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)

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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 10 to 28

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