Trustees of the Plumbers and Gasfitters Local 5 Retirement Savings Fund et al v. Utley Mechanical, Inc.

Filing 16

MEMORANDUM OPINION (c/m to Defendant 11/26/12 sat). Signed by Chief Judge Deborah K. Chasanow on 11/26/12. (sat, Chambers)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
TRUSTEES OF THE PLUMBERS AND
GASFITTERS LOCAL 5 RETIREMENT
SAVINGS FUND, et al.

:
:

v.

:

Civil Action No. DKC 11-2610

:
UTILITY MECHANICAL, INC.
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this action
arising under the Employee Retirement Income Security Act of
1974

(“ERISA”)

is

a

motion

for

default

judgment

filed

by

Plaintiffs, the trustees of the Plumbers and Gasfitters Local 5
Retirement

Savings

Apprenticeship
Productivity

Fund,
Fund,

(collectively,

“the

Fund,

the

Vacation
Industry
Local

5

Plumbers
Fund,

and

Pipefitters

Communication

Fund,

and

Funds”);

the

Medical

and
Fund

Plumbers

and

Pipefitters National Pension Fund and the International Trading
Fund

(together,

“the

National

Local Union No. 5 (“the Union”).

Pension

Funds”);

(ECF No. 15).1

and

Plumbers

The relevant

issues have been briefed and the court now rules pursuant to
Local Rule 105.6, no hearing being deemed necessary.
1

For the

The Local 5 Funds and the National Pension Funds are
collectively referred to as “the Funds.”
The combined
plaintiffs – i.e., the Funds and the Union – are referred to as
“Plaintiffs.”

reasons that follow, the motion will be granted in part and
denied in part.
I.

Background
The following facts are alleged in the complaint.

Funds

are

multiemployer

benefit

plans

within

the

The

meaning

of

sections 3(3) and (37) of ERISA, 29 U.S.C. §§ 1002(3) and (37).
The Union is an unincorporated labor organization, as that term
is defined in section 2(5) of the Labor Management Relations Act
(“LMRA”), 29 U.S.C. § 152(5).

Defendant Utley Mechanical, Inc.,

a District of Columbia metropolitan area plumbing contractor or
subcontractor, is an employer in an industry affecting commerce,
as defined in sections 501(1), (3), and 2(2) of the LMRA, 29
U.S.C. §§ 141(1), (3), and 152(2); sections 3(5), (9), (11),
(12), and (14) of ERISA, 29 U.S.C. §§ 1002(5), (9), (11), (12),
and

(14);

and

section

3

of

the

Multiemployer

Pension

Plan

Amendments Act of 1980, 29 U.S.C. § 1001a.
Pursuant

to

a

collective

bargaining

agreement

(“CBA”),

Defendant agreed to make payments to the Funds of “certain sums
of money for each hour worked by [its covered] employees.”
No. 1 ¶ 23).

(ECF

Some of Defendant’s covered employees “authorized

working assessment/dues deduction[s],” which the CBA required
Defendant to transmit directly to the Union each month.
¶ 32).

(Id. at

The CBA further provided that, in the event of a breach,

Plaintiffs were entitled, inter alia, “to conduct an audit of
2

[Defendant’s]
accounting.
In

payroll

and

related

records”

to

ensure

proper

(Id. at ¶ 29).

2010,

contributions.

Defendant

fell

behind

on

its

scheduled

On September 2, 2010, a meeting was held between

representatives of the Union and Defendant to discuss settlement
of

delinquent

amounts

owed

to

the

Funds.

By

a

letter

of

settlement dated September 23 (“the settlement agreement”), the
parties agreed that, as of August 31, 2010, Defendant owed the
Funds

$270,211.89,

consisting

of

unpaid

contributions

of

$196,966.30, liquidated damages of $63,743,24, and interest of
$9,502.34.

Plaintiffs “agreed to hold [the liquidated damages

amount] in abeyance until all settlement payments and current
contributions [were] received, at which time [Defendant could]
request

in

writing

that

the

liquidated

$63,743.24 be waived by the Funds.”

damages

amount

(ECF No. 1-1, at 1).

of

Thus,

“[t]he total amount to be paid pursuant to [the] settlement
[was] $206,468.64, plus interest at the rate of 10% per annum
over a period of 12 months[.]”
agreement
(including

specified

that

settlement

“[i]f
payments

(Id. at 1-2).2
any

monthly

and

The parties’

payment

future

is

late

reports

and

contributions), this will be considered a breach . . . and the

2

While not relevant here, the parties subsequently modified
the agreement to set forth a schedule of payments over an
eighteen-month term. (ECF No. 1-2).
3

Funds will take immediate steps to collect all amounts owed.”
(Id. at 2).
Defendant failed to make payments due under the settlement
agreement for March through August 2011.

Defendant additionally

failed to pay amounts due to the Funds pursuant to the CBA for
work performed by covered employees from January to September
2011.

During the same time period, Defendant “failed to forward

working assessments to [the Union] . . . on behalf of [its]
employees[,] as required [under the CBA].”
Plaintiffs

commenced

this

action

(Id. at ¶ 32).

on

September

13,

alleging breach of the settlement agreement and the CBA.

2011,
Their

complaint sought a judgment holding Defendant “liable for unpaid
contributions and other amounts due and owing . . . under the
terms of the Letter of Settlement in the amount of $205,030.34”;
for unspecified amounts “owed under the [CBA] . . . for work
performed from January 2011 through the date of judgment”; for
“liquidated damages and interest owed on all late and unpaid
amounts from the date due through the date of payment, plus
costs, and reasonable attorneys’ fees”; “for contributions owed
to

[Plaintiffs]

lawsuit

and

up

which
to

the

became
date

due
of

after

the

judgment,

filing

plus

of

[the]

interest

and

liquidated damages”; and “[f]or all amounts owed to [the Union]
for unpaid dues and work assessments.”
Plaintiffs

further

requested

“a
4

(ECF No. 1, at 9-10).

[c]ourt

[o]rder

requiring

[Defendant]

to

submit

all

payroll

books

and

records

to

[Plaintiffs] for an audit, at the Defendant’s expense, for the
period of January, 2008[,] through and including the date of
judgment.”

(Id. at 10).

Defendant, whose resident agent was served on November 3,
2011,

failed

to

answer

or

moved for entry of default.

otherwise

respond,

and

Plaintiffs

When Defendant failed to respond to

that motion, the clerk entered default on January 24, 2012.
Plaintiffs
March 30.
II.

filed

the

pending

motion

for

default

judgment

on

(ECF No. 15).

Standard of Review
Under

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

party’s default.”

or

otherwise,

the

clerk

must

enter

the

Where a default has been previously entered

by the clerk and the complaint does not specify a certain amount
of damages, the court may enter a default judgment upon the
plaintiff’s

application

and

notice

pursuant to Fed. R.Civ.P. 55(b)(2).

to

the

defaulting

party,

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.

See Lewis v. Lynn, 236 F.3d 766, 767 (5th Cir. 2001).

The Fourth Circuit has a “strong policy” that “cases be decided
5

on their merits,” Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md.
2002) (citing United States v. Shaffer Equip. Co., 11 F.3d 450,
453 (4th Cir. 1993)), but default judgment may be appropriate
where

a

party

is

unresponsive,

see

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)).
“Upon [entry of] default, the well-pled allegations in a
complaint as to liability are taken as true, but the allegations
as

to

damages

Federal

Rule

are
of

not.”

Civil

Lawbaugh,

Procedure

359

54(c)

F.Supp.2d

limits

the

at

422.

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
amount.”

have

expected

his

damages

exceed

that

“the

court

Where a complaint does not specify an
is

required

to

determination of the sum to be awarded.”
F.Supp.2d

would

In re Genesys Data Technologies, Inc., 204 F.3d 124,

132 (4th Cir. 2000).
amount,

that

15,

17

(D.D.C.

2001)

(citing

make

an

independent

Adkins v. Teseo, 180
S.E.C.

v.

Management

Dynamics, Inc., 515 F.2d 801, 814 (2nd Cir. 1975); Au Bon Pain
6

Corp. v. Artect, Inc., 653 F.2d 61, 65 (2nd Cir. 1981)).

While

the court may hold a hearing to consider evidence as to damages,
it is not required to do so; it may rely instead on “detailed
affidavits or documentary evidence to determine the appropriate
sum.”
v.

Adkins, 180 F.Supp.2d at 17 (citing United Artists Corp.

Freeman,

605

F.2d

854,

857

(5th

Cir.

1979));

see

also

Laborers’ District Council Pension, et al. v. E.G.S., Inc., Civ.
No. WDQ–09–3174, 2010 WL 1568595, at *3 (D.Md. Apr. 16, 2010)
(“[O]n
without

default
a

judgment,

hearing

if

the

the

Court

the

record

truth

may

only

award

damages

the

damages

supports

requested.”).
III. Analysis
Assuming

of

the

well-pleaded

allegations

contained in the complaint, as the court must upon entry of
default, Plaintiffs have established Defendant’s liability for
breach of the settlement agreement and the CBA.

With respect to

damages,

the

they

now

seek

a

total

award

in

amount

of

$461,944.42, consisting of $167,170.85 to the Local 5 Funds and
$46,068.14 to the National Pension Fund related to breach of the
settlement

agreement;

$123,666.40

to

the

Local

5

Funds

and

$69,478.42 to the National Pension Fund for unpaid contributions
since January 2011, plus $29,146.45 in liquidated damages and
$12,367.63 in interest; $11,957.77 in unpaid working assessments
and dues to the Union; $2,088.75 in attorneys’ fees and costs;
7

and injunctive relief.

Each category of monetary damages is

supported by a declaration and attached documentary evidence.
A.

Damages Related to Breach of the Settlement Agreement

As

noted,

the

complaint

requests

damages

“for

unpaid

contributions and other amounts due and owing . . . under the
terms

of

the

$205,030.34.”
a

default

agreement

[settlement

(ECF No. 1, at 9).

judgment
in

agreement]

related

the

total

to

the

amount

of

Plaintiffs now seek entry of

the

amount

in

breach
of

of

the

settlement

$213,238.99

–

more

specifically, $167,170.85 to the Local 5 Funds and $46,068.14 to
the National Pension Funds.
In support of the amount sought on behalf of the Local 5
Funds, Plaintiffs submit the declaration of James E. Killeen,
III,

the

trustee

of

those

funds

and

the

business

financial secretary, and treasurer of the Union.
4).

(ECF No. 15-

Mr. Killeen asserts:
Pursuant to the terms of the [settlement
agreement], Defendant owed $206,469.64 of
which $151,043.30 was owed to the Local 5
Funds.
Defendant made seven settlement
payments
totaling
$81,933.79
of
which
$51,803.08 was due to the Local 5 Funds and
was applied to the principal amount owed
leaving a balance owed of $157,545.66.
Defendant is in default in the amount of
$167,170.85
which
consist[s]
of
contributions ($92,209.87), accrued interest
($9,625.19) calculated from the date of the
last settlement payment of March 15, 2011
through March 30, 2012 at 10% per annum on
the principal amount owed of $92,209.87
8

manager,

($144,012.95
less
principal
payments
totaling
$51,803.08)
for
contributions.
Pursuant to the [settlement agreement] the
amount of $167,170.85 is immediately due and
pay[able] to the Local 5 Funds.
(ECF No. 15-4 ¶ 7).
It is not at all clear how Mr. Killeen arrived at this
figure.

Pursuant

to

the

settlement

agreement,

principal amount owed to all funds was $206,468.64.
2, at 3).

the

total

(ECF No. 1-

If, as Mr. Killeen suggests, $151,043.30 of that

amount was owed to the funds he represents, and $51,803.08 was
paid to those funds, the baseline principal amount owed to the
Local 5 Funds would be $99,240.22, not $157,545.66.

Because the

calculation of the principal amount appears to be erroneous, the
interest is incorrect as well.3
The amount sought on behalf of the National Pension Funds
is supported by the declaration of Robert H. Cooke, director of
contributions

and

pensions

National Pension Fund.

of

the

Plumbers

(ECF No. 15-5).

and

Pipefitters

Mr. Cooke initially

asserts that the settlement agreement required “the payment of
the principal amount of $206,468.64 in contributions and accrued
interest

owed”

to

all

funds,

3

and

that,

of

that

amount,

Unfortunately, the spreadsheet attached to Mr. Killeen’s
declaration only confuses matters further.
(ECF No. 15-4, at
7).
That document reflects that the total amount owed to all
funds was $209,348.74, rather than $206,468.64, as reflected in
the settlement agreement itself, or $206,469.64, according to
Mr. Killeen’s declaration.
9

“$55,385.35 [was] owed to the National Pension Fund.”
6).

(Id. at ¶

In the very next paragraph, however, he presents slightly

different

numbers

–

“Defendant

owed

$206,469.64

of

which

$55,395.35 was owed to the National Pension Fund” (id. at ¶ 7) –
and

the

attached

spreadsheet

inexplicably

shows

a

baseline

principal amount due to the National Pension Fund of $60,864.14
(ECF No. 15-5, at 6).
Plaintiffs

have

failed

to

establish

the

amount

damages for breach of the settlement agreement.
their

motion

will

be

denied

with

respect

to

owed

as

Accordingly,
those

damages,

subject to renewal within fourteen days.
B.

Damages Related to Unpaid Contributions from January
2011 to February 2012

Mr. Killeen’s declaration is also insufficient to support
the

requested

judgment

contributions,

liquidated

2011

February

through

amount

with

damages,

and

2012.

He

respect
interest

initially

to

unpaid

from

January

asserts

that

“Defendant has failed to pay contributions to the Local 5 Funds
for the months of January 2011 through February 2012 in the
amount of $123,666.40 pursuant to unfunded reports submitted by
Defendant.”

(ECF

No.

15-4

¶

10).

The

declaration

later

suggests, however, that contributions for at least some of these
months were “submitted late[.]”

(Id. at ¶ 13).

Indeed, while

the attached spreadsheet appears to show unpaid contributions

10

totaling $123,666.40, thereby suggesting that no contributions
were made, it also purports to calculate liquidated damages and
interest for late-paid contributions from April through August
2011.

(ECF No. 15-4, at 7).

Thus, it is not at all clear what

contributions, if any, remain outstanding and what amounts were
paid.

Due

to

the

uncertainty

regarding

the

contribution

amounts, the court is also unable to verify the amounts sought
as liquidated damages and interest.
request

for

contributions,

default
liquidated

judgment
damages,

Accordingly, Plaintiffs’

with
and

respect
interest

to
owed

unpaid
to

the

Local 5 Funds will be denied, subject to renewal within fourteen
days.
By contrast, Mr. Cooke’s declaration with respect to the
National Pension Funds does support the requested judgment.

Mr.

Cooke asserts that “Defendant has failed to pay contributions to
the National Pension Fund[s] for the months of January 2011
through February 2012 in the amount of $69,478.42 pursuant to
unfunded reports submitted by Defendant[.]”

(ECF No. 15-5 ¶ 8).

According to the CBA, “an employer who fails to pay the amounts
required . . . on time to the National Pension Fund shall be
obligated to pay liquidated damages of 10% of the amount of the
delinquency contributions, together with interest at the rate of
12% per annum from the date of the delinquency through the date
of

payment[.]”

(Id.

at

¶

10).
11

With

respect

to

the

International

Training

Fund,

the

CBA

assesses

“liquidated

damages of 20% of the amount of the delinquency contributions,”
plus 12% interest.

(Id. at ¶ 12).

The attached spreadsheet

shows total unpaid contributions to the National Pension Funds
of

$69,478.42,

total

liquidated

damages

of

$7,066.18,

interest through the date of filing totaling $4,259.25.

and
Thus,

Plaintiffs have shown entitlement to judgment in the amount of
$80,803.85,

representing

contributions,

liquidated

amounts
damages,

sought

and

for

interest

owed

unpaid
to

the

National Pension Funds.
C.

Unpaid Union Dues and Work Assessments

The complaint establishes that Defendant “employed certain
employees

covered

assessment/dues

by

the

deduction,”

[CBA]
but

who

“failed

authorized
to

forward

working
working

assessments to [the Union] for the months of January 2011 to the
present on behalf of the employees as required.”
32).

(ECF No. 1 ¶

Mr. Killeen’s declaration and attached documentation shows

the amounts owed for each of the months in question, totaling
$11,957.77.

(ECF No. 15-5 ¶ 18).

Thus, the Union is entitled

to a default judgment in that amount for unpaid dues.
D.

Attorneys’ Fees

Plaintiffs additionally seek an award of attorneys’ fees in
the

amount

of

$1,603.75.

In

support

of

their

fee

request,

Plaintiffs submit the declaration of their counsel, R. Richard
12

Hopp, an attorney with over twenty years of experience, along
with a document detailing attorney and paralegal time expended
on the case.

(ECF No. 15-6).

These documents indicate that the

firm spent a total of 12.25 hours on the case on behalf of
Plaintiffs, charging an hourly rate of $105.00 for paralegal
time and $225.00 for Mr. Hopp’s time.

These hourly rates fall

within the presumptively reasonable range under the guidelines
set forth in Appendix B of the court’s local rules, and the
number of hours appears to be reasonable.

Thus, Plaintiffs are

entitled to recover attorneys’ fees in the amount of $1,603.75.
E.

Costs

Plaintiffs seek costs totaling $485.00 for the complaint
filing fee and the fee of a private process server.
15-6 ¶¶ 5, 6).

(ECF No.

The docket reflects that Plaintiffs paid the

$350.00 filing fee and Mr. Hopp has attached an invoice from a
process server in the amount of $135.00.

(ECF No. 15-6, at 4);

see also Wyne v. Medo Industries, Inc., 329 F.Supp.2d 584, 590
(D.Md. 2004) (finding that “fees associated with private process
servers are taxable costs”).

Accordingly, costs will be taxed

in favor of Plaintiffs in the amount of $485.00.
F.
As
breach,

Injunctive Relief
noted,

the

CBA

establishes

Plaintiffs

are

entitled

that,
“to

the

conduct

[Defendant’s] payroll and related records.”
13

in

an

event

of

audit

(Id. at ¶ 29).

a
of

The

court is authorized to grant such relief by default judgment,
see International Painters and Allied Trades Industry Pension
Fund v. Libmak Co., LLC, Civil Action No. ELH-12-1125, 2012 WL
5383313,

at

*10

(D.Md.

Oct.

31,

2012),

and

Plaintiffs

are

entitled to conduct an accounting.
IV.

Conclusion
For

the

foregoing

reasons,

Plaintiffs’

motion

will

be

granted in part and denied in part.

Plaintiffs are entitled to

a

of

default

judgment

contributions,
National

in

the

liquidated

Pension

amount

damages,

Funds;

and

$11,957.77

$80,803.85
interest
for

for
owed

unpaid

unpaid
to

the

working

assessments and dues to the Union; $1,603.75 in attorneys’ fees;
and

costs

in

the

amount

of

$485.00.

They

are

additionally

entitled to conduct an audit of Defendant’s payroll records.
They

have

not

established

entitlement,

however,

to

requested

amounts related to breach of the settlement agreement or for
unpaid contributions, liquidated damages, and interest owed to
the Local 5 Funds.

As to these amounts, Plaintiffs may file a

supplemental motion for default judgment within fourteen days.
A separate order will follow.

________/s/_________________
DEBORAH K. CHASANOW
United States District Judge

14