Trustees of The National Automatic Sprinkler Industry Welfare Fund et al v. Sheehe et al
Filing
13
MEMORANDUM OPINION (c/m to Defendant 11/15/11 sat). Signed by Chief Judge Deborah K. Chasanow on 11/15/11. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
TRUSTEES OF THE NATIONAL
AUTOMATIC SPRINKLER INDUSTRY
WELFARE FUND, et al.
:
:
v.
:
Civil Action No. DKC 11-0365
:
BILL R. SHEEHE d/b/a
ALL STAR FIRE PROTECTION
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this action
arising under the Employee Retirement Income Security Act of
1974
(“ERISA”)
judgment.
is
Plaintiffs’
(ECF No. 12).
amended
motion
for
default
The relevant issues have been briefed,
and the court now rules pursuant to Local Rule 105.6, no hearing
being
deemed
necessary.
For
the
reasons
that
follow,
Plaintiffs’ amended motion will be granted in part and denied in
part.
Plaintiffs’ original motion for default judgment (ECF No.
8) will therefore be denied as moot.
I.
Background
Plaintiffs are trustees of various trust funds associated
with Sprinkler Fitters Local Union No. 669 (“the Funds”).
The
Funds are employee benefit plans within the meaning of section
3(3) of ERISA.
Sheehe
is
an
See 29 U.S.C. § 1002(3).
individual
doing
business
Defendant Bill R.
as
All
Star
Fire
Protection,
an
employer
commerce under ERISA.
Funds
were
Restated
agreements”)
and
and
a
in
an
industry
affecting
See 29 U.S.C. §§ 1002(5), (12).
established
Agreements
engaged
and
are
maintained
Declarations
collective
of
pursuant
Trust
bargaining
(“the
agreement
The
to
the
trust
between
Sprinkler Fitters Local Union No. 669 and Defendant.1
On
February
10,
2011,
Plaintiffs
filed
a
complaint
on
behalf of the Funds alleging that Defendant breached the trust
agreements and the collective bargaining agreements by failing
to make contributions for certain months.
According to the
complaint, Defendant was required to make contributions to the
Funds
for
“each
hour
of
work
by
employees
installation of automatic sprinkler systems.”
performing
(ECF No. 1 ¶ 6).
The agreements further provide that if an employer fails to make
timely contributions, it must pay liquidated damages according
to a specified formula:
If payment is not received by the
fifteenth day of the month in which it is due, the employer must
pay
liquidated
damages
of
ten
percent
of
the
contribution
amount; if the payment is not received by the last working day
of the month, the employer must pay an additional five percent;
and if payment is not received by the fifteenth day of the
1
The Funds are administered in Landover, Maryland.
2
following
damages.
In
month,
another
five
percent
is
owed
as
liquidated
(Id. ¶ 11).
Defendant
made
only partial payments during the 2009 to 2010 time period.
(Id.
¶
the
9).
complaint,
In
addition
Plaintiffs
to
the
allege
that
outstanding
contributions
of
$94,628.70, Plaintiffs seek liquidated damages of $13,789.74,
interest for late payments, attorneys’ fees, and costs.
Plaintiffs served the summons and complaint on February 26,
2011.
When Defendant failed to respond within the requisite
time period, Plaintiffs moved for entry of default and default
judgment.
(ECF Nos. 7, 8).
The clerk entered default against
Defendant on September 1, 2011.
2011,
this
court
issued
an
(ECF No. 9).
order
On October 21,
directing
Plaintiffs
to
supplement their motion for default judgment to provide further
information from which prejudgment interest could be calculated.
(ECF Nos. 10, 11).
On November 2, 2011, Plaintiffs filed an amended motion for
default judgment.
Plaintiffs
state
(ECF No. 12).
that
they
seek
In an accompanying memorandum,
prejudgment
interest
amount of $13,782.09 assessed through November 1, 2011.
No. 12-1, at 2).
in
the
(ECF
To summarize, Plaintiffs now seek a default
judgment for unpaid contributions in the amount of $94,628.70,
liquidated
damages
of
$13,789.74,
interest
attorney’s fees of $787.50, and costs of $350.00.
3
of
$13,782.09,
(Id.).
II.
Standard of Review
A.
Default Judgment
Pursuant
to
Fed.R.Civ.P.
55(a),
“[w]hen
a
party
against
whom a judgment for affirmative relief is sought has failed to
plead
or
otherwise
affidavit
or
default.”
defend,
otherwise,
and
the
that
clerk
failure
must
enter
is
shown
the
by
party’s
Where a default has been previously entered by the
clerk and the complaint does not specify a certain amount of
damages,
the
plaintiff’s
pursuant
court
may
application
to
automatically
Rule
enter
55(b)(2).
entitle
the
default
notice
and
a
to
A
judgment,
the
defendant’s
plaintiff
to
upon
defaulting
default
entry
of
the
party,
does
a
not
default
judgment; rather, that decision is left to the discretion of the
court.
See Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002).
The United States Court of Appeals for the Fourth Circuit has a
“strong policy” that “cases be decided on their merits,” id.
(citing United States v. Shaffer Equip. Co., 11 F.3d 450, 453
(4th Cir. 1993)), but default judgment may be appropriate when
the adversary process has been halted because of an essentially
unresponsive party, see SEC v. Lawbaugh, 359 F.Supp.2d 418, 421
(D.Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C.
Cir. 1980)).
Upon
entry
of
default,
the
well-pled
allegations
in
a
complaint as to liability are taken as true, but the allegations
4
as to damages are not.
Lawbaugh, 359 F.Supp.2d at 422.
Rule
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.”
Thus, where a complaint specifies the amount of damages sought,
the plaintiff is limited to entry of a default judgment in that
amount.
“[C]ourts have generally held that a default judgment
cannot award additional damages . . . because the defendant
could not reasonably have expected that his damages would exceed
that
amount.”
Meindl
v.
Genesys
Pac.
Techs.,
Inc.
(In
re
Genesys Data Techs., Inc.), 204 F.3d 124, 132 (4th Cir. 2000).
Where a complaint does not specify an amount, “the court is
required to make an independent determination of the sum to be
awarded.”
Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001)
(citing SEC v. Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir.
1975); Au Bon Pain Corp. v. Artect, Inc., 653 F.2d 61, 65 (2d
Cir.
1981)).
While
the
court
may
hold
a
hearing
to
prove
damages, it is not required to do so; it may rely instead on
“detailed affidavits or documentary evidence to determine the
appropriate sum.”
Adkins, 180 F.Supp.2d at 17 (citing United
Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)); see
also Laborers’ Dist. Council Pension v. E.G.S., Inc., No. WDQ09-3174, 2010 WL 1568595, at *3 (D.Md. Apr. 16, 2010) (“[O]n
5
default judgment, the Court may only award damages without a
hearing if the record supports the damages requested.”).
III. Analysis
In their amended motion for default judgment, Plaintiffs
seek
a
total
award
of
$123,338.03,
which
consists
of:
(1)
unpaid contributions of $94,628.70; (2) liquidated damages of
$13,789.74; (3) interest of $13,782.09; (4) attorneys’ fees of
$787.50; and (5) costs of $350.00.
they
submit
the
declaration
of
In support of these amounts,
John
P.
Eger,
Assistant
Administrator of the Funds (ECF No. 12-2) and the declaration of
their attorney, Charles W. Gilligan, in support of their claim
for attorneys’ fees and costs (ECF No. 12-3).
A.
Unpaid Contributions
Plaintiffs seek $94,628.70 in unpaid contributions for the
relevant time period.
request,
Plaintiffs
(ECF No. 12-1, at 2).
submit
the
Declaration
(ECF No. 12-2, Eger Decl., ¶ 5).
In support of this
of
John
P.
Eger.
The amount specified in the
Eger Declaration corresponds with the amount requested in the
amended motion for default judgment and, more importantly, the
amount requested in the complaint.
Thus, the record supports
Plaintiffs’ request for $94,628.70 in unpaid contributions.
B.
Liquidated Damages
Plaintiffs seek $13,789.74 in liquidated damages assessed
on late contributions for the relevant time period.
6
(ECF No.
12-1, at 2).
In support of this request, Plaintiffs submit the
Eger Declaration.
(ECF No. 12-2 ¶¶ 6-8).
The amount specified
in the Eger Declaration corresponds with the amount requested in
the amended motion for default judgment and, more importantly,
the
amount
supports
requested
in
Plaintiffs’
the
complaint.
request
for
Thus,
$13,789.74
the
in
record
liquidated
damages.
C.
Interest
Plaintiffs seek $13,782.09 in interest at the rate of 12%
per annum assessed on late paid contributions accruing through
November 1, 2011.
pursuant
(Id.).
to
U.S.C.
§
1132(g)
and
The interest is owed
the
trust
agreements.
In support of this request, Plaintiffs submit the Eger
Declaration.
In
order,
29
(ECF No. 12-1, at 2).
its
the
(ECF No. 12-2 ¶ 8).
memorandum
court
opinion
explicitly
accompanying
noted
that
its
October
Plaintiffs
“did
21
not
provide the original monthly amounts of unpaid contributions in
the complaint.”
directed
(ECF No. 10, at 10).
Plaintiffs
to
supplement
their
The court therefore
original
motion
for
default judgment with sufficient information to enable the court
“to calculate independently the interest.”
have
not
done
so.
The
only
new
(Id.).
information
Plaintiffs
provided
in
Plaintiffs’ amended motion for default judgment is a new total
amount
of
interest
requested:
7
$13,782.09.
Without
more
information, the court is unable to verify the accuracy of this
figure.
Although this figure appears in the Eger Declaration
and the amended motion, it does not appear in the complaint,
which
only
requests
interest
“pursuant
to
the
Collective
Bargaining Agreement, the Trust Agreements, the Guidelines and
29 U.S.C. § 1132(g).”
(ECF No. 1, at 5).
Interest will thus be awarded to the extent possible based
on the current, albeit sparse, record.
According to the Eger
Declaration, $94,628.70 in unpaid contributions is owed for work
performed “during the years 2009 and 2010.”
(ECF No. 12-2 ¶ 5).
Because Plaintiffs do not provide a monthly breakdown of the
unpaid contributions, the court will assume that this lump sum
was
due
record.2
in
December
2010,
the
latest
date
supported
by
the
Accounting for the liquidated damages provisions of the
trust agreements, interest on this amount will be calculated
starting January 15, 2011.3
In their amended motion, Plaintiffs request interest at the
rate
of
12%
per
annum.
The
Eger
Declaration
on
its
own,
2
In their motion, Plaintiffs allege that the unpaid
contributions were due in July 2010 at the latest. (ECF No. 12,
at 1).
There is no indication in the complaint or the Eger
Declaration that this is the case. Accordingly, interest cannot
be calculated starting from that earlier date.
3
According to the liquidated damages provisions of the
trust agreements, liquidated damages are assessed on late
contributions until “the 15th of the month following the month
in which payment was due.” (Id. ¶ 7).
8
however, does not actually specify this interest rate.
The 12%
interest rate is presumably found in the trust agreements, but
Plaintiffs have failed to introduce the trust agreements into
the
record
here.
As
an
alternative,
the
Eger
Declaration
identifies 29 U.S.C. § 1132(g), which allows for interest to be
calculated pursuant to the Internal Revenue Code.
this
rate
scheme,
and
with
the
assumptions
According to
described
above,
Plaintiffs will be awarded $2,701.45 in interest.
D.
Attorneys’ Fees
Plaintiffs seek $787.50 in attorneys’ fees.
In support of
this request, Plaintiffs submit a Declaration of Attorney’s Fees
and Exhibit C, a spreadsheet of the hours billed by Plaintiffs’
counsel.
(ECF Nos. 12-3, 12-4).
Exhibit C indicates that the
firm spent 7.00 hours on this case on behalf of the Plaintiffs
at a rate of $100 per hour for paralegal time and $275 per hour
for attorney time.
(ECF No. 12-4).
The paralegals spent 6.5
hours on this case and the attorneys spent 0.5 hours on this
case.
(Id.).
The sum of $787.50 is accurate based on the rates
and times listed in Exhibit C and is sufficiently supported by
the record.
E.
Costs
Plaintiffs
seek
$350.00
in
costs.
In
support
of
this
request, Plaintiffs submit Exhibit C, a spreadsheet of the costs
incurred by Plaintiffs’ counsel.
9
(ECF No. 12-4).
Exhibit C
indicates
that
filing fee.
the
(Id.).
costs
included
$350.00
for
the
complaint
The sum of $350.00 is accurate based on the
figures listed in Exhibit C and is sufficiently supported by the
record.
IV.
Conclusion
For the foregoing reasons, Plaintiffs’ amended motion for
default judgment will be granted in part and denied in part.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
10
A
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