Teamsters Local 639 Employers Health Trust et al v. Boiler & Furnace Cleaners, Inc.
MEMORANDUM OPINION. Signed by Judge Theodore D. Chuang on 12/19/2016. (jf3s, Deputy Clerk)
UNITED STATES DISTRICT COURT
DISTRICT OF MARYLAND
TEAMSTERS LOCAL 639 EMPLOYERS
HEALTH TRUST et at.,
Civil Action No. TDC-15-3053
BOILER & FURNACE CLEANERS, INC.,
This case alleging payments owed. under a collective bargaining agreement is before the
Court on a Motion for Default Judgment.
Having reviewed the Complaint, the Motion, and the
supporting documents, the Court finds no hearing necessary.
See D. Md. Local R. 105.6. For
the following reasons, the Motion for Default Judgment is granted in part and denied in part.
Plaintiffs are the Teamsters Local 639 Employers Health Trust ("Health Fund"), the
Teamsters Local 639 Employers Pension Trust ("Pension Fund"), and their respective trustees.
The Health Fund is an employee welfare benefit plan and multi employer plan, as those terms are
defined in the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C.
(2012). See id.
1002(1), (3), (37)(A). The Pension Fund is an employee pension benefit plan
and multiemployer plan, as those terms are defined in ERISA. See id.
1002(2), (3), (37)(A).
Defendant Boiler & Furnace Cleaners, Inc. ("Boiler & Furnace Cleaners"), a company engaged
in an industry affecting commerce, is an employer for purposes of ERISA. See id.
Boiler & Furnace Cleaners is required to make regular contributions to the Health Fund
and Pension Fund pursuant to its current collective bargaining agreement ("CBA") with the
Drivers, Chauffeurs and Helpers Local Union No. 639 ("Union") and was also required to make
regular contributions under prior CBAs with the Union.
The current CBA covers the period
from October 16, 2014 through October 15, 2017; the previous CBA covered the period from
October 16, 2013 through October 15, 2014; and another prior CBA covered the period from
October 16, 2010 through October 15, 2013.
Furnace Cleaners must make contributions
By the terms of these agreements, Boiler &
to the Health Fund and Pension Fund at rates
specified in the CBAs for each hour or portion thereof for which an employee actually performed
The CBAs also provide that Boiler & Furnace Cleaners agrees to be bound by the
Agreement and Declaration of Trust for each of the Health Fund and the Pension Fund ("Trust
The Trust Agreements provide that an employer who fails to pay timely the
amounts required by the CBAs must pay 10 percent of the amount due in liquidated damages and
1.5 percent of the amount due in interest.
The Trust Agreements further specify that if the
trustees must initiate a legal action to compel payment of delinquent contributions, the employer
also becomes liable for attorney's fees and costs, as well as additional liquidated damages of 10
percent of the amount due.
On October 7, 2015, Plaintiffs filed this action, alleging that Boiler & Furnace Cleaners
has been delinquent in making its required payments to the Health Fund and the Pension Fund.
Specifically, the Complaint asserted that Boiler & Furnace Cleaners failed to pay an unspecified
amount in contributions, liquidated damages, and interest for the month of August 2015 and that
the employer owes liquidated damages and interest for prior late payments for certain months
from July 2013 through July 2015. Plaintiffs also claim that Boiler & Furnace Cleaners owes
liquidated damages of $4,341.19 and interest of $334.71 to the Health Fund, as well as liquidated
damages of $7,198.80 and interest of $257.18 to the Pension Fund, for late payments for certain
months from July 2013 through July 2015. In addition, they seek attorney's fees and costs.
Boiler & Furnace Cleaners was served with the Complaint on October 9, 2015 but has
failed to file a timely responsive pleading.
The Clerk entered default against Boiler & Furnace
Cleaners on April 6, 2016. To date, Boiler & Furnace Cleaners has not responded to that default
or to the Plaintiffs' Motion for Default Judgment.
The Motion for Default Judgment seeks an order entering judgment against Boiler &
Furnace Cleaners for liquidated damages and interest for "late payments for certain months from
June 2013 through February 2016," Mot. Default J. Aff. Nichelle Grey ~~ 10-11, ECF No. 10-2,
as well as attorney's
fees and costs.
In addition, Plaintiffs request that the Court "enter a
permanent injunction requiring Defendant to remit its contributions to the Health Fund and
Pension Fund in a timely manner."
Mem. Supp. Mot. Default J. at 8, ECF No. 10-1. Plaintiffs
state in their Motion that since the filing of the Complaint, Boiler & Furnace Cleaners has paid
its contributions for the month of August 2015.
Pursuant to 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 or otherwise, the clerk must enter the party's default."
Fed. R. Civ. P.
55(a). Under Rule 55(b)(2), after a default has been entered by the clerk, the court may, upon the
plaintiff's application and notice to the defaulting party, enter a default judgment.
Fed R. Civ. P.
55(b)(2). A defendant's default does not, however, automatically entitle the plaintiff to entry of
a default judgment; rather, that decision is left to the discretion of the court. United States v.
Moradi, 673 F.2d 725, 727 (4th Cir. 1982) ("[T]rial judges are vested with discretion, which
must be liberally exercised, in entering [default] judgments and in providing relief therefrom.");
Dow v. Jones, 232 F. Supp. 2d 491, 494 (D. Md. 2002). The United States Court of Appeals for
the Fourth Circuit has a "strong policy that cases be decided on their merits," United States v.
Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993), but default judgment may be appropriate
"when the adversary process has been halted because of an essentially unresponsive party,"
v. Lawbaugh, 359 F. Supp. 2d 418, 421 (D. Md. 2005); see H F. Livermore Corp. v.
Gebruder Loepje, 432 F.2d 689, 691 (D.C. Cir. 1970) ("[T]he default
judgment must normally be viewed as available only when the adversary process has been halted
because of an essentially unresponsive party.
In that instance, the diligent party must be
protected lest he be faced with interminable delay and continued uncertainty as to his rights.").
In reviewing a Motion for Default Judgment, the court accepts as true the well-pleaded
factual allegations in the complaint relating to liability. Ryan v. Homecomings Fin. Network, 253
F.3d 778, 780-81 (4th Cir. 2001). However, it remains for the court to determine whether these
unchallenged factual allegations constitute a legitimate cause of action. Id.; see also lOA
Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure ~ 2688 (3d ed. 2010)
("[L]iability is not deemed established simply because of the default ... and the court, in its
discretion, may require some proof of the facts that must be established in order to determine
liability."). If liability is established, the court must then determine the appropriate amount of
damages. See Ryan, 253 F.3d at 780-81.
In calculating damages, the court does not accept as true the factual allegations of the
plaintiff but must instead make an independent determination.
See Dundee Cement Co. v.
Howard Pipe & Concrete Prods., Inc., 722 F.2d 1319,1323 (7th Cir. 1983); Lawbaugh, 359 F.
Supp. 2d at 422. To do so, the court may conduct an evidentiary hearing, see Fed. R. Civ. P.
55(b )(2), or may dispense with a hearing if there is an adequate evidentiary basis in the record
from which to calculate an award.
See Pope v. United States, 323 U.S. 1, 12 (1944) ("It is a
familiar practice and an exercise of judicial power for a court upon default, by taking evidence
when necessary or by computation from facts of record, to fix the amount which the plaintiff is
lawfully entitled to recover and to give judgment accordingly.").
Because Boiler & Furnace Cleaners has failed to appear or otherwise defend, the Court
accepts as true the well-pleaded factual allegations in the Complaint.
Ryan, 253 F.3d at 780.
Those allegations establish that Boiler & Furnace Cleaners was obligated by the terms of the
CBAs and Trust Agreements to make timely contributions to the Health Fund and the Pension
Fund for any hours worked by covered employees and that Boiler & Furnace Cleaners failed to
make timely contributions
for the period from July 2013 to August 2015.
therefore establishes that Boiler & Furnace Cleaners is liable to Plaintiffs for damages arising
from the late contributions, as defined in the governing agreements.
By the terms of the agreements between the parties, Boiler & Furnace Cleaners is liable
to Plaintiffs for: (1) any unpaid contributions, (2) interest on delinquent contributions at the rate
of 1.5 percent of the amount due, (3) liquidated damages in a total amount of 20 percent of the
delinquency, and (4) attorney's fees and costs incurred in attempting to recover the amounts
owed. These provisions track ERISA itself, which provides that employers who fail to timely
make contributions are liable for:
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of(i) interest on the unpaid contributions; or
(ii) liquidated damages provided for under the plan in an amount not in
excess of 20 percent (or such higher percentage as may be permitted under
Federal or State law) of the amount determined by the Court under
(D) reasonable attorney's fees and costs of the action, to be paid by the defendant,
(E) such other legal or equitable relief as the court deems appropriate.
29 U.S.c. ~ 1132(g)(2). Plaintiffs are therefore entitled under ERISA and the terms of the
parties' agreements relating to interest, liquidated damages, and attorney's fees and costs.
As to specific amounts, in the Motion for Default Judgment, Plaintiffs assert that Boiler
& Furnace Cleaners owe: (1) liquidated damages of $6,735.50 and interest of $560.50 to the
Health Fund for the period of June 2013 through February 2016; and (2) liquidated damages of
$9,706.16 and interest of $423.26 to the Pension Fund for the period of June 2013 through
February 2016. In support of these damages, Plaintiffs rely on the Affidavit ofNichelle Gray, an
administrator of the Health Fund and Pension Fund, attached to the Motion, as well as the
Supplemental Grey Affidavit and accompanying exhibit submitted pursuant to the Court's
November 28,2016 Order.
"A default judgment must not differ in kind from, or exceed in amount, what is
demanded in the pleadings." Fed. R. Civ. P. 54(c). Thus, where a complaint specifies the
amount of damages sought, the plaintiff is limited to entry of a default judgment in that amount.
In re Genesys Data Techs., Inc., 204 F.3d 124, 132 (4th Cir. 2000). Here, Plaintiffs in their
Complaint sought a specified amount of damages for liquidated damages and interest allegedly
owed to the Health Fund and Pension Fund during the period between July 2013 and July 2015.
The Court therefore will award only the damages owed for delinquent payments during this
period and for the month of August 2015, for which Plaintiffs seek an unspecified amount in
Grey Affidavit and accompanying
exhibit confirm the
accuracy of the following damages owed by Boiler & Furnace Cleaners: (1) liquidated damages
of $4,341.19 and interest of $334.71 owed to the Health Fund for the period from July 2013 to
July 2015; (2) liquidated damages of$681.10 and interest of$67.18 owed to the Health Fund for
August 2015; (3) liquidated damages of $7,049.77 and interest of $257.18 owed to the Pension
Fund for the period from July 2013 to July 2015; and (4) liquidated damages of $649.74 and
interest of $49.39 owed to the Pension Fund for August 2015.
Plaintiffs also request in their Motion a "permanent injunction requiring Defendant to
remit its contributions to the Health Fund and Pension Fund in a timely manner."
Mot. Default J. at 8. They did not, however, request such relief in their Complaint. Accordingly,
the request for a permanent injunction shall be denied. See Fed. R. Civ. P. 54(c).
Finally, Plaintiffs seek attorney's fees and costs.
In support of their request, Plaintiffs
submit the declaration of attorney Lauren P. McDermott, accompanied by an exhibit that details
the legal services rendered for the case, the date the services were performed, the individual who
performed the services, and the time expended. McDermott attests that she worked on this case
and was assisted by John R. Mooney, Elizabeth A. Saindon, Diana M. Bardes, a paralegal, and a
McDermott and Bardes are both associates in their fifth year of practice; John R.
Mooney is a partner with over 30 years of experience; and Elizabeth A. Saindon is a partner with
over 25 years of experience.
The documents indicate that counsel spent 20.4 billable hours on
this case at a rate of $410 per hour for partners and $290 per hour for associates, a paralegal
spent 9.9 hours of billable time at a rate of $150 per hour, and a law clerk spent 6.7 hours of
billable time at a rate of $90 per hour, for a total of $8,172. This Court's Guidelines Regarding
Hourly Rates advise hourly billing ranges of $150-225 for counsel with less than five years of
experience, $165-300 for counsel with 5 to 8 years of experience, $300-475 for counsel with 25
years or more of experience, and $95-150 for paralegals and law clerks. See D. Md. Local R.
App. B ~ 3. The submission also documents $455 in costs.
The Court accepts the proposed hourly rates, with the exception of the associate hourly
rate, which will be reduced to $225, in accordance with this Court's Guidelines. As a result, the
attorney's fee award is $6,937. With that adjustment, the Court finds that the attorney's fees and
costs are reasonable. The Court therefore awards the Plaintiffs $7,392 in attorney's fees and
costs, as delineated above.
For the foregoing reasons, Plaintiff's Motion for Default Judgment is GRANTED IN
PART and DENIED IN PART. The Motion is granted as to damages for the period from July
2013 through August 2015 and attorney's fees and costs. The Motion is denied as to damages for
the period from September 2015 through February 2016 and the permanent injunction. Plaintiffs
are awarded a total of $20,822.26, as specified in the separate Order accompanying this
Date: December 19,2016
THEODORE D. C
United States Distric
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