Board of Trustees of the Cement Masons Health and Welfare Trust Fund for…

Background

The Boards of Trustees of four Cement Masons employee-benefit trust funds sued Eagle Rock Industries to collect unpaid and late-paid contributions, interest, liquidated damages, attorney fees, and costs. The funds were created through collective bargaining agreements and trust agreements. The opinion states that Eagle Rock became bound by the relevant agreements in 2017 through its membership with United Contractors.

The Boards alleged that Eagle Rock failed to pay contributions for work performed in August and September 2018, and paid required contributions late during several months from September 2019 through March 2021. The complaint and summons were served on Eagle Rock’s authorized agent on August 2, 2022. Eagle Rock did not appear or respond, and the clerk entered default on December 9, 2022.

Default Judgment Standard

The court applied Federal Rule of Civil Procedure 55(b)(2) and the seven factors commonly used to decide whether to enter default judgment. Because Eagle Rock had been properly served and had not participated in the case, the court found that the factors favored default judgment. The court accepted the complaint’s well-pleaded liability allegations as true, but separately examined the evidence supporting the requested damages.

Unpaid Contributions, Interest, and Liquidated Damages

The court found that the Boards sufficiently alleged an Employee Retirement Income Security Act (ERISA) claim requiring a signatory employer to make contributions required by a collective bargaining agreement. The court awarded $12,582.68 in unpaid contributions: $3,329.52 for August 2018 and $9,253.16 for September 2018.

Using the plan’s 1.5 percent monthly interest rate, the court calculated $9,486.94 in interest on those unpaid contributions. It also awarded $9,486.94 in statutory liquidated damages under ERISA. The total award for unpaid contributions, interest, and liquidated damages was therefore $31,556.56. The court did not award interest through the date of judgment because the Boards had not provided the information needed to calculate it, although the order stated that the Boards were not precluded from seeking such interest after judgment was entered.

Late-Paid Contributions

The Boards also sought $3,221.39 in interest and liquidated damages for contributions Eagle Rock had paid late. The court held that the agreements’ $150 liquidated-damages charge for each delinquent contribution was enforceable because the harm from late payments was difficult to estimate and the amount was a reasonable forecast of compensation.

However, the court found that the evidence was insufficient to calculate the amount owed. The accounting did not identify the amount of each delinquent payment or when Eagle Rock ultimately paid it. The court therefore denied without prejudice the request for liquidated damages and interest on the late-paid contributions. The order permitted the Boards to submit a supplemental declaration for that request within two weeks of the order’s filing.

Audit Injunction

The court granted the request for a mandatory injunction requiring Eagle Rock to submit to an audit covering January 2019 through the last completed quarter and to provide the records needed for the audit. The order relied on the trust agreements’ audit provision and described the audit as part of proper plan administration.

Attorney Fees and Costs

The court awarded $3,445.00 in attorney fees and $587.70 in costs, for a total of $4,032.70. It found counsel’s 10.6 hours of work and $325 hourly rate reasonable and found the claimed costs reasonable.

Disposition

The motion for default judgment was granted in part. The Boards received $31,556.56 in unpaid contributions, interest, and liquidated damages; $4,032.70 in attorney fees and costs; and the requested audit injunction. The request for liquidated damages and interest on late-paid contributions was denied without prejudice, subject to a possible supplemental filing.