Case Information
*1 UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA
JAMES BIGHAM, JOHN QUARNSTROM, Case No. ‐ CV ‐ (NEB/ECW) ROBERT VRANICAR, JIM BOWMAN,
MIKE MCCAULEY, MATT
FAIRBANKS, as Trustees Sheet
Metal Local #10 Board Trust ORDER ON PLAINTIFFS’ Fund, SHEET METAL LOCAL MOTION FOR ENTRY OF #10 CONTROL BOARD TRUST FUND, DEFAULT JUDGMENT
Plaintiffs,
JOHN W. MCDOUGALL CO. INC.,
Defendant. move entry against Defendant John W. Company, Inc. (“McDougall”) liability Employee Retirement Income Security Act (“ERISA”), §§ et seq. 19.] seek delinquent damages, $7,090.04 related collection contributions. For reasons addressed below, grants Plaintiffs’ motion. This matter was heard before undersigned on April Christy E. Lawrie McGrann Shea Carnival Straughn & Lamb, Chartered, appeared behalf Plaintiffs. There was no appearance behalf Defendant.
BACKGROUND are Trustees Sheet Metal Local #10 Control Board Trust Fund
(“Control Board”) [ECF No. (“Am. Compl.”) ¶ 1.] Control Board clearinghouse provides various services to employee benefit plans designated by various labor agreements as entity to, amongst other things, accept distribute contributions employee benefit plans specified labor agreement. (Am. Compl. ¶ 2.) employee benefit plans whose behalf Control Board seeks contributions, which Control Board forms part, are multi ‐ employer jointly trusteed fringe benefit plans. ( Id. ¶ 3.) Created maintained pursuant Section 302(c)(5) Labor Management Relations Act codified as amended at § 186(c)(5), funds maintained by Control Board, including Sheet Metal Local Control Board Trust (“the Fund”), administered accordance with ERISA. ( Id. ) bound collective bargaining agreement (“CBA”) with Sheet
Metal Workers Union Local (the “Union”). No. (“Rice Decl.”) ¶ 2.] In September agreed be bound by terms Participation Agreement required it remit fringe benefit Board (and constituent fringe benefit funds) each hour work performed its employees covered CBA with Union who were performing work within *3 jurisdiction of Sheet Metal Workers Union Local No. (Am. Compl. ¶ 10; Rice Decl. ¶ 3.)
The Participation Agreement requires McDougall remit fringe benefit contributions the Fund on behalf of its covered employees their hours worked. (Rice Decl. ¶ Ex. A.) The employer “delinquent” the Participation Agreement if its remittance report and payment are not postmarked or before the tenth day the month following month the are due. (Rice Decl. Ex. B at 10.) Additionally, Participation Agreement gives Control Board’s trustees, their authorized agent, right inspect complete set all relevant payroll and employment records. (Rice Decl. ¶ 5.)
Initially, was breach terms Participation Agreement Trust Agreements by failing refusing produce requested payroll employment records Audit Period. But following filing Amended Complaint action 11], voluntarily complied with request Control Board’s authorized agent produce complete set payroll employment records period January through December (audit period). Board’s authorized agent reviewed these records determined that there were hours worked McDougall’s employees covered Participation *4 Agreement for which McDougall did not submit contributions to Fund. In total, Board’s authorized agent determined that $54,060.39 due and owing to for delinquent during audit period. ( See gen. Rice Decl.) Plaintiffs allege McDougall failed pay these contributions. [ECF No. 29, Ex. C.]
Plaintiffs commenced ERISA action against McDougall on March 14, 2018, seeking for contributions, damages, and costs. Plaintiffs served summons complaint on McDougall on March 14, 2018. then had days file an answer otherwise respond complaint. See Fed. R. Civ. P. 12(a)(1)(A)(i). That deadline passed without any response complaint. Plaintiffs first applied an entry default on April 11, [ECF No. 5] obtained entry default from Clerk April [ECF No. 8.] Following filing initial complaint, untimely submitted a payment total it entitled a credit. (Rice Decl. ¶¶ ‐ 9.) Thereafter, filed an Amended Complaint [ECF No. 11] applied obtained entry default May 13] June [ECF No. 16], respectively. then filed pending entry judgment.
ANALYSIS
To obtain default judgment, a party must follow a two ‐ step process. First, party seeking judgment must obtain entry default Clerk Court. “When party against whom affirmative relief sought has failed *5 plead or otherwise defend, that failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ. P. 55(a). Here, sought an entry of default, Clerk of Court entered default against June 5, The Clerk Court’s entry default supported record, which reflects that was properly served failed to answer or otherwise respond to complaint. first step process has been completed.
Second, after default has been entered, party seeking affirmative relief “must apply to court default judgment.” Fed. R. Civ. P. 55(b)(2). Upon default, factual allegations complaint deemed admitted except those relating to amount damages. Fed. R. Civ. P. 8(b)(6); accord Murray v. Lene , 595 F.3d 868, 871 (8th Cir. 2010). For reason, sole remaining issue before to determine amount damages. See Brown v. Kenron Aluminum & Glass Corp. , F.2d 531 (8th Cir. 1973). A party entitled judgment must prove its damages reasonable degree certainty. Everyday Learning Corp. v. Larson , F.3d (8th Cir. 2001). district court may establish damages “by taking evidence when necessary computation facts record, fix plaintiff lawfully entitled recover give accordingly.” Pope United States , U.S. (1944).
Section 502(g)(2) ERISA governs calculation employer fails fulfill contribution obligations, providing that court shall award: (A) contributions,
(B) interest on unpaid contributions,
(C) an amount equal greater of—
(i) interest unpaid contributions, or
(ii) liquidated damages provided plan an not excess percent ... [of contributions], (D) reasonable attorney’s fees action, be paid defendant, (E) such other legal equitable relief as court deems appropriate. § 1132(g)(2). “The legislative history these provisions explains Congress
added these strict remedies give employers strong incentive honor their contractual obligations contribute facilitate collection delinquent accounts.” Laborers Health & Welfare Tr. N. Cal. Advanced Lightweight Concrete Co. , U.S. (1988).
In support his judgment, submitted sworn testimony from Control Board’s Administrator, Sheila Rice, addressing amounts due audit period. These amounts derived audit invoice prepared Board’s authorized agent based McDougall’s payroll employment records. also seek costs.
I. Unpaid Contributions seek $54,060.39 in unpaid contributions. The Rice declaration, the Lawrie supplemental affidavit accompanying audit report, show hours that McDougall reported in its payroll records for certain employees during the audit period. The affidavit compares those numbers to the corresponding hours that McDougall reported to Board contributions. The audit invoice demonstrates that, during audit period, failed report total 2,486.66 hours. The audit report multiplies these unreported hours applicable rates pay reach total unpaid contribution amount $54,060.39. Court has reviewed audit report underlying records identifies no substantial errors in auditor’s calculations. Accordingly, Plaintiffs’ as unpaid contribution amount is granted.
II. Liquidated Damages ERISA states that—in addition interest unpaid contributions—a plaintiff is entitled greater either liquidated damages amount provided plan total accrued interest contributions. § 1132(g)(2)(C). CBA case provides that, if contribution obligations, it liable penalty equals *8 percent of unpaid if the contribution remain unpaid after the 10th day of following month then liquidated damages increase 20 percent of unpaid contributions. (Rice Decl. Ex. B. at 11.) As such, liquidated damages amount is $10,812.08, which is 20 percent contribution amount $54,060.39. also entitled liquidated damages $1,661.8, is 20 percent $8,309.40, January 2018 payment. Because amount greater than interest amount provided CBA, Plaintiffs’ assessing double interest in total amount $12,473.96 granted.
III. Reasonable Attorneys’ Fees Costs Both ERISA CBA provide recovery reasonable attorneys’ fees costs. See 29 § 1132(g); Rice Decl. Ex. B, at rely supplemental affidavit their attorney support their claim attorneys’ fees, disbursements.
A district court has substantial discretion when determining reasonableness attorneys’ fees. Hensley v. Eckerhart , 461 U.S. 424, 437 (1983); Jarrett v. ERC Props., Inc. , 211 F.3d 1078, 1085 (8th Cir. 2000). reasonable determined employing lodestar method. McDonald v. Armontrout , 860 F.2d 1458 (8th Cir. 1988); Pennsylvania v. Del. Valley Citizens’ Council Clean Air , U.S. ‐ (1986); see also Chi. Truck Drivers, Helpers & Warehouse Workers Union (Indep.) Pension Bhd. Labor Leasing , F. Supp. (E.D. Mo. 1997) (applying lodestar method ERISA *9 context), aff’d , 141 F.3d 1167 (8th Cir. 1998). The party seeking recover attorneys’ fees bears burden of establishing requested fees reasonable. Hensley , 461 U.S. at 433.
When calculating lodestar amount, district court multiplies number hours reasonably expended by reasonable hourly rate. Id. ; Hanig v. Lee , F.3d 822, (8th Cir. 2005). The hourly rate sought an attorney must be “in line with [the] prevailing [rate] in community similar services lawyers reasonably comparable skill, experience and reputation.” Blum Stenson , U.S. n.11 (1984). A district court may rely experience and knowledge prevailing market rates determine whether claimed hourly rate reasonable. Hanig , F.3d at
The billing records reflect that, commencement this action through date filed their motion default judgment and supporting documents, incurred fees and $543.25 and disbursements total cost expended $7,090.04. These represent 19.5 hours billed at an hourly rate $260, 3.25 hours billed at an hourly rate $265, 4.75 hours billed at hourly rate $195. work performed during period included: corresponding with client representatives, drafting application entry supporting affidavit, drafting default supporting documents. foregoing rates hours billed between March February reasonable. disbursements incurred are reasonable.
CONCLUSION
Based foregoing all files, records, proceedings herein, IT IS HEREBY ORDERED THAT:
1. That Plaintiffs’ Motion Entry Judgment 19.] GRANTED. That judgment, be entered against Defendant favor Plaintiffs. LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: June BY THE COURT:
s/Nancy E. Brasel Nancy E. Brasel United States District Judge
[1] Participation Agreement provides provisions Agreement Declaration Trust binding McDougall. (Rice Decl. Ex. B.)
[2] Counsel submitted supplemental affidavit with updated Exhibit D Rice declaration, document relies upon.