National Electrical Benefit Fund v. United Network Systems, Inc. et al

Filing 12

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 10/30/2017. (tds, Deputy Clerk)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND

lOll OCT 30

SOlllhem Divisioll

NATIONAL ELECTI{ICAL
BENEFIT FUND,

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1'llIintiff,

v.

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UNITED NETWORK SYSTEMS, INC.,

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lind

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.JANET MROZ,

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Defendants.

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Case No.: (;."'-17-00027

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MEMORANDUM OI'INION
PlaintilTNational
against Defendants

Electrical Benefit Fund ("Plaintifr'

United Network Systems. Inc. and Janet Mroz (collectively.

under thc Employee Retirement
Multiemployer
Defendants'

or "NEBF") brings this action

Income Security Act of 1974 ("ERISA").

Pension Plan Amendments

"Defendants")

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
Plaintitrs

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
reasons. Plaintiffs

Motion t()r Default Judgment is granted. andjudgmcnt

DeJendants in the amount 01'$29.551.56.

is cntcred against

I.

BACKGROUND
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
U.S.c.

* 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
20850-3238. /<1.
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.

2

At all times relevant to the action. Defendants
agreements

("Collective

Bargaining

bargaining

representatives

Collective

Bargaining

Agreements")

for Defendants'

Agreements

NEBI' on behalfofemployecs

were signatories

'18. According

Id

Defendants

of thc Restated Employees

Trust ("Trust Agrcement"").

administration

actions to recovcr dclinquent

authorizes

contributions.

Plaintiff: as a Trustee. to take all necessary

including

interest on the delinquent

and all costs. including attorneys'

the delinquency.

NEBI' on behalf of its cmployees
~ 10. Specifically.
Defendants

according

covered by thc Collective

to an audit of Defendants'

by covered employces

II. Upon further inquiry. PlaintilTlearned
contributions

between January
that Defendants

the Complaint.

I

Defendant

Pin cites to documents

by

made demands

Bargaining

for payments

Agreements.

I. 2013 and December

ECF NO.1
in 2015.
with

31. 2014. Ill. ~

have failed to pay required
owed flJr the periods January

I.

Id. ~~ 12. 13.

filing system (CM/ECF)

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to the

owed to NEBI' in connection

has failed and rcfused to pay the same. ECI' NO.1

filed on the Court's electronic

fees and

ECF No. 10-2 at 12.

of the foregoing amounts.

that system.

at a

in an amount

in making contributions

contributions

2006 through July 31. 2016 arc equal to $29.602.51.

'i 23:

damages

books and records conducted

in contributions

since at least 2006. and Defendants'

PlaintifThas

ECF No. I

have been delinquent

failed to rcport or pay $5.197.09

work performed

liquidated

contributions

equal to twenty percent (20%) of the delinquency.

PlaintifT allegcs that Defendants

and

of the NEBI'. ECF No. I ~ 9: ECF

monthly.

incurred in collecting

to the

Benelit Agreement

rate of ten percent (10%) per annum compounded

audit expenscs

the

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.:

which govcrned

bargaining

with lBEW Local Union 134 as the collective

employees.

obligated

to collective

and. prior to liling

'i 14.PlaintifTliled

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.

II.

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

A~~II1I.COl]).\'.

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.

1'.

Sa\'Qllllah Slwkli Carp .. No. DKC-II-0438.

*2 (D. Md. Oct. 25. 2011) (citing Ulliled Slales

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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

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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

I'.

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)).
III.

ANALYSIS
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

1'.

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.

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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:
(A)
(B)
(C)
I.
II.

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
(A),

(D)
(E)

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
appropriate.

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):
/111

'!i'ailllers & Allied hades /ndlls. i'ension Fund

I'.

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

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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
29 U.S.c.

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1132(g)(2)(B).

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
U.S.c.
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1132(g)(2)(D).

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).

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IV.

CONCLUSION
For the foregoing reasons. Plaintiffs Motion for Default Judgment. Eel' No. 10, is

granted against Defendants in the total amount of$29.551.56.

Additionally. post-judgment

interest shall accrue until the judgment is satistied pursuant to 28 U.S.c.

* 1961. A separate

Order shall issue.

Date: October

&/?-

'5J. 2017

GEORGE J. HAZEL

United States District Judge

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