Mid-America Carpenters Regional Council v. St. Louis Union Installations, LLC

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

MID-AMERICA CARPENTERS )

REGIONAL COUNCIL, et al., )

)

Plaintiffs, )

) Case No. 4:23-cv-00779-SRC

v. )

)

ST. LOUIS UNION )

INSTALLATIONS, LLC, )

Defendant.

Memorandum and Order

Plaintiffs—a labor organization and fiduciaries of various multi-employer benefit plans

covered by ERISA—sued St. Louis Union Installations, LLC, for delinquent contributions those

plans. Doc. 1. Installations failed to appear after being validly served, and the Clerk of Court

entered default upon Plaintiffs’ motion under Federal Rule of Civil Procedure 55(a). Plaintiffs

now seek an order compelling a payroll audit so they can prove their damages and judgment for

contributions. Doc. 17.

I. Background

One of the plaintiffs is a labor union; the other plaintiffs are pension, health, and welfare-

benefit funds of the union and their respective fiduciaries. Union Plaintiff—Mid-America

Carpenters Regional Council—is a labor organization under the National Labor Relations Act,

29 U.S.C. § 152(5), and an employee organization under ERISA, 29 U.S.C. § 1002(4). Doc. 1 at

¶ 2. The fund Plaintiffs are the Carpenters’ Pension Trust Fund of St. Louis, the St. Louis-

Kansas City Regional Health Plan, the St. Louis-Kansas City Regional Annuity Fund, the St.

Louis-Kansas City Carpenters Regional Vacation Plan, and the St. Louis-Kansas City Carpenters

Regional Training Fund. Id. at ¶ 3. The fiduciary Plaintiffs are the Board of Trustees, plan

sponsors, and fiduciaries of each corresponding fund. Id. The Funds are all employee-benefit

plans under ERISA, 29 U.S.C. §§ 1002(3), 1132(d)(1), and multi-employer plans under ERISA,

29 U.S.C. §§ 1002(37)(A), 1145.

Installations entered into an Agreement with the Plaintiffs that requires it to contribute to

the Funds, to forward to the Union dues deducted from employees’ paychecks, and to provide

the Funds’ offices with monthly statements showing the number of regular and overtime hours

worked by each employee. Doc. 1 at ¶ 5. Plaintiffs filed this case on June 16, 2022, raising

claims under Section 502 of ERISA, as amended, 29 U.S.C. § 1132, and the Labor Management

Relations Act, 29 U.S.C. § 185. Plaintiffs allege that Installations failed to make all obligated

contributions to the Funds and to forward to the Union all the deducted dues.

Defendants failed to plead or otherwise defend by the deadline, see Fed. R. Civ. P.

12(a)(1)(A)(i), and no counsel has entered an appearance. Upon Plaintiffs’ motion, Doc. 16, the

Clerk of Court entered default on August 22, 2023, Doc. 19. Plaintiffs now apply for a default

judgment under Rule 55(b)(2) of the Federal Rules of Civil Procedure, primarily seeking the

Court to compel Installations to account for dues owed to Plaintiffs from January 1, 2021, until

the current date. Doc. 17.

II. Standard

Default judgments are not favored in the law, and before granting one, a court should

satisfy itself that the moving party is entitled to judgment by reviewing the sufficiency of the

complaint and the substantive merits of the plaintiff’s claim. United States ex rel. Time Equip.

Rental & Sales, Inc. v. Harre, 983 F.2d 128, 130 (8th Cir. 1993); Monsanto v. Hargrove, No.

4:09-cv-1628-CEJ, 2011 WL 5330674, at *1 (E.D. Mo. Nov. 7, 2011). To obtain a default

judgment under Rule 55(b), a party must follow a two-step process.

First, the party must obtain an entry of default from the Clerk of Court. Fed. R. Civ. P.

55(a). “When a party against whom a judgment for affirmative relief is sought has failed to

plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must

enter the party’s default.” Id. Once the Clerk enters default, the defendant is deemed to have

admitted all well-pleaded factual allegations in the complaint. Marshall v. Baggett, 616 F.3d

849, 852 (8th Cir. 2010) (citing Thomson v. Wooster, 114 U.S. 104 (1885)); see also Fed. R. Civ.

P. 8(b)(6) (“An allegation––other than one relating to the amount of damages––is admitted if a

responsive pleading is required and the allegation is not denied.”).

Second, the party must “apply to the court for a default judgment.” Fed. R. Civ. P.

55(b)(2). “[T]he entry of a default judgment . . . [is] committed to the sound discretion of the

district court.” Harre, 983 F.2d at 130 (citing FTC v. Packers Brand Meats, Inc., 562 F.2d 9, 10

(8th Cir. 1977) (per curiam)); see also Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d

852, 856 (8th Cir. 1996) (reviewing the entry of default judgment for abuse of discretion)

(citations omitted). While courts deem all well-pleaded facts admitted upon default, “it remains

for the [district] court to consider whether the unchallenged facts constitute a legitimate cause of

action, since a party in default does not admit mere conclusions of law.” Murray v. Lene, 595

F.3d 868, 871 (8th Cir. 2010) (citing 10A Charles Alan Wright, Arthur R. Miller, & Mary Kay

Kane, Federal Practice and Procedure § 2688 at 63 (3d ed. 1998)).

A party entitled to default judgment must sufficiently prove its damages. Everyday

Learning Corp. v. Larson, 242 F.3d 815, 818–19 (8th Cir. 2001). “[A] default judgment cannot

be entered until the amount of damages has been ascertained.” Hagen v. Sisseton-Wahpeton

Cmty. Coll., 205 F.3d 1040, 1042 (8th Cir. 2000) (quoting Enron Oil Corp. v. Diakuhara, 10

F.3d 90, 97 (2d Cir. 1993)). “The court may conduct hearings or make referrals . . . when, to

enter or effectuate judgment, it needs to: (A) conduct an accounting; (B) determine the amount

of damages; (C) establish the truth of any allegation by evidence; or (D) investigate any other

matter.” Fed. R. Civ. P. 55(b)(2).

In addition to specified damage awards, ERISA expressly permits equitable relief to

redress any act or practice that violates ERISA or the terms of a plan. 29 U.S.C. §§ 1132(a)(3),

1132(g)(2)(E). “An audit constitutes an appropriate element of relief in an ERISA case where

the amount of the delinquency is not known.” Painters Dist. Council No. 2 v. Com. Drywall

Const., LLC, No. 4:11-cv-1430-CAS, 2012 WL 996663, at *4 (E.D. Mo. Mar. 23, 2012) (citing

Int’l Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., Inc., 239 F.

Supp. 2d 26 (D.D.C. 2002)).

III. Analysis

The Court begins by considering whether the unchallenged facts constitute legitimate

causes of action. Murray, 595 F.3d at 871 (citing 10A Charles Alan Wright, Arthur R. Miller, &

Mary Kay Kane, Federal Practice and Procedure § 2688 at 63 (3d ed. 1998)). Plaintiffs bring an

ERISA claim, alleging that Installations did not comply with the terms of their Agreement. Doc.

1 at ¶¶ 7–10. Plaintiffs bring this action under section 502, which requires employers to make

contributions to a multiemployer plan in compliance with the agreement. 29 U.S.C. § 1145.

Pursuant to section 502 of ERISA, Plaintiffs seek an audit and accounting to determine the costs

payable to them for Installations’ failure to pay required fees. ERISA allows the following:

A civil action may be brought—

. . .

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which

violates any provision of this subchapter or the terms of the plan, or (B) to obtain

other appropriate equitable relief (i) to redress such violations or (ii) to enforce any

provisions of this subchapter or the terms of the plan[.]

29 U.S.C. § 1132(a). Courts regularly require defendants to discharge their obligations in fringe-

benefit disputes. See, e.g., Laborers Fringe Ben. Funds-Detroit & Vicinity v. Nw. Concrete &

Const., Inc., 640 F.2d 1350, 1350–53 (6th Cir. 1981); Cent. States, Se. & Sw. Areas Pension Fund

v. N.E. Friedmeyer-Sellmeyer Distrib. Co., 650 F. Supp. 978, 980 (E.D. Mo. 1987); Trs. for IBEW,

Loc. No. 1, Health & Welfare Fund v. Res. Elec. Sys., Inc., No. 4:20-cv-00218-JCH, 2020 WL

7353709, at *1, *4–5 (E.D. Mo. Dec. 15, 2020); Painters, 2012 WL 996663, at *4.

Plaintiffs also seek attorneys’ fees and costs, audit fees, and any contributions, liquidated

damages, and interest found to be due and owing based on the requested payroll audit. Doc. 1 at

¶ 10–11. ERISA explicitly requires, or permits in the Court’s discretion, each type of relief that

Plaintiffs request. See 29 U.S.C. § 1132(g). Plaintiffs have pleaded a valid cause of action under

ERISA. Further, Plaintiffs cannot currently prove their damages, and the Court therefore holds

the motion for default judgment in abeyance. Hagen, 205 F.3d at 1042 (quoting Enron, 10 F.3d

at 97). The Court orders Installations, by no later than September 22, 2023, to fully submit to a

payroll audit pursuant to the audit provisions of the Agreement, Doc. 1-2, for the period spanning

from January 1, 2021, to September 8, 2023. As part of the payroll audit, Installations must submit

monthly contribution reports from the months of January 1, 2021, to September 8, 2023. By no

later than October, 20, 2023, Plaintiffs must either supplement the record with any proof

establishing damages and attorney fees or, if Installations does not submit to an audit, file a report

advising the Court on the status of this case.

III. Conclusion

Accordingly, the Court holds the motion for default in abeyance. Doc. 17. The Court

orders Installations to produce, by no later than September 22, 2023, all records necessary for

Plaintiffs to complete a payroll audit pursuant to the Audit provisions of the Agreement, for the

period of January 1, 2021, through September 8, 2023.

By no later than October 20, 2023, Plaintiffs must either: (a) supplement the record with

any proof establishing damages and attorney fees; or (b) if Installations does not submit to an

audit, file a report advising the Court on the status of the case.

So Ordered this 8th day of September 2023.

STEPHEN R. CLARK

CHIEF UNITED STATES DISTRICT JUDGE