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Bigham v. Don Haught, Inc.

United States District Court, D. Minnesota

August 16, 2019

James Bigham et al., Plaintiffs,
v.
Don Haught, Inc., doing business as Clear Creek Plumbing and Heating, doing business as Clear Creek HVAC Services LLC, Defendant.

          ORDER GRANTING MOTION FOR ENTRY OF DEFAULT JUDGMENT

          WILHELMINA M. WRIGHT UNITED STATES DISTRICT JUDGE

         This matter is before the Court on Plaintiffs' motions for entry of default judgment. (Dkts. 13, 36.) For the reasons addressed below, Plaintiffs' request for $16, 143.25 in unpaid contributions, liquidated damages, and attorneys' fees and costs is granted.

         BACKGROUND

         Plaintiffs are the Sheet Metal Local #10 Control Board Trust Fund (Fund) and its trustees. The trustees of the Fund ensure that contractually bound employers accurately report and contribute to employee benefit plans. Defendant Don Haught, Inc., doing business as Clear Creek Plumbing and Heating and as Clear Creek HVAC Services LLC (Clear Creek), agreed to be bound by the terms of a collective bargaining agreement (CBA) between the Bismarck-Minot Subdivision North Dakota & South Dakota Division of SMARCA, Inc., and the International Association of Sheet Metal, Air, Rail and Transportation Local Union No. 10 Bismarck-Minot North Dakota. The CBA covers the period from June 17, 2013, through June 3, 2018. Because the CBA automatically renews for an additional 12-month period, Clear Creek is bound by the CBA through at least June 3, 2019.

         In relevant part, the CBA requires Clear Creek to make monthly contributions to the Fund on behalf of its covered employees for hours worked. The CBA also requires Clear Creek to set forth the amount due and owing for contributions on a remittance report form that is submitted to the Fund with its monthly payment. An employer is “delinquent” under the CBA if its remittance report and payment are not received by the Fund on or before the fifteenth day of the month following the month for which the contributions are due.

         Plaintiffs allege that Clear Creek failed to submit the contributions that it owed to the Fund for the months of April and May 2018. Plaintiffs assert that Clear Creek's employees worked certain hours covered by the CBA for which Clear Creek did not submit contributions to the Fund. Plaintiffs commenced this Employee Retirement Income Security Act (ERISA) action against Clear Creek on June 26, 2018. Plaintiffs served the summons and complaint on Clear Creek on October 22, 2018. Clear Creek 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 applied for an entry of default under Federal Rule of Civil Procedure 55(a), which the Clerk of Court entered on November 15, 2018.

         Plaintiffs moved for entry of default judgment on November 29, 2018. Because Clear Creek had not produced the monthly remittance reports for the period from May 2018 through November 2018 as required by the CBA, Plaintiffs also sought an order directing Clear Creek to produce the overdue remittance reports. On March 15, 2019, the Court enjoined Clear Creek from refusing to submit monthly remittance reports and held Plaintiffs' motion for entry of default judgment in abeyance until the record was supplemented as to the amount of damages due.

         Clear Creek subsequently produced the required remittance report for May 2018. Moreover, Clear Creek informed Plaintiffs that it had ceased business operations as of May 23, 2018, and thus did not have any remittance reports to submit for the months of June 2018 through November 2018. Plaintiffs supplemented the record with their updated damages calculation and filed another motion for entry of default judgment. Plaintiffs request $16, 143.25 for unpaid contributions, liquidated damages, and attorneys' fees and costs.

         ANALYSIS

         To 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 Clear Creek on November 15, 2018. The Clerk of Court's entry of default is supported by the record, which reflects that Clear Creek was properly served and failed to answer or otherwise respond to the complaint. The first step of the process is complete.

         Second, 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 Brown v. Kenron Aluminum & Glass Corp., 477 F.2d 526, 531 (8th Cir. 1973). Therefore, the remaining issue before the Court is to determine the amount of damages. See Brown, 477 F.2d at 531. 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, 818-19 (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).

         Section 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 ...

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