Cement Masons v. Wenrich PD Construction

Background

Cement Masons, Plasterers and Shophands Service Corporation brought an action under the Employee Retirement Income Security Act (ERISA) to enforce an employee-benefit plan and collect unpaid fringe-benefit contributions under a collective bargaining agreement. The plaintiff acts as the receiving and collection agency for member benefit funds, including several Minnesota multiemployer benefit plans.

Wendy Sullivan, identified in the opinion as one of Wenrich PD Construction’s principals and owners, signed the collective bargaining agreement on behalf of Wenrich PD Construction in May 2020. The agreement covered May 1, 2020, through April 30, 2023. It required the employer to submit monthly reports identifying covered employees and their hours and to make corresponding contributions to the benefit funds. Sullivan also agreed to be personally and individually bound by the agreement’s obligations.

The plaintiff alleged that the defendants did not submit the required reports or payments for May, June, and July 2021. After the complaint was filed, the defendants provided information showing that three employees worked a total of 323.94 hours during those months, but they did not make the corresponding payments.

Default and liability

The defendants were served with the summons and complaint on February 24, 2022. They did not answer or otherwise appear. Although they communicated an intention to pay the outstanding amount, they did not pay it or respond to the action. The Clerk entered default on June 2, 2022. The defendants also did not respond to the motion for default judgment or appear at the September 7, 2022 hearing.

For a default judgment, the complaint’s factual allegations—other than allegations about the amount of damages—are treated as true. The court still must determine whether those facts establish a valid legal claim and must determine the damages with reasonable certainty.

The court held that the accepted allegations established a valid ERISA claim. Under ERISA, an employer required to contribute to a multiemployer benefit plan under a collective bargaining agreement must make the contributions according to the agreement’s terms. The court found that the defendants failed to meet their reporting and payment obligations.

Damages and fees

The plaintiff established that the unpaid contributions totaled $9,625.41. The court also awarded $962.54 in liquidated damages, which was 10 percent of the unpaid contributions and was authorized by both the collective bargaining agreement and ERISA.

The court further found that the plaintiff supported its request for $3,156.90 in reasonable attorneys’ fees and costs. The collective bargaining agreement and ERISA authorized recovery of those amounts.

The complaint also requested interest at eight percent per year, but the plaintiff did not request interest in its motion for default judgment or proposed order. The listed award therefore did not include interest.

Disposition

Judge Eric C. Tostrud granted the plaintiff’s Motion for Default Judgment. The court ordered Wenrich PD Construction and Wendy Sullivan to pay the plaintiff jointly and severally $9,625.41 for delinquent contributions for May through July 2021, $962.54 in liquidated damages, and $3,156.90 in attorneys’ fees and costs. The court directed that judgment be entered accordingly.