Pipe Trades Services Minnesota, Inc. v. Mike’s Custom Mechanical, Inc.

Background

Plaintiff Pipe Trades Services Minnesota, Inc. (PTSM) is a fiduciary responsible for collecting fringe-benefit contributions owed to the "Pipe Trades Services MN Fringe Benefit Funds" (PTSM Funds) — multi-employer employee-benefit plans governed by the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132. The PTSM Funds provide pension, health, disability, death, and other benefits to employees covered by local unions of the United Association of the Plumbing and Fitting Industry, including Local Union No. 34 and Local Union No. 539. PTSM also collects contributions for a Working Fund and an Industry Fund, which the court noted may not be ERISA multi-employer funds; the court exercised supplemental jurisdiction over claims related to those funds under 28 U.S.C. § 1367(a).

Defendant Mike's Custom Mechanical, Inc. (MCM) is a Minnesota corporation bound by collective bargaining agreements (referred to in the opinion as "the CBA") between Local 539, Local 34, and the Minnesota Mechanical Contractors Association. Under the CBA and related trust agreements, MCM was required to submit monthly contribution reports and pay fringe-benefit contributions for each hour worked by covered employees. The CBA further provided for liquidated damages — a penalty of three percent of contributions owed if payment is not made within five days of the due date, increasing to ten percent if payment remains outstanding ten days after the due date — and interest at the prime rate (stated as 6.75% at the time of the ruling).

Procedural History

PTSM filed its complaint on February 23, 2026, and MCM was served that same day. (The opinion notes the action was initiated on November 12, 2025, but the complaint was filed February 23, 2026.) MCM failed to file an answer, serve a response on plaintiff's counsel, or otherwise participate in the litigation. On March 19, 2026, the Clerk of Court entered default against MCM pursuant to Federal Rule of Civil Procedure 55(a). MCM also failed to appear at the August 6, 2026 hearing on PTSM's Motion for Default Judgment.

Findings of Fact

The court found that MCM failed to submit fringe-benefit contributions for covered employees' hours worked during September 2025, October 2025, and December 2025 through the present. For September and October 2025, MCM had submitted contribution reports but made no payment. For December 2025 onward, MCM provided neither reports nor payment; PTSM calculated amounts owed using pay stubs supplied by a Local 34 employee who continued to work at MCM. Although PTSM had originally sought contributions for August 2025, MCM paid those contributions (plus the corresponding liquidated damages) after the litigation began, so August 2025 was not included in the judgment.

Based on evidence submitted by PTSM — including declarations, exhibits showing contribution calculations, and attorney billing records — the court found the following amounts established:

- Unpaid base contributions: $85,381.58 - Liquidated damages: $8,538.16 - Interest: $3,285.71 - Attorneys' fees: $11,520.00 - Costs: $500.00 - Total: $109,225.45

Legal Analysis

Under Eighth Circuit precedent (citing Everyday Learning Corp. v. Larson, 242 F.3d 815, 818 (8th Cir. 2001)), when a defendant is in default the court treats the factual allegations in the complaint establishing liability as true, but independently examines the evidence to verify the amount of damages claimed. The court found that PTSM's allegations, taken as true, supported MCM's liability, and that PTSM's evidentiary submissions were sufficient to establish the specific amounts claimed. Federal Rule of Civil Procedure 55(b)(2) authorizes a court to enter default judgment upon a party's application.

Jurisdiction was based on 29 U.S.C. §§ 185(a) (Labor Management Relations Act) and 1132 (ERISA), as well as 28 U.S.C. § 1331 (federal question jurisdiction) and § 1367 (supplemental jurisdiction for the non-ERISA funds). Venue was proper under 29 U.S.C. § 1132(e)(2).

Disposition

Judge Menendez granted PTSM's Motion for Entry of Default Judgment and ordered that MCM is liable to PTSM for $109,225.45, comprising $85,381.58 in base contributions, $8,538.16 in liquidated damages, $3,285.71 in interest, $11,520.00 in attorneys' fees, and $500.00 in costs. The court directed that judgment be entered accordingly.