Trustees of the National Automatic Sprinkler Industry Welfare Fund et al v. Kimberly Harvey d/b/a All Valley Fire Protection et al
Filing
13
MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 10/27/2017. (tds, Deputy Clerk)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
SOlltltem Division
TRUSTEES OF THE NATIONAL
AUTOMATIC SPRINKLER INDUSTRY
WELFARE FUND, et al.,
*
*
Plaintiffs,
*
v.
Case No.: G.JH-17-0449
*
KIMBERLY HARVEY D/B/A ALL
VALLEY FIRE PROTECTION, et aI.,
*
Defendants.
*
*
*
*
*
*
*
*
*
MEMORANDUM
The Trustees of the National Automatic
Automatic
International
Defendants
*
*
*
Sprinkler Industry Welfare Fund. National
Sprinkler Industry Pension Fund. Sprinkler Industry Supplemental
Training Fund ("'Plaintiffs"
*
OPINION
Pension Fund. and
or the "NASI Funds") bring this action against
Kimberly and Gregory Harvey. both in their individual capacities and to the extent
that they do business as All Valley Fire Protection ("Defendants")
Retirement
*
under the Employee
Income Security Act of 1974 ('"ERISA"). as amended by the Multiemployer
Plan Amendments
Act of 1980, 29 U.S.c.
~~ 1001 el seq. Following Defendant's
Pension
failure to
answer or otherwise defend in this action, the Clerk of the Court entered default against
Defendants
on June 7, 2017. ECF No. 12. Now pending before the Court is Plaintifls'
Default Judgment
is necessary.
pursuant to Fed. R. Civ. P. 55(b). ECF No. 11. No hearing
See Loc. R. 105.6 (D. Md. 2016). For the reasons that follow. Plaintiffs'
Default Judgment
$192.943.96.
against Defendants
is granted. Judgment
Motion for
is entered against Defendants
Motion for
in the total amount of
I.
BACKGROUND1
The NASI Funds are multi employer
ERISA, 29 U.S.c.
according
S
1002(3). ECF No. I
to the provisions
and the Collective
Defendants
at 8000 Corporate
Kimberly
under the laws of the State of California,
Defendants
operate as a contractor
ERISA, 29 U.S.c.
Act (LMRA),
SS
SS
Fire Sprinkler
Bargaining
Association.
were obligated
worked by their employees
According
to the Complaint.
Bargaining
Agreements
Maryland
Id. The
20785. /d.
doing business in California:
a corporation
~ 2-5.
with offices located in California./d.
in the sprinkler
existing
industry, and at all times
in an industry affecting commerce
as detined by
Relations
Id.
entered into agreements
Agreements
executed
with the Unions. which. in turn.
between the Unions and the
8. Pursuant to the Collective
Bargaining
Agreements,
to pay to the NASI Funds certain sums of money for each hour
who were covered by the Collective
Defendants
from September
employed
individuals
Bargaining
Id.
2009 through the present. /d. ~ 10.
for Participation
facts are taken from Plaintiffs
Agreements.
covered by the Collective
at all times relevant to the action, Defendant
and the Guidelines
The background
between
142(1). (3) and 152(2). See id.
bound them to the Collective
Agreements
Agreements
1002(5), (9). (11), (12) and (14) and by the Labor-Management
28 U.S.c.
Additionally,
Drive. Landover.
or subcontractor
PlaintitTs allege that Defendants
Defendants
of Trust establishing
and the Defendants.
All Valley Fire Protection.
relevant to the action were and are employers
I
Bargaining
and Gregory Harvey are individuals
the Harveys also do business as Defendant
and maintained
and Declarations
Fitters Local Unions No. 669 and 483 (the "Unions")
NASI Funds are administered
National
benefit plans as defined in Section 3(3) of
I. The Funds are established
of the Restated Agreements
the NASI Funds ("Trust Agreements").
Sprinkler
employee
was bound to the Trust
in the NASI Funds ("Guidelines")
Complaint.
2
ECF No. I.
Id.,r 9. Under
the terms of the Trust Agreements,
when an employer becomes two or more months delinquent
in making the required contributions,
and has not submitted the proper reporting forms. the NASI
Funds are permitted to project the amount of the employer's
delinquency
using the following
formula:
[T]he greater of (a) the average of the monthly payments or reports
submitted by the Employer for the last three (3) months for which
payments or reports were submitted, or (b) the average of the
monthly payments or reports submitted by the Employer for the
last twelve (12) months for which payments or reports were
submitted ...
ECF NO.1
17; ECF NO.1 1-14 at 24-25. Additionally,
required contributions,
when an employer fails to timely pay
the employer is obligated to pay liquidated damages under the following
calculation:
(1) If payment is not received ... by the 15th of the month, 10% of
the amount [owed] is assessed.
(2) An additional 5% is added if payment is not received ... by the
last working day of the month in which payment was due.
(3) An additional 5% is added if payment is not received by the
15th of the month following the month in which payment was
due.
ECF NO.1
20; ECF No. 11-14 at 23.
In February 2015, the Plaintiffs filed a separate lawsuit in this Court against Defendants
and obtained a judgment
Defendants
in favor of Plainti ITs in the amount of $243,480.26.
Id.
1I. Although
initially made some payments to reduce the amount owed, they began experiencing
difficulty making payments and, in October 2016, the Plaintiffs and Defendants entered into a
private Settlement Agreement
No. 1 1- 18. The Settlement
establishing
Agreement
a payment plan for Defendants.
Id.
12: see also ECF
required the Defendants to make monthly payments over
a period of fifty-two months. and required the Defendants to remain current on all subsequent
contributions
to the Plaintiffs. Id. ~ 13. In their Complaint
3
Plaintiffs allege that Defendants
failed to make settlement
contributions
payments
due on January
1,2017,
and allegedly
failed to pay
2016 through January 2017. Id. ~
which were owed for the months from November
14.
Plaintiffs
initiated this action against Defendants
their Complaint,
"contributions,
Plaintiffs
sought $155,842.40
costs, attorneys'
sought: $16,736.84
January 2017; $2,231.58
attorneys'
attorneys'
fees for contributions
2017. ECF No.4;
filed, Plaintiffs
that became due subsequent
Id. at 8-9. Summons
considered
damages
damages,
2016 through
costs, interest, and
interest, and
to the filing of their Complaint
were returned as executed on March 21,
which was served on Defendants,
since the tiling of their Complaint,
Motion for Default Judgment.
the well-pleaded
documentation.
favor of Plaintiffs,
result of Defendants'
allegations
on May 10. 2017, ECF No. 10.
on June 7, 2017. ECF No. 12. In their Motion
Plaintiffs allege that they have incurred
as Defendants
that were due since the tiling of the Complaint.
and supporting
for
Id ~ 15. They also
from November
moved for an entry of default against Defendants
Plaintiffs'
ECF No. I. In
ECF NO.5; ECF NO.6; ECF NO.7; ECF NO.8. With no Answer having been
for Default Judgment,
contributions
Agreement
damages:'
costs, liquidated
and the Clerk entered default against Defendants
additional
16.2017.
damages assessed on late contributions;
fees; and, all contributions,
through the date of judgment.
liquidated
due for work performed
in liquidated
reasonable
under the Settlement
fees and reinstated
for contributions
on February
have not made
ECF No. 11-1 at 2-3.
ECF No. II, is now ripe for review. I-laving
of the Complaint,
and the Motion for Default Judgment
the Court now grants default judgment
in the total amount of $192,943.96,
broken down as follows: $155.842.40
default on the terms of the Settlement
4
against Defendants
Agreement.
$27,894.73
in
and in
as a
subsequent
delinquent
attorneys'
II.
contributions,
fees of $1,100.50,
STANDARD
$6,549.12
in liquidated
enter the party's
$827.21 in interest,
and costs of $730.00.
OF REVIEW
"When a party against whom a judgment
plead or otherwise
damages.
for affirmative
relief is sought has failed to
defend, and that failure is shown by affidavit or otherwise,
default."
Fed. R. Civ. P. 55(a). "A defendant's
entitle the plaintiff to entry of a default judgment:
the clerk must
default does not automatically
rather, that decision is left to the discretion
of
the court." Educ. Credit lv/gmt. Corp. v. Optimum Welding, 285 F.R.D. 371, 373 (D. Md. 2012).
Although
"[t]he Fourth Circuit has a 'strong policy'
that 'cases be decided on their merits,'''
Choice Hotels Intern .. Inc. v. Savannah Shakti Carp., No. DKC-II-0438,
20 II WL 5118328 at
*2 (D. Md. Oct. 25,2011)
(citing United States v. ShqfTer Equip. Co., II F.3d 450, 453 (4th Cir.
1993)), "default judgment
may be appropriate
because of an essentially
418,421
unresponsive
process has been halted
It!. (citing S.E.C. v. Lawhaugh, 359 F. Supp. 2d
(D. Md. 2005).
"Upon default, the well-pled
although
party[.r
when the adversary
the allegations
court first determines
allegations
as to damages
in a complaint
as to liability are taken as true,
are not." Lawbaugh. 359 F. Supp. 2d at 422. Thus, the
whether the unchallenged
factual allegations
constitute
a legitimate
cause
of action. Agora Fin.. LLC v. Sander, 725 F. Supp. 2d 491, 494 (D. Md. 2010). In determining
whether the factual allegations
constitute
a legitimate
cause of action, courts typically apply the
Iqbal/Twombly pleading standard. See Baltimore Line Handling Co. v. Brophy, 771 F. Supp. 2d
531, 544 (D. Md. 20 11) (finding Iqbal "relevant
a complaint
to the default judgment
inquiry").
fails to state a claim entitling the pleader to relief if the complaint
'" labels and conclusions'"
or "'naked
Under Iqbal.
offers only
assertion[ s]' devoid of' further factual enhancement.'"
5
Ashcr<~fiv. Iqbal. 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twomhly. 550 U.S.
544, 555-57 (2007)). As the Fourth Circuit has recognized, ...the court need not accept the legal
conclusions drawn from the facts. and [ ] need not accept as true unwarranted inferences.
unreasonable conclusions, or arguments.'" Monroe v. City (~rCI1(Jrloffes\'ille.579 F.3d 380. 38586 (4th Cir.2009) (citation omitted), cert. denied. 559 U.S. 992 (20 I0); accord Simmons v.
United Mortg. & Loan Investment. LLc' 634 F.3d 754, 768 (4th Cir. 2011). Indeed. "where the
well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct.
the complaint has alleged-but
it has not 'show[n]'-'that
the pleader is entitled to relief.'"
Iqhal. 129 S.Ct. at 1950 (quoting Fed. R. Civ. P. 8(a)(2)).
If liability is established. the court then makes an independent determination of damages.
Agora Financial. LLC, 725 F. Supp. 2d at 494. Fed. R. Civ. P. 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." In entering default judgment. a court
cannot, therefore. award additional damages "because the defendant could not reasonably have
expected that his damages would exceed th[e] amount [pled in the complaint]." In re Genesys
Data Techs .. Inc., 204 F.3d 124, 132 (4th Cir. 2000). 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. 180 F. Supp. 2d at 17 (citing
United Artists Corp. v. Freeman. 605 F.2d 854. 857 (5th Cir. 1979)); see also Lahorers' District
Council Pension. et al. v. E.
c.s.. Inc.. No. WDQ-09-3174.
2010 WL 1568595. at *3 (D. Md.
Apr. 16. 2010) ("[O]n default judgment. the Court may only award damages without a hearing if
the record supports the damages requested.").
6
III.
ANALYSIS
A. Liability
Under ERISA, "[e]very
multiemployer
agreement
employer
who is obligated
to make contributions
to a
plan under the terms of the plan or under the terms of a collectively
shall ...
make such contributions
in accordance
bargained
with the terms and conditions
of such
Nat 'I
plan or such agreement."
29 U.S.c.
Pension
Constr .. Inc., No. I: 14-CV -161-LMB- TRJ, 2015 WL 1305003 L at *3
Fllml v. Camelot
~ 1145; see Bd. (?f'Trllstees. Sheet lv/etal Workers'
(E.D. Va. Apr. 14.2015).
Because Defendants
the well-pleaded
establish
have failed to appear or otherwise
factual allegations
that: (1) Defendants
timely payments
Defendants
were obligated
to the Plaintiffs,
were obligated
make timely contributions
in the Complaint.
unpaid contributions
Ryan. 253 F.3d at 780. Those allegations
by the terms of the Settlement
and that Defendants
Agreement
failed to make those payments;
by the terms of the CBA. the Trust Agreements.
to make
and. (2)
and the Guidelines
to the NASI Funds for any hours worked by covered employees.
that Fire Tech failed to make those payments
2017. The Complaint
defend. the Court accepts as true
therefore
establishes
and for additional
for the periods from November
that Defendants
damages
and
2016 through May
are liable to the Trustees
as set out in the governing
to
for those
agreements.
B. Damages
Regarding
damages,
enforce the payment
awarded,
29 U.S.C. ~ I I 32(g)(2) provides that in any action brought to
of delinquent
contributions,
and in which a judgment
the court shall award the plan:
(A)
(B)
(C)
I.
the unpaid
interest on
an amount
interest on
contributions,
the unpaid contributions.
equal to the greater 01'the unpaid contributions. or
7
in favor of the plan is
11.
(D)
(E)
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 State law)
of the amount determined by the court under subparagraph
(A),
reasonable attorney's fees and costs of the action, to be paid
by the defendant, and
such other legal or equitable relief as the court deems
appropriate.
29 U.S.c. ~ I I 32(g)(2); see also Columbus Show Case Co.. 2014 WL 3811252. at *4 (E.D. Va.
Aug. 1,2014);
Int'/ Painters & Allied Trades Indus. Pension Fund v. Capital Restoration &
Painting Co., 919 F. Supp. 2d 680, 686 (D. Md. 2013); Trustees qf Plwnbers & Pipe.!itters Nat.
Pension Fund v. Lake Side Plumbing & Heating. Inc., No. I: 12-CV-00298
LO/lDD, 2012 WL
6203001, at *4 (E.D. Va. Nov. 20, 2012).
In support of the request for damages, Plaintiffs refer to the Declaration of John P. Eger,
who attests that Defendants
in fact failed to make payments under the Settlement Agreement
January 2017 through May 2017, and failed to pay contributions
November
2016 through March 2017, and that Defendants
owed for the months of
failed to submit report forms for those
months. ECF No. 11-4 at 3-4. Eger also attests to a projected delinquency
November
2016 through March 2017 in the amount of $27,894.73,
described supra. ECF No. 11-4
for
for the months of
using the projection
formula
15. Pursuant to the liquidated damages formula described
earlier, and as Eger attests in his Declaration,
Defendant
further owes $6,549.12 in liquidated
damages. ECF No. 11-4 ~ 18; see 29 U.S.c. ~ I I 32(g)(2)(C)(ii).
Additionally.
interest assessed at twelve percent per annum on unpaid contributions
and accruing through the date of payment, totaling $21,301.21.
owed pursuant to 29 U.S.C. ~ 1 I 32(g)(2)(B)
through March 31,2017,
ECF No. II
and the Trust Agreements.
4. The interest is
In support of their
damages, Plaintiffs further attach all the relevant contracts, Trust Agreements,
8
Plaintiffs seek
Settlement
Agreements,
and Policies. See ECF No. 11-5; ECF No. 11-6; ECF No. 11-7; ECF No. 11-8; ECF
No. 11-9; ECFNo.
11-10;ECFNo.11-11;ECFNo.
11-12;ECFNo.
11-13 ; ECFNo.
11-14;
ECF No. 11-15; ECF No. 11-16; ECF No. 11-17; ECF No. 11-18.
Finally, in support of their claim for attorneys'
declarations
of their attorney,
Charles W. Gilligan,
fees and costs, Plaintiffs submit the
ECF No. 11-19, a spreadsheet
specifying
the
hourly billing by Gilligan and his paralegal
with respect to the instant lawsuit, ECF No. 11-20,
and invoices for costs spent on out-of-state
process service, ECF No. 11-21. These materials
indicate that Gilligan's
firm spent 8.25 hours on this case on behalf of Plaintiffs,
$122.00 per hour for paralegal
time and $310.00 per hour for attorney time. ECF No. 11-19 ~13,
5; ECF No. 11-20. These rates are within the local guidelines
and are reasonable.
App. B (D. Md. July 1, 2016). Plaintiffs are therefore awarded $1,100.50
record also substantiates
at a rate of
the following
expenses:
See Loc. R.
in attorneys'
fees. The
$330.00 for service of process and $400.00 for
filing fees. ECF No. 11-19 ~ 6; ECF No. 11-20; ECF No. 11-21. Thus, Plaintiffs are awarded
$730.00 in costs.
The Court notes that the judgment
initial Complaint,
it is awarding
and that under Fed. R. Civ. P. 54(c), "[a] default judgment
kind from, or exceed in amount, what is demanded
defendant
could not reasonably
in the complaint]."
have expected
in the pleadings."
must not differ in
This is "because
the
that his damages would exceed th[el amount [pled
In re Gene.sys Data Techs., Inc., 204 F.3d 124, 132 (4th Cir. 2000). However,
in cases where plaintiffs
sought in their Complaint
become due in subsequent
what could be included
specific amounts
is higher than the amount sought in the
unspecified
months, this Court has held that defendants
in any additional
Plaintiffs
an additional
damages,"
and furthermore
sought to recover in default judgment
9
amount that would
properly "had notice of
"received
notice of the
when they were served with
copies of Plaintiffs'
Motion for Default Judgment."
Indus. We(fcrreFund v. Harvey, No. GJH-15-521,
Trustees (~lthe Nat 'I A utomatic Sprinkler
2016 WL 297425, at *6 (D. Md . .Ian. 21.
2016). See also Trustees qlNat'l Automatic Sprinkler Indust. We(fcrreFund v. First Responder
Fire Prot. Corp., No. GJH-16-4000,
("Defendant
to make contributions
agreements:').
collective
bargaining
award is proper under Rule 54(c).
CONCLUSION
entered
against
Additionally,
U.S.c.
increase due to the continuing
to the Funds under the applicable
As such, the Court finds that the additional
For the foregoing
IS
at *2 (D. Md. Aug. 1L 2017)
is fairly regarded to be on notice of the subsequent
obligations
IV.
2017 WL 3475678,
reasons,
Defendants
post-judgment
Plaintiffs'
Motion for Default Judgment
and in favor of Plaintiff
interest
is granted. Judgment
in the total amount
shall accrue until the judgment
is satisfied
of $192.943.96.
pursuant
~ 1961. A separate Order shall issue.
Date: October
&/e:-
'b-7 . 2017
GEORGE J. HAZEL
United States District Judge
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