Reed et al v. Gladstone Construction, Inc.

Filing 25

ORDER FOR ENTRY OF JUDGMENT. IT IS ORDERED: 1.That Plaintiffs' Motion for Entry of a Default Money Judgment is granted 15 . 2. That judgment in the amount of $10,873.16 be entered against Gladstone Construction, Inc., and in favor of Plaintiffs.LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Chief Judge Michael J. Davis on 4/12/13. (GRR)

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, 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,

Case No: 12-CV-1879 (MJD/FLN)

ORDER FOR
ENTRY OF JUDGMENT

Plaintiffs,
v.
Gladstone Construction, Inc.,
Defendant.

This matter was heard before the undersigned on March 22, 2013. 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.

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FINDINGS OF FACT
1.

The Amended Complaint was filed with the Court on October 24, 2012.

2.

The Amended Complaint was served on Gladstone Construction, Inc.’s

(“Gladstone Construction”) authorized agent on October 25, 2012.
3.

Gladstone Construction 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
Gladstone Construction to answer the Complaint lapsed.
4.

The Clerk entered default on November 20, 2012.

5.

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”).
6.

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).
7.

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”).
8.

The Funds are exempt from federal taxation pursuant to the Internal

Revenue Code.
9.

The Gladstone Construction accepted and agreed to be bound to the

terms of a collective bargaining agreement between the Metropolitan Builders Division
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of Associated General Contractors of Minnesota and the Minnesota Concrete and
Masonry Contractors Association and the Laborers’ District Council of Minnesota and
North Dakota and its affiliated Unions covering the period of September 6, 2010 through
April 30, 2013 (“Collective Bargaining Agreement”).
10.

The Collective Bargaining Agreement requires Gladstone Construction to

submit contributions to the Funds in an amount per hour specified in the Collective
Bargaining Agreement for each hour worked by its employees covered by the Collective
Bargaining Agreement.
11.

The

Collective

Bargaining

Agreement

requires

that

Gladstone

Construction set forth the amount due and owing for contributions on a remittance
report form to be submitted to the Funds with its monthly payment.
12.

The

Collective

Bargaining

Agreement

requires

that

Gladstone

Construction 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.
13.

Gladstone Construction breached the terms of the Collective Bargaining

Agreement by failing to submit the required remittance reports and contributions for the
months of June and July 2012 (“Delinquency Period”).
14.

Pursuant to the remittance reports and contributions untimely submitted

by Gladstone Construction, $3,749.17 is due and owing to the Funds for delinquent
contributions.
15.

Following the filing of this lawsuit, Gladstone Construction made a partial
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payment in the amount of $3,749.17 for which it is entitled to a credit.
16.

The Collective Bargaining Agreement further provides 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.
17.

The Funds’ authorized agent requested that Gladstone Construction

produce a complete set of its payroll and employment records for the period of January
1, 2011 through August 31, 2012 (“Audit Period”).
18.

Gladstone Construction voluntarily produced a complete set of its payroll

and employment records for the Audit Period and the Funds’ authorized agent reviewed
them to determine whether Gladstone Construction complied with its contribution
obligations to the Funds as set forth in the Collective Bargaining Agreement.
19.

In conducting the audit, the Funds’ authorized agent determined that

there were hours worked by Gladstone Construction’s employees covered by the
Collective Bargaining Agreement for which Gladstone Construction 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 $35,280.70 is due and owing to the Funds for delinquent contributions
for the Audit Period.
20.

Following the filing of this lawsuit, Gladstone Construction submitted a

partial payment in the amount of $35,280.70, for which it is entitled to a credit.
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21.

The Collective Bargaining Agreement provides 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.
22.

Liquidated damages in the amount of $374.92 are due and owing to the

Funds for delinquent contributions for the Delinquency Period.
23.

Liquidated damages in the amount of $3,528.07 are due and owing to the

Funds for delinquent contributions for the Audit Period.
24.

The Collective Bargaining Agreement further provides that Gladstone

Construction is liable to the Funds for interest charges on the unpaid contributions.
25.

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 a auditor determines a discrepancy of five percent
or greater than the total contributions remitted by the employer in a 12 month period.
26.

The current actuarial assumed rate of return for the Minnesota Laborers

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.
27.

Interest in the amount of $4,117.67 is due and owing to the Funds for the

Audit Period.
28.

The Collective Bargaining Agreement further provides that a delinquent

employer shall be required to pay all reasonable attorneys’ fees and court costs
incurred by the Funds.
29.

The Funds incurred attorneys’ fees and costs in pursuing this delinquency
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in the amount of $2,262.90. 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.

Gladstone Construction is in default and the Funds are entitled to entry of

judgment.
2.

Gladstone Construction is liable to the Funds in the amount of $374.92 for

liquidated damages for the Delinquency Period.
3.

Gladstone Construction 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 the award of liquidated damages and interest.

5.

Gladstone Construction is liable to the Funds in the amount of $8,235.34 for

double interest on the unpaid contributions for the Audit Period.
6.

Gladstone Construction is liable to the Funds in the amount of $2,262.90 for

attorneys’ fees and costs.

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ORDER
IT IS ORDERED:
1.

That Plaintiffs’ Motion for Entry of a Default Money Judgment is granted.

2.

That judgment in the amount of $10,873.16 be entered against Gladstone

Construction, Inc., and in favor of Plaintiffs.

LET JUDGMENT BE ENTERED ACCORDINGLY.
Dated: April 12, 2013

BY THE COURT:
s/ Michael J. Davis
The Honorable Michael J. Davis
United States District Court Judge

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