Bigham et al v. Duluth Sheet Metal & Roofing Company

Filing 27

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND ORDER FOR ENTRY OF JUDGMENT. IT IS HEREBY ORDERED: 1. That Plaintiffs' Motion for Entry of Judgment is granted 18 9 . 2. That judgment, in the amount of $9,332.52 be entered against the Defendant and in favor of the Plaintiffs. LET JUDGMENT BE ENTERED ACCORDINGLY. (Written Opinion). Signed by Chief Judge Michael J. Davis on 9/4/14. (GRR)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil File No. 14-CV-906 (MJD/LIB)
James Bigham, John Quarnstrom,
Robert Vranicar, Jim Bowman, Mike
McCauley, and Matt Fairbanks as
Trustees of the Sheet Metal Local #10
Control Board Trust Fund, and the
Sheet Metal Local #10 Control Board
Trust Fund,

FINDINGS OF FACT
CONCLUSIONS OF LAW AND
ORDER FOR ENTRY OF JUDGMENT

Plaintiffs,
vs.
Duluth Sheet Metal & Roofing
Company,
Defendant.

This matter came before the undersigned upon the Plaintiffs Motion for
Entry of Judgment. A hearing was held on September 5, 2014. 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.

Plaintiffs filed the Summons and Complaint in this matter on April

1, 2014.

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2.

Duluth Sheet Metal & Roofing Company (“Duluth Sheet Metal’)

was served with the Summons and Complaint, by and through Mark Jam, its
authorized agent on April 7, 2014.
3.

Duluth Sheet Metal failed to file and serve a response or Answer to

the Summons and Complaint.
4.

The Clerk entered default on May 1, 2014.

5.

Plaintiffs are Trustees of the Sheet Metal Local #10 Control Board

Trust Fund (“Control Board”).

The Control Board is a clearinghouse which

provides various services to employee benefit plans and is designated by various
labor agreements as the entity to, among other things, accept and distribute
contributions to the employee benefit plans specified in the labor agreements.
6.

The Control Board Trustees are fiduciaries of the employee benefit

plans specified in the labor agreements. The employee benefit plans on whose
behalf the Control Board seeks contributions, and which the Control Board forms
a part, are multi-employer jointly-trusteed fringe benefit plans created and
maintained pursuant to Section 302(c)(5) of the Labor Relations Management Act
of 1974 (“LMRA”), as amended, 29 U.S.C § 186(c)(5).
7.

The employee benefit plans are administered in accordance with the

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provisions of the ERISA, as amended 29 U.S.C. § 1001, et. seq. and are exempt
from federal income taxation pursuant to Internal Revenue Code.
8.

On May 29, 1996, Defendant Duluth Sheet Metal & Roofing

Company (“Duluth Sheet Metal”) applied for membership in the Sheet Metal,
Air Conditioning & Roofing Contractors’ Association of Minnesota, North
Dakota & South Dakota, Inc. (“SMARCA”).
9.

SMARCA’s Board of Directors approved Duluth Sheet Metal’s

membership in SMARCA on July 17, 1996.
10.

SMARCA’s Articles of Incorporation provide that members of

SMARCA delegate to SMARCA the authority to negotiate labor agreements with
the Sheet Metal Workers Local No. 10.
11.

SMARCA and Sheet Metal Workers’ International Association Local

No. 10, Duluth-Superior negotiated a collective bargaining agreement with a
term of June 13, 2011 through April 28, 2013 (“Collective Bargaining
Agreement”) to which Duluth Sheet Metal agreed to be bound by virtue of its
membership in SMARCA.
12.

The Collective Bargaining Agreement contains an evergreen clause

which provides as follows:

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This Agreement and Addenda Numbers Section 1 through Section
30 attached hereto shall become effective on the 13th day of June
2011 and remain in full force and effect through the 28th of April
2013 and shall continue in force from year to year thereafter unless
written notice of reopening is given not less than ninety (90) days
prior to the expiration date. In the event such notice of reopening is
served, this Agreement shall continue in force and effect until
conferences relating thereto have been terminated by either party.
13.

Notice of reopening was given but conferences relating to a new

agreement have not yet been terminated by either party. As a result, the
Collective Bargaining Agreement remains in full force and effect.
14.

The Collective Bargaining Agreement requires Duluth Sheet Metal to

submit contributions to pension, health and welfare, vacation, industry and
training funds in the amount per hour specified in the Collective Bargaining
Agreement for each hour worked employees covered by the Collective
Bargaining Agreement.
15.

The Collective Bargaining Agreement incorporates by reference the

Restated Declaration of Trust for the Sheet Metal Local No. 10 Control Board
Trust Fund (“Trust Agreement”) and states that all contributions shall be paid in
accordance with the Trust Agreement.
16.

The Collective Bargaining Agreement and Trust Agreement require

Duluth Sheet Metal to set forth the amount due and owing for contributions on a

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remittance report to be submitted to the Control Board with Duluth Sheet
Metal’s monthly payment.
17.

The Collective Bargaining Agreement and the Trust Agreement also

require Duluth Sheet Metal to submit the remittance report and payment to the
Control Board by the tenth day of the following month for which the
contributions are due. Any employer whose report and contributions are not
received by the Control Board within five days after the tenth, or the first
working day thereafter, is deemed delinquent.
18.

Duluth Sheet Metal breached the terms of the Collective Bargaining

Agreement and Trust Agreement by failing to timely submit the remittance
reports and contributions for the period of February 2014 through April 2014
(“Delinquency Period”).
19.

Pursuant to the remittance reports untimely submitted by Duluth Sheet

Metal for the Delinquency Period, $37,250.67 is due and owing for delinquent
contributions.
20.

The Collective Bargaining Agreement and the Trust Agreement further

state that delinquent employers are subject to a liquidated damages assessment
equal to ten percent of the contributions due and owing for the month.

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However, if the delinquent contributions, together with the liquidated damages
assessment, are not received by the Fund on or before the tenth day of the next
month, the liquidated damages assessment increases to twenty percent.
21.

Liquidated damages of $7,540.13 are due and owing for the

Delinquency Period.
22.

Following the filing of this lawsuit, Duluth Sheet Metal made one

payment in the amount of $37,250.67 for which Duluth Sheet Metal is entitled to
a credit. After application of the payment, $7,540.13 remains due and owing for
delinquent contributions and liquidated damages for the Delinquency Period.
23.

The Collective Bargaining Agreement states that any attorneys’ fees

incurred in the collection of contributions shall be payable by the delinquent
employer. Likewise, the Trust Agreement states that the reasonable costs and
attorneys’ fees incurred by the Control Board in collecting or attempting to
collect delinquent contributions shall be paid by the delinquent employer.
24.

The Control Board incurred attorneys’ fees and costs totaling $1,882.39,

in pursuing this delinquency. The attorneys’ fees and costs incurred by the
Control Board are reasonable under the circumstances and were limited to
performing those services necessary for the prosecution of the Control Board’s

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claims.
25.

The total amount due and owing for delinquent contributions,

liquidated damages, and attorneys’ fees and costs for the Delinquency Period is
$9,332.52.
CONCLUSIONS OF LAW
1.

Duluth Sheet Metal is in default and the Control Board is entitled to

entry of a money judgment.
2.

Duluth Sheet Metal owes the Control Board $7,540.13 for delinquent

fringe benefit contributions together with liquidated damages for the
Delinquency Period.
3.

Duluth Sheet Metal owes the Control Board $1,882.39 for attorneys’ fees

and costs.

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ORDER
IT IS HEREBY ORDERED:
1. That Plaintiffs’ Motion for Entry of Judgment is granted.
2. That judgment, in the amount of $9,332.52 be entered against the
Defendant and in favor of the Plaintiffs.
LET JUDGMENT BE ENTERED ACCORDINGLY.

Dated: September 5, 2014

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

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