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Cook v. Shotley Construction, Inc.

United States District Court, D. Minnesota

March 26, 2014

MICHAEL J. COOK, as Trustee of the Minnesota and North Dakota Bricklayers and Allied Craftworkers Pension Fund, et. al., Plaintiffs,
v.
SHOTLEY CONSTRUCTION, INC., a Minnesota corporation, and ERIC M. SPANGRUD, Defendants.

Andrew E. Staab, Felhaber Larson, Counsel for Plaintiffs.

No appearance on behalf of Defendants.

MEMORANDUM OF LAW & ORDER

MICHAEL J. DAVIS, Chief District Judge.

I. INTRODUCTION

This matter is before the Court on Plaintiffs' Motion for Entry of Judgment. [Docket No. 28]

II. BACKGROUND

A. Factual Background

The factual background of this dispute is set forth in detail in this Court's Findings of Fact, Conclusions of Law and Order filed May 31, 2013. [Docket No. 15]. Generally, Plaintiffs are Trustees and fiduciaries of the Minnesota and North Dakota Bricklayers and Allied Craftworkers Pension Fund, Health Fund, Vacation Fund, and Journeyman and Apprentice Training Trust Fund ("Funds"), multiemployer plans governed by ERISA. Defendant Shotley Construction, Inc. ("Shotley") is a Minnesota corporation, and Defendant Eric M. Spangrud is the president and a stockholder of Shotley. Shotley and Spangrud were bound by the terms of the collective bargaining agreement ("CBA") between the Associated General Contractors of Minnesota, the Minnesota Concrete and Masonry Contractors Association, the Bricklayers and Allied Craftworkers Local Union 1 Minnesota/North Dakota, and Independent Employers. Under the CBA, Defendants were required to make contributions on behalf of covered employees. Defendants were also required to submit a fringe benefit contribution Report Form and pay fringe benefit contributions for each hour worked by all employees covered by the CBA during the previous month.

Defendants did not submit Report Forms or pay the contributions for work performed in April 2012 or May 2012. Plaintiffs made written demand on Shotley on June 12, 2012, and June 26, 2012, but Shotley did not comply. On July 23, 2012, Shotley submitted Report Forms and contributions for May 2012, but the payment did not include liquidated damages, so Plaintiffs returned the payment. On August 2, 2012, Shotley submitted Report Forms and payment for the June 2012 work, but did not include liquidated damages so Plaintiffs returned the payment. Shotley did not submit Report Forms or pay contributions for work performed in July 2012 or any month thereafter. In their June 26, 2012 demand letter, Plaintiffs had also demanded a fringe benefit audit, but Shotley failed to supply the requested payroll records, so the accuracy of the Report Forms that were submitted has not been verified.

B. Procedural History

Plaintiffs filed a Complaint against Shotley and Spangrud in this Court on September 4, 2012. The Complaint contains no individual counts, but generally alleges Defendants' delinquencies and requests that Defendants submit the documents necessary for an audit; post a $50, 000 bond; and pay all unpaid fringe benefit contributions owing and coming due during the pendency of the action, liquidated damages, and reasonable attorney fees. Shotley and Spangrud were served with the Summons and Complaint on September 6, 2012. [Docket No. 3] They failed to plead or otherwise appear. On October 2, 2012, the Clerk entered default against both Defendants. [Docket No. 6] Plaintiffs then moved for default judgment.

On May 31, 2013, after a hearing, this Court entered default judgment against Defendants and granted Plaintiffs' request for a fringe benefit audit. [Docket No. 15] Specifically, the Court ordered that, by June 14, 2013, Defendants were required to furnish Plaintiffs' agent with all employment and payroll records and other relevant information necessary for a fringe benefit audit, cooperate fully in the fringe benefit order, and post a surety bond in the face amount of $50, 000.

On October 16, 2013, Plaintiffs filed a Motion for Holding Defendants in Civil Contempt. [Docket No. 16] Plaintiffs asserted that although Defendants did mail a letter to Plaintiffs, Defendants had not otherwise complied with the Court's Order, and Plaintiffs requested that the Court impose a fine on Shotley and Spangrud and imprison Spangrud for civil contempt.

On November 5, 2013, this Court issued an Order to Show Cause that ordered Spangrud and Shotley to personally appear for a contempt hearing before this Court on January 10, 2014. [Docket No. 21] Spangrud did appear for the January 10 hearing. [Docket No. 25] The parties agreed to work together to attempt to resolve their issues. [Id.] On February 3, 2014, Plaintiffs informed the Court that Defendants had provided ...


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