Trustees of the Rodman Local 201 Pension, Welfare, Vacation and Apprentice Funds et al v. Contract Design & Development, LLC
Filing
13
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.
:
:
v.
:
Civil Action No. DKC 16-3497
:
CONTRACT DESIGN & DEVELOPMENT,
LLC
:
MEMORANDUM OPINION
Presently pending and ready for resolution in this action
arising
under
the
Employee
Retirement
Security
Act
(“ERISA”) is Plaintiffs’ motion for default judgment.
10).
of
1974
(ECF No.
The relevant issues have been briefed and the court now
rules pursuant to Local Rule 105.6, no hearing being deemed
necessary.
For the reasons that follow, Plaintiffs’ motion will
be granted in part and Defendant will be ordered to submit to an
audit.
I.
Background
Plaintiffs are trustees of various trust funds associated
with
the
International
Ornamental
Funds”).
&
The
Association
Reinforcing
Funds
are
of
Ironworkers
employee
meaning of § 3(3) of ERISA.
Bridge,
Union
benefit
No.
plans
See 29 U.S.C. § 1002(3).
Structural,
201
(“the
within
the
Defendant
Contract Design & Development, LLC is an employer engaged in an
industry
affecting
commerce
under
ERISA.
See
29
U.S.C.
§§
1002(5), (12).
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
and
submit
December,
required
contribution
2015.
to
reports
According
make
to
contributions
for
the
to
October,
November,
and
complaint,
Defendant
was
the
Funds
for
“each
hour
worked by employees of the Defendant performing work covered by
the Collective Bargaining Agreement . . . .”
Additionally,
Defendant
was
obligated
to
(ECF No. 1 ¶ 11).
submit
month reporting the amount of contributions due.
forms
every
The trust
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
are due.
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
make
any
payments.
contributions,
Plaintiffs
In
addition
seek
2
to
employees’
the
outstanding
dues,
liquidated
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
Defendant
sheets.
and
provided
Plaintiffs
with
his
weekly
payroll
(ECF No. 10-4, p. 3, 4).
Plaintiffs served the summons and complaint on Defendant on
November 1, 2016.
requisite
default.
time
When Defendant failed to respond within the
period,
The
clerk
January 3, 2017.
Plaintiffs
entered
moved
default
(ECF No. 8).
for
the
against
entry
of
Defendant
on
Plaintiffs filed the subject
motion for entry of default judgment on February 2, 2017.
(ECF
No. 10).
Plaintiffs
Vacation
and
Trustees
Apprentice
of
the
Funds
Rodman
201
(“Rodman
Pension,
Funds”)
seek
Welfare,
default
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.
Plaintiff
unpaid
the
Annuity
contributions
in
Fund
the
seeks
amount
(ECF No. 12).
$1,234.52
of
$924.00,
representing
liquidated
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.
3
(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.
For
the
following
reasons,
Plaintiffs’
motion
will
be
granted in part and denied in part.
II.
Standard of Review
Pursuant
to
Fed.R.Civ.P.
55(a),
“[w]hen
a
party
against
whom a judgment for affirmative relief is sought has failed to
plead
or
otherwise
affidavit
or
default.”
defend,
otherwise,
and
the
that
clerk
failure
must
enter
is
shown
the
by
party’s
Where a default has been previously entered by the
clerk and the complaint does not specify a certain amount of
damages,
the
plaintiff’s
court
may
application
enter
and
a
default
notice
pursuant to Fed.R.Civ.P. 55(b)(2).
to
judgment,
the
upon
defaulting
the
party,
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.
See Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002);
Lipenga v. Kambalame, 219 F. Supp. 3d 517 (D.Md. 2016).
The
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
4
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)).
Upon
entry
of
default,
the
well-pled
allegations
in
a
complaint as to liability are taken as true, but the allegations
as to damages are not.
court
first
Lawbaugh, 359 F.Supp.2d at 422.
determines
whether
the
unchallenged
The
factual
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).
While the
court may hold a hearing to prove damages, it is not required to
do
so;
it
may
rely
instead
on
“detailed
affidavits
documentary evidence to determine the appropriate sum.”
or
Adkins,
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
damages requested”).
III. Analysis
Assuming the truth of the well-pleaded allegations of the
complaint, as the court must upon entry of default, Plaintiffs
5
have established a violation under ERISA.
authorizes
parties
agreements.
to
enforce
the
Section 502(a)(3)
provisions
of
trust
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.
on
these
undisputed
allegations,
the
sufficient claim for relief under ERISA.
Funds
have
Based
stated
a
See La Barbera v. Fed.
Metal & Glass Corp., 666 F.Supp.2d 341, 348 (E.D.N.Y. 2009)
(entering
default
judgment
in
favor
of
trustees
where
the
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.,
Inc.,
Civ.
No.
DKC
11-0893,
2011
WL
6153022
(D.Md.
Dec.
9,
2011).
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
6
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).
pursuant
to
ERISA,
benefit
plan
trustees
have
the
Indeed,
right
review the records of employers contributing to the plans.
to
Id.
(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
the
absence
of
an
adequate
legal
remedy.
La
Barbera,
666
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.
audit
is
ensuring
not
permitted,
Defendant’s
Plaintiffs
compliance
with
will
the
Specifically, if an
have
terms
no
of
means
the
of
Trust
Agreements, nor will they be able to collect any amounts to
which
they
may
be
entitled.
Accordingly,
Plaintiffs
are
entitled to conduct an audit and Defendant will be directed to
7
produce
any
records
thirty (30) days.
requested
by
Plaintiffs’
auditor
within
Should the audit reveal unpaid or delinquent
contributions, Plaintiffs may petition the court, with proper
evidentiary
support,
requesting
appropriate
relief,
including
reimbursement of the audit fee and attorneys’ fees and costs
associated with the litigation.
A.
Unpaid Contributions
The original motion for default judgment demands payment to
Plaintiffs Rodman Funds of $3,738.55 in contributions.
At the
direction of the court, Plaintiffs supplemented their motion for
default
judgment
reducing
unpaid contributions.
a
spreadsheet
Contributions
amount
sought
to
$3,661.30
in
Plaintiffs support their request based on
attached
and
the
Dues
to
its
which
supplement
reflect
235
titled
hours
Summary
for
of
which
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.
In
support
of
these
amounts,
Plaintiffs
submit
the
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
8
administrator
for
the
Rodman
Funds.
Rhonda
St.
Clair
is
employed by Lawrence C. Musgrove Associates, Inc. which performs
services as a third party administrator to jointly administered
Taft-Hartley
Trust
Funds,
as
the
Administrator
of
the
Mid-
Atlantic States District Council Participating Locals Annuity
Fund (“Annuity Fund”).
a
spreadsheet
Each of the subject affidavits contains
specifying
damages, and interest.
unpaid
contributions,
liquidated
The spreadsheet attached to Ms. Cole’s
affidavit on behalf of the Rodman Funds is superseded by the
spreadsheet attached to Plaintiffs’ supplement.
Ellen
submitted
O.
a
Boardman
of
declaration
O’Donoghue
in
support
&
of
(ECF No. 12-1).
O’Donoghue
Plaintiffs’
LLP
also
claim
for
attorneys’ fees and costs (ECF No. 10-3).
After an independent determination of damages based on the
affidavits
finds
that
payroll
and
supporting
Plaintiffs
sheets
documentation
are
attached
owed
that
for
provided,
only
account
231
for
the
hours.
October
court
Seven
9,
2015,
through December 12, 2015, are clear and add up to a total of
207 hours.
then
(ECF No. 10-5, at 6-12).
attached
December
three
13-19,
more
2015,
sheets
each
of
Perplexingly, Plaintiffs
accounting
which
worked, but in three different ways.
shows
for
the
week
twenty-four
of
hours
(ECF No. 10-5, at 13-15).
One says the contractor worked eight hours per day on December
9
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.
third
says
that
the
contractor
(ECF No. 10-5, at 14).
worked
eight
hours
per
A
day
December 13, 14, and 15, and was paid in full for all three
days.
(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.
1
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.
10
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
contributions.
The record supports the Annuity’s demand for
$924 in unpaid contributions.
B.
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
contributions.
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
the
date
of
payment.
Pursuant
to
the
Rodman
Trust
Funds
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.
11
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%)
per annum.
These figures are supported by the record.
The
court calculates interest through July 31, 2017, to be $174.60.
C.
Working Assessment
The
Rodman
Funds
seek
$421.20
as
working
assessment.
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).
Plaintiffs
appear
these dues.
to
have
duplicated
(ECF No. 12-1).
certain
calculations
of
For October, Plaintiffs identify
gross wages of $1,539.00 that align with the payroll sheets for
October 9-31.
(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.
at 8-11).
(ECF No. 10-5,
Plaintiffs then calculate total wages of $2,403.00
for December, which appears to account for: seventeen hours from
12
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.
D.
Attorneys’ Fees
Plaintiffs seek $5,556.75 in attorneys’ fees.
In support
of this request, Plaintiffs submit a Declaration of Attorney’s
Fees
and
counsel.
a
spreadsheet
of
(ECF No. 10-3).
the
hours
billed
by
Plaintiff’s
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.
consistent
with
the
rates
and
times
The sum requested is
listed
by
Exhibit
1.
Plaintiffs attorneys’ fees will be reduced, however, for failing
to explain sufficiently its damages calculations.
In spite of
the
to
court’s
Plaintiffs’
supplement
record,
order
damages
seeking
including
to
supplement
calculations,
amounts
a
that
discrepancy
the
record
Plaintiffs
were
between
not
the
justify
submitted
supported
hours
by
for
a
the
which
contributions were sought by the Annuity Fund and the Rodman
13
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.
E.
Costs
Plaintiffs
seek
$675.00
in
costs.
In
support
of
this
request, Plaintiffs recite that in addition to the $400 filing
fee
to
commence
this
action,
$275
process on Defendant (ECF No. 10-3).
was
spent
for
service
of
The record supports this
requested amount.
IV.
Conclusion
For the foregoing reasons, Plaintiffs’ motion for the entry
of default judgment and supplement will be granted in part.
separate order will follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
14
A
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