Reed et al v. Polyphase Electric Company
Filing
39
ORDER granting 31 Motion for Entry of Judgment (Written Opinion). Signed by Judge Ann D. Montgomery on 12/12/2012. (GS)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Gary Reed and Tom Vevea as Trustees of
the Minnesota Laborers Health and
Welfare Fund and the Minnesota Laborers
Pension Fund, James Brady and Keith
Kramer as Trustees of the Minnesota
Laborers Vacation Fund, Gary Reed as
Trustee of the Construction Laborers’
Education, Training, and Apprenticeship
Fund of Minnesota and North Dakota, Dan
Olson and Chris Born as Trustees of the
Minnesota
Laborers
Employers
Cooperation and Education Trust; and
each of their successors,
Case No: 10-CV-2348 (ADM/LIB)
ORDER FOR
ENTRY OF JUDGMENT
Plaintiffs,
v.
Polyphase Electric Company, Inc.,
Defendant.
This matter was heard before the undersigned on December 12, 2012. Christy
E. Lawrie of McGrann Shea Carnival Straughn & Lamb, Chartered, appeared for and on
behalf of the Plaintiffs. There was no appearance on behalf of the Defendant.
FINDINGS OF FACT
1.
The Summons and Complaint were filed with the Court on June 10, 2010.
2.
The Summons and Complaint were served on Eph Eichten, as authorized
agent for the Defendant Polyphase Electric Company, Inc. (“Polyphase Electric”) on
June 23, 2010.
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3.
The Amended Complaint was filed with the Court on September 5, 2012.
4.
The Amended Complaint was served on September 7, 2012.
5.
Polyphase Electric failed to file an Answer with the Clerk of Court or serve
an appropriate Answer upon the Funds’ counsel, and the time allowed by law for
Polyphase Electric to answer the Complaint lapsed.
6.
The Clerk entered default on October 3, 2012.
7.
Plaintiffs are Trustees and fiduciaries of the Minnesota Laborers Health
and Welfare Fund, the Minnesota Laborers Pension Fund, the Minnesota Laborers
Vacation Fund, the Construction Laborers Education, Training, and Apprenticeship
Fund of Minnesota and North Dakota, and the Minnesota Laborers Employers
Cooperation and Education Trust (“the Funds”).
8.
The Funds are multi-employer, jointly-trusteed fringe benefit plans created
and maintained pursuant to Section 302(c)(5) of the Labor Management Relations Act
of 1947 (“LMRA”), as amended 29 U.S.C. § 186(c)(5).
9.
The Funds are administered in accordance with the provisions of the
Employee Retirement Income Security Act of 1974, as amended 29 U.S.C. § 1001, et
seq. (“ERISA”).
10.
The Funds are exempt from federal taxation pursuant to the Internal
Revenue Code.
11.
Polyphase Electric accepted and agreed to be bound to the terms of a
series of collective bargaining agreements between the Highway, Railroad and Heavy
Construction Contractors and the Laborers’ District Council of Minnesota and North
Dakota and its affiliated Unions covering the periods of May 1, 2005 through April 30,
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2008 and May 1, 2008 through April 30, 2011. (“Collective Bargaining Agreements”)
12.
The Collective Bargaining Agreements require Polyphase Electric to
submit contributions to the Funds in an amount per hour specified in the Collective
Bargaining Agreements for each hour worked by its employees covered by the
Collective Bargaining Agreements.
13.
The Collective Bargaining Agreements require that Polyphase Electric set
forth the amount due and owing for contributions on a remittance report form to be
submitted to the Funds with its monthly payment.
14.
The Collective Bargaining Agreements require that Polyphase Electric
submit the remittance report and payment to the Funds by the fifteenth day of the
following month for which the contributions are due. Any employer whose remittance
reports and contributions are not postmarked on or before the fifteenth is considered
delinquent.
15.
The Collective Bargaining Agreements provide that the Funds’ Trustees,
or their authorized agent, have the right, at any reasonable time, to inspect a complete
set of all relevant payroll and employment records, including, but not limited to federal
forms W2s and W3s, Social Security, withholding, unemployment, and Workers’
Compensation payment records, 1099s, and 941s, and any other records deemed
necessary by the Funds.
16.
The Funds’ authorized agent requested that Polyphase Electric produce a
complete set of its payroll and employment records for the period of January 1, 2008
through December 31, 2009 (“Audit Period”).
17.
Polyphase Electric voluntarily produced a complete set of its payroll and
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employment records for the Audit Period and the Funds’ authorized agent reviewed
them to determine whether Polyphase Electric complied with its contribution obligations
to the Funds as set forth in the Collective Bargaining Agreements.
18.
In conducting the audit, the Funds’ authorized agent determined that
there were hours worked by Polyphase Electric’s employees covered by the Collective
Bargaining Agreements for which Polyphase Electric did not submit contributions to the
Funds, and the Funds’ authorized agent created an audit invoice setting forth the unpaid
contributions. Specifically, the Funds’ authorized agent determined that $15,354.53 is
due and owing to the Funds for delinquent contributions for the Audit Period.
19.
Polyphase Electric failed to remit the delinquent contributions found due
and owing pursuant to the audit thereby breaching the terms of the Collective
Bargaining Agreements.
20.
The Collective Bargaining Agreements provide that if a payment for
contributions is not submitted to the Funds on or before the fifteenth day of the month
following the month for which the contributions are due, the employer is subject to a
penalty in the amount of ten percent of the contributions as liquidated damages.
21.
Liquidated damages in the amount of $1,535.45 are due and owing to the
Funds for delinquent contributions for the Audit Period.
22.
The Funds’ Collection Policy further provides for the collection of interest
at a rate equal to the actuarial assumed rate of return for the Minnesota Laborers
Pension Fund plus .5 percent when an auditor determines a discrepancy of five percent
or greater than the total contributions remitted by the employer in a 12 month period.
23.
The current actuarial assumed rate of return for the Minnesota Laborers
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Pension Fund is 7.75 percent. As such, the Funds are entitled to interest on the unpaid
contributions at a rate of 8.25 percent annually.
24.
Using the interest rate prescribed by the Funds’ Collection Policy, interest
in the amount of $4,792.32 is due and owing to the Funds for the Audit Period.
25.
The Collective Bargaining Agreements further provide that a delinquent
employer shall be required to pay all reasonable attorneys’ fees and court costs
incurred by the Funds.
26.
The Funds incurred attorneys’ fees and costs in pursuing this delinquency
in the amount of $4,000.12. These attorneys’ fees and costs were reasonable under
the circumstances and limited to performing those services necessary for the
prosecution of the Funds’ claims.
CONCLUSIONS OF LAW
1.
Polyphase Electric is in default and the Funds are entitled to entry of
judgment.
2.
Polyphase Electric is liable to the Funds in the amount of $15,354.53 for
delinquent fringe benefit contributions for the Audit Period.
3.
Polyphase Electric is liable to the Funds for the greater of liquidated damages
plus interest calculated at a rate prescribed by the Funds’ Collection Policy, or double
interest.
4.
Double interest is greater than an award of liquidated damages together with
interest calculated at the rate prescribed by the Funds’ Collection Policy.
5.
Polyphase Electric is liable to the Funds in the amount of $9,584.64 for
double interest on the unpaid contributions for the Audit Period.
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6.
Polyphase Electric is liable to the Funds in the amount of $4,000.12 for
attorneys’ fees and costs.
ORDER
IT IS ORDERED:
1.
That Plaintiffs’ Motion for Entry of a Default Money Judgment is granted.
2.
That judgment in the amount of $28,939.29 is entered against Polyphase
Electric Company and in favor of Plaintiffs.
LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: December 12, 2012
BY THE COURT:
s/Ann D. Montgomery
________________________________
The Honorable Ann D. Montgomery
United States District Court Judge
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