George v. USAFRIK, Inc.
- Katherine Menendez
- 0:23-cv-00753
- U.S. District Court · District of Minnesota
- 8
In George v. USAFrik, Inc., Judge Menendez granted the trustees’ default motion, ordering records for an audit and allowing a later request for unpaid contributions.
The order affects USAFrik, Inc. and Richard Anthony Mongo, who must provide records for an audit and may later face a money judgment for unpaid benefit contributions and related amounts; it also gives the trustees authority to seek that judgment.
What happened
George and Gillen, acting as trustees of employee benefit funds, sued USAFrik, Inc. and Richard Anthony Mongo over allegedly unpaid benefit contributions and missing business records. The defendants did not respond or appear, and the clerk entered default.
The court treated the complaint’s factual allegations as true and found that the defendants breached their agreements by failing to submit required contribution reports and permit an audit. It ordered them to produce specified records for January through September 2023 within 10 days.
Judge Menendez granted the plaintiffs’ motion for a default order and injunction. After the audit, the plaintiffs may seek a later money judgment for unpaid contributions, liquidated damages, interest, and reasonable attorney fees and costs if the defendants do not pay an invoice within 14 days.
The detailed version
- George v. USAFRIK, Inc. · No. 0:23-cv-00753
- Katherine Menendez
- Nov. 30, 2023
Background
Jason George and Timoty Gillen, as trustees of the Operating Engineers Local #49 Health and Welfare Fund and related funds, sued USAFrik, Inc. and Richard Anthony Mongo. The funds are jointly trusteed employee-benefit plans governed by the Labor Management Relations Act and administered under the Employee Retirement Income Security Act, or ERISA.
The defendants agreed to collective bargaining agreements requiring covered employers to submit monthly reports and pay fringe-benefit contributions for covered employees’ hours. The agreements and the funds’ collection policies also provide for liquidated damages of 15% of unpaid contributions, 8% annual interest, reasonable attorney fees, and other collection expenses.
The plaintiffs alleged that the defendants failed to submit reports and payments for covered work from August 2022 through March 2023 and believed additional covered work occurred through the period ending September 2023. The plaintiffs also sought an audit. USAFrik produced some records but did not produce records for January 2023 forward or submit a requested August 2022 report.
Default and Merits
The defendants were personally served but did not respond, appear, or answer. The clerk entered default on April 26, 2023. Because of that default, the court treated the complaint’s factual allegations as true but still examined whether those facts established a valid legal claim.
The court found that USAFrik, Inc. and Richard Anthony Mongo were in default and that the plaintiffs were entitled to the relief demanded in the complaint. It concluded that the defendants breached their collective bargaining obligations by failing to submit all required reports for August 2022 through September 2023 and by failing to permit inspection and auditing of business and employment records for January through September 2023.
The court found USAFrik liable for unpaid contributions shown by the reports and audit. It found Richard Mongo liable for unpaid contributions owed to the Health Fund for the same period. After the audit, the defendants are liable for unpaid contributions, 15% liquidated damages, 8% interest, and reasonable attorney fees and costs as provided by ERISA and the agreements.
Order
The court granted the plaintiffs’ Motion for Entry of Default Order and Injunction. Within 10 days after entry of the order, USAFrik and Richard Mongo must produce records for January 1 through September 30, 2023, including payroll records, time cards, quarterly tax reports, Forms 1099, 1096, W-2, and W-3, payments for labor or services, cash-disbursement records, bank statements and checks, Minnesota unemployment and tax forms, records identifying work performed, and any additional records needed for the audit.
The inspection and production must occur at the premises of Wilson-McShane Corporation. After the audit, the plaintiffs may issue an invoice for contributions due for covered work from August 2022 through September 2023. If the defendants do not pay within 14 days after the invoice is issued, the plaintiffs may move for a money judgment supported by a declaration. The order states that the court will review the submissions and enter judgment as appropriate, with no hearing unless the court orders one. The opinion does not set a dollar amount for the contributions or other amounts due.
Judge
The order was entered and signed by United States District Judge Katherine Menendez.
Read the full 8-page opinion on CourtListener, the free public archive maintained by the Free Law Project.