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Conroy v. Marianne's Roofing Co., LLC

United States District Court, D. Minnesota

March 15, 2018

Mark Conroy and Robert Dalsin, as Trustees of the Roofers Local No. 96 Health and Welfare Fund; Chris Cronin and James Hadel, as Trustees of the Roofers and Waterproofers Research and Education Joint Trust Fund; and Robert Dalsin and Kinsey Robinson, as Trustees of the National Roofing Industry Pension Fund, Plaintiffs,
Marianne's Roofing Company LLC, a Wisconsin limited liability company, separately and doing business as “W.J. Woodruff Roofing Contractors, ” Defendant.



         The above-captioned case comes before the undersigned on Plaintiffs' Motion for Preliminary Injunction to Compel Compliance with Audit (“Motion for Emergency Relief”) [Doc. No. 4], for which Plaintiffs requested expedited relief.[1] This matter has been referred for the resolution of pretrial matters pursuant to 28 U.S.C. § 636(b)(1) and District of Minnesota Local Rule 72.1. (Order of Reference) [Doc. No. 10]. For the reasons stated below, the Court recommends granting the Motion for Emergency Relief.

         I. BACKGROUND

         “The Trust Funds are multi-employer, jointly-trusteed, fringe benefit plans created and maintained” under the Labor Management Relations Act and are multi-employer plans under the Employment Retirement Income Security Act of 1974 (“ERISA”). (Compl. ¶ 2). The Trust Funds “provide pension, health, and other benefits to individuals performing labor in the trades, or to the eligible dependents of such individuals.” (Id. ¶ 7). Defendant Marianne's Roofing Company, LLC (“Marianne's Roofing”), is a Wisconsin-based limited liability company. (Id. ¶ 4).

         Marianne's Roofing is a party to a collective bargaining agreement (the “CBA”) that requires it to submit “fringe benefit contribution reports and pay the fringe benefit contributions owed for each hour worked in the immediately preceding month.” (Id. ¶ 10); see also (id. ¶ 8); (Articles of Agreement, Ex. B at 15, Attached to Aff. of Thomas C. Atmore, “Atmore Aff.”) [Doc. No. 7-1].[2] The reports and contributions are to be submitted to Wilson-McShane Corporation (“Wilson McShane”), the Trust Funds' third-party administrator, on or before the fifteenth day of the month. (Compl. ¶ 10); (Mem. of Law in Supp. of Pls.' Mot. for Emergency Relief, “Mem. in Supp.”) [Doc. No. 6 at 3]; (Articles of Agreement at 15); (Aff. of James F. Wilson, “Wilson Aff.”) [Doc. No. 8 ¶ 2].

         Marianne's Roofing did not submit fringe benefit contribution reports and failed to pay contributions for work performed in September 2017, and each month thereafter. (Compl. ¶ 14); (Wilson Aff. ¶ 5). In January 2018, Wilson-McShane requested to audit Marianne's Roofing's books and records as permitted by the CBA. (Compl. ¶ 15); (Articles of Agreement at 15); (Wilson Aff. ¶ 7). On January 19, 2018, Plaintiffs' counsel made a written demand to Marianne's Roofing's attorney that it comply with the audit. (Letter, Ex. D, Attached to Atmore Aff.). To date, Marianne's Roofing has not responded to the demands of Wilson-McShane and Plaintiffs' counsel, and it has not complied with its audit obligations. (Compl. ¶ 15); (Wilson Aff. ¶¶ 7-8). The exact number of jobs and projects for which Marianne's Roofing owes benefits and reports cannot be determined without an audit. (Wilson Aff. ¶ 9). Plaintiffs believe that Marianne's Roofing “recently ceased active operations.” (Mem. in Supp. at 2); (Atmore Aff. ¶ 8) (“Upon information and belief, [Marianne's Roofing] recently had active business operations, although [Marianne's Roofing's] declination to respond to requests for information has made it impossible to confirm the accuracy of this statement.”).

         In February 2018, both Wilson-McShane and Plaintiffs' counsel contacted general contractors of construction projects that used Marianne's Roofing as a subcontractor.[3] (Mem. in Supp. at 4-5); see also (Letters, Ex. E, Attached to Atmore Aff.); (Wilson Aff. ¶¶ 10-11). Wilson-McShane and Plaintiffs' counsel explained that Marianne's Roofing “was delinquent in reporting and paying its fringe-benefit contributions” and requested that the general contractors withhold amounts due to Marianne's Roofing so that those amounts could be “used to defray the balance of unpaid contributions” that Marianne's Roofing owes the Trust Funds. (Mem. in Supp. at 4-5); see also (Letters, Ex. E, Attached to Atmore Aff.); (Wilson Aff. ¶¶ 10-11). Both Wilson-McShane and Plaintiffs' counsel believe that the general contractors are withholding payments to Marianne's Roofing as requested. (Mem. in Supp. at 5); (Wilson Aff. ¶ 11).

         Plaintiffs initiated this lawsuit on February 14, 2018, and completed service on February 23, 2018. (Compl.); (Summons Returned Executed) [Doc. No. 13]. Plaintiffs filed their Motion for Emergency Relief on February 26, 2018. (Mot. for Emergency Relief). Plaintiffs served Marianne's Roofing with the Motion for Emergency Relief and associated documents, as well as this Court's Order setting a briefing schedule. (Certificates of Serv.) [Doc. Nos. 9, 15]; see also (Order Dated Mar. 2, 2018) [Doc. No. 14] (requiring Marianne's Roofing to respond to the Motion for Emergency Relief on or before March 7, 2018). To date, Marianne's Roofing has not entered an appearance in this case or responded to the Motion for Emergency Relief. Further, no representative of Marianne's Roofing appeared at the hearing on this motion.[4] (Minute Entry Dated Mar. 12, 2018) [Doc. No. 16].


         A. Legal Standard

         When making a determination regarding whether to issue a preliminary injunction, the Court considers four factors: “(1) the threat of irreparable harm to the movant; (2) the state of the balance between this harm and the injury that granting the injunction will inflict on other parties litigant; (3) the probability that movant will succeed on the merits; and (4) the public interest.” Dataphase Sys., Inc. v. C L Sys., Inc., 640 F.2d 109, 113 (8th Cir. 1981). “A preliminary injunction is an extraordinary remedy and the burden of establishing the propriety of an injunction is on the movant.” Watkins Inc. v. Lewis, 346 F.3d 841, 844 (8th Cir. 2003) (internal citations omitted). “A court issues a preliminary injunction in a lawsuit to preserve the status quo and prevent irreparable harm until the court has an opportunity to rule on the lawsuit's merits.” Devose v. Herrington, 42 F.3d 470, 471 (8th Cir. 1994) (per curiam).

         B. Analysis

         The Court considers each of the Dataphase factors in turn, and concludes that a preliminary injunction should be issued.

         1. ...

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