Bigham v. John W. McDougall Co. Inc.
0:18-cv-00706
D. MinnesotaJun 3, 2019Background
- Plaintiffs are trustees of the Sheet Metal Local #10 Control Board Trust Fund (the Control Board), a multi-employer ERISA-covered trust that collects and distributes fringe benefit contributions under collective bargaining/participation agreements.
- Defendant John W. McDougall Co., Inc. (McDougall) signed a Participation Agreement obligating it to report hours and remit fringe contributions for covered employees; remittances are delinquent if not postmarked by the 10th of the month following the work month.
- Plaintiffs requested and (after suit) obtained McDougall’s payroll records for Jan. 1, 2016–Dec. 31, 2017; an audit found 2,486.66 unreported hours, producing $54,060.39 in unpaid contributions.
- McDougall made an untimely partial payment of $8,309.40, which Plaintiffs credited against amounts due. McDougall did not defend or appear in this action.
- Plaintiffs sought default judgment under ERISA § 502(g)(2) for unpaid contributions, liquidated damages/interest, and attorney fees and costs; the Clerk entered default and the court convened a damages determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Liability for unpaid contributions | McDougall failed to remit contributions for audited unreported hours; audit shows $54,060.39 due | No responsive argument or defense (no appearance) | Court treated allegations as admitted and awarded $54,060.39 in unpaid contributions |
| Measure of damages: liquidated damages vs interest | Under ERISA §502(g)(2) and CBA, plaintiffs entitled to greater of plan liquidated damages (up to 20%) or interest; CBA imposes 20% after default | No opposing argument | Court awarded liquidated damages of 20%: $10,812.08 on audit balance and $1,661.88 on the January 2018 payment; total assessed $12,473.96 |
| Attorneys’ fees and costs entitlement | ERISA and the CBA authorize reasonable attorneys’ fees and costs; submitted billing records show $6,546.79 fees and $543.25 costs | No opposing argument | Court found rates, hours, and costs reasonable and awarded $7,090.04 |
| Default-judgment procedure and proof of damages | Default entered; damages must be proved with reasonable certainty by affidavit/audit records | No opposing argument | Court followed Fed. R. Civ. P. 55, accepted audit and affidavits as sufficient to fix damages |
Key Cases Cited
- Murray v. Lene, 595 F.3d 868 (8th Cir. 2010) (default admits well-pleaded factual allegations except damages)
- Everyday Learning Corp. v. Larson, 242 F.3d 815 (8th Cir. 2001) (plaintiff must prove damages to reasonable certainty after default)
- Pope v. United States, 323 U.S. 1 (U.S. 1944) (court may compute damages from record or take evidence)
- Laborers Health & Welfare Trust Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484 U.S. 539 (U.S. 1988) (legislative purpose of ERISA remedies to encourage employer compliance)
- Hensley v. Eckerhart, 461 U.S. 424 (U.S. 1983) (lodestar method and district court discretion in awarding attorneys’ fees)
- Hanig v. Lee, 415 F.3d 822 (8th Cir. 2005) (district court may rely on experience to determine prevailing rates)
- Blum v. Stenson, 465 U.S. 886 (U.S. 1984) (hourly rates must align with prevailing market rate)
- McDonald v. Armontrout, 860 F.2d 1456 (8th Cir. 1988) (lodestar applied in fee calculations)
- Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 478 U.S. 546 (U.S. 1986) (lodestar method discussion)
Final judgment: court entered judgment for Plaintiffs in the amount of $73,624.39 against McDougall (sum of unpaid contributions, liquidated damages/assessed interest, and fees/costs).