Mackey v. J & J Holdings, LLC

Background

The plaintiffs were the Minnesota Laborers Health and Welfare Fund, Minnesota Laborers Pension Fund, Minnesota Laborers Vacation Fund, Construction Laborers’ Education, Training, and Apprenticeship Fund of Minnesota and North Dakota, Minnesota Laborers Employers Cooperation and Education Trust, and their trustees. The opinion states that J & J Holdings, LLC, doing business as Scrapbusters, agreed to be bound by three collective bargaining agreements covering May 8, 2016, through April 30, 2019.

Those agreements required Scrapbusters to make monthly contributions to the Funds for covered employees’ hours worked and to submit monthly remittance reports. The plaintiffs filed this Employee Retirement Income Security Act (ERISA) action on September 5, 2018, and served Scrapbusters on September 10, 2018. Scrapbusters did not respond. The clerk entered default on October 10, 2018.

The court previously granted the plaintiffs’ request for an injunction requiring Scrapbusters to submit overdue remittance reports and held the default-judgment motion in abeyance. After Scrapbusters submitted the reports, the plaintiffs provided updated calculations of the amounts they claimed were owed.

Default Judgment and Damages

A default judgment is a judgment entered after a defendant fails to respond. The court explained that, after default, the complaint’s factual allegations are generally treated as admitted, except for the amount of damages. The plaintiffs still had to prove their damages with reasonable certainty.

Under ERISA Section 502(g)(2), an employer that fails to make required contributions may be ordered to pay unpaid contributions, interest, liquidated damages or an amount based on interest as specified by the statute, reasonable attorneys’ fees and costs, and other appropriate relief.

The court awarded $47,138.76 in unpaid contributions. The amount was based on 2,323.31 unreported regular hours and 129.36 unreported overtime hours from October 2018 through March 2019. The court found no errors in the plaintiffs’ calculations.

The court awarded $4,713.88 in liquidated damages, equal to 10 percent of the unpaid contributions as provided by the collective bargaining agreements. It did not award interest because the plaintiffs neither requested interest damages nor provided documentation supporting a particular amount.

The plaintiffs requested $3,983.75 in attorneys’ fees and $591.50 in costs. The court found $3,841.25 in fees reasonable but deducted $142.50 for three administrative billing entries involving scheduling communications with the court. It found the requested $591.50 in costs reasonable and supported by the record. The resulting award for attorneys’ fees and costs was $4,432.75.

Ruling

The opinion states that Scrapbusters made a partial payment of $25,182.98 on May 20, 2019. After crediting that payment against the unpaid contributions, liquidated damages, and attorneys’ fees and costs, the court determined that $31,102.41 remained due.

Judge Wilhelmina M. Wright ordered that the plaintiffs’ motions for entry of default judgment were granted in part and denied in part as addressed in the opinion. The court directed the clerk to enter judgment for $31,102.41 against J & J Holdings, LLC, doing business as Scrapbusters, in favor of the plaintiffs.