this case is reasonable. Mr. Siegel’s hourly rate exceeds the Court’s guidelines, but these
guidelines are not determinative. In other cases, judges in the District of Maryland have found
that Mr. Siegel’s hourly rate is reasonable, even though it is greater than the Court’s guideline
rate. See Laborers’ District Council Pension and Disability Trust Fund No. 2, et al. v. E.G.S.,
Inc., No. WDQ-09-3174, Paper No. 16 (D. Md. Apr. 22, 2010); Plasterers’ Local Union No. 96
Pension Plan v. Perry, 711 F.Supp.2d 472, 2010 WL 686694, at *3 (D. Md. 2010). In light of
these cases, as well as the factors set forth in Robinson, 560 F.3d at 243, I find that Mr. Siegel’s
hourly rate is reasonable. I recommend that the Court award Plaintiffs attorney’s fees for Mr.
Siegel’s work in the amount of $8,848.00.
Finally, Plaintiffs incurred a total of $480.00 in costs, consisting of the $350.00 fee for
filing their Complaint and the cost of $130.00 to serve Parkinson. I recommend that the Court
grant Plaintiffs’ request for costs in the amount of $480.00.
III.

CONCLUSION
In sum, I recommend that:
1.

the Court grant Plaintiffs’ Motion for Default Judgment (ECF No. 13);

2.

the Court award damages to Plaintiffs in the amount of $3,310.91;

3.

the Court award attorney’s fees and costs to Plaintiffs in the amount of $9,943.00;

4.

the Court award Plaintiffs post-judgment interest at the statutory rate.

and

I also direct the Clerk to mail a copy of this Report and Recommendation to the
Defendant at the addresses listed on Plaintiffs’ Amended Complaint (ECF No. 4).

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Any objections to this Report and Recommendation must be served and filed within
fourteen (14) days, pursuant to Fed. R. Civ. P. 72(b) and Local Rule 301.5.b.

April 3, 2014
Date

/s/
Timothy J. Sullivan
United States Magistrate Judge

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