United States District Court, D. Minnesota
Wilhelmina M. Wright United States District Judge
move for entry of default judgment against Defendant J &
J Holdings, LLC, doing business as Scrapbusters
(Scrapbusters), for liability under the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. §§
1001 et seq. (Dkts. 10, 21.) Plaintiffs seek $56,
427.89 for unpaid contributions, liquidated damages, and
attorneys' fees and costs. For the reasons addressed
below, the Court grants in part and denies in part
are the Minnesota Laborers Health and Welfare Fund; Minnesota
Laborers Pension Fund; Minnesota Laborers Vacation Fund;
Construction Laborers' Education, Training, and
Apprenticeship Fund of Minnesota and North Dakota; and
Minnesota Laborers Employers Cooperation and Education Trust
(collectively, the Funds) and their trustees. Created and
maintained pursuant to Section 302(c)(5) of the Labor
Management Relations Act of 1947, codified as amended at 29
U.S.C. § 186(c)(5), the Funds are administered in
accordance with ERISA. Scrapbusters agreed to be bound by the
terms of three collective bargaining agreements (CBAs)
negotiated by the Laborers District Council of Minnesota and
North Dakota on behalf of its affiliated local Unions
(District Council). The CBAs cover the period from May 8,
2016, through April 30, 2019.
CBAs require Scrapbusters to make monthly contributions to
the Funds on behalf of its covered employees for hours
worked. The CBAs also require Scrapbusters to set forth the
amount due and owing for contributions on a remittance report
form, to be submitted to the Funds with its monthly payment.
An employer is “delinquent” under the CBAs if its
remittance report and payment are not postmarked on or before
the fifteenth day of the month following the month for which
the contributions are due. The Funds' trustees, or their
authorized agents, have the right to inspect a complete set
of all relevant payroll and employment records.
commenced this ERISA action against Scrapbusters on September
5, 2018, and served the summons and complaint on Scrapbusters
on September 10, 2018. Scrapbusters 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 from Scrapbusters to the complaint. Plaintiffs
applied for an entry of default under Federal Rule of Civil
Procedure 55(a), which the Clerk of Court entered on October
10, 2018. On January 18, 2019, Plaintiffs filed a motion for
default judgment and sought an injunction requiring
Scrapbusters to submit any overdue remittance reports.
Court granted the Plaintiffs' request for an injunction
and held Plaintiffs' motion for default judgment in
abeyance on March 15, 2019. Scrapbusters subsequently
submitted the required remittance reports, allowing
Plaintiffs to calculate the amount of unpaid contributions
and liquidated damages. Plaintiffs submitted their
calculations to the Court in supplemental affidavits on May
22, 2019. That same day, Plaintiffs filed an updated motion
for default judgment. Thereafter, the Court took
Plaintiffs' motions for default judgment under
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). The record reflects that Scrapbusters was properly
served with the amended complaint and failed to answer or
otherwise respond. Plaintiffs sought an entry of default, and
the Clerk of Court entered default against Scrapbusters on
October 10, 2018. The first step of this process is complete.
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). Therefore, the sole remaining issue before
the district court is 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, 818
(8th Cir. 2001). A 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 contributions,
(C) an amount equal to the ...