Pat Nilsen and John Nesse v. Top Down Construction LLC
Pat Nilsen and John Nesse, as Trustees of the Carpenters and Joiners Welfare Fund, and Wayne Nordin and Pat Nilsen, as Trustees of the Carpenters and Joiners Apprenticeship and Journeymen Training Trust Fund, and each of their successors v. Top Down Construction LLC, a/k/a top down construction L.L.C.
- Eric Tostrud
- 0:25-cv-03174
- U.S. District Court · District of Minnesota
- 13
In Nilsen v. Top Down Construction LLC, Judge Tostrud granted in part the plaintiff benefit funds' motion for a default order requiring the defendant to hand over payroll and employment records for audit under ERISA.
Employers bound by collective bargaining agreements with union benefit funds who fail to submit to payroll audits or produce required employment records may face court orders compelling record production under ERISA, even if they do not respond to the lawsuit. Union benefit fund trustees seeking to audit employer compliance with fringe benefit contribution obligations may obtain injunctive relief through default proceedings, though any such injunction must describe the required records with specificity.
What happened
In Nilsen v. Top Down Construction LLC (No. 25-cv-3174), two union benefit funds — the Carpenters and Joiners Welfare Fund and the Carpenters and Joiners Apprenticeship and Journeymen Training Trust Fund — sued Top Down Construction LLC, a Minnesota company in the construction industry, for failing to provide payroll and employment records needed to audit whether Top Down had paid required fringe benefit contributions under a collective bargaining agreement and the federal employee-benefits law known as ERISA (the Employee Retirement Income Security Act).
Top Down never responded to the lawsuit or appeared in court, so the court clerk had already formally entered a default against it. With the default in place, the court accepted the funds' factual allegations as true, found they stated a valid legal claim under ERISA and the collective bargaining agreement, and considered whether the requested relief — an order compelling Top Down to turn over records — was appropriate. The court also examined whether earlier court judgments against Top Down for related contribution shortfalls (in two prior lawsuits called Nilsen I and Nilsen II) would legally bar this new case under the doctrine of res judicata (claim preclusion), ultimately concluding that because Top Down defaulted in those cases too and never raised that defense, it was waived and the court would not apply it on its own.
Judge Tostrud granted the motion in part. The court ordered Top Down to produce a specific list of payroll and employment records covering January 1, 2023, through the date of the order within ten days of being served with the order. The court denied the funds' request for an open-ended provision allowing them to demand additional records as they see fit, finding that an injunction must describe its requirements specifically under the Federal Rules of Civil Procedure. Once the audit is complete, the funds may file a further motion seeking a money judgment for any unpaid contributions, liquidated damages, interest, and attorneys' fees.
The detailed version
- Pat Nilsen and John Nesse v. Top Down Construction LLC · No. 0:25-cv-03174
- Eric Tostrud
- Feb. 23, 2026
Background
Plaintiffs Pat Nilsen, John Nesse, and Wayne Nordin serve as trustees of two union benefit funds: the Carpenters and Joiners Welfare Fund and the Carpenters and Joiners Apprenticeship and Journeymen Training Trust Fund (collectively, the "Funds"). The Funds are multiemployer employee benefit plans governed by ERISA (the Employee Retirement Income Security Act, 29 U.S.C. § 1145) and created under Section 302(c)(5) of the Labor Management Relations Act.
Defendant Top Down Construction LLC is a Minnesota limited liability company operating in the construction industry. On April 22, 2022, Top Down signed a collective bargaining agreement (CBA) with the North Central States Regional Council of Carpenters, binding it to make monthly fringe benefit contributions to the Funds for each hour worked by covered employees. The CBA and accompanying Trust Agreements also obligate Top Down to submit monthly remittance reports and, on demand, to furnish trustees with all necessary payroll and employment records for audit.
On February 21, 2025, the Funds' administrative agent, Wilson-McShane Corporation, requested records for an audit covering May 2020 through February 2025. A follow-up demand was sent July 15, 2025. In November 2025, the Funds learned that Top Down had previously undergone an audit through December 31, 2022, narrowing the relevant audit period to January 1, 2023, through the present. Top Down never responded.
This is the third ERISA lawsuit the Funds have filed against Top Down. In Nilsen I (No. 24-cv-162), filed January 2024, the Funds recovered a default judgment for delinquent contributions covering September through December 2023, which was fully satisfied. In Nilsen II (No. 24-cv-3650), filed September 2024, the Funds recovered a default judgment for contributions owed from May 2024 and remittance reports for June through November 2024, plus liquidated damages, interest, and attorneys' fees. Top Down did not appear in either prior case.
Procedural History in This Case
The Funds filed this action and served Top Down with the Amended Complaint on December 4, 2025. Top Down did not respond or appear. The clerk entered default. The Funds moved for a default order and injunction compelling production of records (ECF No. 26). A hearing was held February 23, 2026; Top Down did not appear.
Legal Framework: Default and Injunctive Relief
Upon entry of default, the factual allegations of the complaint are accepted as true, except those relating to the amount of damages. The court must determine whether the accepted allegations state a legitimate cause of action — a defaulting party does not admit mere legal conclusions. See Marshall v. Baggett, 616 F.3d 849, 852 (8th Cir. 2010).
ERISA, at 29 U.S.C. § 1132(a)(3), authorizes injunctive relief to redress violations of ERISA or a covered plan. Section 1132(g)(2)(E) additionally allows "other legal or equitable relief." Courts in this district have held that ordering a defendant to produce records and cooperate with an audit is consistent with ERISA. See Raines v. Phoenix Corp., No. 19-cv-2552, 2020 WL 814189, at *2 (D. Minn. Feb. 19, 2020).
The court found the Funds' taken-as-true allegations stated a valid cause of action: Top Down is an ERISA employer; it bound itself to the CBA requiring record production on demand; and it failed to produce the requested records.
Scope of the Injunction
The court granted the request to compel production of a specific enumerated list of payroll and employment records for the Audit Period (January 1, 2023, through the order date). The enumerated records include payroll registers, time cards, IRS quarterly and annual forms (941s, W-2s, W-3s, 1099s, 1096s), cash disbursement records, bank statements, Minnesota unemployment forms (SUTAs), monthly remittance reports, and records identifying the type of work performed by each individual who provided services to Top Down.
However, the court denied the open-ended component of the Funds' proposed order that would have required Top Down to produce additional records as the Funds' representatives deemed necessary. The court cited Federal Rule of Civil Procedure 65(d)(1)(B), which requires that an injunction's terms be stated "specifically." An open-ended, non-specific demand does not satisfy that standard.
Preclusion Analysis
Because the Audit Period (January 1, 2023, to the present) overlaps with periods covered by Nilsen I and Nilsen II, the court considered whether res judicata (claim preclusion) barred the current lawsuit.
Collateral estoppel (issue preclusion)
The court agreed with the Funds that collateral estoppel does not apply. Default judgments do not give rise to issue preclusion because no issues are actually litigated in a default. See Arizona v. California, 530 U.S. 392, 414 (2000). An exception exists when the defaulting party substantially participated in the prior litigation, but Top Down did not appear in either Nilsen I or Nilsen II, so no exception applies.
Res judicata (claim preclusion)
The court noted that a court may raise res judicata on its own initiative to avoid judicial waste. See Emerald Pointe, LLC v. Taney County, 78 F.4th 428, 432–33 (8th Cir. 2023). Under federal law, res judicata bars claims arising from the same nucleus of operative facts as a prior judgment, including all or any part of the same transaction or series of transactions. Regions Bank v. J.R. Oil Co., 387 F.3d 721, 731–32 (8th Cir. 2004).
Nevertheless, the court declined to apply res judicata sua sponte (on its own initiative without a party raising it). The court reasoned: (a) res judicata is an affirmative defense that must generally be pleaded or it is waived; (b) Top Down had ample opportunity to assert it but never did; and (c) judicial economy carries less weight when a party seeks a default judgment, because the defendant's own non-participation forecloses a full adversarial airing of the defense. See Nali v. MaxPro Flooring, LLC, No. 09-cv-3625, 2013 WL 673779, at *6 (D. Minn. Feb. 25, 2013).
Disposition and Next Steps
Judge Tostrud granted in part and denied in part the Funds' Motion for Default Order and Injunction (ECF No. 26). Top Down is ordered to produce the specified records within 10 days of service of the order at Wilson-McShane Corporation's offices in Bloomington, Minnesota.
Once the audit is complete, if Top Down fails to make required payments, the Funds may file a motion for entry of a money default judgment covering unpaid contributions, liquidated damages, interest, and reasonable attorneys' fees and costs. Top Down would then have 10 days to respond, and the court will rule on the written submissions without a hearing unless it orders otherwise.
Read the full 13-page opinion on CourtListener, the free public archive maintained by the Free Law Project.