United States District Court, D. Minnesota
JAMES BIGHAM, JOHN QUARNSTROM, ROBERT VRANICAR, JIM BOWMAN, MIKE MCCAULEY, and MATT FAIRBANKS, as Trustees of the Sheet Metal Local #10 Control Board Trust Fund, and the SHEET METAL LOCAL #10 CONTROL BOARD TRUST FUND, Plaintiffs,
JOHN W. MCDOUGALL CO. INC., Defendant.
ORDER ON PLAINTIFFS' MOTION FOR ENTRY OF DEFAULT
E. BRASEL UNITED STATES DISTRICT JUDGE
move for entry of default judgment against Defendant John W.
McDougall Company, Inc. (“McDougall”) for
liability under the Employee Retirement Income Security Act
of 1974 (“ERISA”), 29 U.S.C. §§ 1001,
et seq. [ECF No. 19.] Plaintiffs seek $66, 534.35 for
delinquent contributions and liquidated damages, and $7,
090.04 for attorneys' fees and costs related to the
collection of delinquent contributions. For the reasons
addressed below, the Court grants Plaintiffs' motion.
This matter was heard before the undersigned on April 24,
2019. Christy E. Lawrie of McGrann Shea Carnival Straughn
& Lamb, Chartered, appeared for and on behalf of the
Plaintiffs. There was no appearance on behalf of the
are the Trustees of the Sheet Metal Local #10 Control Board
Trust Fund (“Control Board”) [ECF No. 11
(“Am. Compl.”) ¶ 1.] The Control Board is a
clearinghouse that provides various services to employee
benefit plans and is designated by various labor agreements
as the entity to, amongst other things, accept and distribute
contributions to the employee benefit plans specified in the
labor agreement. (Am. Compl. ¶ 2.) The employee benefit
plans on whose behalf the Control Board seeks contributions,
and which the Control Board forms a part, are multi-employer
jointly trusteed fringe benefit plans. (Id. ¶
3.) Created and maintained pursuant to Section 302(c)(5) of
the Labor Management Relations Act of 1974, codified as
amended at 29 U.S.C. § 186(c)(5), the funds maintained
by the Control Board, including the Sheet Metal Local 10
Control Board Trust Fund (“the Fund”), are
administered in accordance with ERISA. (Id.)
is bound to a collective bargaining agreement
(“CBA”) with Sheet Metal Workers Union Local No.
177 (the “Union”). [ECF No. 22 (“Rice
Decl.”) ¶ 2.] In September 2016, McDougall agreed
to be bound by the terms of a Participation Agreement which
required it to remit fringe benefit contributions to the
Control Board (and its constituent fringe benefit funds) for
each hour of work performed by its employees covered by the
CBA with the Union who were performing work within the
jurisdiction of Sheet Metal Workers Union Local No. 10. (Am.
Compl. ¶ 10; Rice Decl. ¶ 3.)
Participation Agreement requires McDougall to remit fringe
benefit contributions to the Fund on behalf of its covered
employees for their hours worked. (Rice Decl. ¶ 3, Ex.
A.) The employer is “delinquent” under the
Participation Agreement if its remittance report and payment
are not postmarked on or before the tenth day of the month
following the month for which the contributions are due.
(Rice Decl. Ex. B at 10.)Additionally, the Participation
Agreement gives the Control Board's trustees, or their
authorized agent, the right to inspect a complete set of all
relevant payroll and employment records. (Rice Decl. ¶
McDougall was in breach of the terms of the Participation
Agreement and Trust Agreements by failing and refusing to
produce the requested payroll and employment records for the
Audit Period. But following the filing of the Amended
Complaint in this action [ECF No. 11], McDougall voluntarily
complied with a request from the Control Board's
authorized agent to produce a complete set of its payroll and
employment records for the period of January 1, 2016 through
December 31, 2017 (audit period). The Control Board's
authorized agent reviewed these records and determined that
there were hours worked by McDougall's employees covered
by the Participation Agreement for which McDougall did not
submit contributions to the Fund. In total, the Control
Board's authorized agent determined that $54, 060.39 is
due and owing to the Fund for delinquent contributions during
the audit period. (See gen. Rice Decl.) Plaintiffs
allege that McDougall failed to pay these delinquent
contributions. [ECF No. 29, Ex. C.]
commenced this ERISA action against McDougall on March 14,
2018, seeking damages for unpaid contributions, liquidated
damages, and attorneys' fees and costs. Plaintiffs served
the summons and complaint on McDougall on March 14, 2018.
McDougall then had 21 days to file an answer or otherwise
respond to the complaint. See Fed. R. Civ. P.
12(a)(1)(A)(i). That deadline passed without any response to
the complaint. Plaintiffs first applied for an entry of
default on April 11, 2018 [ECF No. 5] and obtained entry of
default from the Clerk of Court on April 12, 2018. [ECF No.
8.] Following the filing of the initial complaint, McDougall
untimely submitted a payment in the total amount of $8,
309.40 for which it is entitled to a credit. (Rice Decl.
¶¶ 7-9.) Thereafter, Plaintiffs filed an Amended
Complaint [ECF No. 11] and applied for and obtained entry of
default on May 31, 2019 [ECF No. 13] and June 5, 2019 [ECF
No. 16], respectively. Plaintiffs then filed the pending
motion for entry of judgment.
obtain a default judgment, a party must follow a two-step
process. First, the party seeking a default judgment must
obtain an entry of default from the Clerk of Court.
“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.” Fed.R.Civ.P.
55(a). Here, Plaintiffs sought an entry of default, and the
Clerk of Court entered default against McDougall on June 5,
2018. The Clerk of Court's entry of default is supported
by the record, which reflects that McDougall was properly
served and failed to answer or otherwise respond to the
complaint. The first step of the process has been completed.
after default has been entered, the party seeking affirmative
relief “must apply to the court for a default
judgment.” Fed.R.Civ.P. 55(b)(2). Upon default, the
factual allegations in the complaint are deemed admitted
except those relating to the amount of damages. Fed.R.Civ.P.
8(b)(6); accord Murray v. Lene, 595 F.3d 868, 871
(8th Cir. 2010). For this reason, the sole remaining issue
before the Court is to determine the amount of damages.
See Brown v. Kenron Aluminum & Glass Corp., 477
F.2d 526, 531 (8th Cir. 1973). A party entitled to a default
judgment must prove its damages to a reasonable degree of
certainty. Everyday Learning Corp. v. Larson, 242
F.3d 815, 819 (8th Cir. 2001). The district court may
establish damages “by taking evidence when necessary or
by computation from facts of record, to fix the amount which
the plaintiff is lawfully entitled to recover and to give
judgment accordingly.” Pope v. United States,
323 U.S. 1, 12 (1944).
502(g)(2) of ERISA governs the calculation of damages for an
employer that fails to fulfill its contribution obligations,
providing that a court shall award:
(A) the unpaid contributions,
(B) interest on the unpaid ...