Trustees of the Sheet Metal Workers' Local Union No. 100 Washington, D.C. Area Pension Fund et al v. Lohmeier's Sheet Metal, Inc. et al

Filing 9

MEMORANDUM OPINION. Signed by Judge George Jarrod Hazel on 3/13/2019. (jf3s, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
Southern Division

TRUSTEES OF THE SHEET METAL
WORKERS’ LOCAL UNION NO. 100,
WASHINGTON, D.C. AREA PENSION
FUND, et al.,

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Plaintiffs,

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v.

Case No.: GJH-17-2563
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LOHMEIER’S SHEET METAL, INC. et al.,
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Defendants.
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MEMORANDUM OPINION
On September 5, 2017, Plaintiffs Trustees of the Sheet Metal Workers’ Local Union No.
100, Washington, D.C. Area Pension Fund, Trustees of the Sheet Metal Workers’ Local Union
No. 100, Washington, D.C. Area Apprenticeship Fund, Trustees of the Sheet Metal Workers’
Local Union No. 100, Washington, D.C. Area Vacation Fund, Trustees of the Sheet Metal
Workers’ Local Union No. 100, Washington, D.C. Area 401(k) Fund, Trustees of the Sheet
Metal Workers’ Local Union No. 100, Washington, D.C. Area Recruitment Fund, Trustees of the
Sheet Metal Workers’ Local Union No. 100, Washington, D.C. Area Health Benefit Fund
(collectively, “The Funds”), and International Association of Sheet Metal, Air, Rail, and
Transportation Workers, Local Union No. 100 (“Local 100”) brought this action against
Defendants Lohmeier’s Sheet Metal, Inc. and Terry Lee Lohmeier pursuant to the Employee
Retirement and Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(a)(3), 1132(a)(3),
1145, and the Labor-Management Relations Act, 29 U.S.C. § 185(a), to recover amounts owed to
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the funds under the terms of a Collective Bargaining Agreement (“CBA”) and for injunctive
relief to require Defendants to submit to an audit pursuant to the terms of the CBA. ECF No. 1.
The Clerk has entered default, and Plaintiffs have moved for a default judgment. ECF No. 8 No
hearing is necessary. See Loc. R. 105.6 (D. Md. 2016). For the following reasons, Plaintiffs’
Motion for Default Judgment is granted.
I.

BACKGROUND1
The Funds are multiemployer employee benefit plans as defined in 29 U.S.C. §§ 1002(3),

1002(37). ECF No. 1 ¶¶ 1-6. The Funds are established and maintained in accordance with their
respective Agreement and Declarations of Trust. Id. Local 100 is a labor organization as defined
in 29 U.S.C. § 152(5). Id. ¶ 7. The Funds and Local 100 are all located in Maryland. Id. ¶¶ 1-7.
Defendant Terry Lee Lohmeier is a resident of the state of Maryland and an individual doing
business as Defendant Lohmeier Sheet Metal, Inc. Id. ¶ 8. Defendants operate as a contractor or
subcontract in the sheet metal industry, and at all times relevant to this action were employers “in
an industry affecting commerce” as defined by ERISA, 29 U.S.C. §§ 1002(5), (9), (11), (12) and
(14), and by the Labor Management Relations Act, 28 U.S.C. §§ 142(1), (3) and 152(2). Id. ¶ 10.
Plaintiffs allege that Defendants are bound by the terms of the CBA between Local 100
and the Sheet Metal and Air Conditioning Contractors National Association Mid-Atlantic
Chapter (the “Association”) effective July 1, 2014 through June 30, 2017. Id. ¶ 11. Specifically,
the CBA bound Defendants to the Funds’ Agreements and Declarations of Trust. Id. ¶ 19.
Defendants were obligated to “submit reports and pay to [The Funds] certain sums of money for
each hour worked by employees of the Defendants” covered by the CBA. Id. ¶ 16. Under the
terms of the agreement, Defendants must pay this money each month. ECF No. 8-2 at 58. The
Complaint originally alleged that Defendants failed to make these payments for the months of

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Unless otherwise stated, the background facts are taken from Plaintiff’s Complaint, ECF No. 1.

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June and July, 2016, and February, March, May, June, and July, 2017. Id. ¶ 18. However,
Defendants have since made the payments for those months and Plaintiffs now seek payments
for the months of July through December, 2017. ECF No. 8 at 4. The CBA and the Agreements
and Declarations of Trust contain provisions that hold an employer who defaults on these
payments liable for an additional 20% of the unpaid contributions in liquidated damages and
interest calculated at a rate of 12% per annum. Id. at 97. They also contain provisions requiring
employers to “promptly furnish to the Board of Trustees on demand, any and all records relating
to such Employer’s Employees determined by the Board of Trustees to be needed to determine
that the appropriate Contributions are being made to the Fund.” Id. at 96.
The Complaint in this case was filed on September 5, 2017. ECF No. 1. The summons
was returned executed on September 19, 2017. ECF No. 4. Defendants never filed a responsive
pleading, and on February 7, 2018, Plaintiffs moved for an entry of default. ECF No. 5. On
March 30, 2018, the Clerk entered default against Lohmeier’s Sheet Metal, Inc. ECF No. 7. On
April 18, 2018, Plaintiffs moved for default judgment in the amount of $23,562.91 and for an
injunction to enforce the audit agreement. ECF No. 8. The amount sought consists of $16,038.37
in unpaid contributions due for work performed between July and December 2017; $753.62 in
interest pursuant to the CBA’s rate of 12% per annum; $3,207.67 in liquidated damages pursuant
to the CBA; $3,073.25 in attorney’s fees (constituting 13.75 hours of work); and $490.00 in
costs. See ECF No. 8-2 at 97. Plaintiffs also seek an injunction requiring Defendants to “submit
all payroll books and records to the Funds for an audit, at Defendants’ expense, for the period of
January 1, 2016 through the present.” ECF No. 1 ¶ 27(c).
II.

STANDARD OF REVIEW
“A defendant's default does not automatically entitle the plaintiff to entry of a default

judgment: rather, that decision is left to the discretion of the court.” Choice Hotels Intern., Inc. v.
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Savannah Shakti Carp., No. DKC-11-0438, 2011 WL 5118328 at * 2 (D. Md. Oct. 25.2011).
Although “[t]he Fourth Circuit has a ‘strong policy’ that ‘cases be decided on their merits,’” id.
(citing United States v. Shaffer Equip. Co., 11 F.3d 450, 453 (4th Cir.1993)), “default judgment
may be appropriate when the adversary process has been halted because of an essentially
unresponsive party[.]” Id.
“Upon default, the well-pled allegations in a complaint as to liability are taken as true,
although the allegations as to damages are not.” S.E.C. v. Lawbaugh, 359 F. Supp. 2d 418, 422
(D. Md. 2005). The pleadings in the complaint must constitute a legitimate cause of action, as
analyzed under the Iqbal/Twombley pleading standard. Baltimore Line Handling Co. v. Brophy,
771 F. Supp. 2d 531, 544 (D. Md. 2011). That is, the “complaint must contain sufficient factual
matter, accepted as true, ‘to state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)).
Plaintiffs must “provide sufficient detail” to show “a more-than-conceivable chance of success
on the merits.” Upstate Forever v. Kinder Morgan Energy Partners, 887 F.3d 637, 645 (4th Cir.
2018) (citing Owens v. Balt. City State’s Attorneys Ofice, 767 F.3d 379, 396 (4th Cir. 2014)).
If the pleadings in the complaint constitute a legitimate cause of action, the Court must
make an independent determination of damages. See Agora Fin., LLC v. Samler, 725 F. Supp. 2d
491, 494 (D. Md. 2010). In doing so, the Court need not “accept factual allegations regarding
damages as true.” Id. The Court may not, however, enter a default judgment that differs “in kind
from, or exceed in amount, what is demanded in the pleadings.” Id.
III.

DISCUSSION
Under ERISA, “[e]very employer who is obligated to make contributions to a

multiemployer plan under the terms of the plan or under the terms of a collectively bargained
agreement shall . . . make such contributions in accordance with the terms and conditions of such
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plan or agreement.” 29 U.S.C. § 1145. Plaintiffs have plausibly alleged that Defendants were
bound by the terms of the CBA between Local 100 and the Association, and by the Funds’
Agreements and Declarations of Trust, that these agreements required monthly contributions for
any hours worked by covered employees, and that Defendants failed to make those payments.
Plaintiffs also plausibly allege that the CBA and the Agreements and Declarations of Trust
require disclosure of records relating to Defendants’ employees. Therefore, Plaintiff plausibly
alleges that Defendants have violated ERISA.
Turning to damages, as a threshold matter, the Complaint requests unpaid contributions
for the months of June and July, 2016, and February, March, May, June, and July, 2017. ECF
No. 1 ¶ 26. Plaintiffs also request “all amounts owed to its employees and the Union under the
terms of the Collective Bargaining Agreement through and including the date of judgment.” Id. ¶
27(D). Though Plaintiffs now seek, instead, payments for the months of July through December,
2017, this Court has repeatedly held that where plaintiffs seek “an additional unspecified amount
that would become due in subsequent months . . . defendants properly ‘had notice of what could
be included in any additional damages.” See Trs. Of the Nat’l Automatic Sprinkler Indus.
Welfare Fund v. Harvey, No. GJH-17-449, 2017 WL 4898264, at *5 (D. Md. Oct. 27, 2017)
(citing Trs. Of the Nat’l Automatic Sprinkler Indus. Welfare Fund v. Harvey, No. GJH-15-521,
2016 WL 297425, at *6 (D. Md. Jan. 21, 2016)). Therefore, the award of damages for the months
of July through December, 2017, does not violate the rule prohibiting a default judgment from
differing “in kind from, or exceed[ing] in amount, what is demanded in the pleadings.” Samler,
725 F. Supp. 2d at 494.
ERISA provides that if a court enters a judgment in favor of the Plaintiff, then the court’s
judgment shall award the plan:
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
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(C) an amount equal to the greater of—
(i)
interest on the unpaid contributions, or
(ii)
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)
(D) reasonable attorney’s fees and costs of the action, to be paid by the defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
29 U.S.C. § 1132(g). The CBA requires delinquent employers to pay 12% per annum interest
and liquidated damages in the amount of 20% of the unpaid contributions.
Plaintiffs have submitted a sworn affidavit stating that remittance reports submitted by
Defendants state that they owe $16,038.37 in unpaid contributions for the months of July through
December, 2017. ECF No. 8-2 ¶ 4. The same affidavit states that the interest owed on these
unpaid contributions, calculated at a rate of 12% per annum through April 6, 2018, amounts to
$753.62. Id. ¶¶ 5-6; id. at 113. Liquidated damages on the unpaid contributions, calculated at a
rate of 20%, amount to $3,207.67. Id. Plaintiffs have also submitted an affidavit swearing that
their attorneys have spent a total of 13.75 hours to bring this action, at a rate of $289.00 per hour
for attorney time and $145.00 per hour for paralegal time. ECF No. 8-3 ¶¶ 5-6. These rates are
within the local guidelines and are reasonable. See Loc. R. App. B (D. Md. July 1, 2016).
Plaintiffs’ affidavit also swears to the incursion of reasonable costs, including a filing fee in the
amount of $400.00 and a service of process fee of $90.00. The Court will thus enter judgment in
the amount of $23,562.91 pursuant to 29 U.S.C. § 1132(g).
Plaintiffs have also established that the CBA and the Agreements and Declarations of
Trust entitle Plaintiffs to review records sufficient for Plaintiffs to determine that the appropriate
Contributions are being made to the fund. ECF No. 8 at 96. Defendants are thus ordered to
furnish Plaintiffs with copies of these records.

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IV.

CONCLUSION
Plaintiff’s Motion for Default Judgment, ECF No. 8, is granted. A separate order shall

issue.

Dated: March 13, 2019

/s/
GEORGE J. HAZEL
United States District Judge

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