Painters District Council No. 58 et al v. JohnEd, Inc. et al

Filing 16

MEMORANDUM AND ORDER: IT IS HEREBY ORDERED that Plaintiffs Motion for Default Order and to Compel an Accounting (ECF No. 11 ) is GRANTED. (SEE ORDER FOR DETAILS). Signed by District Judge Catherine D. Perry on 8/18/17. (JAB)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
PAINTERS DISTRICT COUNCIL NO. 58, et al.,1 )
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Plaintiffs,
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v.
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JOHNED, INC. and EDWARD BENSON,
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Defendants.
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No. 4:17 CV 1271 JMB

MEMORANDUM AND ORDER
This matter is before the Court on Plaintiffs’ Motion for Default Order and to Compel
an Accounting against Defendants JohnEd, Inc. and Edward Benson (“Defendants”). (ECF
No. 11) Plaintiffs seek entry of default judgment in an amount of $5,143.93, as well as an
accounting of corporate records for the period of January 1, 2015, through the present date.
Plaintiff’s requested recovery includes attorneys’ fees and costs incurred in this action during
the period between April 1, 2017, and July 7, 2017.
I.

Factual Background
Plaintiffs in this action are a union and several funds—Painters District Council No. 58

(“the Union”), and St. Louis Painters Pension Trust, St. Louis Painters Welfare Trust, St.
Louis Painters Vacation Trust, and the Painters District Council No. 2 Apprenticeship and
Journeyman Training Trust (collectively “the Funds”). Plaintiffs filed this action on April 7,
2017, with the Union filing under the Labor Management Relations Act, 29 U.S.C. § 185, and
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Plaintiffs are Painters District Council No. 58, Gregg Smith, in his capacity as Business
Manager of Painters District Council No, 58, St. Louis Painters Pension Trust, St. Louis Painters
Welfare Trust, St. Louis Painters Vacation Trust, Painters District Council No. 2 Apprenticeship
and Journeyman Training Trust, by and through, Gregg Smith, David Doerr, Rich Lucks, Joseph
F. Mueller, Carl Farrell, Donald Thomas, Daniel Wienstroer, Michael Smith, Walter Bazan, Jr.,
Steve Phillipp, Jr., Mark Borgmann, Dane McGraw, Joseph Keipp, Tim Weis, Fred Phillipp, Jr.,
in their capacities as trustees (collectively referred to as “Plaintiffs”).

the Funds filing under the Employee Retirement Security Act (“ERISA”), 29 U.S.C. § 1132.
(ECF No. 1 at ¶¶ 3-15) In the Complaint, Plaintiffs allege that Defendant JohnEd, Inc., failed
to (1) accurately account to and fully pay several employee benefit funds, (2) remit deducted
dues, and (3) make contributions to trust funds under the collective bargaining agreement
between JohnEd, Inc. and its employees’ union. (Id. at ¶¶ 15-47, 58-61) Plaintiffs further
allege that Defendant Edward Benson should be held liable for Defendant JohnEd, Inc.’s
violations and breaches by virtue of his personal guaranty. (Id. at ¶¶ 55-61)
Although Defendants were served on April 18, 2017, neither Defendant has filed an
answer or otherwise entered an appearance. (ECF Nos. 3 and 4) On May 19, 2017, the Clerk
of Court entered an Order of Default against Defendants. (ECF No. 7) Defendants have not
moved to set aside the default. The Court ordered Plaintiffs to file appropriate motions for
entry of default and for default judgment, supported by all necessary affidavits and
documentation, by July 7, 2017. (ECF No. 8)
II.

Legal Standard
Under Fed. R. Civ. P. 55(a), a court may enter a default judgment for failure “to plead

or otherwise defend.” “Default judgment for failure to defend is appropriate when the party’s
conduct includes ‘willful violation of court rules, contumacious conduct, or intentional
delays’” Ackra Direct Marketing Corp. v. Fingerhut Corp., 86 F.3d 852, 856 (8th Cir. 1996)
(quoting United States v. Harre, 983 F.2d 128, 130 (8th Cir. 1993)). Although default
judgments are disfavored under the law, Harre, 983 F.2d at 130, “entry of default judgment …
is an appropriate exercise of a court’s discretion for a party’s repeated failure to comply with
court orders due to willfulness or bad faith.” Monsanto Co. v. Hargrove, 2011 WL 93718, at *
2 (E.D. Mo. Jan. 11, 2011) (citation omitted). When the Clerk of the Court has entered default
judgment against a defendant, the “allegations of the complaint except as to the amount of
damages are taken as true.” Mueller v. Jones, 2009 WL 500837, at *1 n. 2 (E.D. Mo. Feb 27,
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2009). Further, ‘[a] party seeking damages under a default judgment must … prove its rights
to such damages with affidavits or other supporting documentation.” Joe Hand Promotions,
Inc. v. Kickers Corner of the Americas, Inc., 2014 WL 805731, at *2 (E.D. Mo. Feb. 28,
2014) (citations omitted). See Fed.R.Civ.P. 8(b)(6) (stating that “[a]n allegation – other than
one relating to the amount of damages – is admitted if a responsive pleading is required and
the allegation is not denied.”) (citations omitted).
III.

Discussion
In deciding the instant motion for default judgment, the Court accepts as true the factual

allegations set forth in Plaintiffs’ Complaint together with the affidavits presented in Plaintiffs’
motion and memorandum in support as they relate to Plaintiffs’ damages and prayer for relief.
Defendant JohnEd, Inc. has failed to accurately account to and fully pay several employee
benefit funds, remit deducted dues, and make contributions to trust funds under the collective
bargaining agreement between JohnEd, Inc. and its employees’ union. (ECF No. 1 at ¶¶ 1547, 58-61; Affidavit of Gregg Smith at ¶¶ 12-14, 16-17 exhibits 1, 3, 5, and 10 attached
thereto; Affidavit of Stefanie Sneed at ¶¶ 5-8) Defendant Edward Benson can be held liable
for Defendant JohnEd, Inc.’s violations and breaches by virtue of his personal guaranty. (ECF
No. 1 at ¶¶ 55-61; Smith Aff. at ¶¶ 55-56) Based on those allegations and affidavits, the
Court finds that Plaintiffs are entitled to the relief requested.
Plaintiffs also seek an accounting covering the time period of January 1, 2015, to the
present under the parties’ trust documents, collective bargaining agreement, and ERISA-based
common law. ERISA entitles Plaintiffs to audit Defendants’ books and check their payroll
records and thereafter recover a sum equivalent to the amounts that should have been
contributed on an hours-worked basis. See Central States, Se. and Sw. Areas Pension Fund v.
Central Transp., Inc. 472 U.S. 559, 565-66 (1985) (finding that the power of trustees to
administer the trust entitle them to “demand and examine employer records.”).
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Accordingly,
IT IS HEREBY ORDERED that Plaintiffs’ Motion for Default Order and to Compel
an Accounting (ECF No. 11) is GRANTED. Plaintiffs are awarded default judgment against
Defendants, jointly and severally, for a total of $5,143.93, 2 upon which Plaintiffs may
immediately execute. Plaintiffs are further granted their requested accounting of Defendants’
corporate records, including individual compensation records, payroll registers, payroll
journals, time-cards, federal and state tax forms, W-2 forms and 1099 forms, state quarterly tax
returns, workers compensation reports, fringe benefits records and reports, job cost records,
general ledger with cash disbursements and supporting documents, accounts receivables,
invoices, and check stubs for the period of January 1, 2015, through the present date. Within
thirty (30) days of the date of this Court’s Order, Defendants shall permit Plaintiffs to conduct
the accounting of Defendants’ corporate records and submit to the requested financial
examination. Plaintiffs are required to sever a copy of this Default Order upon Defendants and
to file an affidavit demonstrating compliance with this Default Order when the subsequent
motion for default judgment is filed.
IT IS FURTHER ORDERED that not later than September 15, 2017, Plaintiffs shall
file with the Court a report regarding the status of Defendants’ compliance with this Order.
The Court reserves jurisdiction to make such further orders and grant such additional
relief, including but not limited to the entry of partial and final judgments, as it deems
appropriate.

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This amount includes $2,759.80 in principal deduction and contribution damages,
$1,284.90 in outstanding liquidated damages on the unpaid contributions and deductions, and
$1,099.23 in attorneys’ fees and costs for the period between April 1 and July 7, 2017.
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A separate Judgment in accordance with this Memorandum and Order is entered this
same date.
_______________________________
UNITED STATES DISTRICT JUDGE
Dated this 18th day of August, 2017.

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