National Electrical Benefit Fund v. AC-DC Electric, Inc., No. 8:2011cv00893 - Document 8 (D. Md. 2011)
Court Description: MEMORANDUM OPINION (c/m to Defendant 12/9/11 sat). Signed by Chief Judge Deborah K. Chasanow on 12/9/11. (sat, Chambers)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND : NATIONAL ELECTRICAL BENEFIT FUND : v. : Civil Action No. DKC 11-0893 : AC-DC ELECTRIC, INC. d/b/a Q & S ELECTRIC CO. : MEMORANDUM OPINION Presently pending and ready for resolution in this action arising under the Employee Retirement Income Security Act of 1974 ( ERISA ) is the motion for default judgment filed Plaintiff National Electrical Benefit Fund ( the Fund ). No. 6). by (ECF The relevant issues have been briefed, and the court now rules pursuant to Local Rule 105.6, no hearing being deemed necessary. For the reasons that follow, Plaintiff s motion will be in granted part and denied in part without prejudice to renewal. I. Background The following facts are alleged in the complaint. is a multiemployer employee pension benefit plan The Fund within the meaning of section 3(2) of ERISA, see 29 U.S.C. § 1002(2), and two of its trustees have brought this action on its behalf. The Fund was established by an agreement between the International Brotherhood of Electrical Workers ( IBEW ) and the National Contractors employees Association, whose and employers it provides enter into agreements ( CBAs ) with the IBEW. pension benefits collective to bargaining Defendant AC-DC Electric is a New Jersey corporation and a signatory to CBAs with several IBEW unions. Pursuant to these CBAs, Defendant must submit contributions to the Fund on behalf of its employees and abide by the terms of the Fund s Restated Employees Benefit Agreement and Trust ( trust agreement ). The trust agreement requires Defendant to permit the Fund s trustees, or their authorized representatives, to audit its employment and payroll records in order to ensure that Defendant s contributions to the Fund are accurate. The trustees requested to audit Defendant s books for the years 2006 through 2010, but Defendant refused this request. On April 6, 2011, the trustees filed this action on the Fund s behalf, seeking an order requiring Defendant to submit to an audit for the years 2006 through 2010. seeks to identified have by Defendant the audit, pay all as well The complaint also delinquent as contributions liquidated damages, interest, and fees related to initiation of the action and the conduct of the audit. Defendant, whose corporate secretary was served with a copy of the complaint on April 18, 2011, did not answer or otherwise respond, and the Fund subsequently moved for entry of default and default judgment. default against Defendant on June 3, 2011. 2 The clerk entered II. Analysis Where a default has been previously entered and the complaint does not specify a certain amount of damages, the court may enter application and a default notice to judgment, the upon defaulting the party, plaintiff s pursuant to Fed.R.Civ.P. 55(b)(2). A defendant s default, however, does not automatically the entitle plaintiff to entry of a default judgment; rather, that decision is left to the discretion of the court. See Dow v. Jones, 232 F.Supp.2d 491, 494 (D.Md. 2002). The United States Court of Appeals for the 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)), but default judgment may be appropriate where a party is essentially unresponsive, SEC v. Lawbaugh, 359 F.Supp.2d 418, 421 (D.Md. 2005) (citing Jackson v. Beech, 636 F.2d 831, 836 (D.C.Cir. 1980)). Here, nearly eight months have passed since Defendant s corporate secretary was served with the complaint, but Defendant has failed to respond in any manner. As a result, the adversary process has been halted because of [this] essentially unresponsive party. Id. Default judgment against Defendant will thus be warranted if the complaint adequately pleads an ERISA claim. See Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001) (explaining that, although the defendant 3 is deemed admit upon complaint to entry every of well-pleaded default, the allegation court must of the nonetheless determine whether those allegations have been adequately pleaded and thus warrant relief). The facts set forth in the complaint, for which the Fund provides supporting documentation in its motion for default judgment, are sufficient to state a claim under ERISA. Section 502(a)(3) of ERISA authorizes parties to enforce the provisions of their CBAs and the trust agreement. See 29 U.S.C. § 1132(a)(3) (providing that a civil action may be brought: (A) to enjoin any act or practice which violates the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any . . . terms of the plan. ). signatory to According CBAs to the obligating it complaint, Defendant is to with trust comply the a agreement, which requires Defendant to submit to an audit at the request of the Fund s trustees. Despite demands by the trustees, however, Defendant purportedly refused to permit the Fund to conduct such an audit for the years 2006 through 2010. Based on these undisputed allegations, the Fund has stated a claim for which relief is warranted, Defendant s liability under ERISA. thereby establishing See La Barbera v. Fed. Metal & Glass Corp., 666 F.Supp.2d 341, 348 (E.D.N.Y. 2009) (entering default judgment in favor of a 4 fund s trustees where the trustees alleged that an employer had refused to submit to an audit despite being contractually bound to do so by a CBA and trust agreement). With Defendant s liability established, the analysis now turns to the issue of relief. The Fund sought the following forms of relief in both the complaint and the motion for default judgment: (1) an injunction requiring Defendant to submit to an audit for the years 2006 through 2010 within ten days; (2) an order that Defendant pay any delinquent contributions identified by the audit, along with liquidated damages, interest, and fees associated with the audit; and (3) an award of attorney s fees and costs related to the initiation of this action. Each of these requests will be analyzed in turn. ERISA authorizes courts to grant equitable relief as . . . appropriate where a plaintiff brings a successful action to enforce the requirements of ERISA. See 29 U.S.C. 1132(g)(2)(E); see also La Barbera, 666 F.Supp.2d at 350. relief may include an injunction ordering the § Such defendant to submit to an audit. Int l Painters & Allied Trades Indus. Pension Painting, Fund (D.D.C. 2010). v. Exec. Inc., 719 F.Supp.2d 45, 52 Indeed, pursuant to ERISA, benefit plan trustees have the right to review the records of employers contributing to the plans. Id. (citing Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 581 (1985)). 5 Because ERISA provides for injunctive relief as a possible remedy, an injunction requiring Defendant to submit to an audit is warranted as long as the Fund establishes the prerequisites for an injunction irreparable adequate legal remedy. harm and the absence of an La Barbera, 666 F.Supp.2d at 350-51. The Fund submitted a declaration from its counsel asserting that both of these prerequisites had been satisfied based on the facts of this case. (See ECF No. 6-3 ¶¶ 9-10). Courts considering analogous circumstances a defendant s refusal to permit an audit and subsequent unwillingness to engage in resulting court proceedings - have generally agreed and granted requests for injunctive relief. at 350-51 (granting an E.g., La Barbera, 666 F.Supp.2d injunction requiring an employer to submit to an audit where an employer ha[d] defaulted and ha[d] further refused to submit to the requested audit ). A similar conclusion is appropriate in the present case, and the Fund s request for an order requiring Defendant to submit to an audit within ten days will be granted. See Exec. Painting, 719 F.Supp.2d at 52-53; Flynn v. Mastro Masonry Contractors, 237 F.Supp.2d 66, 70 (D.D.C. 2002). While the facts of this case justify injunctive relief, they do not at present warrant a court order permitting the Fund to collect delinquent contributions, liquidated damages, interest, and fees stemming from 6 the audit. Indeed, this request is premature. Defendant failed to The Fund does not currently allege that make required contributions; rather, the Fund merely asserts that its trustees must conduct an audit to determine if Defendant has in fact failed to do so. As a result, the Fund s request for a blank check authorizing it to collect amounts that are currently unknown is denied. Should the audit reveal delinquent contributions, however, the Fund may petition the court, with proper evidentiary support, for such relief. See La Barbera, 666 F.Supp.2d at 350 (permitting the plaintiff to delinquent return to court contributions, to request liquidated amounts for interest, damages, owed and other fees following completion of an audit); Int l Painters & Allied Trades Indus. Pension Servs., 697 F.Supp.2d 112, Fund 117 v. Advanced (D.D.C. 2010) Pro Painting (allowing the plaintiffs to seek additional or supplemental judgments if the audit reveals additional delinquencies ). Finally, the Fund seeks an award of $1,919 for the attorney s fees and costs that it has incurred in obtaining this judgment, actions. both of which are generally See 29 U.S.C. § 1132(g)(2).1 available in ERISA Unlike with allegations pertaining to liability, however, a defendant is not deemed to admit allegations relating to damages 1 and other fees, see This amount includes $1,419 in attorney s fees, $350 in filing fees, and $150 in costs for a process server. 7 Lawbaugh, 359 F.Supp.2d at 422, and the plaintiff bears the burden to establish entitlement to recovery, Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992). sought, the Where a complaint does not specify the amount of court is required to make determination of the sum to be awarded. an independent Adkins v. Teseo, 180 F.Supp.2d 15, 17 (D.D.C. 2001) (citing SEC v. Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir. 1975). 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. Id. at 17 (citing United Artists Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979)). In large part here, the Fund fails to provide sufficient evidence to enable the court to make this determination. The court evaluates the reasonableness of an attorney s fee award by comparing the requested amount to the lodestar amount, which is defined as a reasonable hourly rate multiplied by hours reasonably expended. Grissom v. Mills Corp., 549 F.3d 313, 320-21 (4th Cir. 2008). Other courts in this district have found Appendix B of the Local Rules, which provides guidelines for hourly rates based on attorney experience, particularly instructive in determining whether an hourly rate is reasonable. See, e.g., Asbestos Workers Local 24 Pension Fund v. NLG Insulation, Inc., 760 F.Supp.2d 529, 543 (D.Md. 2010); Monge v. 8 Portofino Ristorante, 751 F.Supp.2d 789, 800 (D.Md. 2010). Appendix B provides for an hourly rate in excess of $275 only when attorneys fifteen years. have been admitted to the bar for at least See Local Rules, App. B. at § 3(d). Here, the declaration submitted by counsel for the Fund states that she worked 4.2 hours at a rate of $338 per hour, resulting in a total fee of $1,419. While the number of hours worked appears reasonable in light of the numerous documents that counsel has filed in this case, the record currently fails to demonstrate the reasonableness of the requested hourly rate. Indeed, at the present time, it is wholly devoid of any information supporting the rate listed in counsel s declaration. For that reason, the Fund s request for attorney s fees will be denied without prejudice to its right to renew. The Fund also seeks $500 in costs as part of its motion for default judgment - $350 in filing fees and $150 in fees related to serving process on Defendant. The docket reflects that the Fund in paid therefore, provided no the $350 entitled filing to fee recover documentation to this support this case, amount. its claim and The for it is, Fund has $150 in process server fees, and the request for an award as to that amount will thus be denied without prejudice to the Fund s right to renew. 9 III. Conclusion For the foregoing reasons, Plaintiff s motion for default judgment will be granted in part and denied in part without prejudice to renewal. A separate Order will follow. /s/ DEBORAH K. CHASANOW United States District Judge 10
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