Sheet Metal Workers' Local Union No. 100 Washington, D.C. Area Pension Fund et al v. Western Surety Company

Filing 35

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 5/17/2016. (kns, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern l)ivision

*
SHEET METAL WORKERS' LOCAL
UNION NO. 100WASHINGTON, D.C.
AREA PENSION FUND, et al.,

*
*

I'laintiffs,

Case No.: G.JH-15-1175

*
v.
*
WESTERN SURETY COMI'ANY,

*
Defendant.

*
*

*

*

*

*

*

*

*

*

*

*

*

*

MEMORANDUM OPINION
In this action. Plaintiffs. the Sheet Mctal Workers' Local Union No. I DO (the "Union").
Sheet Metal Workers' Local Union No. 100 Washington. D.C. Arca Pension Fund. Shcct Metal
Workers' Local Union No. 100 401(k) Fund. Sheet Metal Workers' Local Union No. 100
Washington. D.C. Area Apprenticeship Fund. Sheet Metal Workers' Local Union No. I DO
Washington. D.C. Area Vacation Fund. and Sheet Metal Workers' Local Union No. I DO
Washington. D.C. Area llealth Fund (collectively. "Benefit Funds") seek to recover on a lj'ingc
benefit bond on which Defendant. Western Surety Company ("Western Surety"). is the surety.
Currently pending bel()re the Court is Plaintiffs' Motion for Summary Judgment. Eel' No. 3D.
No hearing is necessary to resolve the Motion. See Local Rule 105.6 (D. Md.). For the reasons
that follow. Plaintitl's' Motion is GRANTED. in part. and DENIED. in part.

I.

BACKGROUND

I

Before it ceased operations. United Sheet Metal. Inc. ("United") was a sheet metal
subcontractor that employed members of the Union on various construction projects. ECF No. 32
at 1.2 In July 2009. the Union and United entered into a collective bargaining agreement
("CSA") in which United agreed to pay set amounts or contributions to the Bene/it Funds. ECF
No. 30-2 at 37. In a "Washington. D.C. Area Addendum" to the CBA (the "Addendllln"). the
Union and United agreed to maintain and operate through trustees the various distinct trust
funds, which were to be governed in accordance with the Labor-Management Relations Act. 29
U.S.C. ~~ 157 el seq. and the Employee Retirement Income Security Act ("ERISA"). 29 U.S.C.
1001 el seq3 Jd. The Union and United also agreed to be bound by the terms of the Benefit
Funds' respective Restated Agreements and Declarations of Trust ("Trust Agreements"). Id at
37-38. Pursuant to the Trust Agreements. the trustees were authorized to enforce the payment of
contributions in the manner in which they deemed proper. and they were not required to compel
or enforce payment it: in the opinion of the trustees. any such enforcement would "involve an
expense greater to the [Benefitj Fund than the amount to be obtained Ii'om any effort to compel
or enforce the payment of the [cjontributions," It/. at 73: see also hi. at 107. 152. 186-87. 235.
Pursuant to the CBA. United was required to make contributions to each lund for "all
hours worked" by Union members no later than the 20th day of the month following the month
I

All facts are viewed in the light

2 All pin cites to documents
generated by that system.

l11os1 favorable

to

the

nOIl-lllovant.

filed 011the COllrt"S electronic

tiling system (CM/ECF)

refer to the page numbers

, The CBA indicates that it is applicable in "the District of Columbia. the ENTIRE stale of Maryland and Ihe
ENTIRE state of Virginia (with ,hI? excepfion ol/11/chanan, Dickenson. Lt!I!, Russell. Scull. Smyth. Ta:eU'ell,
Washing/on, and Wise Counfil!s, J'irginil1). and West Virginia Counties
Berkeley. Grant. Hampshire. Ilardy.
Jefferson. Mineral and Morgan:' EeF No. 30-2 al IS (emphasis in original). The Addendum. by contrast. is
applicable in "[the] District ofColulllbia:
Virginia Counties of Arlington. Clarke. Culpeper. Fairfa,. Fauquier.

or

Frederick, Loudoun. Louisa. Page. Prince William. Rappahannock. Rockingham. Shenandoah. Spotsylvania.
Stafford. and Warren; Maryland Counties of Calvert. Charles. Montgomery. Prince George's. and Saint Mary's:' Id.
at 35.

2

during which the work was performed:

United was dcemed "in de!tlUlt .. if it failed to abide by

this deadline. See ill. at 3. 37-39. United was responsible
worked by each Union member and. accordingly.

lor sell:reporting

for calculating

the number of hours

the amount of contributions

owed in any given month. though the trustees of the Benelit Funds were required to periodically
audit United to ensure that hours were being properly reported and all applicable
were paid.

It!. at 23. 39. In accordance

remittance

reports to Plaintiffs

detailing

with this obligation.

contributions

each month. United submitted

the number of hours worked and contributions

owed.

See ill. at 3.
The CBA also required that United post a bond "to ensure the payment of wages,
contributions
Contractors
principal

and deductions

...

:' Id at 39. On Septcmber

Fringe Bcnefits Bond (the "Bond")

Western Surety issued a

in the amount 01'$500.000 naming United as its

and the Union and Benefit Funds as its obligees.

contract provided.

1.2011,

Ill. at 250-251. The two-page

Bond

in relevant part:

WHEREAS. the above-named Principal [i.e .. United] is employing employees lor
the purpose of perflmning sheet metal work in the territory within the jurisdiction
of the Union as defined in the collective bargaining agreement now in full lorcc
and effect between the Principal and the Union ... which results in the Principal
being obligated to pay wages to the employees. pay dues to the Union and pay
contributions to the Funds.
NOW. THEREFORE,
the conditions of this Bond are such that if the Principal
timely pays the amounts due Ito] the IBenefitJ Funds. the Union and the
Employees under the terms of the collective bargaining agreement. any successor
thereto, and any other agreement. then the obligation under this Bond shall bc
void: otherwise
the same shall remain in liJrce and elfect. It is expressly
understood and agreed that the Surety shall become obligated under this Bond to
pay such wages. dues, and contributions as are due and unpaid by the Principal.
The Surety further agrees to pay any liquidated damages in the amount of 20% of
the delinquent contributions. interest on the delinquent contributions at the rate of
I% per month from date due to date paid, and all attorneys'
fees and costs
incurred by the Union and the [Benelit 1 Funds in collecting such amounts as arc
due.

3

[d. The Bond further provided that Western Surety agreed to pay the Union and Benelit Funds
"promptly alier receipt ofa notice Ii'om the Union or the [Benefit] Funds to the Surcty of the
delinquency in payment of wages. dues or contributions by [United]."' ld. at 251. Finally. thc
Bond allowed Western Surety to cancel it by providing 90 days written notice to Plaintiffs and
United. [d.
On October 4.20 I0: United and Wcstern Surety entcrcd a Gcncral Agrecment of
Indemnity ("Indemnity Agreemcnt"). in which Unitcd agrced to indemnify Westcrn Surety
"against every claim. demand. liability. cost. charge. suit. judgment and expcnse which I Western
Surety] may payor incur in consequenee of having executed

[the Bond]

ECF No. 30-3

at 20. Under the Indcmnity Agreement. in the event of a delault by United. Western Surcty was
entitled to all ofUnite,fs

rights under various bonded agrccments. all proceeds Irom bonded

contracts. and an assignment of United's "machinery. plant. equipment. tools and materials
[d. at 21. Additionally. United was rcquired to providc Wcstern Surety with trce acccss to its

books and rccords. and was required to submit to a credit report at thc time thc Indemnity
Agrcement was entered. as well as "in any revicw or rencwal. at thc timc of any potcntial or
actual claim, or for any other legitimatc purpose as detcrmined by [Westcrn Surety] in its
reasonable discrction'" [d.
Around October or November of 20 13. United fell behind in contributions owcd to thc
Union and Benelit Funds. The Union sent a letter to United on Dcccmber 5. 2013 notifying
United that it owed contributions for work pcrformed in Septcmbcr and Octobcr of 20 13. ECF
No. 30-2 at 253-54. 258. In rcsponse. Unitcd indicatcd that it was having difficulty obtaining
paymcnt Irom ccrtain customers and it requested a payment plan to makc up for thc
~ Neither Plaintiffs nor Western Surety indicate how it came to be that \\.'estcrn Surety and United entered the
Indemnity Agreement before the Bond was executed in this casco but no party disputes that the Indemnity
Agreement applies with respect to the tlond. See. e.g. ECF No. 31 at 36: ECF No. 32 at I.

4

.

delinquencies. See hi. at 256-57. On Deccmber 6. 2013. PlaintitTs and United entcrcd a
settlement agreement in which thcy acknowledged that Unitcd was bchind on paymcnts for
September and October and that it appearcd unlikcly that Unitcd would be able to timely submit
contributions for November 2013. It!. at 262. Pursuant to thc scttlemcnt. Unitcd agrecd to make
weekly payments of $1 00.000 to pay all amounts due for thc pcriods up to and including thc
work month of November 2013. /d. In considcration of thc scttlcmcnt agreemcnt. Plainti ffs
agreed to forebear from filing suit or pursing a claim undcr the Westcrn Surety Bond or tiling
any bond claims with mechanical or other contractors for that time pcriod. It!. at 263.
On January 20. 2014. United requested that certain contributions owcd ti.Jrwork
performed in December 2013 be added to the amounts owed under thc settlcmcnt payment plan.
and Plaintiffs agreed to do so. See it!. at 265. And on February 20. 2014. Unitcd requcstcd that
certain contributions owcd tor work pertormed in January 2014 also be added to the paymcnt
plan, and Plaintiffs again agreed. See it!. at 267. At no point betwccn Octobcr 2013 and Fcbruary
2014 was Western Surety providcd notice ofUnited's

delay in submitting contributions during

those months. or of the payment plan entercd betwecn Plaintiffs and Unitcd. ECF No. 32 at 2.
United continucd to submit weekly payments of $100.000 to Plaintiffs through March 6.
2014. ECF No. 30-2 at 6. Then. on March 13. 2014. the Union rcceived notice that United had
ceased operations and laid ofT its cmployecs. Id.: see a/so it!. at 270. As of that date. United had
submitted weekly payments sufficicnt to pay Plaintiffs for all amounts owed through Decembcr
2013, as well as part of the contributions owed Ii.JrJanuary 2014. Id. at6.
On March 20. 2014. Plaintiffs sent a lettcr to Western Surety notil)'ing it that Unitcd had
ceased operations on March 12.2014 and that PlaintifTs sought to recover under the Bond./d. at
270. The letter indicated that the amount due lor January 2014 was $314.138.32. but that United

5

had a credit of $92.262.66 that was applied to that amount. leaving a balance 01'$221.875.66. Jd.
at 269. The letter further noted that interest was due on any January eontributions paid late.
which would be calculated once all January contributions were received by Plaintiffs. and that
Plaintiffs would separately request attorneys' fees and costs. Id. at 269-70. I'inally. the letter
indicated that United would still owe contributions for work complcted in February and March
2014. and that ifPlaintifTs did not receive the amounts owed when they became due. Plaintiffs
would amend their bond claim to include those slilns. interest. and additional attorneys' fees and

costs.ld. at 270. Attached to the letter were the reports submitted by United to Plaintiffs
documenting the hours workcd and contributions owed f()r the month of January 2014. Jd. at
271-342.
On March 21, 2014. Plaintiffs sent another lettcr to Western Surety notif~.ing it that
United failed to pay contributions owed for work completed in February 2014. which totaled
$332,162.96.1d.

at 345-46. And on June 24. 2014. Plaintiffs inf(mned Western Surety that

United failed to pay contributions owed for work completed in March 2014. which totaled
$117,162.63.1d. at 413-14. Atlached to both the March 21 and June 24 letters were the reports
that United submitled to Plaintiffs documenting the hours worked by Union members during the
months of I'ebruary and March 2014 and the total contributions owed for those months. Jd. at
347-410,415-43.

In all. the amount claimed on the Bond totaled $671.201.25. plus interest. late

fees, atlorneys' fees and costs. Id. at 413. Alier receiving notice of these claims under the Bond.
in July 2014, Western Surety registered its Indemnity Agreement with United as a security
interest with the Maryland Department of Assessments and Taxation and the Florida Sccured
Transaction Registry. See Eel' No. 30-3 at 29-60.

6

Between January and March 2014. United served as a subcontractor on at least twelve
difTerent construction projects5 See ECF No. 30-2 at 519. PlaintifTs indicated in the June 24
letter that they had filed claims for payment on project-specific bonds securing work performed
by United on multiple projects. lei. at414. As of that date. however. Plaintiffs had not received
payment on any of those bond claims. Id.
Westem Surety initially responded to Plaintiffs claims by seeking fimher documentation
to aid its investigation of the Bond claim. such as copies of the C13A and documentation setting
forth the contribution rates. ld. at 445-46. Plaintiffs supplied the requested documentation on
April 7, 2014. Id. at 448-96. On July 3 I. 2014. Western Surety sought additional infi)J'Jnation
from Plaintiffs. specifically:
(I) the projects on which the fringe benefit contributions are attributable. (2) the
amounts of the claims on a project-by-project basis. (3) those parties in thc
eontraetual chain (e.g.. the owners. general contractors and subcontractors in the
tiers above United ... ) for each project. (4) whethcr there are any contract.
subcontract or sub subcontract payment bonds. (5) whether United ... furnished a
contractor's license bond and (6) the identity of any sureties.
lei. at 498. Plainti fTsresponded with cel1ain requested infi)J'Jnation on or around August 8. 2014.
ld. at 501. They provided documentation of the hours worked by Union members on live
projects during the relevant time period bctween January and March 2014. See it!. at 503-09.
540-66. Plaintiffs indicated that they had filed bond claims for funds owed on four different
jobs: $72.115.46 for work completed by Union members at St. Charles lligh School. $4.063.44
for work completed at Hyattsville Elementary. $42.273.08 for work completed at Rockville
Judicial Center Annex. and $63.304.16 fi)r work completed at Coppin State University. lei. at
501. Plaintiffs also provided copies of the bonds for three of those projects. but indicated that.
In pursuing their bond claim against Western Surety. Plaintiffs provided a list of twelve projects 011 which Union
members \\:orked during the relevant time period. ECF No. 30-2 at 519. In a declaration in support of the Motion.
however, John R. Shields. the business manager for the Union. referenced a thirteenth project. but he indicated that
Plaintiffs have already fully recovered the contributions owed for that project. Id. at 7.
5

7

despite their efforts. they were unable to obtain a copy of thc bond for the Coppin State
University project.6 /£1.:see a/so ill. at 510-17. 520-24. 525-31. Project-speci lic bonds cxisted
for an additional five projects on which Union members worked. but Plaintiffs did not submit
claims on those bonds. See ECl' No. 31-2: ECF No. 31-8: ECF No. 31-11: ECF No. 31-13: ECF
No. 31-14; ECFNo. 32-1 at 4-5. As of the tiling of the present Motion. however. Plaintiffs have
fully recovered the contributions owed lor hours worked on three projects. and have filcd a
lawsuit to enforce a bond covering a fourth project. ECl' No. 30-2 at 7-8.
After Western Surety refused to remit any payment on Plaintiffs' bond claim. Plaintiffs
initiated the present action in the Circuit Court for Prince George's County. Maryland. See ECl'
NO.2. Western Surety removed the action to this Court on the basis of diversity jurisdiction on
April 24, 2015. See ECF NO.1; see a/so 28 U.S.c.

* 1332: 28 U.S.c.

1441. Western Surety

answered Plaintiffs' Complaint on May I. 2015. and Plaintiff filcd the pending Motion for
Summary Judgment on October 19.2015. ECF Nos. 16 & 40.

II.

STANDARD OF REVIEW
"Under [Federal Rule of Civil I'rocedure] 56(e). sUlllmary judgment is proper 'ifthe

pleadings. depositions, answers to interrogatories. and admissions on file. together with the
affidavits, if any. show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law .... Celotex Corp.

I'.

Catrett. 477 U.S. 317. 322,

106 S.C!. 2548 (1986) (quoting Fed. R. Civ. P. 56(c)). The party moving for summary judgment
bears the burden of demonstrating that no genuine dispute exists as to material lacts, I'ulliam

/1/\'.

Co. v. Cameo I'rops .. 810 F.2d 1282. 1286 (4th Cir. 1987). If the moving party delllonstrates that
there is no evidence to support the non-moving party's case, the burden shins to the non-moving

6

Plaintiffs' claim under the Coppin State University bond was time-barred, and. accordingly. they did not recover

anything on that bond for contributions owed for work completed

8

all

that project. See ECF No. 31-7.

party to identify specific facts showing that there is a genuine issue for trial. See Celo/ex. 477
U.S. at 322-23. Importantly. at the summary judgment stage. it is not the Court's function to
weigh the evidence but simply to decide if there is a genuine issue for trial. Anderson v. Uherly
Lobby. Inc.• 477 U.S. 242. 249. 106 S. Ct. 2505 (1986). A "genuine" dispute of material fact is
one where the conflicting evidence creates "/air doubt:' Cox \'. Cmy. O(Prince Williwn. 249
F.3d 295, 299 (4th Cir. 2001), such that "a reasonable jury could return a verdict l'or the
nonmoving party:' £1nderson. 477 U.S. at 248.
When ruling on a motion for summary judgment. "[tlhe evidence of the non-movant is to
be believed. and alljustiliable

inferences are to be drawn in his lavor:' Id. at 255. Nevertheless. a

"mere scintilla of proof" is not enough to defeat a motion f(lr summary judgment. Pew's ,'.
Jenney, 327 F.3d 307, 314 (4th Cir. 2003) (citing Anderson. 477 U.S. at 252). To defeat the
motion, the party opposing summary judgment must submit evidentiary materials showing facts
on the basis of which the finder of fact could reasonably decide the case in its fin'or. Anderson.
477 U.S. at 252. If a party fails to make a showing suflicient to establish the existence of an
essential element on which that party will bear the burden of proof at trial. summary judgment is
proper. ld.
III.

DISCUSSION
A surety bond is a ..tripartite agreement among a principal obligor, his obligee. and a

surety." Na/"/ Union Fire Ins. Co. ,!O'illShurxh v. David £1.Bramble. Inc.. 879 A.2d 101. 107
(Md. 2005) (citations omitted). "It is a three party arrangement intended to provide personal
security for the payment of a debt or perf'onnance of an obligation:' ld. (internal quotation marks
and citations omitted). A surety. in other words, is "[a] person who binds himself/or the
payment of a sum of money. or far the performance of something else. l(lr another:' Id. "The

9

liability ofa surety is eoextensive with that orthe principal:' and thus ... the liability orthe surety
is measured by the contract of the principal." (Jell. Builders Supply Co. \'. MacAnhur.

179 A.2d

868, 871-72 (Md. 1962) (citation omitted); see also A II. Conlracling & ,IIll/erial Co. \". Ulico
Cas. Co., 844 A.2d 460, 468 (Md. 2004) ("The liability ora surety is coextensive with that orthe
principal. The surety is primarily or jointly liable with thc principal and. thcrefore. is
immediately responsible if the principal fails to perlol'ln:' (citations omitted)).
By way of background, suretyship originated in early Rome and England and
traditionally took the form of an uncompensated personal guarantee. See Nal '1Union Fire IllS..
879 A.2d at 107 C'A personal surety was not compensated and was motivated by duty rathcr than
profit.'"). Such personal sureties were ordinarily "favored by the law:' but with the emergence of
the compensated corporate surety as a business entity. the law developed such that "a surety
'whose obligation is deliberately entered into. as a commercial transaction. and with the
exclusive view to the pecuniary profit resulting from it:" it!. at 108 (quoting Smilh \".Turner. 61
A. 334, 336 (Md. 1905)). would not receive such favorable treatment. See AIC E/ec. Co. \'. Aelna
Ins. Co., 247 A.2d 708. 711 (Md. 1968) ("The doctrine that a surety is a favorite of the law. and
that a claim against him is strictissimi juris[7] does not apply where the bond or undertaking is
executed upon a consideration by a corporation organized to make such bonds or undertakings
for profit." (internal quotation marks and citation omitted)). Rather. because "a compcnsated
surety is in effect an insurer ....

its contract will be construed as an insurance contract most

strongly in favor of the party or parties protected thereby:' and therefore "Iorlciture on tcchnical
grounds [is] not ... favored:' It!. (quoting AIC Elec/ric. 247 A.2d at 711-12). In general.
however, ordinary principles of contract interpretation apply when interpreting surety bonds. See

7 Strictissimi juris is a Latin ternl of art meaning ..to be interpreted in the strictest manner:' Strictissimi
Lall' Dictionary (10th Ed. 2014).

10

juris. Black's

A/I. Contracting, 844 A.2d at 468 C"A surety bond is a eontract and is to be construed as such,"
(internal quotation marks and citation omitted».
Under Maryland law. which the Parties agree controls in this case, ECr No. 30-1 at 13:

ECF No. 31 at 23, courts follow the objective law of contract interpretation and construction. A
court construing an agreement under the objective theory "must first determine li'om the
language of the agreement itself what a reasonable person in the position of the parties would
have meant at the time it was effectuated:'

Taylor

I'.

Na/iollslJallk. N.A .. 776 A.2d 645. 653 (Md.

2001) (citation omitted). and. to the extent possible. "provisions of a contract are to be
interpreted,

, . so as to give elfect to all." Na/ '/ Unioll Fire IllS.. 879 A.2d at 110. The "cardinal

rule in the interpretation of bonds. as in the interpretation of all written contracts. is to ascertain
the intention of the parties and to give effect to that intention ... ,'. Lei)'

/0

Use (J(Walhrook .Ifill

& Lumher Co. v. Glells Falls fmlem. Co.. 123 A.2d 348. 352 (Md. 1956). But "when the
language of the contract is plain and unambiguous there is no room for construction. and a court
must presume that the parties meant what they expressed," Taylor. 776 A.2d at 653. Under this
view, "the clear and unambiguous language of an agreement will not give [ lway to what the
parties thought that the agreement meant or intended to mean," Jd Thus, on a motion Ii.lf
summary judgment. "a court will only consider extrinsic evidence concerning the parties' intent
ifit first deems the contract's language ambiguous," Ulliled Sla/es

I'.

!far/liml Accidelll &

lndell/. Co., --- F. Supp. 3d. ---, No. JKB-14-2148. 2016 WL 852730. at *6 (D. Md. Mar. 4.
2016) (citing Spacesaver Sys .. fnc. \'. Adam. 98 A.3d 264. 277 n. 12 (Md. 2014».
In this case. the language of the Bond is straightforward and unambiguous. It provides
that Western Surety would be liable to Plaintiffs li.)r"wages. dues. and contributions as arc due
and unpaid by [Unitedr

and that such payment would he remitted "promptly after receipt of a

II

notice from the Union or the [Benelit] Funds to the Surety of the delinquency in payment of
wages, dues or contributions by [United]:' ECF No. 30-2 at 251. Moreover. the Bond provided
that, if United failed to pay the amounts due to PlaintilTs. Western Surety agreed to pay
"liquidated damages in the amount of20% of the delinquent contributions. interest on the
delinquent contributions at the rate of I% per month li'OIndate due to date paid. and all
attorneys' fees and costs incurred by thc Union and the [Benefit] Funds in collecting such
amounts as are due." ld The evidence establishcs that United ceased operating in March 2014.
that it failed to submit contributions for the months of January through March 2014. that
Plaintiffs notified Western Surety of their claim under the Bond on March 20. 2014. and that
Western Surety has not yet paid any amounts owed under the Bond. See ECF No. 30-2 at 6. 26970. Thus, unless the Bond was voided in some lashion. Western Surety's liability under it is
clear.
Western Surety. however. contests liability in several respects. Specilically. it argues
that: (1) Plaintiffs breached a duty owed to Western Surety by failing to pursue project-specilic
contract payment bonds before seeking recovery under the Bond: (2) Western Surety was
relieved from liability under the Bond because Plaintiffs failed to provide notice ofUnited's
financial difficulties: and (3) Western Surety was relicved from liability when Plaintiffs agreed
to enter a payment plan with United and thereby modi lied the CBA. Finally. Western Surety
contends that, even ifPlaintilTs have established liability on the Bond. they have failed to carry
their burden of proof as to the amount of damages owed. In this regard. Western Surety argues
that the remittance reports submitted in support of Plaintifts' Motion constitute inadmissible

12

hearsay and, in any event. fail to establish the amount of damages owed.R The Court will
consider each of these arguments in turn.
A. Cosurel)'ship Issues
First, Western Surety argues that it has been released lI'om liability under the Bond
because Plaintiffs breached their duty to pursue or exhaust any project-specific contract bonds
that may have been available to them upon United's default. According to Western Surety.
because certain construction projects on which Union members worked during the relevant time
period were covered by payment bonds relevant to those particular projects. Plainti ffs had an
obligation to pursue recovery under those project-specitic bonds before seeking recovery Irom
Western Surety. See ECF No. 31 at 29-31. 39.
Although it does not appear that any Maryland court has explicitly detined under \\hat
circumstances a cosurety relationship exists. a case on which Western Surety relics in support of
its motion explains:
The test of cosuretyship is a common liability for thc same debt or burden. This
liability may arise at the same time or at different times, out of the same writing
or out of many writings. A common interest and a common burden alone arc
required to create the relation. and to enable the cosurety who has paid more than
his due proportion to claim contribution Irom those who have paid less than their
just proportion of the common liability.

us. Fie/. & GUOI'.Co. \'. Naylor.

237 F. 314. 316 (8th Cif. 1916): see also Arkansas \'. ['l!filhl. 52

F.2d 116, 120 (8th Cif. 1931) ("Sureties who arc bound for a common principal to insure the
performance of the same duty or obligation arc cosureties, but not if the obligations are different.
as where they are bound for ditferent portions of the same debt." (citations omitted)): Gen. Mills.
Inc. v. Wallner. 628 F. Supp. 1573. 1575 (D. Minn. 1986) ("If the guaranties are of separate
obligations. although arising out of the same transaction, the guarantors are not co-sureties and
The Court has reordered the arguments presented in Western Surety's brief and. in some circumstances. combined
certain arguments that the Court deems duplicative.
8

13

have no right to contribution. Obligations are separate where the guarantors are bound for
different portions ofthc same debt:}

The Maryland Law Encyclopedia similarly defines

cosuretyship as ..the relationship between two or more sureties who are bound to answer for the
same duty of the principal and who. as between themselves. should share the loss caused by the
default of the principal:' Kimberly C. Simmons. '\/wyland Lall' Encyclopedia: Sureties. ~ 42
(Mar. 2016) (footnote omitted).
When cosureties share a common liability. each surety is "liable only for their proportion
of the debt:' Smith v, State, to U,'e ,!/'Baltimore Oy, Comm'rs. 46 Md, 617. 619 (1877). and may
seek contribution from a cosurety when one pays more than their share of the debt. The right of
contribution docs not exist, however. "unless [the surety I hal sJ paid an amount exceeding this
proportion:'

Id.: see also Nally \'. Long. 56 Md. 567. 572 (1881) ("[T]he equitable obligation.

which binds one surety to contribute to another. springs up at the time the relation is entered into.
and is consummated when the surety has paid the debt:' (internal quotation marks and citation
omitted)); Simmons. supra. ~ 44 ("The right to contribution arises between sureties only when
one has paid or satisfied more than his or her proportionate share of the principal obligation,"),
Moreover, "[a] creditor whose debtor has defaulted may proceed against any of the debtor's
sureties or guarantors to collect the outstanding indebtedness: he is not required. according to the
general rule, to attempt to collect his debt piecemeal

1"0111

each of the various cosureties or

coguarantors." Roland F, Chase. Right oj'guarantor or surety. in order /() amid paying alllll/lJ1t
in excess of his proportionate share, to cOlJ1pelcoguarantors or cosureties to pay their share to
creditor, 38 A.L.R.3d 680 ~ 2[aJ (1971).
Here, none of the project-specific bonds that Western Surety contends preclude Plaintiffs'
recovery list United as the principal. See ECF No, 31-2: ECF No. 31-4: ECF No. 31-8: ECF No,

14

31-11; ECF No. 31- J 3: ECF No. 31-14. It is unlikcly. therefore. that Maryland courts would
deem any of the sureties on those bonds to be cosureties with Wcstcrn Surcty. But cvcn ifthcy
were deemed to be cosureties. as the fi.lregoing authorities demonstratc. the only benclit this
would provide to Western Surety would be to allow it to seek contribution Irom thosc cosmctics
in the event Western Surety pays more than its proportionatc sharc of its liability to Plaintiffs.
Accordingly, the existence of other bonds covering specific construction contracts does not
impact Western Surety's liability on the Bond at issue in this case.
B. Notice of Default
Western Surety next contends that it should be relieved of liability undcr thc Bond
because Plaintiffs failed to notifY it whcn United initially cxperienced financial diflicultics and
requested a payment plan. ECF No. 31 at 35-36. In support of this argumcnt. Wcstern Surety
principally relies on HUnI Constrllction Group. Inc.
87 (D.D.C. 2008). aO"d on other groll/uk

l'.

National Wrecking COIl'" 542 F. Supp. 2d

587 r.3d 1119 (D.C. Cir. 2009). In that casc. the bond

at issue secured performancc on a construction subcontract. The subcontractor (which was thc
principal under the performance bond). National Wrecking Corporation ("National"). was to
provide excavation services on the project, but causcd signi Iicant delays in the ovcrall
construction. Hunt Construction Group ("Hune). the oblige on the relevant per!(mnance bond.
delayed notifYing the sureties of National's dclay on the project until scveralmonths

alier

National completed work on the project and was no longer on the site. Id. at 88-89. Language in
the bond provided that, upon National's default and Hunt's notice to thc sureties thereof: the
sureties could "promptly remedy the default
[National's] obligation under the subcontract

:. or "arrange j(lr thc per!(lrmanCe of
:. and that ..[tJhe balance of the subcontract

price ... shall be credited against the reasonable costs of completing performance of the

15

subcontract ... :' Id. at 91. The court thus concluded that Hunt's fililure to timely notify the
sureties of National's delays rendered the bond null and void. insofar as that fililure prevented the
sureties from exercising their options under the performance bond. Id. at 96. In other words.
under the terms of the relevant bond. "[a]s soon as Hunt knew that [National) would not
complete the job on time. it had an obligation to decide whether to dcclare [National] in defilllit
and notify the Sureties (who might have done something to aid (National] in speeding up the
work, whether by hiring more trucks. more workers. more oversight, or \\hatever. in its
judgment, would assist the obligor):' but that Hunt could not wait several months until alier
National significantly delayed the project and had completed the necessary \\'ork bcfore
providing thc sureties with notice of default.') Id. at 95.
Here, however. thcre was no provision in the Bond that would have triggercd an
opportunity for Western Surety to eure any default by United. Although Western Surety was fi'ce
to cancel the Bond at any point by providing Plaintiffs and United with notice of such
cancellation, ECF No. 30-2 at 251. that provision did not crcatc any obligation for Plaintiffs to
provide Western Surety with notice of any particular event to allow Western Surety to exercise
that option. As previously explained. a bond contract is interpreted as any other contract. See Atl.
Contracting, 844 A.2d at 468. Because there was no language in the contract requiring Plaintiffs
to provide Western Surety with notice of United's financial difficulties. Plaintiffs did not breach
any obligation under the Bond in this regard.lo See Cmy. '!lBnl/7.\\l'ick \'. Lexollllls. Co.. 425

On appeal. the United States COllrt of Appeals for the District of Columbia Circuit concluded that timely notice
was a condition precedent to the sureties' performance under the bond. and that Hunt's failure to provide timely
notice "depriv[ ed] them of any realistic opportunity to exercise their rights under the bond to cure the
subcontractor"s defective performance," Hunt Consi. Grp., Illc. l'. Nat '/ Wrecking Corp .. 587 F.3d I I 19. II 19 (D.C.
Cir.2009).

q

10 Even if the failure to earlier declare United in default under the CBA constituted a breach of some obligation
owed by Plaintiffs. Western Surety would have the burden to prove lhat it suffered some harm by such failure. set!

16

Fed. App'x. 190, 192 (4th Cir. 2011) (noting that because contractual terms of the bond control.
where contract did not require obligee to make declaration of default. there was no lellal
obligation to do so).
C. Effect of Plaintiffs'

and United's Settlement Agreement

Western Surety next challenges Plaintiffs' decision to enter a settlement and payment
plan with United in December 2013 alter United had fallen behind in contributions. Eel' No. 31
at 36-39. Western Surety argues that this agreement materially modi lied the underlying contract.
relieving Western Surety of liability under the Bond. Ill. at 3&-39. PlaintilTs disagree. and note
that, pursuant to the ternlS of the CBA and the relevant Trust Agreements. Plaintiffs were Creeto
pursue contributions in any way that would be most beneficial to them. See ECF No. 33 at 2527.
The Court of Appeals of Maryland acknowledged in WieJ.:und ". Sill/e. 76& A.2d 43 (Md.
2001) that "a change in the agreement by the principal and the obligee. without notice or consent
by the surety. when i/ l11a/eriully changes /he risk. entitles the surety to discharge ... :. !d. at 49
(emphasis added). This principle is consistent with the Restatement. which provides:
If the principal obligor and thc obligec agree to a modilication. other than an
extension of time or a complete or partial release. oCthe principal obligor's duties
pursuant to the underlying obligation ... the [surety] is discharged Crom any
unperformed duties ... : (i) if the modilication creates a substituted contract or
imposes risks on the [surety] fundamentally diCferent Crom those imposed
pursuant to the transaction prior to modification; (ii) in other cases. to the extent
that the modilication would otherwise cause the [suretyl a loss ....
Restatement (Third) of Suretyship & Guaranty ~ 41 (1996) ("Restatement"'). When an obi igee
merely grants the principal an extension of time. however. a compensated surety is not
discharged. Rather. under those circumstances. the surety's obligation is only lessened to the

Blackhawk Heating & PlulI/hing Co. \'. Seahoard S/lr. Co .• 534 F. Supp. 309. 316-18 (N.D. III. 1982). "hieh. as the
Coun will explain funher. Western Surety has failed to do.

17

extent of its hann. See Cadle Co. \'. Arbonrood 1/ Nominee Corp .. 757 A.2d 791. 794 (Md.
2000) ("[A] compensated surety ... [is] not discharged as a matter of law [where creditor
granted extension of time to principal without surety's consent]. but would have to prow that it
had been prejudiced by the time extension and. if it could so prove. would have its obligation
lessened to the extent of its harm"' (citing AIC Dec .. 247 A.2d at 712): Restatement. supra. ~ 40
("If the obligee grants the principal obligor an extension of the time for performance of its dutics
pursuant to the underlying obligation ... [the surety] is dischargcd from those dutics to thc
extent that the cxtension would otherwisc cause the [surety] a loss ... "). Morcover. thc burden
of proof rests on the surety to prove any such harm. Nell" Amsterdam Cas. Co. \'.

u.s. Shipping

Sd Emergency Fleet Corp .• 16 F.2d 847. 852 (4th Cir. 1927).
Notably, in AIC Electric Co. \'. Aetna Insurance Co.. alier the principal initially defaultcd
on a payment when its check was not honored by the bank. the obligec accepted a notc Irom the
principal. which. in effcct. extended the deadline for payment to the obligee by 60 days and
provided for 6 percent interest during that time. 247 A.2d at 709. Thc surety in that case sought
to avoid liability, arguing that the acceptance of an extension of time fbr paymcnt. without thc
surety's consent. "substituted a wholly new obligation for the debt." !d. at 710. The Maryland
Court of Appeals disagreed and held that. in the case of a compensatcd surety. an extension of
time does not relievc the surcty of liability. but only Icssens the surcty's obligation by the extcnt
it was harmed.ld. at 713: see also./ohn T Callahan & Sons. Inc. \'. Dykeman £Iec. Co.. 266 F.
Supp. 2d 208. 238 (D. Mass. 2003) (holding that obligee's "delay in declaring a delimit. even ifit
prejudiced [surety's] ability to obtain reimbursement from the principal obligors under laJ
general indcmnity agrecment. does not discharge [surety] from its obligations undcr the
performance bond").

18

Additionally, in Board (!/Trilstees.

Ro'!lers Local No. 311Comhined

Wei/lire FlInd ".

Fidelity IllSurance Co .. the United States District Court for thc Eastern District of

International

Pennsylvania faced a similar dispute as the one at issue in the present case. See 63 F. Supp. 3d
459 (E.D. Pa. 2014). a/fd. No. 15-1367.2016 WL 1027716 (3d Cir. Mar. 15.2016). The
plaintiffs in that case, trust funds established in Pennsylvania under collective bargaining
agreements between a roofer's union and two companies, sought to recover fringe benefit
contributions on surety bonds when the companies failed to pay as was required in their
collective bargaining agreements. ld. at 462-64. The plaintiffs had previously tiled lawsuits
against the companies when they fell behind in contributions, and the lawsuits endcd in
settlement whereby the companies agreed to pay the amounts owed in monthly installments. in
addition to regular contributions already required under the collective bargaining agreements. ld.
at 463. Seeking to avoid liability, the surety raised two principle arguments: (I) that the plaintiffs
unreasonably delayed giving notice of the companies' delimIt because default occurred when the
plaintiffs initiated litigation against the companies. and (2) that the settlement agreements
produced by the prior litigation materially modified the underlying contract. and therefore
discharged the surety's liability. Jd at 467. 470. The court rejected both arguments. Applying
Pennsylvania law, which, like Maryland law, requires that surety bonds be interpreted under
ordinary principles of contract interpretation. id. at 465. the court found that the bond granted the
plaintiffs discretion to determine when a "default" occurred under the collective bargaining
agreements, and that the settlement agreements did not modify the bonded obligation. The court
noted that a materialmoditication
significant

which discharges a surety from its obligation "is one that is a

change in the principal debtor's obligation to the creditor that in essence su!Jstitutes

an agreement

suhstamial/y

different

from the original agreement on which the surety accepted

19

liability:' Id at 469 (emphasis added) (internal quotation marks and citation omitted). The
settlement agreements did not amount to a "significant change:' the court f<'llll1d.
because both
before and after the settlement agreements. the bonded obligations-i.e
bargaining agreements-required

.. the collective

the companies to pay fringe benefit contributions. liquidated

damages, fees and costs. Thus. "[t]he settlement Sllll1S
were lor amounts then owed under the
[collective bargaining agreements]-the

bonded obligation-and

nothing more:' Id at 470.

In this case. the extensions of time Plaintiffs granted to United through the payment plan
arc no different than that which was granted to the principal in AIC flec/ric Co. and is
remarkably similar to the issue presented in Board of 71'1ls/ees.Roofers Locol No. 30. Although
Western Surety essentially contends that the payment plan "imposer dj risks on [it] fundamentally
different from those imposed pursuant to the transaction prior to modi tieation:' Restatement.
supra,

S 41,

the payment plan did not modify Western Surety's obligations under the Bond in

any way. Both before and alter the payment plan was entered. Western Surety's only obligation
under the Bond was to remit payments. if and when United failed to do so. for contributions
owed "under the tenllS of the collective bargaining agreement. any successor thereto. and any
other agreement:'

ECF No. 30-2 at 250. The settlement agreement entered between Plaintiffs and

United constitutes an "other agreement'. pursuant to which United was obligated to remit
contributions, and, under the terms of the Bond. Western Surety was equally liable. Notably.
under the terms of the CHA. United-and.
extension-agreed

through the terms of the Bond. Western Surety by

to be bound by the terms of the Trust Agreements. which permitted the

trustees to enforce the payment of contributions "in any manner in which [theyjmay deem
proper:' and to forego enforcement of contributions if doing so would "involve an expense
greater to the [Henetit] Fund than the amount to be obtained from any effort to compel or enforce

20

the payment of the [c]ontributions:'

ECI' No. 30-2 at 73: .lee also hI. at 107. 152. 186-87.235:

Gen. Builders Supply. 179 A.2d at 872 ("fT]he liability of the surety is measured by the contract
of the principal."). Entering a payment plan was. therefore. permissible under the terms of the
relevant agreements and did not alter Western Surety's obligation under the Bond.11
Western Surety argues. however. that it has suffered loss due to the extensions of time
because, had it received notice ofUnited's

financial dilliculties as soon as they arose. it could

have canceled the Bond or asserted its rights under the Indemnity Agrcement to takc posscssion
of United's machinery, equipmcnt. tools. and materials. or obtain the proceeds under any other
bonded contracts to which United was a party. See ECF No. 30-3 at2!. In support of this
argument, Western Surety relies on an aftidavit of Stephcn Bcatty. a Senior Claims Counsel
employed by CNA Surcty Company. Western Surety's parcnt corporation. Eel' No. 30. Beatty
attests that Plaintiffs' failure to provide notice sooncr "hindered Westcrn Surcty's ability to
exercise its rights as surety" because. by the time it received noticc. Unitcd had alrcady gone out
of business. !d at 2. Undcr the Indcmnity Agrccmcnt. howcver. Westcrn Surcty had the right to
examine United's books and records at any time. and it could have registcred the agreement as a
security interest if it concluded that it may become liable under the Bond. See ForreSler ,'. SI,lIe.
10

Use o/Kernan. 46 Md. 154. 160-61 (1877) ("It was the duty of his surcties to make inquirics.

and see to it that thcir principal discharged the obligation resting upon him. whether he was thcn
solvent or insolvent."). Nothing in the Bond shitis this rcsponsibility to Plaintiffs. Western
Surety has the burden to prove its loss. New AlIIslat/alll Cas. Co.. 16 1'.2d at 852. but Bcatty's

II Western Surety points to;) provision or the CBA that mandates that the "business manager withdraw members
from [United'sl employment when IUnited] becomes sixty (60) days delinquent past the twentieth (20th) of the
month in \\lhich the funds were due," ECF No. 30-2 at 39. Western Surety contends that. had the Union withdrawn
its employees pursuant 10 this provision. United would not have been able to 1:111
further behind in payments. and
thus. Western Surety's risk was increased. ECF No. 31 at 38. \Vhen Plaintiffs and United entered the paymcnt plnll.
however. United had not yet becomc sixty days delinquent pnst the due dnte for the contributions owed. SI!I! ECF
No. 30-2 at 39. 262.

21

declaration that Western Surety was somehow hindered in cxercising its rights is no more than a
"scintilla" of evidence, insutlicient to satisfy Western Surety's burden in opposing Plaintiffs'
Motion, see Anderson. 477 U.S. at 252.
D. Damages
Finally, Western Surety contends that Plaintitfs have failed to satisfy their burden of
proof as to the amount of damages owed under the Bond. With respect to this issuc. Wcstern
Surety lodges two arguments. First. Western Surety argues that Plaintiffs have failed to prove
damages because the remittance reports submitted in support of Plaintiffs' Motion constitute
inadmissible hearsay.12 ECI' No. 31 at 18-23. Second. Western Surety argucs that even if the
remittance reports are admissible. Plaintiffs have failed to meet their burden of proof as to certain
projects on which Union members purportedly worked between January and March 2014. It/. at
23-29. Of these arguments. the Court is only persuaded by the latter.
It is true, of course, that "[tJo be entitled to consideration on summary judgment. the
evidence supporting the facts set forth by the parties must be such as would be admissible in
evidence." Lorraine

1'.

Markel Am. fns. Co .. 241 F.R.D. 534.535 (D. Md. 2007). However.

;;[ujnder the amended [Rule j 56.. facts in support of or opposition to a motion 1(Irsummary
judgment need not he in admissible form: the new requirement is that the party idcnti ties Itlcts
that could he put in admissible forn1.... Williams

1'.

Sil\'l!r Spring Volunreer Fire Dep

Supp. 3d 398. 407 (D. Md. 2015) (emphases in original) (quoting Wake
Corp., No. 12-1510,2013

WL 5423978. at

* 1 (D.

1'.

'1.

86 F.

Nal '/ R.R. Passenger.

Md. Sept. 26. 2013 )): see also Niagara

Transformer COIl}' v. Baldwin Techs .. fnc .. No. CIV.A. DKC 11-3415.2013 WL 2919705. at

*1

12 Western Surety also argues that certain cmails from a fonner United employee are inadmissible
to prove the
amount of damages owed. ECF No. 31 at 22. Because Plainitffs have failed to respond to Western Surety's
argument in this regard. they have conceded this issue. See ,\IeA:eel t', United Slales. 178 F. Stipp. 2d 493,50-1 (D.
Md. 200 I) (noting that a party conceded an argument by failing to respond to it).

22

n.1 (D. Md. June 12. 2013) ("Importantly, 'the objection [now] contemplated by the amended
Rule is not that the matcrial 'has not' bccn submitted in admissible l()rm, but that it 'cannot'
be. ,,, (citation omitted)).
To be deemed hearsay. a statement must be offered "in evidence to prove the truth of the
matter asserted in the statement:' Fed. R. Evid. 801(c)(2). When properly placed in context. it is
evident that the reports Plaintiffs rely on to prove their damages are not offered to prove that
Union members in fact worked the hours documented on the remittance reports. Rather. the
reports are ofTered to prove that United reponed

to Plaintiffs the hours worked and the

contributions owed. While this may. at first blush. sound like a distinction without a difference.
the CBA was clear that Plaintiffs were entitled to rely on United's self:reporting of the hours
worked by Union members and the corresponding contributions that it would owe each month.
See ECF No. 30-2 at 23. 39. Although the Benefit Funds could periodically audit United to
ensure that the correct number of hours was being reported. United was required to track and
report the hours worked by Union members. See id Thus. the Benelit Funds must "rely on the
employers who subscribe to their plans to submit honest and accurate inf(JrI11ation:' IJd (!f'
Trus/ees v. D 'Elill Erec/ors. l/1c.. 17 F. Supp. 2d 511. 517 (E.D. Va. 1998): .Iee also CO/1/1ors \'.
Hal!mark &

SO/1

Coal Co .. 935 F.2d 336. 342-43 (D.C. Cir. 1991) ("IT]he Trustees remain

dependent upon the operators' honesty and accuracy: the records with which the Trustees might
verify the accuracy of the operators' reporting-as
both originate and stay with the operators:').

well as the accuracy of their contributions-

Indeed. as the court in D 'Elia Erec/oJ's recognized:

[T]his reliance on the honesty and accuracy of the reporting employers is the heart
that animates the selt:reporting system. Even O'Elia admits that only with an
employer's honest and accurate completion of the reports can the Fllllds be
expected to calculate how much an employer owes in monthly contributions. To
abandon this system and instead require employee-benefit funds to verify every
piece of datum received li'OIllevery employer would impose on funds burdens so
23

severe as to frustrate the efticiency goals of a selt:reporting system. Indeed. it
would be administratively impossible for fa fund] to review each and every
contribution it rcceives li'OInan employer for vcrification of the facts represented
in the report. Thus. funds are entitled to rcly exclusively on the infonnation that
they require employers to report.
Id. (internal quotation marks and citations omitted): see also Nal '1 Elee. Bell. Fund

I'.

Arlinglon

Park Racecourse. LLC, NO.8: I1-CV -0090-RWT. 20 II WL 2712742. at *4 (D. Md. July 8.
2011) (noting that "it is typical for multi-employer [bcnefit] funds ... to require employers to
'self-report'

the employment of covered employees and make contributions on their behalf' and

that funds must rely on honesty and accuracy of the employers' reporting): cf' US.jiJr

Use &

Benefil (!fWesling!Jouse Elec. Supply Co. \'. El1tlebrock-W!Jile Co.. 275 F.2d 57. 60 (4th Cir.
1960) (holding. in action against surety company arising under the Miller Act. that "it is not
required of the materialman that he prove that his materials were actually used in the prosecution
of the work ....

but only that in good faith hc reasonably believed that the materials wcre so

intended").U Thus, in order to establish that Plaintiffs are entitled to recovery under the Bond.
they need not demonstrate that United employees in lact worked certain hours lor whieh United
was required to pay contributions. Rather. they need only show that United reported that Union
members worked those hours and that Plaintiffs were entitled to those corresponding
contributions, and. of course. that United failed to remit those payments. The remittance reports
therefore are not hearsay and the Court may properly rely on them when ruling on Plaintiffs'
Motion for Summary Judgment.

1.

13The Miller Act, 40 U.S.C. ~ 3131 el seq .. requires contractors on certain federal public works projl:cts to. among
other things. obtain payment bonds to protect persons supplying labor and material in carrying out the work
involved in the project. See 40 U.S.c. ~ 3131 (b)(2).
14 Even if the reports \\rcrc hearsay. however. they would be admissible under the business record c:\ceptioll.
Contrary to Westem Surety's contentions. "ltJhc custodian [of records) need not have personal knowledge of the
actual creation of the document to lay a proper foundation",:'
Ullifl?dSfuf/!S \', Williams. 205 F.3d 23. 34 (2d Cir.
2000), Moreover, multiple courts have concluded that "a company receiving a document from another business can
lay a sufficient foundation where it, acting in the regular course of its business. integrates the received record into its

24

Nevertheless. despite their admissibility. thc Court agrecs with Western Surcty that thc
remittance reports submitted in support of Plaintiffs' Motion are insufJicicnt to establish thc
precise amount of damagcs owed. Thc evidence indicates that. bctween January and March 2014.
United was engaged in over a dozen construction projects. ECr No. 30-2 at 519. and Plaintiffs
indicate that they have fully recovered the contributions owed on threc projects. ECF No. 30-1 at

9-10; see also ECr No, 30.2 at 7-8, The remittance reports Plaintiffs rely on to provc their
damages, however. largely do not break down the contribution calculations by projcct. but rathcr
indicate the total number of hours Union members workcd in a given month. See ECF No, 30-2
at 271-342. 347--410. 415--443. Plaintiffs submitted projcct-specific documentation for only five
construction projccts that they indicate amassed compensable hours during the relevant time
period, See ECF No. 30-2 at 503-09. 540-66, Importantly. the CBA is limitcd in gcographic
scope; it applies in the District of Columbia: Maryland: Virginia. with the cxception of eight of
its counties; and only seven counties in West Virginia.

I; ECF

No. 30.2 at 15, Absent projcct-

own business records, relies on it in its day to day operations and surrounding circulllstances indicate
trustworthiness." Bank o/Nell' l'ork Mellon \'. Adallls, No. 5:I3-CV-245-BO, 2014 WI. 3810631. at *1 (E.D.N.C.
Aug. I, 20t4): see also, e.g .• Un;led Slales \'. {'Oil',.,.". 578 F. App', 763. 779 (10th Cir. 2014) ("IT)he courts of
appeals have overwhelmingly chosen to recognize-either explicitly or implicitly-an adoptive business records
doctrine,"). Although none of the affidavits submitted in support of PlaintifTs' motion explicitly state that the
remittance reports were "adopted" by the Union and Benetit Funds \vhen they were submitted by United each
month. the evidence indicates that the reports submitted in support of the Motion arc those that United submitted to
Plaintifls each month. and that Plaintiffs relied on the same in determining the amount of contributions United owed.
See ECF No. 30-2 al 6. 269.
IS Because it is likely to be raised at trial. the Court notes that. although Western Surety challenges
Plaintiffs' right
to recover contributions for work completed within Ihe jurisdictional scope of the CRA. but outside of the
jurisdictional scope of the Addendum to the ellA. see ECF No. 31 at 27-29 and footnole 3 of this Memorandum
Opinion. the CBA itself provides that the minimum rate of wages for all Union members for work within the
jurisdiction of the CBA is to be prescribed by the rates sel forth in the Addendum. ECF No. 30-2 at 17. The
Addendum further provides that, when Union members are sent to work in an area outside of the geographic scope
of the Addendum, they must be paid the "highest total wage package" provided for in the CRA or Addendum. and
that the "total wage package" includes .'the value of all hourly contractual costs:' which would include the relevant
fTinge benefits. ECF No. 30-2 at 40. Thus, read together. the CBA and the Addendum appear to contemplate "ork
being performed outside the scope orlhe Addendum but within the scope oflhe CBA. and anticipates payment for
such work. But even if the language of the CBA was ambiguous in this regard. Plaintiffs have suhmined extrinsic
evidence indicating that Plaintiffs and United intended contributions to be made for such work, namely, the
remittance repol1s submitted by United, which includes a construction project that falls outside of the Addendum.

25

specific data for the jobs worked during the relevant time period. the Court has no method of
determining whether Plaintiffs have satislied their burden to demonstrate that the hours worked
are compensable under the CBA. or that the contributions sought have not already been collected
through other means.

16

Thus, the Court is unable to conclude that there is no genuine dispute as to the amount of
damages to which Plaintiffs may be entitled. In this regard. Plaintifls' Motion for Summary
Judgment is denied.
IV.

CONCLUSION
For the foregoing reasons. Plaintifts' Motion is GRANTED. in part. and DENIED. in

part. Specifically, Plaintifts' Motion is granted with respect to Western Surety's liability under
the Bond, but it is denied with respect to the amount of damages owed. A separate Order follows.

Dated: Mav

'7

hA-----

.2016

GEORGE .I. HAZEL

United States District Judge

See ECr No. 30-2 at 553-59. Western Surety has submitted no evidence to the contrary. 5'!!/!fae. Int/em. Co. \'.
Interstate Fire & Cas. Co .• 488 A.2d 486. 489 (Md. 1985) ("Irthe extrinsic evidence presents disputed ractual
issues, construction of the ambiguous contract is for the jury. The court may construe an ambiguous contract if there
is no factual dispute in the evidence,").
16 Cf Reliable Home Health Care. Inc. \'. Union Cen. Ins. Co .• No. elv A98-2157. 2000 WL 18771 19. at *4 (ED.
La. Dec. 27, 2000). rev'd in part 011 olher grounds. 295 F.3d 505 (5th Cir. 2002) (reducing recovery to plaintiff ill
ERISA action where plaintiff settled with one defendant before trial in order to prevent double recovery because
"ERISA contemplates equitable recoveries and not monetary gains").

26