National Electrical Benefit Fund v. United Network Systems, Inc. et al
MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 10/30/2017. (tds, Deputy Clerk)
: .... _.. :..,
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
lOll OCT 30
UNITED NETWORK SYSTEMS, INC.,
Case No.: (;."'-17-00027
Electrical Benefit Fund ("Plaintifr'
United Network Systems. Inc. and Janet Mroz (collectively.
under thc Employee Retirement
or "NEBF") brings this action
Income Security Act of 1974 ("ERISA").
Pension Plan Amendments
as amended hy the
Act of 1980.29 U.S.c. ~~ 100 I el self. Following
tailure to answer or otherwise detend in this action. the Clerk of the Court entered
detault against DeJendants on .Iune 6. 20 I 7. ECF No. I I. Now pending before the Court is
Motion for Default Judgment against Delendants
pursuant to Fcd. R. Civ. P. 55(b).
ECF No. 10. No hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For thc t()llowing
Motion t()r Default Judgment is granted. andjudgmcnt
DeJendants in the amount 01'$29.551.56.
is cntcred against
The following facts are established by the Complaint. ECF No. I. and evidentiary
exhibits in support of the Motion for Default Judgment. ECF Nos. 10-1. 10-2. The NEBI' is a
multiemployer employee pension bene/it plan within the meaning ofScction 3(2) of ERISA. 29
* 1002(2). which has been established
pursuant to an agreement entered into between the
International Brotherhood of Electrical Workers ("IBEW") and the National Electrical
Contractors Association ("NECA"). Eel' No. I ~ 4. Employers agree to participate in the NEBF
pursuant to collective bargaining agreements with the IBEW or one of its arnliated local unions.
/<1.The NEBI' is administered at 2400 Research Boulevard. Suite 500. Rockville. Maryland
Plaintiff states. upon in!cJnllation and belief: that Defendant United Network Systems.
Inc. ("UNS") is an lllinois corporation whose main place of business is or was 2021 Midwest
Road. Suite 1.1.-1. Oak Brook. Illinois 60523. /<1. 5. UNS is an employer within the meaning of
Section 3(5) of ERISA. 29 U.S.c.
* 1002(5) and is contractually
and legally obligated to submit
contributions to the NEBF. Id. According to the website for the Illinois Secrctary of State. UNS
was involuntarily dissolved on December 13. 2013./<1. Defendant Mroz is or was the president
of UNS and. since at least December 13.20 J 3. has continued to do business under the UNS
name and maintains the same address for service of process. /<1.'i'16. 7. Plaintiff alleges that
Mroz is or was the functioning principal of UNS. failed to observe corporate !cJnllalities as they
related to UNS. commingled the undercapitalized assets of UNS with her own personal IClI1ds.
and is obligated to satisfy UNS's delinquent payments owed to Plaintiff pursuant to 29 U.S.c.
* 1I32(g)(2). /<1.~~ 26-32.
At all times relevant to the action. Defendants
NEBI' on behalfofemployecs
of thc Restated Employees
Trust ("Trust Agrcement"").
actions to recovcr dclinquent
Plaintiff: as a Trustee. to take all necessary
interest on the delinquent
and all costs. including attorneys'
NEBI' on behalf of its cmployees
~ 10. Specifically.
covered by thc Collective
to an audit of Defendants'
by covered employces
II. Upon further inquiry. PlaintilTlearned
Pin cites to documents
I. 2013 and December
31. 2014. Ill. ~
have failed to pay required
owed flJr the periods January
Id. ~~ 12. 13.
filing system (CM/ECF)
owed to NEBI' in connection
has failed and rcfused to pay the same. ECI' NO.1
filed on the Court's electronic
ECF No. 10-2 at 12.
of the foregoing amounts.
in an amount
in making contributions
2006 through July 31. 2016 arc equal to $29.602.51.
books and records conducted
since at least 2006. and Defendants'
ECF No. I
have been delinquent
failed to rcport or pay $5.197.09
equal to twenty percent (20%) of the delinquency.
PlaintifT allegcs that Defendants
of the NEBI'. ECF No. I ~ 9: ECF
incurred in collecting
rate of ten percent (10%) per annum compounded
ECF No. 10-2 at 7.1 Defendants
were also bound to the terms and conditions
No. 10-2 at 6-13. The Trust Agreement
to the Complaint.
to submit payroll contributions
covcrcd by thc Agrcements.ld.:
with lBEW Local Union 134 as the collective
and. prior to liling
refer to the page numbers generated
the instant Complaint on January 5. 2017, ECF No. I. and Defendants were properly served with
the Complaint on January 29. 2017. lOCI'No. 10 ~ 2. An Answer li'om Defendants was due on or
belore February 19.2017. On May 22. 2017. with no answer having been tiled. Plaintiff moved
for default. and the Clerk of the Court entered default against Defendants on June 7. 2017. ECF
Nos. 9. 11. Alier the Complaint was served. PlaintilT received one payment of $35.954.26 on
Defendants' behalf~ ECF NO.1 0-2 ~ 7. Plaintiff considers this payment sufficient to satisfy
Defendants' unpaid contributions. liquidated damages. and audit expenses but maintains that
Defendants remain liable lor accrued interest and attorney's fees and costs in the total amount of
$29.551.56. ECF No. 10-2 ~'17. 12.
STANDARD OF REVIEW
"When a party against whom ajudgment for affirmative relief is sought has failed to
plead or otherwise delend, and that failure is shown by aflidavit or otherwise. thc clerk must
enter the party's default:. Fed. R. Civ. 1'. 55(a). "A detendant's default does not automatically
entitle the plaintiff to entry ofa default judgment: rather. that decision is leli to the discretion of
the court:' Educ. Credil
Oplill1ull1 Weldin/;. 285 F.R.D. 371. 373 (D. Md. 2012).
Although "[tJhe Fourth Circuit has a 'strong policy' that 'cases be decided on their merits ....
Choice Holels fmci'll .. Illc.
Sa\'Qllllah Slwkli Carp .. No. DKC-II-0438.
*2 (D. Md. Oct. 25. 2011) (citing Ulliled Slales
2011 WL 5118328. at
ShafFer Equip. Co.. 11 F.3d 450. 453 (4th Cir.
1993 i). "del~lltltjudgmentl11ay be appropriate when the adversary process has been halted
because of an essentially unresponsive partyl']"" fd. (citing s.E.C. \'. Lall'bauxh. 359 F. Supp. 2d
418.421 (D. Md. 2005)).
"Upon del~lUlt.the well-pled allegations in a complaint as to liability arc taken as true.
although the allegations as to damages are not:' Lml'hauxh. 359 F. Supp. 2d at 422: see also
RyanI'. Homecomings Fin. Network. 253 F.3d 778. 780 (4th Cir. 2001) (noting that "[t]he
defendant. by [its] default. admits the plaintiffs well-pleaded allegations of fact:' whieh provide
the basis for judgment). Upon a finding of liability ... [tJhe court must make an independent
determination regarding damages .. :. IlIt'IPalmers
& Allied hades IlIdlis. Pellsioll Fllml
Capital Restoration & Paimillg Co.. 919 F. Supp. 2d 680. 684 (D. Md. 2013). Fed. R. Civ. 1'.
54(c) 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:'
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 \'. Teseo. 180 F. Supp. 2d 15, 17 (D.D.C. 2001) (citing Unifed Artists CO/I)' \'. Freeman.
605 F.2d 854. 857 (5th Cir. 1979)).
The Court has subject matter jurisdiction over this action pursuant to Section 502 of
ERISA, 29 U.S.c. ~ 1132. Venue is proper under 29 U.S.c. ~~ 1132(e)(2) as the NEBF is
administered in Rockville. Maryland. Under ERISA. "'elvery employer who is obligated to
make contributions to a multiemployer plan under the terms of the plan or under the terms ofa
collectively bargained agreement shall. , . make such contributions in accordance with the terms
and conditions of such plan or such agreement:' 29 U,S,C, ~ 1145: see Bd. (!(Trllstees, Sheet
Metal Workers' Nat 'IPellsioll Fllnd
Camelof Constr .. IIIC,.No, I: 14-CV -161- LM B-TRJ. 2015
WL 13050031. at *3 (E.D, Va. Apr. 14. 2015). In the Complaint, Plaintiff alleges that
Defendants were obligated under the terms of the Collective Bargaining Agreements and Trust
Agreement to make contributions to NEBF. but failed to do so between January 1.2006 through
July 31. 2016. ECF NO.1 'lJ 13: ECF No. 10-2 '15.
29 U.S.C. ~ 1\32(g)(2) provides that in any action brought to enforce the payment of
delinquent contributions, and in which ajudgment in favor of the plan is awardcd, the court shall
award the plan:
the unpaid contributions,
interest on the unpaid contributions,
an amount equal to the greater of-interest on the unpaid contributions, or
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 Statc law)
of the amount determined by the court under subparagraph
reasonable attorney's fees and costs of the action. to be paid
by the defendant. and
such other Icgal or equitable relief as the court decms
29 U.S.c. ~ 1132(g)(2): see a!so Board (!fTruslees Sheel Mew! Workers' Nat. i'ension Fllnd ".
Columblls Sho\\' Case Co., NO.1: 14-cv-4 78. 2014 WI. 3811252. at *4 (E.D. Va. Aug. I. 2014):
'!i'ailllers & Allied hades /ndlls. i'ension Fund
Capita! Restoration & i'aintin~ Co.. 919
F. Supp. 2d 680. 686 (D. Md. 2013): 7i'ustees (!(I'lumhers & i'ipe./illers Nat. i'ension FUlld ".
Lake Side i'!lImhin~ & Heatin~. /nc .. NO.1 :12-CV-00298 LOIIDD, 2012 WL 6203001. at *4
(E.D. Va. Nov. 20. 2012). Thus. assuming the truth of the well-pleaded allegations in the
Complaint. PlaintilThas established Defendants' liability under the Collective Bargaining
Agrecmcnts, Trust Agrccmcnt. and Section 502(g) of ERISA. 29 U.S.c. ~ I I32(g)(2).
In support of its request for damages. Plaintiff submits a Delinquency Report for the
months of January 2006 through May 2017. ECF No. 10-2 at 20-23. along with the Affidavit of
Angel Losquadro, Director ofthc Audit and Delinquency Department of the NEBI', ECF No. 102 at 1-4. Losquadro attests that pursuant to the Trust Agreemcnt and 29 U.S.c. ~ 1132(g)(2).
NEBI' is authorized to recover interest on delinquent contributions at a rate often pcrcent per
annum. liquidated damages in the amount of twenty pcrcent of the delinqucncy. audit expenses.
and attorney's fees. ECI' No. 6-2 ~ 9.
Thc Delinquency Repon indicates $29.602.51 in unpaid contributions rcmained
outstanding during the months betwcen January 2006 through .Iuly 2016. as well as $5.920.50 in
liquidated damages and $431.25 in audit expenses. ECI' No. I0-2 ~ 23. Plaintiff rcceived a check
for $35.954.26 on February 14.2017 and applied the funds to satisfy the unpaid contributions.
liquidated damages. and audit expenses. lei. However. Defendants have failed to satisfy the
accrued interest charged on their unpaid contributions in the amount of $28.212.262 Id: see also
In support ofPlaintitrs
request for attorney's tees and costs in an amount of$1.339.30.
Plaintiff attaches the Allidavit of attorney Jennifer Bush Hawkins. ECl' No. 10-1. $1.339.30
represents 1.2 hours of work done by Hawkins. at an hourly rate of $3 79.00. 1.5 hours of work
done by legal assistant Caroline Lippie. at an hourly rate of$123.00. $400.00 filing fee. and
$300 for services of process fees. lei. at 2-3 (noting that Hawkins has been a licensed attorney for
twenty two years). The Court finds the time billed and hourly rates applied to be reasonable and
commensurate with the Local Guidelines (D. Md. July 1. 2016). Therefore. the request will be
granted in full. See Nal'l Elec. Bellefit Fund \'. AI/rallil-lemmer
Elf!('.. LLC. No. GJII-16-1184.
2017 WL 1273922. at *4 (D. Md. Jan. 6. 2017) (awarding attorneys' fees and expenses to same
counsel for NEBl'). Detendants therefore owe $1.339.30 in attorney's tees and costs. See 29
PlaintitTs Complaint prays for judgment to include "interest on the unpaid contributions calculated from the date
due until the date paid at the rate of I 0% per annum:' ECF No. I ,; 23(b). At the lime of tiling the Complaint.
Plaintiff calculated interest due as $22.82 \.4 7. Id At the time of filing the Motion for Default Judgment. PlaintifT
now calculates interest due as $28.212.26. ECF No. I0-2 ~ 10. While Fed. R. Civ. P. 54(c) provides Ihat "[a] default
judgment must not differ in kind from. or exceed in amount, \vhat is demanded in the pleadings:" this Court has held
that such an increase is permissible where Defendants had notice that an additional unspecified alllount of interest
would become due in subsequent months after filing the Complaint. Trustees (!fthe Nat 'I Automatic Sprinkler Indus.
Welfare Fund \'. II(I/,\,~)', No. GJH-15-521. 2016 WL 297425, at ,(, (D. Md. Jan. 21. 2016).
For the foregoing reasons. Plaintiffs Motion for Default Judgment. Eel' No. 10, is
granted against Defendants in the total amount of$29.551.56.
interest shall accrue until the judgment is satistied pursuant to 28 U.S.c.
* 1961. A separate
Order shall issue.
GEORGE J. HAZEL
United States District Judge
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