Michael J. Cook and Richard C. Dentinger, as Trustees of the Minnesota and North Civil File Dakota Bricklayers and Allied Craftworkers Pension Fund; Michael J. Cook and Paul R. Weise, as Trustees of the Minnesota and North Dakota Bricklayers and Allied Craftworkers Health Fund; Jay A. Lommel and Michael J. Cook, as Trustees of the Minnesota and North Dakota Bricklayers and Allied Craftworkers Vacation Fund; and Timothy J. Miller and Michael J. Cook, as Trustees of the Minnesota and North Dakota Bricklayers and Allied Craftworkers Journeyman and Apprentice Training Trust Fund, Plaintiffs,
Shotley Construction, Inc., a Minnesota corporation, and Eric M. Spangrud, Defendants.
Andrew E. Staab, Esq., Felhaber, Larson, Fenlon & Vogt, P.A., appeared as counsel for Plaintiffs.
No one appeared for Defendants.
FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER
MICHAEL J. DAVIS, Chief District Judge.
The above-entitled matter came before the Court on Plaintiffs' Motion to Compel Fringe Benefit Audit, Posting of a Surety Bond, and for Entry of Default Judgment (ECF Document No. 7). The Court, having reviewed the Complaint, the Clerk of Court's Entry 342426.2 of Default, the Affidavit of Andrew E. Staab, the Affidavit of Michael J. Cook, Plaintiffs' Memorandum of Law, and upon all files, records and proceedings herein, makes the following:
FINDINGS OF FACT
1. Federal Court jurisdiction of this action is based on 29 U.S.C. §1132, which is part of the Employee Retirement Income Security Act of 1974 ("ERISA"), and 28 U.S.C. §1331.
2. Plaintiffs are Trustees of the Minnesota and North Dakota Bricklayers and Allied Craftworkers Pension Fund, Health Fund, Vacation Fund, and Journeyman and Apprentice Training Trust Fund ("the Trust Funds"), and are fiduciaries of multiemployer plans as defined at 29 U.S.C. § 1002(37)(A).
3. The Trust Funds are established by Agreements and Declarations of Trusts, pursuant to the provisions of the Labor Management Relations Act of 1947 (the Taft-Hartley Act). As required by the Taft-Hartley Act, the Trust Funds are governed by a board of trustees with equal representation from labor and management. The Trust Funds are established to provide pension, health, and other benefits to employees doing work in the trades under the jurisdiction of the International Union of Bricklayers and Allied Craftworkers, Local 1 Minnesota/North Dakota ("Local 1"), for employers who are signatories to a Collective Bargaining Agreement or Participation Agreement, and also to the eligible dependents of those employees.
4. Defendant Shotley Construction, Inc. ("Shotley") is a Minnesota corporation and employer of certain employees doing work in the trades under the jurisdiction of Local 1. Shotley is signatory to the Minnesota Statewide Independent Agreement (the "Independent Agreement"), which it executed on February 24, 2012 and which binds it to the Collective Bargaining Agreement between the Associated General Contractors of Minnesota, the Minnesota Concrete and Masonry Contractors Association, the International Union of Bricklayers and Allied Craftworkers, Local 1 Minnesota/North Dakota, and Independent Employers (the "CBA").
5. Defendant Eric M. Spangrud ("Spangrud") is an officer and stockholder of the employer, Shotley. Spangrud is personally and individually bound to the Independent Agreement and the CBA pursuant to the terms and conditions of the Independent Agreement, which provides in part that it is binding personally and individually upon each of the individuals, partners, officers or stockholders of the employer.
6. The CBA is for the period of May 1, 2010 through April 30, 2013. Absent written notice of termination given at least 60 days before the expiration date, the CBA renewed automatically for a further period of 12 months. Neither party to the CBA gave written notice of termination at least 60 days before the expiration date, Shotley has not abrogated the CBA pursuant to the terms thereof and the provisions of 29 USC §158(d), and the CBA renewed and remains in full force and effect through April 30, 2014.
7. Pursuant to the Independent Agreement and the CBA, Shotley is required on a monthly basis to submit to Plaintiffs' Third-Party Administrator ("TPA") fringe benefit contribution Report Forms, and to pay on a monthly basis fringe benefit contributions for each hour worked by all employees covered by the CBA. The Report Forms and contributions are due on or before the 15th day of the month following the month in which the work was performed.
8. Pursuant to 29 U.S.C. §1145, 29 U.S.C. §1132(g)(2), and Article 22 of the CBA, if Shotley fails to timely submit the Report Forms and pay the contributions, then it is required to pay liquidated damages of ten percent (10%) of the contributions.
9. Shotley did not submit Report Forms or pay the contributions for work performed in April 2012. Plaintiffs through counsel made written demand on Shotley by letters dated June 12, 2012 and June 26, 2012 to submit Report Forms and pay the contributions, but it did not comply with the demands.
10. Shotley did not timely submit Report Forms or pay the contributions for work performed in May 2012. On July 23, 2012, Shotley submitted Report Forms and payment for the May 2012 work, but the payment did not include ...