Trustees of the National Automatic Sprinkler Industry Welfare Fund et al v. Altitude Fire Protection, LLC

Filing 10

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 7/29/2016. (jf3s, Deputy Clerk)

FILED
DISTRICT COURT
IN THE UNITED STATES DISTRICT CO R ICT OF MARYLAND
i
Dr lO.
'l
FOR THE DISTRICT OF MARYLAND
Southern Division

AM JUL 29 A II: 55
CLERK'S OFFICE
AT GREENERLT

TRUSTEES OF THE NATIONAL
AUTOMATIC SPRINKLER INDUSTRY
WELFARE FUND, et al.,
Plaintiffs,

Case No.: GJH-15-2662

V.

ALTITUDE FIRE PROTECTION, LLC,
Defendant.

MEMORANDUM OPINION
Pursuant to Fed. R. Civ. P. 55(b), Trustees of the National Automatic Sprinkler Industry
Welfare Fund, Trustees of the National Automatic Sprinkler Local 669 UA Education Fund,
Trustees of the National Automatic Sprinkler Industry Pension Fund, Trustees of the Sprinkler
Industry Supplemental Pension Fund, and Trustees of the International Training Fund
(collectively. "Plaintiffs" or "NASI Funds"), have filed a Motion for Default Judgment, with
supporting declarations and exhibits, as to Defendant Altitude Fire Protection, LLC. ECF No. 8.
No hearing is necessary to resolve the Motion. See Local Rule 105.6 (D. Md. 2016). For the
reasons that follow, Plaintiffs' Motion is granted.
I.

BACKGROUND
The NASI Funds are multiemployer "employee benefit plans- as that term is defined in

the Employee Retirement Income Security Act ("ERISA-), 29 U.S.C. § 1002(3). ECF No. 2 if 2.
The NASI Funds are established and maintained according to provisions of the Restated
Agreements and Declarations of Trust ("Declarations of Trust-) and a collective bargaining

agreement between the Sprinkler Fitters Local Union No. 669 (the "Union-) and Defendant. Id.;
see also ECF Nos. 8-4, 8-5, 8-6, 8-7, 8-8, 8-9. Defendant is a Colorado corporation with offices
located in Colorado. Defendant transacts business as a contractor or subcontractor in the
sprinkler industry, and is an employer in an industry affecting commerce as defined by ERISA.
29 U.S.C. § 1002(5). (12), and the Labor-Management Relations Act, 28 U.S.C. § 142(1). ECF
No. 2 'I 3.
Plaintiffs allege that Defendant entered a collective bargaining agreement with the Union,
pursuant to which Defendant was required to submit reports documenting the hours worked by
journeymen and apprentice sprinkler fitters employed by Defendant and to pay certain
contributions to the NASI Funds for each of those hours worked. ECF No. 2 ¶J 4-5. Pursuant to
the collective bargaining agreement, Defendant became bound by the respective Declarations of
Trust, as well as Guidelines for Participation in the NASI Funds (collectively, "Trust
Agreements"). Id. ¶ 7; see also ECF No. 8-10. Under the terms of the Trust Agreements,
payments and completed reporting forms are due by the 15th day of the month after which the
work was completed. See, e.g., ECF No. 8-5 at 24: ECF No. 8-10 at 6. When an employer
becomes two or More months delinquent in making the required contributions and filing properly
completed report forms, the NASI Funds are permitted to determine the amount of the
employer's delinquency using the following formula:
[T]he amount of the delinquency [is] the greater of (a) the average of the monthly
payments or reports submitted by the Employer for the last three (3) months for
which payments or reports were submitted, or (b) the average of the monthly
payments or reports submitted by the Employer for the last twelve (12) months
for which payments or reports were submitted ....

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ECF No. 2 ¶ 9; see also ECF No. 8-3 ¶ 8; ECF No. 8-5 at 25-26; ECF No. 8-6 at 24; ECF No. 87 at 23; ECF No. 8-8 at 28-29; ECF No. 8-9 at 22-23: Additionally, when an employer fails to
timely pay required contributions, the employer is obligated to pay liquidated damages pursuant
to the following calculation:
(1) If payment is not received . . . by the 15th of the month, 10% of the amount
[owed] is assessed.
(2) An additional 5% is added if payment is not received . . . by the last working
day of the month in which payment was due.
(3) An additional 5% is added if payment is not received by the 15th of the month
following the month in which payment was due.
ECF No. 2 1[13; ECF No. 8-3 1112; ECF No. 8-5 at 24; ECF No. 8-6 at 23: ECF No. 8-7 at 22:
ECF No. 8-8 at 27; ECF No. 8-9 at 21.
According to the Complaint, Defendant failed to submit reports or pay contributions for
the months of March 2015 through July 2015. ECF No. 2 118. Additionally, Defendant's
contributions on behalf of its sprinkler fitter employees for the months of April 2013 through
March 2014 and July 2014 through February 2015 were paid late. Id. 1111. In the Complaint.
Plaintiffs sought a judgment totaling $67,276.79, plus costs, interest, and reasonable attorneys'
fees, representing $25,275.67 in unpaid contributions and $42,001.12 in liquidated damages
assessed on the late contributions for the months of April 2013 through March 2014 and July
2014 through July 2015, as well as "all contributions and liquidated damages which become due
subsequent to the filing of this action through the date of judgment . .

Id. ¶¶ A—C.

Plaintiffs initiated the present action on September 9, 2015, ECF No. 1, and the time for
Defendant to respond to Plaintiffs' Complaint expired on October 13, 2015, see ECF No. 5: Fed.
R. Civ. P. 12(a)(1)(A)(i). On December 11,2015, the Court ordered Plaintiffs to file and serve a
motion for entry of default and a motion for default judgment within thirty days. ECF No. 6.
I Pin cites to documents filed on the Court's electronic filing system (CM/ECF) refer to the page numbers generated
by that system.

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Plaintiffs filed those motions on January 8, 2016, ECF Nos. 7 & 8, and an Order of Default was
entered against Defendant on March 4,2016. ECF No. 9.
In Plaintiffs' Motion for Default Judgment, Plaintiffs indicate that, after initiating the
present action, Defendant submitted untimely reports and paid contributions due to the NASI
Funds for the months of March and April 2015, but that Defendant failed to submit reports or
pay contributions for the months of August 2015 through November 2015. ECF No. 8-3 ¶¶ 6-7.
And, in addition to the months of late payments specified in the Complaint, Plaintiffs note that
the contributions owed for the months of May 2015 through November 2015 were late. Id. ¶ 11.
H.

STANDARD OF REVIEW
"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.- Choice Hotels Intern., Inc. v.
Savannah•Shakli Carp., No. DKC-11-0438, 2011 WL 5118328 at * 2 (D. Md. Oct. 25.2011)
(citing Dow v. Jones, 232 F.Supp.2d 491, 494 (D. Md. 2002)). Although "[tjhe 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)), "default judgment may be appropriate when the
adversary process has been halted because of an essentially unresponsive party[.]" Id. (citing
S.E.C. v. Lawbaugh, 359 F.Supp.2d 418, 421 (D. Md. 2005)).
"Upon default, the well-pled allegations in a complaint as to liability are taken as true,
although the allegations as to damages are not." S.E.C. v. Lawhaugh, 359 F. Supp. 2d 418, 422
(D. Md. 2005). Rule 54(c) of the Federal Rules of Civil Procedure 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." In entering default judgment, a court
cannot, therefore, award additional damages "because the defendant could not reasonably have
expected that his damages would exceed th[e] amount [plead in the complaint].- In re Genesys
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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. Management Dynamic,s,
Inc., 515 17.2d 801, 814 (2nd Cir. 1975); AuBon Pain Corp. v. Artect Inc., 653 F.2d 61, 65 (2nd
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 Freeman, 605 F.2d 854, 857
(5th Cir. 1979)); see also Laborers' District Council Pension. et al. v. E.G.S., Inc., No. WDQ09-3174, 2010 WL 1568595, at *3 (D. Md. Apr.16, 2010) ("[O]n default judgment, the Court
may only award damages without a hearing if the record supports the damages requested.").
III. DISCUSSION
In considering a motion for default judgment, the Court accepts as true the well-pleaded
factual allegations in the Complaint as to liability, but nevertheless "must determine whether the
well-pleaded allegations . . . support the relief sought in th[e] action." Int 'I Painters & Allied
Trades Indus. Pension Fund v. Capital Restoration & Painting Co., 919 F. Supp. 2d 680, 685
(D. Md. 2013) (citation and internal quotation marks omitted). In the Complaint, Plaintiffs allege
that Defendant committed to a collective bargaining agreement whereby it agreed to submit
reports and pay contributions for hours worked by journeymen and apprentice sprinkler fitters
employed by Defendant, and that Defendant became delinquent on those payments. ECF No. 2
¶¶ 4-5, 8, 11-12. ERISA states that "[e]very employer who is obligated to make contributions to
a multiemployer plan under the terms of the plan or under the terms of a collectively bargained
agreement shall, to the extent not inconsistent with law, make such contributions in accordance
with the terms and conditions of such plan or such agreement-129 U.S.C. § 1145; see also 29
U.S.C. § 1132(g) (providing that employers who fail to timely make contributions are liable in a
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civil action for, inter alia, unpaid contributions, interest on the unpaid contributions, liquidated
damages, reasonable attorneys' fees, and costs of the action). ERISA therefore "provide[s]
trustees of multiemployer benefit plans. with an effective federal remedy to collect delinquent
contributions.' Int 7 Painters, 919 F. Supp. 2d at 685-86 (quoting Laborers Health & Welfare
Trust Fund/or Northern Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539, 541. 108
S.Ct. 830 (1988)). Thus, assuming the truth of the well-pleaded allegations in the complaint,
Plaintiffs have established Defendant's liability for failure to pay contributions required under
the collective bargaining agreement and trust agreements.
With respect to damages, Plaintiffs now seek judgment against Defendant in an amount
totaling $86,226.35, broken down as follows: $33,959.80 in contributions owed for the months
of May through November 2015; $44,917.05 in liquidated damages assessed on late
contributions for the months of April 2013 through March 2014 and July 2014 through
November 2015; $5,562.50 in interest "at the rate of 12% per annum through the date of
payment and assessed on unpaid contributions through January 22, 2016 and continuing to
accrue through the date of payment"; $1,192.00 in attorneys' fees; and $595.00 in costs. ECF
No. 8 at 1.
The Court is, of course, limited in the amount of damages it may award in a default
judgment by Rule 54(c). Under that rule, the award may not "differ in kind from, or exceed in
amount, what is demanded in the pleadings." Fed. R. Civ. P. 54(c). Although the damages sought
in Plaintiffs' Motion for Summary Judgment differ in dollar amount than those sought in
Plaintiffs' Complaint, this Court recently recognized:
Where a complaint demands a specific amount of damages and unspecified
additional amounts, . . so long as a defendant has notice that additional
unspecified damages may be awarded if the case proceeds to judgment, general
allegations in the complaint may suffice to support default judgment in an amount
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that is proven, either by way of exhibits, affidavits, and other documentation in
support of a motion for default judgment, or at a hearing.
Tr. of the Nat'l Automatic Sprinkler Indus. Welfare Fund v. Harvey, No. GJH-15-521, 2016 WL
297425, at *5 (D. Md. Jan. 21. 2016) (emphasis in original). Indeed. "the purpose of Rule 54(c)'s
prohibition on damages that 'exceed in amount' o 'differ in kind' from that sought in the
complaint is to allow the defendant to be able to 'decide on the basis of the relief requested in the
original pleading whether to expend the time, effort, and money necessary to defend the action.—
Id. (quoting 10 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2663
(3d ed. 1998)). Thus, Rule 56(c) "does not preclude an award of damages that accrued during the
pendency of the action [where] such damages were explicitly requested in the complaint, and
sufficiently established by the affidavits submitted by plaintiffs." Id (quoting Ames v. STAT Fire
Suppression, Inc., 227 F.R.D. 361, 362 (E.D.N.Y. 2005)). In those circumstances, a defendant is
"put on notice that [the] plaintiff was seeking such damages when defendant was served with the
complaint" and "[t]hat notice was renewed when defendant was served with [the plaintiffs]
motion for default judgment ... ." Id. (quoting Ames. 227 F.R.D. at 362).
Here, although Plaintiffs only demanded $25,275.67 in unpaid contributions and
$42,001.12 in liquidated damages in the Complaint, ECF No. 2 ¶1J A—B, they also sought
contributions and liquidated damages "which become due subsequent to the filing of this action
through the date of judgment, plus costs, interest, and reasonable attorneys' fees, pursuant to 29
U.S.C. § 1132(g)." Id. ¶ C. Defendant, accordingly, had notice at the time the Complaint was
filed that failure to defend the action could result in a judgment in excess of the specific dollar
figure stated in the Complaint. Defendant also received notice of the specific amounts Plaintiffs
sought to recover in default judgment when they were served with copies of Plaintiffs' Motion
for Default Judgment. ECF No. 8. Accordingly, "[t]he damages sought by Plaintiffs in their
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Motion for Default Judgment do not `differ in kind' or `exceed in amount' that plead for in the
Complaint: rather under the plain language of that provision, the damages Plaintiffs request in
their Motion are precisely the damages plead for in the Complaint, notwithstanding that the total
amount of those damages has increased since the time this action was initiated.- Harvey, 2016
WL 297425, at *6.
In support of their request for contributions owed under the collective bargaining
agreement and Trust Agreements, Plaintiffs submit the declaration of Michael W. Jacobson. a
Fund Administrator of the NASI Funds. ECF No. 8-3. Jacobson attests that Defendant has failed
to pay contributions for May through November 2015. Id ¶ 7. Jacobson also attests that
Defendant has failed to submit reports for those months, and, accordingly, that the projected
amount of Defendant's delinquency for the hours worked by covered employees totals
$33,959.80. Id. Im 7, 9. Finally, Jacobson indicates that Defendant's contributions for the months
of April 2013 through March 2014 and July 2014 through April 2015 were paid late, and that
contributions for May through November 2015, being as 3fet unpaid, are late. Id. ¶ 10-11.
Defendants therefore owe liquidated damages totaling $44,917.05. Id. If 13. Jacobson's
calculations are also documented in a spreadsheet specifying all of Defendant's unpaid and late
contributions. ECF No. 8-11 ("Exhibit

The record therefore substantiates Plaintiffs' request

for unpaid contributions and liquidated damages.
Plaintiffs also seek $5,262.50 in interest at the rate of 12% per annum assessed on late
paid contributions through the date of the payment and on unpaid contributions through January
22, 2016 and continuing to accrue through the date of payment. ECF No. 8 at if 3. The interest is
owed pursuant to 29 U.S.C. § 1132(g) and the Trust Agreements. The figures in Exhibit,I
correspond with the amount requested in the motion for default judgment and are otherwise
supported by the record.
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In support of their claim for attorneys' fees and costs, Plaintiffs submit the declaration of
their attorney, Charles W. Gilligan, ECF No. 8-12, a spreadsheet specifying the hourly billing by
Gilligan and his paralegal with respect to the instant lawsuit, ECF No. 8-13, and invoices for
costs spent on out-of-state process service, ECF No. 8-14. These materials indicate that
Gilligan's firm spent nine hours on this case on behalf of Plaintiffs, at a rate of $122 per hour for
paralegal time and $310 per hour for attorney time. ECF Nos. 8-12, 8-13. These rates are well
within the local guidelines and are reasonable. See Local Rule App. B (D. Md. 2016). Plaintiffs
are therefore awarded $1,192 in attorneys' fees. The record also substantiates the following
expenses: $195 for service of process and $400 for filing fees. ECF Nos. 8-12, 8-13. Thus.
Plaintiffs are awarded $595 in costs.
IV. CONCLUSION
For the foregoing reasons, Plaintiffs' Motion for Default Judgment, ECF No. 8, is
GRANTED. Judgment will be entered in favor of Plaintiffs in the amount of $86,226.35 as
follows: $33,959.80 in contributions owed; $44,917.05 in liquidated damages; $1,192.00 in
attorneys' fees; $595.00 in costs; and $5.562.50 in interest assessed at the rate of 12% per annum
on paid contributions through the date of payment and assessed on unpaid contributions through
January 22, 2016 and continuing to accrue through the date of payment. A separate Order
follows.

/s/
GEORGE J. HAZEL
United States District Judge

Dated: July 29, 2016

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