Bricklayers and Allied Craftworkers Service Corporation v. O'Hara Masonry, Inc.

Background

Bricklayers and Allied Craftworkers Service Corporation, acting as trustees for several multi-employer benefit plans, sued O’Hara Masonry, Inc. under the Employee Retirement Income Security Act (ERISA). The lawsuit sought unpaid fringe-benefit contributions allegedly required by a collective bargaining agreement.

O’Hara Masonry did not respond to the complaint. The court entered default against it and later entered a default judgment dated February 17, 2023. That judgment required O’Hara Masonry to submit complete and accurate monthly fringe-benefit reports for specified periods in 2022 and to pay amounts due within 14 days. The order also awarded Bricklayers the unpaid contributions shown to be due from the required reports.

The court found that O’Hara Masonry and Michael O’Hara, the company’s sole owner, officer, and registered agent, received notice of the February order. The company received the order by certified mail, and Mr. O’Hara was personally served. Neither the company nor Mr. O’Hara submitted the required reports, made the required payment, appeared, or presented evidence that compliance was impossible.

Contempt finding

Civil contempt is a court’s power to compel compliance with its orders or compensate an opposing party for losses caused by noncompliance. The moving party must prove by clear and convincing evidence that a valid order existed, the alleged contemnor knew about it, and the order was disobeyed. If that showing is made, the alleged contemnor must show an inability to comply that was not self-induced and that reasonable, good-faith efforts were made to comply.

The court concluded that Bricklayers met its burden. A valid February 17 order existed; O’Hara Masonry and Mr. O’Hara knew about it; and the required monthly reports were not provided. The court also concluded that Mr. O’Hara could be held in contempt because he was the company’s sole owner and officer, had notice of the order, and was responsible for carrying out the company’s obligations. Neither defendant made the required showing of inability to comply.

Sanctions and order

Bricklayers requested a fine of $100 per day beginning March 30, 2023. The court found that amount disproportionate to the anticipated recovery. It instead granted the motion for contempt and sanctions as follows:

- O’Hara Masonry must pay the court $25 per day from July 18, 2023, until it submits all missing monthly fringe-benefit reports and otherwise complies with the February 17 order. - Bricklayers was awarded the attorney’s fees and costs incurred in pursuing the contempt motion and the related motion for an order to show cause. O’Hara Masonry and Mr. O’Hara are jointly and severally responsible for those fees and costs, meaning Bricklayers may seek the full awarded amount from either or both, subject to the procedure in the order. - Bricklayers must file a declaration stating the requested fees and costs. The defendants may object within the periods specified by the order, after which the court may issue a separate order setting the amount. - Bricklayers must serve the contempt order on O’Hara Masonry and Mr. O’Hara and file proof of service.

The court advised Mr. O’Hara that providing the required information would bring the company into compliance and that continued noncompliance could increase the financial penalties.