Raines v. Phoenix Corp.
- Wilhelmina Wright
- 0:19-cv-02552
- U.S. District Court · District of Minnesota
- 7
In Raines v. Phoenix Corp., Judge Wright granted default judgment for unpaid benefit contributions, liquidated damages, fees, and costs totaling $63,075.32.
The judgment affects Phoenix Corp. and Brian R. Connell, who were ordered to pay $63,075.32 to the plaintiffs, trustees of the employee benefit plans.
What happened
In John Raines et al. v. Phoenix Corp. et al., trustees of several employee benefit plans claimed that Phoenix Corp. and Brian Connell failed to make required contributions and provide records for an audit under a collective bargaining agreement. The defendants did not respond, and the Clerk entered default against them.
The court found that the default established the defendants’ liability and then determined the damages from the evidence. It awarded $50,756.89 in unpaid contributions, $5,075.69 in liquidated damages, and $7,242.74 in attorneys’ fees and costs, for a total judgment of $63,075.32 against Phoenix Corp. and Brian R. Connell.
Judge Wilhelmina M. Wright granted the plaintiffs’ motion for default judgment and directed the Clerk of Court to enter judgment for the stated amount.
The detailed version
- Raines v. Phoenix Corp. · No. 0:19-cv-02552
- Wilhelmina Wright
- Aug. 14, 2020
Background
John Raines and Tim McGough were trustees of several multi-employer benefit plans, collectively called the Funds. Phoenix Corp. agreed to follow a collective bargaining agreement with the North Central States Regional Council of Carpenters and the Associated General Contractors of Minnesota. Brian Connell agreed to be personally bound by the agreement. The agreement required contributions to the Funds for covered employees and required Phoenix Corp. and Connell to provide employment and payroll records for examination and audit when necessary.
An audit covering May 2018 through April 2019 identified unpaid contributions and liquidated damages. The Funds later requested payroll records covering January 2019 through September 2019, but the defendants did not provide them. The plaintiffs filed this action alleging that the defendants breached the collective bargaining agreement by failing to timely submit reports and contributions. The defendants were personally served, but they did not defend the case. The Clerk entered default on October 31, 2019.
The court later ordered the defendants to produce records needed for an audit covering January 2019 through February 19, 2020. After the defendants produced the records, the Funds conducted the audit and determined that the defendants owed $50,756.89 in delinquent contributions and $5,075.69 in liquidated damages. The plaintiffs also requested $7,242.74 in attorneys’ fees and costs.
Analysis
Because default had been entered, the court treated the defendants’ liability as established. The remaining issue was the amount of damages. The plaintiffs still had to prove those damages by a preponderance of the evidence, meaning that the evidence had to show that the claimed amounts were more likely than not correct.
The court applied Section 502(g)(2) of the Employee Retirement Income Security Act, which provides remedies for an employer’s failure to make required benefit-plan contributions. Based on the Funds administrator’s affidavit, the court granted default judgment for $50,756.89 in unpaid contributions for May 2018 through February 2020.
The court also awarded $5,075.69 in liquidated damages. The collective bargaining agreement imposed liquidated damages equal to 10 percent of unpaid contributions, and the court found that the requested amount was 10 percent of $50,756.89.
For attorneys’ fees, the court used the lodestar method, which generally calculates fees by multiplying reasonable hours by a reasonable hourly rate. The court found the requested $6,166.50 in attorneys’ fees reasonable. It also found the requested $1,076.24 in filing and process-server costs reasonable and supported by the record. The court therefore granted the full request of $7,242.74 for fees and costs.
Disposition
The court granted the plaintiffs’ motion for entry of default judgment. It ordered the Clerk of Court to enter judgment for $63,075.32 against Phoenix Corp. and Brian R. Connell, in favor of the plaintiffs.
Read the full 7-page opinion on CourtListener, the free public archive maintained by the Free Law Project.