Summary
The United States District Court for the District of Maryland partially grants plaintiffs’ motion for default judgment in an ERISA and LMRA action concerning delinquent employee-benefit contributions. The court establishes liability against East Coast Insulation, Inc. for contributions to the Medical Fund and Pension Fund, but denies default judgment as to the Apprenticeship Fund because plaintiffs did not sufficiently establish that defendant was bound to the relevant agreement. The court denies monetary and injunctive relief without prejudice for lack of adequate supporting documentation, permits supplementation on damages, and defers attorney’s-fee resolution.
Topics
Practice areas
Questions Presented
- Whether default judgment was appropriate after Defendant failed to respond.
- Whether the well-pleaded allegations established Defendant's liability under ERISA and the LMRA for delinquent Pension Fund and Medical Fund contributions.
- Whether the record established Defendant's liability for Apprenticeship Fund contributions.
- Whether Plaintiffs submitted competent evidence sufficient to establish the amount of damages.
- Whether Plaintiffs were entitled at that stage to injunctive relief and attorney's fees.
Holdings
- Default judgment was appropriate in part because Defendant was properly served, failed to file a responsive pleading, and did not respond to the motion for default judgment; however, default did not automatically establish entitlement to all requested relief.
- Plaintiffs established Defendant's liability under ERISA and the LMRA for delinquent contributions to the Pension Fund and Medical Fund.
- Plaintiffs did not establish Defendant's liability for Apprenticeship Fund contributions because they did not provide sufficient evidence that Defendant was bound by the 2022 Joint Trade Agreement imposing that obligation.
- Plaintiffs did not establish the requested monetary damages because the declaration and record lacked sufficient detail concerning employee hours and other evidence necessary to verify the calculations.
- The court denied injunctive relief without prejudice because the damages and underlying record were insufficient, and deferred resolution of attorney's fees.
Key quotations
“When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” (Legal Standard)
“Without more, the Court has no competent evidence to review in support of the requested amount and cannot verify Plaintiff[s’] calculation.” (Analysis § III.B)
Factual background
The Funds alleged that East Coast Insulation was obligated under collective bargaining and participation agreements to make hourly contributions to the Pension Fund, Medical Fund, and Apprenticeship Fund. Defendant allegedly underpaid or paid late contributions from July through November 2023 and failed to submit remittance reports or contributions from December 2023 through October 2024. The Participation Agreement expressly required contributions to the Pension Fund and Medical Fund, but the court found insufficient evidence that Defendant was bound by the 2022 Joint Trade Agreement's separate Apprenticeship Fund obligations. Plaintiffs submitted a declaration asserting damages, but it did not identify employee hours or otherwise provide enough detail to verify the claimed amounts.
Procedural history
Plaintiffs filed the complaint on January 2, 2025, and served Defendant on January 11, 2025. After Defendant failed to plead or otherwise defend, the Clerk entered default. Plaintiffs later moved for default judgment. The court granted default judgment in part as to liability for contributions to the Medical Fund and Pension Fund, denied liability as to the Apprenticeship Fund, denied monetary and injunctive relief without prejudice for lack of competent damages evidence, deferred attorney's fees, and allowed Plaintiffs thirty days to supplement the damages record.
Remand instructions
No remand. Plaintiffs' Medical Fund and Pension Fund, and their trustees, may supplement the damages record within thirty days. The court will then consider monetary and injunctive relief; attorney's-fee resolution is deferred.