Trustees of the Electrical Welfare Trust Fund et al v. Control Specialties, LLC
REPORT AND RECOMMENDATIONS re Plaintiffs' 19 MOTION for Default Judgment, 20 Amended MOTION for Default Judgment, and 28 Second MOTION for Default Judgment. Signed by Magistrate Judge Timothy J. Sullivan on 11/22/2017. (c/m 11/22/2017 chambers) (tds, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
TRUSTEES OF THE ELECTRICAL
WELFARE TRUST FUND, et al.,
Civil No. TDC-16-0220
CONTROL SPECIALTIES, LLC,
REPORT AND RECOMMENDATION
This Report and Recommendation addresses the “Second Amended Motion for Entry of
Default Judgment” (“Motion”) (ECF No. 28) filed by Plaintiffs, Trustees of the Electrical
Welfare Trust Fund (“Welfare Fund”), Trustees of the Electrical Workers Local No. 26 (“Local
26”) Pension Trust Fund (“Pension Fund”), Trustees of the Local No. 26 Joint Apprenticeship
and Training Trust Fund (“Apprenticeship Fund”), Trustees of the Local No. 26 Individual
Account Fund (“Account Fund”), Trustees of the Labor Management Cooperation Committee,
the Collection Agent for the National Electrical Benefit Funds (“NEBF”) and the Collection
Agent for the Local No. 26, International Brotherhood of Electrical Workers (“the Union”)
(collectively, the “Trustees” of their respective “Funds”). Defendant Control Specialties, LLC
(“Defendant”) has not filed a response, and the time for doing so has passed. See Loc. R.
105.2(a). On July 31, 2017, in accordance with 28 U.S.C. § 636 and pursuant to Local Rule
301.6, Judge Chuang referred this case to me for a report and recommendation on Plaintiffs’
Motion. (ECF No. 23.) I find that a hearing is unnecessary in this case. See Fed. R. Civ. P.
55(b)(2); Loc. R. 105.6. For the reasons set forth below, I respectfully recommend that Plaintiffs’
Motion be granted.
FACTUAL AND PROCEDURAL HISTORY
Plaintiffs brought this action against Defendant under the Employee Retirement Security
Act of 1974, as amended, (“ERISA”), 29 U.S.C. § 1132(e), to recover delinquent pension fund
contributions and related relief. (ECF No. 1.) Defendant was personally served with the
Complaint and summons but did not file an answer or responsive pleading within the requisite
time period. On June 15, 2017, Plaintiffs moved for the Clerk’s entry of default (ECF No. 9), and
the Clerk entered default against Defendant on July 15, 2017 (ECF No. 10). On September 15,
2017, Plaintiffs filed the Motion, to which Defendants have not responded. 1
Standard for Entry of Default Judgment
In determining whether to award a default judgment, the Court accepts as true the wellpleaded factual allegations in the complaint as to liability. See Ryan v. Homecomings Fin.
Network, 253 F.3d 778, 780-81 (4th Cir. 2001); United States ex rel. Durrett-Sheppard Steel Co.
v. SEF Stainless Steel, Inc., No. RDB-11-2410, 2012 WL 2446151, at *1 (D. Md. June 26,
2012). Nonetheless, the Court must consider whether the unchallenged facts constitute a
legitimate cause of action, since a party in default does not admit mere conclusions of law.
United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June 30, 2012)
(citing Ryan, 253 F.3d at 790). Although the Fourth Circuit has a “strong policy that cases be
decided on the merits,” United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993),
default judgment “is appropriate when the adversary process has been halted because of an
essentially unresponsive party.” S.E.C. v. Lawbaugh, 359 F. Supp. 2d 418, 421 (D. Md. 2005). If
the Court determines that liability is established, the Court must then determine the appropriate
Plaintiffs’ Motion supersedes the motions for default judgment previously filed by
Plaintiffs. (ECF Nos. 19 & 20.) I recommend that these motions be denied as moot.
amount of damages. CGI Finance, Inc., v. Johnson, No. ELH-12-1985, 2013 WL 1192353, at *1
(D. Md. March 21, 2013). The Court does not accept factual allegations regarding damages as
true, but rather must make an independent determination regarding such allegations. DurrettSheppard Steel Co., 2012 WL 2446151 at *1.
Rule 55 of the Federal Rules of Civil Procedure provides that “[i]f, after entry of default,
the Plaintiff’s Complaint does not specify a ‘sum certain’ amount of damages, the court may
enter a default judgment against the defendant pursuant to Fed. R. Civ. P. 55(b)(2).” A plaintiff’s
assertion of a sum in a complaint does not make the sum “certain” unless the plaintiff claims
liquidated damages; otherwise, the complaint must be supported by affidavit or documentary
evidence. United States v. Redden, No. WDQ-09-2688, 2010 WL 2651607, at *2 (D. Md. June
30, 2012). Rule 55(b)(2) provides that “the court may conduct hearings or make referrals . . .
when, to enter or effectuate judgment, it needs to . . . determine the amount of damages.” The
Court is not required to conduct an evidentiary hearing to determine damages, however; it may
rely instead on affidavits or documentary evidence in the record to determine the appropriate
sum. See, e.g., Mongue v. Portofino Ristorante, 751 F. Supp. 2d 789, 795 (D. Md. 2010).
ERISA provides 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.” 29 U.S.C. § 1145. ERISA further
provides that employers who fail to make timely contributions are liable in a civil action for
unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable
attorney’s fees and costs, and any other relief the Court deems appropriate. 29 U.S.C. § 1132(a),
In the Complaint, the Trustees allege that the Funds are “multi-employer plans” within
the meaning of 29 U.S.C. § 1002(2). (Id. ¶ 4.) The Trustees are fiduciaries of the Plans within the
meaning of 29 U.S.C. § 1002(21). (Id. ¶ 5.) Defendant is an employer that has agreed to
participate in the Funds pursuant to a Collective Bargaining Agreement (“CBA”). (Id. ¶ 6.) The
CBA, which is between Defendant and Local 26, International Brotherhood of Electrical
Workers, and the National Electrical Contractors Association, Washington, D.C. Chapter,
requires Defendant to “make contributions to the Funds at specified rates, and binds Defendant
to the terms and conditions of the Agreements and Declarations of Trust (‘Trust Agreements’)
establishing the Funds.” (Id. ¶¶ 9-10.) Notwithstanding its obligations, Defendant has failed to
make the contributions and to submit the reports to the Funds required by the CBA and the Trust
Agreements. (Id. ¶ 12.) Plaintiffs have demanded payment by the Defendant, but Defendant
remains delinquent in its payment obligations. (Id. ¶ 15.) Accepting as true the unchallenged
allegations of the Complaint, Plaintiffs have established Defendant’s liability for failure to pay
the contributions and to submit the reports as required by the CBA and the Trust Agreements.
Having determined that Plaintiffs have established Defendant’s liability, it is now
appropriate to determine the damages to which Plaintiffs are entitled. The damages Plaintiffs
seek in the Motion are appropriate under Rule 54(c) so long as “the record supports the damages
requested.” See Laborers’ Dist. Council Pension v. E.G.S., Inc., No. WDQ-09-3174, 2010 WL
1568595, at *3 (D. Md. Apr. 16, 2010). Here, Plaintiffs have provided sufficient evidence to
support their claim for damages in the amount of $62,685.15.
In support of their claim for damages, Plaintiffs submit the affidavit of Michael
McCarron (“McCarron”). (ECF No. 28-2.) McCarron is the Accounting Manager of the
Accounting Department at the Local 26, IBEW-NECA Trust Fund Office. (Id. ¶ 1.) In this role,
McCarron is responsible for “monitoring and maintaining records with respect to monthly
contribution reports, payments made by participating electrical contractors, including those of
the Defendant, the determination of whether payments were timely made and if not, the
assessment of liquidated damages, interest and legal fees” in accordance with the CBA and the
Trust Agreements. (Id. ¶ 2.) Pursuant to the CBA and the Trust Agreements, unpaid or late
contribution payments are subject to a liquidated damages assessment in the amount of 20% of
the monthly contribution balance due. (Id. ¶ 4.) In addition, interest is assessed on unpaid and
late-paid contributions at the annual rate of 7%. (Id.) McCarron states that Defendant did not
submit monthly contribution reports for the month of June 2017, and also failed to submit its
contribution payment for that month. (Id. ¶ 8.) As such, and “[i]n accordance with the collections
policies and procedures of the Joint Trust Funds,” McCarron determined that Defendant’s
liability for the unpaid June 2017 contribution was $6,873.78. (Id.) I recommend that Plaintiffs
be awarded $6,873.78 for Defendant’s unpaid June 2017 contributions. 2 McCarron also states
that based on Defendant’s late and unpaid contributions, he determined that Plaintiffs are owed a
total of $35,775.55 in liquidated damages. 3 (Id. ¶¶ 11-12.) I recommend that Plaintiffs be
awarded a total of $35,775.55 in liquidated damages.
Plaintiffs are entitled to interest at the rate of 7% per annum on the unpaid contributions
for June 2017, but “those amounts have not yet been calculated since Defendant has not yet paid
the June 2017 contributions and interest runs until the date payment is received.” (ECF No. 28-1
at 6.) Defendant has otherwise “repaid its full obligation for outstanding interest on its late-paid
contributions dating back to May 2008.” (Id.)
On October 26, 2017, I directed Plaintiffs to file a letter clarifying how the liquidated
damages contained in McCarron’s affidavit were calculated. (ECF No. 29.) Plaintiffs submitted a
Plaintiffs also seek an award of attorney’s fees and costs, which are available in ERISA
cases. 29 U.S.C. §1132(g)(2). When a court enters judgment in favor of the plaintiff in an ERISA
action for a plan to recover unpaid contributions, it “shall award the plan . . . reasonable
attorney’s fees and costs of the action, to be paid by the defendant.” Id. In calculating an award
of attorney’s fees, the court must determine the lodestar amount, defined as a “reasonable hourly
rate multiplied by hours reasonably expended.” Grissom v. The Mills Corp., 549 F.3d 313, 32021 (4th Cir. 2008). The Fourth Circuit has stated that a court’s
discretion should be guided by the following twelve factors: (1) the time and labor
expended; (2) the novelty and difficulty of the questions raised; (3) the skill
required to properly perform the legal services rendered; (4) the attorney’s
opportunity costs in pressing the instant litigation; (5) the customary fee for like
work; (6) the attorney’s expectations at the outset of the litigation; (7) the time
limitations imposed by the client or circumstances; (8) the amount in controversy
and the results obtained; (9) the experience, reputation and ability of the attorney;
(10) the undesirability of the case within the legal community in which the suit
arose; (11) the nature and length of the professional relationship between attorney
and client; and (12) attorneys’ fees awards in similar cases.
Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235, 243 (4th Cir. 2009). In addition, Appendix
B to this Court’s Local Rules (“Rules and Guidelines for Determining Attorneys’ Fees in Certain
Cases”) provides guidelines for the hourly rates that lawyers may reasonably bill, based on the
number of years they have been admitted to the bar:
a. Lawyers admitted to the bar for less than five (5) years: $150-225.
b. Lawyers admitted to the bar for five (5) to eight (8) years: $165-300.
c. Lawyers admitted to the bar for nine (9) to fourteen (14) years: $225-350.
d. Lawyers admitted to the bar for fifteen (15) to nineteen (19) years: $275-425.
e. Lawyers admitted to the bar for twenty (20) years or more: $300-475.
f. Paralegals and law clerks: $95-150.
letter clarifying McCarron’s calculations, along with a table further breaking down the liquidated
damages calculations. (ECF No. 33.) Although the amount of liquidated damages listed in the
table exceeds the amount sought in Plaintiffs’ Motion, I recommend that Plaintiffs be awarded
only the lower amount of liquidated damages that are contained in the Motion.
Throughout this litigation, Plaintiffs have been represented by Charles Fuller, Johanna
Montero-Okon, and Eric Wexler, of the law firm of McChesney & Dale, P.C. (See ECF No. 285.) Mr. Fuller has been a licensed attorney for over 30 years. (Id. at 1.) Ms. Montero-Okon has
been a licensed attorney for seven years. (Id. at 2.) Mr. Wexler has been a licensed attorney for
15 years. (Id.) Plaintiffs’ attorneys charged the same hourly rate for their work, but the rate
changed from year to year. In 2013, Plaintiffs’ attorneys charged $220 per hour, which increased
to $240 in 2014, $250 in 2015, $260 in 2016, and $275 in 2017. (Id. at 4.) Given their respective
years of experience, Plaintiffs’ attorneys’ hourly rates are all within or below the guidelines set
forth in the Local Rules. I find that Plaintiffs’ attorneys charged a reasonable hourly rate. I
further find that the time Plaintiffs’ attorneys spent working on this case, which is detailed in Mr.
Fuller’s Declaration (ECF No. 28-5), is reasonable. I recommend that the Court award to
Plaintiffs attorney’s fees in the amount of $19,468.00.
Plaintiffs also incurred costs in the amount of $567.82, which includes the $400 filing
fee, postage costs in the amount of $117.82, and a private process server fee of $50.00. I
recommend that the Court award costs to Plaintiffs in the amount of $567.82.
In total, I recommend that $62,685.15 in damages be awarded to Plaintiffs against
Defendant. This amount is comprised of $6,873.78 in unpaid contributions for June 2017;
$35,775.55 in liquidated damages; $19,468.00 in attorney’s fees; and $567.82 in costs.
In sum, I recommend that the Court:
Grant Plaintiffs’ Second Amended Motion for Default Judgment (ECF No. 28);
Deny as moot Plaintiffs’ initial Motion for Default Judgment (ECF No. 19) and
Amended Motion for Default Judgment (ECF No. 20);
Enter judgment in favor of Plaintiffs against Defendant in the amount of
I also direct the Clerk to mail a copy of this Report and Recommendation to Defendant.
Objections to this Report and Recommendation must be served and filed within fourteen (14)
days, pursuant to Fed. R. Civ. P. 72(b) and Local Rule 301.5(b).
November 22, 2017
Timothy J. Sullivan
United States Magistrate Judge
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