Nesse v. Hodges Cleaning Co.
- Wilhelmina Wright
- 0:18-cv-00099
- U.S. District Court · District of Minnesota
- 14
In Nesse v. Hodges Cleaning Co., Judge Wright partly granted default judgment, awarding $6,712.61 for ERISA contributions, interest, fees, and costs.
The plaintiffs—multi-employer benefit plans and their trustees—were awarded judgment against Hodges Cleaning Co. for unpaid contributions, double interest, attorneys’ fees, and costs.
What happened
In Nesse v. Hodges Cleaning Co., the plaintiffs—multi-employer benefit plans and their trustees—sought default judgment under the Employee Retirement Income Security Act for unpaid contributions, interest, attorneys’ fees, and costs. Hodges Cleaning Co. did not respond to the lawsuit, and the clerk entered its default.
The court found that Hodges Cleaning Co. owed $2,915.90 in unpaid contributions and awarded $1,364.14 in double interest. The court reduced the requested attorneys’ fees and costs because some billing entries were excessive, duplicative, or administrative, awarding $2,432.57 instead of the requested $3,987.82.
Judge Wright granted the motion for default judgment in part and denied it in part, and ordered judgment against Hodges Cleaning Co. for $6,712.61 in favor of the plaintiffs.
The detailed version
- Nesse v. Hodges Cleaning Co. · No. 0:18-cv-00099
- Wilhelmina Wright
- Dec. 26, 2018
Background
The plaintiffs are multi-employer benefit plans and the plans’ trustees. Hodges Cleaning Co. agreed to be bound by a collective bargaining agreement covering at least May 27, 2013, through April 30, 2017. The agreement required Hodges Cleaning Co. to make monthly contributions to the plans for covered employees’ hours worked and allowed the plans to inspect payroll and employment records.
An audit of Hodges Cleaning Co.’s records for August 13, 2015, through December 31, 2016, found 178 unreported hours and $2,915.90 in unpaid contributions. The plaintiffs filed this Employee Retirement Income Security Act (ERISA) action on January 15, 2018, and served Hodges Cleaning Co. on February 20, 2018. Hodges Cleaning Co. did not answer or otherwise respond. The clerk entered default on March 14, 2018.
Default Judgment and Damages
A default judgment requires an entry of default followed by a court order. After default, the complaint’s factual allegations are treated as admitted, except for the amount of damages. The court therefore reviewed the evidence supporting the damages requested.
Under ERISA, an employer that fails to make required contributions must pay the unpaid contributions, interest, an additional amount equal to the greater of accrued interest or qualifying liquidated damages, and reasonable attorneys’ fees and costs.
Unpaid Contributions and Interest
The court granted the motion for default judgment as to the $2,915.90 in unpaid contributions. The audit invoice and underlying records supported the calculation, and the court found no substantial errors. The court also granted the motion as to $1,364.14 in double interest. The accrued interest was $682.07, which exceeded the $291.59 liquidated-damages amount provided by the collective bargaining agreement.
Attorneys’ Fees and Costs
The plaintiffs requested $3,987.82 in attorneys’ fees and costs. The billing records showed, at most, $3,170 in attorneys’ fees and $538.82 in costs. The court found $1,893.75 in attorneys’ fees reasonable after deducting $1,276.25 for excessive, duplicative, or administrative work. The court found the $538.82 in costs reasonable and supported by the record.
Accordingly, the court granted in part and denied in part the motion concerning attorneys’ fees and costs, awarding $2,432.57 rather than the requested $3,987.82. Overall, the court granted in part and denied in part the motion for entry of default judgment. It directed the clerk to enter judgment against Hodges Cleaning Co. and in favor of the plaintiffs for $6,712.61.
Read the full 14-page opinion on CourtListener, the free public archive maintained by the Free Law Project.