Board of Trustees of the Iron Workers St. Louis District Council Pension Trust v. KPS Rebar, LLC
4:23-cv-00044
E.D. Mo.Jul 19, 2023Background
- Plaintiffs are the trustees of multi-employer ERISA benefit plans (IWSTLDC Trust Funds) and Iron Workers Local No. 103; KPS Rebar signed trust agreements and a collective-bargaining agreement (CBA) obligating it to submit monthly contribution reports, remit fringe-benefit contributions, and forward payroll deductions.
- Plaintiffs allege KPS Rebar (and its sole member/manager Steven Kinkelaar) ceased performing those obligations beginning July 2021 and sued under ERISA, the LMRA, the Illinois Wage Payment and Collection Act (IWPCA), and common-law conversion.
- Defendants were validly served but did not appear; the Clerk entered default. Plaintiffs moved for default judgment and an order compelling a payroll-compliance audit to establish damages.
- The court found counts 1 (ERISA – enforce plan terms/audit), 2 (ERISA – delinquent contributions), and 3 (LMRA – CBA breach) adequately pleaded; counts 4 (conversion) and 5–6 (IWPCA) were defective or preempted.
- Because damages could not be ascertained without an audit, the court held the default-judgment motion in abeyance and ordered KPS Rebar to submit to a payroll-compliance audit for July 1, 2021–January 27, 2023 by August 18, 2023 and to supplement the record by September 8, 2023 (or report status).
- The court denied Plaintiffs’ motion as to counts 4–6 and reserved entry of default judgment on counts 1–3 pending the audit and damage proof.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ERISA fiduciaries may compel production/audit to enforce plan terms (count 1) | Fiduciaries seek equitable relief under § 1132(a)(3) to compel payroll records and an audit | Defendants did not appear to contest (default) | Count 1 valid; audit is appropriate equitable relief and ordered. |
| Whether KPS owes delinquent contributions and related remedies under ERISA (count 2) | KPS failed to submit monthly reports/pay contributions July 2021–Dec 2022; seeks contributions, interest, liquidated damages, fees | Defendants defaulted/no opposing factual showing | Count 2 valid; damages to be determined after ordered audit. |
| Whether Local 103 may recover unpaid dues/contributions under the LMRA (count 3) | CBA breached by failure to remit working dues and contributions | Defendants defaulted/no opposition | Count 3 valid; relief reserved and damages contingent on audit. |
| Whether a state-law conversion claim against Kinkelaar survives (count 4) | Kinkelaar allegedly pocketed payroll deductions owed to Local 103 | Defendants defaulted; but claim derives from CBA | Dismissed: §301 LMRA preempts the conversion claim because duties arise from the CBA. |
| Whether IWPCA claims against Kinkelaar survive (counts 5–6) | Alleged unpaid payroll deductions are "wages" under IWPCA | Defendants defaulted; but statute may be preempted and Local 103 is not an "employee benefit, trust or fund" | Dismissed: claims fail as preempted by ERISA/LMRA and because deductions do not qualify as IWPCA "wages" here. |
Key Cases Cited
- United States ex rel. Time Equip. Rental & Sales, Inc. v. Harre, 983 F.2d 128 (8th Cir. 1993) (default-judgment entry is within district court discretion)
- Marshall v. Baggett, 616 F.3d 849 (8th Cir. 2010) (defendant in default is deemed to admit well-pleaded factual allegations)
- Murray v. Lene, 595 F.3d 868 (8th Cir. 2010) (court must ensure defaulted facts state a valid legal claim; conclusions of law are not admitted)
- Enron Oil Corp. v. Diakuhara, 10 F.3d 90 (2d Cir. 1993) (damages must be ascertained before entry of default judgment)
- Hagen v. Sisseton-Wahpeton Cmty. Coll., 205 F.3d 1040 (8th Cir. 2000) (default-judgment damages ascertainment requirement)
- United Steelworkers v. Rawson, 495 U.S. 362 (1990) (§301 LMRA preempts state-law claims grounded in collective-bargaining agreements)
- Aetna Health Inc. v. Davila, 542 U.S. 200 (2004) (ERISA preempts state-law claims that "relate to" employee benefit plans)
- Marshall v. Anderson Excavating & Wrecking Co., 8 F.4th 700 (8th Cir. 2021) (ERISA fiduciaries may bring suit to compel payment of delinquent fund contributions)