Trustees of the Rodman Local 201 Pension, Welfare, Vacation and Apprentice Funds et al v. Contract Design & Development, LLC
MEMORANDUM OPINION (c/m to Defendant 7/31/17 sat). Signed by Judge Deborah K. Chasanow on 7/31/2017. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
RODMAN LOCAL 201 PENSION,
WELFARE, VACATION, AND
APPRENTICE FUNDS, et al.
Civil Action No. DKC 16-3497
CONTRACT DESIGN & DEVELOPMENT,
Presently pending and ready for resolution in this action
(“ERISA”) is Plaintiffs’ motion for default judgment.
The relevant issues have been briefed and the court now
rules pursuant to Local Rule 105.6, no hearing being deemed
For the reasons that follow, Plaintiffs’ motion will
be granted in part and Defendant will be ordered to submit to an
Plaintiffs are trustees of various trust funds associated
meaning of § 3(3) of ERISA.
See 29 U.S.C. § 1002(3).
Contract Design & Development, LLC is an employer engaged in an
The Funds were established and are maintained
pursuant to the Restated Agreements and Declarations of Trust
(“the trust agreements”) and a collective bargaining agreement
between Rodman Local No. 201 and Defendant.
On October 21, 2016, Plaintiffs filed a complaint on behalf
of the Funds alleging that Defendant breached the collective
bargaining and trust agreements by failing to make contributions
worked by employees of the Defendant performing work covered by
the Collective Bargaining Agreement . . . .”
(ECF No. 1 ¶ 11).
month reporting the amount of contributions due.
agreements provide that if an employer fails to make timely
contributions, it must pay liquidated damages if payment is not
postmarked by the last day of the month in which contributions
Plaintiffs further allege that Defendant was also
obligated to remit employees’ dues deducted from their pay to
the Funds’ third-party administrator.
(Id. at ¶ 23).
The Plaintiffs’ complaint claims that Defendant failed to
damages and interest for late payments, as well as attorneys’
fees and costs.
Plaintiffs recite that they were made aware of
the amounts due by a union member who previously worked for
(ECF No. 10-4, p. 3, 4).
Plaintiffs served the summons and complaint on Defendant on
November 1, 2016.
When Defendant failed to respond within the
January 3, 2017.
(ECF No. 8).
Plaintiffs filed the subject
motion for entry of default judgment on February 2, 2017.
judgment in the amount of $4,793.04 which consists of $3,661.30
in contributions, liquidated damages of $366.13, and interest,
at the time the motion was filed, of $765.61.
(ECF No. 12).
damages of $184.80, and interest, at the time the motion was
filed, of $125.72.
(ECF No. 10-6, p. 5).
Plaintiffs also seek unremitted union dues in the amount of
$421.20, attorneys’ fees of $5,556.75, and costs of $675.00.
(ECF No. 10-1).
Additionally, Plaintiffs move for an order
directing Defendant to submit to a complete audit of its wage
and payroll records for the period August 1, 2015 through the
date of judgment.
granted in part and denied in part.
Standard of Review
whom a judgment for affirmative relief is sought has failed to
Where a default has been previously entered by the
clerk and the complaint does not specify a certain amount of
pursuant to Fed.R.Civ.P. 55(b)(2).
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
See Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002);
Lipenga v. Kambalame, 219 F. Supp. 3d 517 (D.Md. 2016).
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)), but default judgment may be
appropriate when the adversary process has been halted because
of an essentially unresponsive party, see S.E.C. v. Lawbaugh,
359 F.Supp.2d 418, 421 (D.Md. 2005) (citing Jackson v. Beech,
636 F.2d 831, 836 (D.C. Cir. 1980)).
complaint as to liability are taken as true, but the allegations
as to damages are not.
Lawbaugh, 359 F.Supp.2d at 422.
allegations constitute a legitimate cause of action, and, if
liability is established, the court then makes an independent
determination of damages.
Fed. R. Civ. P. 55(a).
court may hold a hearing to prove damages, it is not required to
documentary evidence to determine the appropriate sum.”
180 F.Supp.2d at 17 (citing United Artists Corp. v. Freeman, 605
F.2d 854, 857 (5th Cir. 1979)); see also Laborers’ Dist. Council
Pension v. E.G.S., Inc., Civ. No. WDQ-09-3174, 2010 WL 1568595,
at *3 (D.Md. Apr. 16, 2010) (“on default judgment, the Court may
only award damages without a hearing if the record supports the
Assuming the truth of the well-pleaded allegations of the
complaint, as the court must upon entry of default, Plaintiffs
have established a violation under ERISA.
See 29 U.S.C. § 1132(a)(3) (providing that a civil
action may be brought:
“(A) to enjoin any act or practice which
violates . . . the terms of the plan, or (B) to obtain other
appropriate equitable relief (i) to redress such violations or
(ii) to enforce any . . . terms of the plan”).
According to the
complaint, Defendant is a signatory to the Restated Agreements
and Declarations of Trust and is, therefore, obligated to comply
with the terms of the Trust Agreements, which require it to
submit to an audit at the request of the Funds’ trustees.
sufficient claim for relief under ERISA.
See La Barbera v. Fed.
Metal & Glass Corp., 666 F.Supp.2d 341, 348 (E.D.N.Y. 2009)
complaint alleged that an employer refused to submit an audit
despite being contractually bound to do so by a CBA and trust
agreement); see also National Elec. Ben. Fund v. AC-DC Elec.,
ERISA authorizes courts to grant “equitable relief as . . .
appropriate” where a plaintiff brings a successful action to
enforce its requirements.
See 29 U.S.C. § 1132(g)(2)(E); see
also La Barbera, 666 F.Supp.2d at 350.
“Such relief may include
an injunction ordering the defendant to submit to an audit.”
Int’l Painters & Allied Trades Indus. Pension Fund v. Exec.
Painting, Inc., 719 F.Supp.2d 45, 52 (D.D.C. 2010).
review the records of employers contributing to the plans.
(citing Central States, Southeast and Southwest Areas Pension
Fund v. Central Transport, Inc., 472 U.S. 559, 581 (1985)).
Because ERISA authorizes injunctive relief as a possible
remedy, an injunction requiring Defendants to submit to an audit
is warranted as long as the Funds establish the prerequisites
for an injunction – namely, a showing of irreparable harm and
F.Supp.2d at 350-51.
Plaintiffs have not explicitly asserted that there is no
adequate remedy at law or that irreparable harm will result if
injunctive relief is not granted; however, the record clearly
reflects that these elements are present.
Specifically, if an
Agreements, nor will they be able to collect any amounts to
entitled to conduct an audit and Defendant will be directed to
thirty (30) days.
Should the audit reveal unpaid or delinquent
contributions, Plaintiffs may petition the court, with proper
reimbursement of the audit fee and attorneys’ fees and costs
associated with the litigation.
The original motion for default judgment demands payment to
Plaintiffs Rodman Funds of $3,738.55 in contributions.
direction of the court, Plaintiffs supplemented their motion for
Plaintiffs support their request based on
Defendant failed to make contributions to the Rodman Funds and
231 hours for which Defendant failed to make contributions to
the Annuity Fund.
(ECF No. 12-1).
Plaintiffs recite that the
Annuity Fund failed to account for four (4) hours worked by
Defendant’s employee in December, 2015, but does not wish to
pursue collection contributions for these four hours.
declarations of Cathy Cole (ECF No. 10-5) and Rhonda St. Clair
(ECF No. 10-6).
Ms. Cole is employed by GEMGroup, a third party
employed by Lawrence C. Musgrove Associates, Inc. which performs
services as a third party administrator to jointly administered
Atlantic States District Council Participating Locals Annuity
Fund (“Annuity Fund”).
Each of the subject affidavits contains
damages, and interest.
The spreadsheet attached to Ms. Cole’s
affidavit on behalf of the Rodman Funds is superseded by the
spreadsheet attached to Plaintiffs’ supplement.
(ECF No. 12-1).
attorneys’ fees and costs (ECF No. 10-3).
After an independent determination of damages based on the
through December 12, 2015, are clear and add up to a total of
(ECF No. 10-5, at 6-12).
worked, but in three different ways.
(ECF No. 10-5, at 13-15).
One says the contractor worked eight hours per day on December
14, 15, and 16.
(ECF No. 10-5, at 13).
Another says the
contractor worked eight hours per day December 13, 14, and 15,
but was not paid for work on December 13 because he was required
to repay an amount from November 22.
(ECF No. 10-5, at 14).
December 13, 14, and 15, and was paid in full for all three
(ECF No. 10-5, at 15).
If the contractor worked eight
hours per day for three days, as each of these payroll sheets
indicates, then the twenty-four hours worked that week added to
the 207 hours from previous weeks entitles Plaintiffs to only
231 hours’ worth of contributions.1
Pursuant to the Agreement, Defendant, as employer, was to
pay the Rodman Funds: $6.30 per hour to the Health & Welfare
Fund, $7.65 per hour to the Pension Fund, $0.63 per hour to the
Apprenticeship Fund, $1.00 per hour to the Vacation Fund, for a
total of $15.58 per hour.
Defendant was required to pay $4.00
per hour to the Annuity Fund.
Further, Defendant was to pay six
Even if the contractor worked all four of the days from
December 13 through 16, but somehow payroll failed to account
for the fourth day in any of the three sheets Plaintiffs have
submitted, then Plaintiffs would be owed contributions for 239
hours, not 235 hours.
Because none of the individual payroll
sheets suggest thirty-two, as opposed to twenty-four, hours
worked that week, the court finds that Plaintiffs are entitled
to only 231 hours.
percent (6%) of gross wages as “working assessment” (ECF No. 104, p. 215, ¶ G).
Based on 231 hours worked, the court calculates the Rodman
Funds are owed $3,598.98.
Pursuant to the affidavit of Rhonda
St. Clair, the Annuity Fund alleges it is owed $924 for unpaid
The record supports the Annuity’s demand for
$924 in unpaid contributions.
Liquidated Damages and Interest
The Rodman Funds seek $366.13 in liquidated damages and
$765.61 in interest assessed through February 21, 2017, on late
The affidavit of Kathy Cole indicates that the
agreement between the parties obligates Defendant to pay ten
percent (10%) as liquidated damages and one and one-half percent
(1-1/2%) per month as interest from the date of delinquency to
collection and audit procedure (ECF No. 10-5, p. 21), reports
and contributions are due by the 20th day of the month after
hours were incurred.
Interest at the rate of one and one-half
percent (1.5%) per month is assessed from the due date until the
date of payment.
Liquidated damages of ten percent (10%) will
be assessed if payment is not postmarked on the last day of the
month in which contributions are due.
The court calculates
interest through July 31, 2017, to be $1,013.68 and liquidated
damages to be $359.90.
The affidavit of Rhonda St. Clair recites that pursuant to
the Annuity Funds’ Restated Agreement of Trust, the Defendant is
obligated to pay it liquidated damages in the amount of $184.80
which represents twenty-percent (20%) of the contributions owed
and $125.72 in interest from the date of delinquency through
February 21, 2017, representing the rate of twelve percent (12%)
These figures are supported by the record.
court calculates interest through July 31, 2017, to be $174.60.
Pursuant to the parties’ agreement, the employer is to deduct
from employees’ wages the sum of six percent (6%) of the gross
wages and remit same to the union (ECF No. 10-4, p. 215 ¶ G).
(ECF No. 12-1).
For October, Plaintiffs identify
gross wages of $1,539.00 that align with the payroll sheets for
(ECF No. 10-5, at 6-8).
For November Plaintiffs
calculate $3,078.00 in wages, which seems to account for all
hours worked from November 1 through December 4.
(ECF No. 10-5,
Plaintiffs then calculate total wages of $2,403.00
for December, which appears to account for: seventeen hours from
December 1-4 that are included in their November total, forty
hours from the first full week in December that appear properly
documented, and thirty-two hours for the week of December 13-19,
for which, despite the conflicting information in each payroll
sheet as discussed above, only twenty-four hours are indicated.
(See ECF No. 10-5, at 11-15).
The court calculates a total of
$6,345.00 in gross wages, which entitles Plaintiffs to $380.70
in working assessment dues.
Plaintiffs seek $5,556.75 in attorneys’ fees.
of this request, Plaintiffs submit a Declaration of Attorney’s
(ECF No. 10-3).
Exhibit 1 indicates that the firm
spent 23.25 hours on this case on behalf of the Plaintiffs at a
rate of $239 per hour for attorney time.
The sum requested is
Plaintiffs attorneys’ fees will be reduced, however, for failing
to explain sufficiently its damages calculations.
In spite of
contributions were sought by the Annuity Fund and the Rodman
Funds, which should have indicated to Plaintiffs’ attorneys that
further scrutiny was warranted.
Accordingly, Plaintiffs will be
awarded $3,556.75 for attorneys’ fees, a reduction of $2,000.
request, Plaintiffs recite that in addition to the $400 filing
process on Defendant (ECF No. 10-3).
The record supports this
For the foregoing reasons, Plaintiffs’ motion for the entry
of default judgment and supplement will be granted in part.
separate order will follow.
DEBORAH K. CHASANOW
United States District Judge
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