National Electrical Benefit Fund v. Lewis Electric, LLC

Filing 8

MEMORANDUM OPINION. Signed by Judge Paula Xinis on 10/16/2017. (jf3s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
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NATIONAL ELECTRICAL BENEFIT FUND
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Plaintiff,
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v.

Civil Action No. PX-17-0403
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LEWIS ELECTRIC, LLC,
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Defendant.
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MEMORANDUM OPINION
On February 13, 2017, Plaintiff National Electrical Benefit Fund (“NEBF”) filed its
complaint in the above-captioned case. ECF No. 1. Summonses were served on the Defendant,
Lewis Electric, LLC (“Lewis”). ECF No. 4. On April 4, 2017, the Plaintiff moved for entry of
default against the Defendant pursuant to Rule 55(a) of the Federal Rules of Civil Procedure.
ECF No. 5. The Clerk entered default on April 13, 2017. ECF No. 7. NEBF has moved for
default judgment. ECF No. 6. Lewis has not filed a response, and the time for doing so has
passed. See Loc. R. 105.2.a. Pursuant to Local Rule 105.6, a hearing is not necessary. For the
reasons stated herein, NEBF’s Motion for Default Judgment is GRANTED.
I.

BACKGROUND

This action is brought by the trustees of NEBF, a multiemployer pension plan, against
Lewis, an employer that is obligated to contribute to the NEBF pursuant to its collective
bargaining agreements with the IBEW Local Union 1186 and the NEBF plan documents. ECF
No. 1 at ¶¶ 1, 4, 5, 6, 7. NEBF alleges that, notwithstanding its obligations pursuant to the
collective bargaining agreements and the NEBF plan Trust Agreement, Lewis has been
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delinquent in making contributions to the NEBF. Id. ¶ 8. NEBF seeks a judgment in the amount
of $14,016.11 reflecting delinquent contributions between December 2015 and June 2016,
interest, liquidated damages, and attorney’s fees, as well as an order directing Lewis to provide
monthly payroll reports or access to Lewis’s books and records from July 2016 forward. ECF
No. 6 at 2.
II. DISCUSSION
A. Default Judgment
Federal Rule of Civil Procedure 55(b) provides that default judgment may be entered
“[i]f the plaintiff’s claim is for a sum certain or a sum that can be made certain by computation”
and the defendant is in default for failing to appear. Fed. R. Civ. P. 55(b)(1). The entry of
default judgment is a matter within the discretion of the Court. SEC v. Lawbaugh, 359 F. Supp.
2d 418, 421 (D. Md. 2005) (citing Dow v. Jones, 232 F. Supp. 2d 491, 494 (D. Md. 2002)).
Although “the Fourth Circuit has a ‘strong policy that cases be decided on the merits,’”
Disney Enters. v. Delane, 446 F. Supp. 2d 402, 405 (D. Md. 2006) (quoting United States v.
Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir. 1993)), “default judgment is available when the
‘adversary process has been halted because of an essentially unresponsive party,’ ” id. (quoting
Lawbaugh, 359 F. Supp. at 421). It is within the Court’s discretion to grant default judgment
when a defendant is unresponsive. See Park Corp. v. Lexington Ins. Co., 812 F.2d 894, 896 (4th
Cir. 1987) (upholding a default judgment awarded where the defendant lost its summons and did
not respond within the proper period); Disney Enters., 446 F. Supp. 2d at 405–06 (finding
appropriate the entry of default judgment where the defendant had been properly served with the
complaint and did not respond, despite repeated attempts to contact him).

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To determine whether a default judgment is appropriate, the Court engages in a two-step
inquiry: First, the Court must decide “whether the unchallenged facts in plaintiff[’s] complaint
constitute a legitimate cause of action.” Agora Fin., LLC v. Samler, 725 F. Supp. 2d 491, 494
(D. Md. 2010). Second, if the Court finds liability is established, it must “make an independent
determination regarding the appropriate amount of damages.” Id. The Court may hold a hearing
to determine damages, or it may rely on detailed affidavits or other documentary evidence.
Lipenga v. Kambalame, 219 F. Supp. 3d 517, 525 (D. Md. 2016).
Lewis was served with copies of the Complaint in February of 2017 and failed to
respond. See ECF No. 4. Accordingly, all of NEBF’s allegations—other than those pertaining
to damages—are deemed admitted. Fed. R. Civ. P. 8(b)(6). Lewis also did not respond to
NEBF’s motion for entry of default judgment, nor did it move to set aside the Order of Default
entered by the Clerk of the Court. This Court will exercise its discretion to grant default
judgment in light of the Defendant’s failure to respond. See Educ. Credit Mgmt. Corp. v.
Optimum Welding, 285 F.R.D. 371, 373 (D. Md. 2012).
B. Liability
NEBF has pleaded adequately that Lewis has violated 29 U.S.C. § 1145 by failing to
make contributions required pursuant to collective bargaining agreements and the NEBF Trust
Agreement. The Trust Agreement makes plain that a covered employer is obligated to make
periodic contributions to the NEBF. ECF No. 6-2 at 6. NEBF has alleged that Lewis has failed
to make its contributions, and in support of its claims, NEBF has submitted the affidavit of Angel
Losquadro, Director of NEBF’s Audit and Delinquency Department, with a copy of the relevant
portions of the Trust Agreement and a report of delinquent payments ascertained from Lewis’
self-reported accounting to NEBF. See ECF No. 6-2 at 1–3, 5–12; 14. The affidavit, along with
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its exhibits and additional exhibits provided to the Court with respect to damages, clearly
establish Lewis’ liability. Accordingly, default judgment will be entered in NEBF’s favor.
C. Damages
Federal Rule of Civil Procedure 54(c) provides that “[a] judgment by default shall not be
different in kind from or exceed in amount that prayed for in the demand for judgment.” The
Court must make an independent determination as to the relief requested. See Agora Fin., LLC,
725 F. Supp. 2d at 494.
Although liability has been established, an allegation “relating to the amount of damages”
is not deemed admitted based on a defendant’s failure to deny in a required responsive pleading.
Fed. R. Civ. P. 8(b)(6); see Trs. of the Elec. Welfare Trust Fund v. MH Passa Elec. Contracting,
Inc., No. DKC–08–2805, 2009 WL 2982951, at *1 (D. Md. Sept. 14, 2009). Damages in the
context of default judgment “must generally be established in an evidentiary proceeding at which
the defendant is afforded the opportunity to contest the amount claimed.” U2 Home Entm’t, Inc.
v. Fu Shun Wang, 482 F. Supp. 2d 314, 318 (E.D.N.Y. 2007). However, the Court may award
damages without a hearing if the record supports the damages requested. See Pentech Fin.
Servs., Inc. v. Old Dominion Saw Works, Inc., No. 6:09cv00004, 2009 WL 1872535, at *2 (W.D.
Va. June 30, 2009) (concluding that there was “no need to convene a formal evidentiary hearing
on the issue of damages” after default judgment was entered against the defendant because the
plaintiff submitted affidavits and printouts of electronic records establishing the amount of
damages it sought).
Under 29 U.S.C. 1132(g)(2), NEBF is entitled to Lewis’ unpaid contributions, interest on
the unpaid contributions, the liquidated damages provided for under the plan, and reasonable
attorney’s fees and costs. NEBF has attached to its Motion for Default Judgment the records
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detailing the amount owed by Lewis, the authority for charging and amounts owed for interest
and as liquidated damages, and the records of its counsel detailing legal fees and expenses
incurred as a result of this action, totaling $14,016.11. ECF Nos. 6-1, 6-2. The Court notes that
NEBF presently requests $1,001.62 in interest on unpaid contributions, which is slightly higher
than the $741.85 prayed in the Complaint. This difference is simply the result of additional
interest accruing during the pendency of this case. Because NEBF is entitled, by statute, to
interest for which the Complaint sets forth the method for calculation, the Court includes in the
damages award the calculated interest to-date. See Dotson v. Pfizer, Inc., 558 F.3d 284, 302 (4th
Cir. 2009) (prejudgment interest pursuant to statute is mandatory rather than discretionary, and
therefore “does not constitute the kind of additional relief that requires briefing” (internal marks
omitted)); see also Ames v. STAT Fire Suppression, Inc., 227 F.R.D. 361, 362 (E.D.N.Y. 2005).
Therefore, the Court will award the $14,016.11 in its entirety. The Court also will order,
consistent with NEBF’s request in its Complaint and its Motion for Default Judgment, as well as
the Trust Agreement, that Lewis’ delinquent contributions will accrue interest at 10% per annum,
compounded monthly. See ECF No. 1 at 5; ECF No. 6 at 2; ECF No. 6-2 at 11.
D. Inspection of Books
NEBF requests that default judgment include an order directing Lewis to submit monthly
payroll reports or other payroll records for the period from July 2016 through the present,
consistent with the terms of the Trust Agreement. ECF No. 6-2 at 10–11. NEBF prayed for the
same relief in its Complaint. Thus, the Court will so order.
II.

CONCLUSION

For the foregoing reasons, NEBF’s motion for default judgment is GRANTED. NEBF is
entitled to $9,567.24 in delinquent contributions, $1,001.62 in interest, $1,913.45 in liquidated
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damages, and $1,533.80 in attorney’s fees and costs. The Court also will issue an order directing
Lewis to provide NEBF with payroll reports and/or access to its books and records. A separate
order shall follow.

10/16/2017
Date

/S/
Paula Xinis
United States District Judge

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