Bigham v. Don Haught, Inc.

Background

The plaintiffs are the Sheet Metal Local #10 Control Board Trust Fund and its trustees. The Fund administers employee-benefit contributions required from covered employers. Don Haught, Inc., doing business as Clear Creek Plumbing and Heating and as Clear Creek HVAC Services LLC, agreed to follow a collective bargaining agreement covering June 17, 2013, through June 3, 2018. The agreement automatically renewed for another 12 months, so the court found that Clear Creek remained bound through at least June 3, 2019.

The agreement required monthly contributions to the Fund for covered employees’ hours and required Clear Creek to submit monthly reports showing the amounts due. The plaintiffs alleged that Clear Creek did not pay contributions for covered work performed in April and May 2018. They sued under the Employee Retirement Income Security Act (ERISA) on June 26, 2018, and served Clear Creek on October 22, 2018. Clear Creek did not answer or otherwise respond within the required 21 days. The clerk entered default on November 15, 2018.

The plaintiffs first sought default judgment and an order requiring Clear Creek to provide overdue reports. On March 15, 2019, the court ordered Clear Creek not to refuse to submit monthly reports and postponed deciding the default-judgment request until the damages record was supplemented. Clear Creek later provided the May 2018 report and told the plaintiffs that it had stopped operating on May 23, 2018, so it had no reports for June through November 2018.

Default judgment standard

A default judgment has two steps. First, the clerk enters default when a properly served party fails to plead or otherwise defend. Second, the party seeking relief applies to the court for judgment. After default, the complaint’s factual allegations are treated as admitted, except allegations about the amount of damages. The party seeking damages must support the amount with reasonable certainty.

ERISA requires an employer that fails to make required benefit-plan contributions to pay unpaid contributions, interest, certain liquidated damages, and reasonable attorneys’ fees and costs. The plaintiffs supported their request with affidavits from the Fund’s administrator, the April and May 2018 remittance reports, and an affidavit from their attorney.

Damages

The court awarded $8,191.99 in unpaid contributions for April and May 2018. It also awarded $1,638.39 in liquidated damages, equal to 20 percent of the unpaid contributions under the collective bargaining agreement.

The court awarded $4,921.25 in attorneys’ fees and $1,391.62 in costs, for a combined total of $6,312.87. The fees covered work including preparing the default-judgment motions, communicating with the court and client representatives, preparing for a hearing, and drafting a motion for an order to show cause. The court found the requested fees and costs reasonable and supported by the record. Although a footnote stated that multiplying the listed hours and rates produced $4,941.25, the plaintiffs requested only $4,921.25, and the court awarded that requested amount.

The court did not award interest because the plaintiffs neither requested interest damages nor provided documentation supporting a particular interest amount.

Ruling

Judge Wilhelmina M. Wright granted the plaintiffs’ motions for entry of default judgment. The court directed the clerk to enter judgment for $16,143.25 against Don Haught, Inc., doing business as Clear Creek Plumbing and Heating and as Clear Creek HVAC Services LLC, in favor of the plaintiffs.