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.,

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*

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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