Nesse et al v. Lipe Brothers Construction, Inc.

Filing 48

ORDER granting 40 Motion for Entry of Judgment.(Written Opinion) Signed by Judge Paul A. Magnuson on 8/22/2018. (ALT)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
______________________________________
Case No.: 17-CV-1168 (PAM/LIB)
John Nesse and Tim Mackey as Trustees of
the Minnesota Laborers Health and Welfare
Fund, et al,
Plaintiffs,

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

vs.
Lipe Brothers Construction, Inc.,
Defendant.
______________________________________

This matter came on for hearing before the undersigned on August 22, 2018, on
Plaintiffs’ Motion for Entry of Judgment pursuant to Rule 55 of the Federal Rules of Civil
Procedure. 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 Complaint in this matter on April 14, 2017. The Complaint

was personally served upon the Defendant Lipe Brothers Construction, Inc. (“Lipe
Brothers”) on April 25, 2017.
2.

Lipe Brothers failed to file and serve a response or Answer to the Complaint.

3.

The Clerk entered default on May 22, 2017.

4.

The Plaintiffs are Trustees 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
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North Dakota, and the Minnesota Laborers Employers Cooperation and Education Trust
(“Funds”).
5.

The Funds are a multi-employer jointly-trusteed fringe benefit plan 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).
6.

The Funds are administered in accordance with the provisions of the ERISA

and are exempt from federal income taxation pursuant to the Internal Revenue Code.
7.

Lipe Brothers accepted and agreed to be bound to the terms of two

collective bargaining agreements, the first between the Twin Ports Contractors
Association and the Laborers’ District Council of Minnesota and North Dakota on behalf
of its Local Unions covering the period of May 1, 2014 through April 30, 2017 (“Twin Ports
Agreement”), and the second between the Highway, Railroad and Heavy Construction
Division of Associated General Contractors of Minnesota and the Laborers’ District
Council of Minnesota and North Dakota on behalf of its Local Unions, covering the period
of May 5, 2014 through April 30, 2017 (“Highway Heavy Agreement”) (collectively referred
to as CBAs).
8.

The CBAs require Lipe Brothers to contribute every month, not later than

the 15th day of the following month, contributions to the Funds in an amount set forth in
the CBA for each hour worked by employees covered by the CBA.
9.

The CBAs require Lipe Brothers to accurately report and calculate the

contributions due and owing in any given month to the Funds on a remittance report form
which must be submitted with their monthly payment to the Funds.
10.

The CBAs state that Lipe Brothers shall be considered delinquent for a

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particular month if the required report and payment are not postmarked on or before the
15th day of the following month.
11.

Finally, the CBAs require Lipe Brothers to promptly furnish to the Trustees

of the Funds or their authorized agents on demand federal forms W2s and W3s, federal
quarterly 941 forms, federal forms 1099s and 1096s, Minnesota Unemployment Quarterly
Reports (MUTAs or MN UCs) or such similar state required quarterly reports, time cards,
payroll and check registers and any other relevant information that may be required in
connection with the administration of the Funds.
12.

The Funds’ authorized agent requested that Lipe Brothers produce a

complete set of its payroll and employment records as specified in the CBAs for the period
of January 1, 2016 through June 1, 2017 (“Audit Period”).
13.

Lipe Brothers breached the terms of the CBAs by failing and refusing to

produce the requested payroll and employment records for the Audit Period.
14.

Following this Court’s Order on the Trustees’ Motion for Default Judgment

and Injunction and a subsequent Order on the Trustees’ Show Cause Motion, Lipe
Brothers produced a complete set of its payroll and employment records as specified in
the CBAs for the Audit Period.
15.

After a review of the payroll and employment records produced by Lipe

Brothers, the Funds’ auditor determined that there were hours worked covered by the
CBAs by Lipe Brothers’ employees for which no contributions were made. Specifically,
the Funds’ auditor determined that $8,832.26 is due and owing for unpaid contributions
for the Audit Period.
16.

The CBAs provide that if a payment for contributions is not submitted to the

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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.
17.

Liquidated damages in the amount of $883.23 are due and owing for the

Audit Period.
18.

Further, pursuant to the Funds’ collection policy interest on the unpaid

contributions in the amount of $1,176.61 is due and owing for the Audit Period.
Accordingly, double interest on the unpaid contributions for the Audit Period $2,353.22 is
greater than the award of liquidated damages and unpaid interest.
19.

The CBA further provides that a delinquent employer shall be required to

pay all reasonable attorneys’ fees and court costs incurred by the Funds
20.

The Funds incurred attorneys’ fees and costs in pursuing this delinquency

in the amount of $7,582.77. These attorneys’ fees and costs are reasonable under the
circumstances and limited to performing those services necessary for the prosecution of
the Funds’ claims.
CONCLUSIONS OF LAW
1.

Lipe Brothers is in default and the Funds are entitled to entry of judgment.

2.

Lipe Brothers is liable to the Funds in the amount of $11,185.48 for unpaid

contributions and double interest for the Audit Period.
3.

Lipe Brothers is liable to the Funds in the amount of $7,582.77 for attorneys’

fees and costs for the Delinquency Period.

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ORDER
Based on the foregoing, and on all the files, records, and proceedings, herein IT
IS ORDERED THAT:
1.

Plaintiffs’ Motion for Entry of Judgment (Docket No. 40) is GRANTED.

2.

That judgment in the amount of $18,768.25 be entered against Lipe

Brothers Construction, Inc. and in favor of Plaintiffs.
LET JUDGMENT BE ENTERED ACCORDINGLY

s/Paul A. Magnuson

Dated: __August 22, 2018__

Paul A. Magnuson
United States District Court Judge

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