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Raines v. Wingender

United States District Court, D. Minnesota

August 28, 2019

JOHN RAINES and TIM McGOUGH, as Trustees of the Carpenters & Joiners Welfare Fund, and JOHN RAINES as Trustee of the Carpenters and Joiners Apprenticeship and Journeymen Training Trust Fund, and each of their successors, Plaintiffs,
v.
KENNY WINGENDER, doing business as BN Service Inc., Defendant.

          Nathan Boone, Amanda R. Cefalu, and Andrew R. Shedlock, Kutak Rock LLP, Counsel for Plaintiffs.

         No appearance by Defendant.

          MEMORANDUM OF LAW & ORDER

          MICHAEL J. DAVIS UNITED STATES DISTRICT COURT JUDGE.

         I. INTRODUCTION

         This matter is before the Court on Plaintiffs' Motion for Entry of Default Order. [Docket No. 11] The Court heard oral argument on August 1, 2019.

         II. BACKGROUND

         A. Factual Background

         1. The Parties

         Plaintiffs John Raines and Tim McGough are Trustees of the Carpenters & Joiners Welfare Fund and Raines is also Trustee of the Carpenters and Joiners Apprenticeship and Journeyman Training Trust Fund (“the Funds”). (Compl. ¶¶ 1-2.) The Funds are multi-employer jointly-trusteed fringe benefit plans created and maintained under Sections 302(c)(5) and 302(c)(6) of the Labor Management Relations Act of 1947 (“LMRA”), as amended, 29 U.S.C. §§ 186(c)(5), 186(c)(6). (Compl. ¶¶ 1-2.) The Funds are administered in accordance with the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended, 29 U.S.C. § 1001, et seq. (Compl. ¶¶ 1-2.) Raines and McGough are Trustees of the Funds and fiduciaries under ERISA, 29 U.S.C. § 1002(21). (Id. ¶ 3.)

         Defendant Kenny Wingender is doing business as BN Service, Inc., and is engaged in the construction industry in Omaha, Nebraska. (Compl. ¶ 4.) During the relevant time period, Defendant employed individuals in the carpentry trade, submitted reports for them to Plaintiffs, and made fringe benefit contributions for them to Plaintiffs. (Wilson Supp. Aff. ¶ 5.) Although Defendant operated under the name “BN Service, Inc., ” that entity is not an active corporation. (Id.)

         2. The Collective Bargaining Agreement

         Defendant was bound to the terms of the collective bargaining agreement negotiated between the Omaha Building Contractors Employers Association and the Carpenters District Council of Kansas City Local Union 427 (formerly known as Local 444) (“CBA”). (Compl. ¶ 7; Wilson Aff. ¶ 2; Wilson Aff., Ex. A, CBA at 13, 27.) Defendant signed the CBA as “Kenny Wingender” and represented himself as “President” of “BN SVCS.” (Wilson Supp. Aff. ¶ 3; CBA at 2, 13.) There is no corporate entity that operates under the name “BN SVCS.” (Wilson Supp. Aff. ¶ 4.) Although Defendant operates under the name of an inactive company, BN Service, Inc., Defendant personally employs the workers who are covered by the CBA. (Id. ¶ 7.)

         The CBA requires employers, including Defendant, to make fringe benefit contributions to the Funds in accordance with its terms. (Compl. ¶ 9; Wilson Aff. ¶ 4; CBA, Art 10.) Employers must make contributions on behalf of each bargaining unit employee as defined in the CBA in amounts set forth in the CBA for the purpose of funding employee benefits. (Compl. ¶ 9; Wilson Aff. ¶¶ 3-4; CBA at 22-25.)

         Under the CBA, an employer must complete a report form with the information as required by the Trustees, identifying each of its employees and each hour that employee performed covered work during that month. (Compl. ¶ 10; Wilson Aff. ¶ 4.) All fringe fund reports and contributions must be submitted to Wilson-McShane Corporation by the 15th day of the month after the month in which the hours were worked. (Compl. ¶ 10; Wilson Aff. ¶¶ 4-5.) The Declarations of Trust under which the Funds were established also provide that when an employer is delinquent in the submission of fringe benefit contributions, it is also liable for liquidated damages of 10% of the amounts owed and must pay interest on the unpaid contributions at the rate set forth in IRC § 6621, starting on the date such contributions were due. (Compl. ¶ 17; Wilson Aff. ¶ 6.) Additionally, the CBA and Declarations of Trust, as well as 29 U.S.C. § 1132(g)(2)(D), provide that Defendant is liable for reasonable attorney's fees and costs incurred by Plaintiffs in pursuing this action. (Compl. ¶ 19.)

         3. Defendant's Breach of the CBA

         Defendant failed to timely submit the fringe fund reports and contributions for the months of August 2018 through December 2018. (Compl. ¶ 12; Wilson Aff. ¶ 7.) In March 2019, after Plaintiffs filed the current action, Defendant submitted the remittance reports due for the months of August 2018 through January 2019. (Wilson Aff. ¶ 8.) Plaintiffs determined that Defendant owed $16, 648.36 in fringe benefit contributions for that time period, plus liquidated damages and interest, and Defendant paid Plaintiffs $16, 648.36. (Id. ¶¶ 8-9.) Defendant has not made payments to Plaintiffs for the liquidated damages or interest. (Id.) Plaintiffs are owed $1, 664.84 in liquidated damages, $252.08 in interest, and attorney's ...


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