Wisconsin Laborers Health Fund et al v. KCM Excavation & Landscaping LLC

Filing 12

ORDER granting 10 Motion for Default Judgment and Injunctive Relief. (cc: all counsel) (Griesbach, William)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
WISCONSIN LABORERS HEALTH FUND,
WISCONSIN LABORERS PENSION FUND,
WISCONSIN LABORERS APPRENTICESHIP
AND TRAINING FUND, BUILDING & PUBLIC
WORKS LABORERS VACATION FUND, and
JOHN J. SCHMITT (in his capacity as Trustee),
Plaintiffs,
v.

Case No. 13-C-1366

KCM EXCAVATION & LANDSCAPING, LLC,
Defendant.

ORDER GRANTING DEFAULT JUDGMENT AND INJUNCTIVE RELIEF

Plaintiffs filed this action on December 4, 2013, pursuant to the Employee Retirement
Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1132, 1145. Plaintiffs are employee benefit
plans and John Schmitt, a trustee and fiduciary of the Wisconsin Laborers’ Health Fund. Defendant
is a Wisconsin limited liability company that has allegedly entered into several collective bargaining
agreements with the Wisconsin Laborers District Council. Plaintiffs allege that Defendant violated
ERISA by failing or refusing to pay contributions on behalf of its employees to the Plaintiff Funds,
as required by the collective bargaining agreements. Plaintiffs also allege that Defendant has failed
to accurately report employee work status to Plaintiffs and that Defendant has denied Plaintiffs’
auditor access to books and records needed to complete an audit for the period of April 1, 2011 to
the present. (Compl. ¶¶ 3–4, 7–8, 12, 16, ECF No. 1.)
Plaintiffs served Defendant on February 26, 2014, making Defendant’s answer due by
March 19, 2014. (ECF No. 4.) Defendant has failed to appear or otherwise defend, and at

Plaintiffs’ request, the Clerk has entered default against Defendant pursuant to Fed. R. Civ. P. 55(a).
On March 28, 2014, Plaintiffs filed a “Motion for Entry of Injunctive Relief” and an accompanying
proposed order explaining that Plaintiffs seek a default judgment as to liability and an injunction
ordering Defendant to (1) turn over all pertinent books and records for the period of April 1, 2011
to the present date to Plaintiffs’ auditor, or (2) submit to an on-site audit of the same. (ECF No. 10.)
Plaintiffs also seek an order that Defendant shall pay the additional costs and expenses incurred by
Plaintiffs due to Defendant’s refusal to produce all requested records on the original audit date.
On default, “the well-pleaded allegations of the complaint relating to liability are taken as
true,” and those “relating to the amount of damages suffered ordinarily are not.” Merrill Lynch
Mortgage Corp. v. Narayan, 908 F.2d 246, 253 (7th Cir. 1990) (quoting United States v. DiMucci,
879 F.2d 1488, 1497 (7th Cir. 1989)). “As a general rule, a default judgment establishes, as a matter
of law, that defendants are liable to plaintiff as to each cause of action alleged in the complaint.”
DiMucci, 879 F.2d at 1497 (citing Dundee Cement Co. v. Howard Pipe & Concrete Prods.,
722 F.2d 1319, 1323 (7th Cir. 1983)). Based on the allegations in Plaintiffs’ complaint, the court
holds that Defendant has violated ERISA, 29 U.S.C. § 1145, for failing to pay required
contributions in accordance with its collective bargaining agreements on behalf of its covered
employees, and Plaintiffs are entitled to the relief specified in 29 U.S.C. § 1132(g)(2), including the
amount of the unpaid contributions, interest on the unpaid contributions or liquidated damages, and
reasonable attorney’s fees and costs.
As for Plaintiffs’ request for injunctive relief, under 29 U.S.C. § 1132(a)(3), a civil action
may be brought by a participant, beneficiary, or fiduciary “(A) to enjoin any act or practice which
violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate
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equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or
the terms of the plan.” “Equitable relief” under § 1132(a)(3) includes “categories of relief that were
typically available in equity (such as injunction, mandamus, and restitution, but not compensatory
damages).” Health Cost Controls v. Skinner, 44 F.3d 535, 538 n.7 (7th Cir. 1995) (citing Mertens
v. Hewitt Assoc., 508 U.S. 248, 256 (1993)). The court concludes that the requested injunctive relief
is appropriate, as it is necessary to determine damages in this action. Plaintiffs allege that
Defendant was required under the collective bargaining agreements to file monthly reports and make
prompt contributions on behalf of its employees, and that Defendants have failed to comply with
these obligations. (Compl. ¶¶ 11–12.) Defendant’s failure to appear in this action necessitates that
Plaintiffs have access to its books and records for the relevant period. See Illinois Conference of
Teamsters & Emp’rs Welfare Fund v. Steve Gilbert Trucking, 71 F.3d 1361, 1364 n.1 (7th Cir.
1995) (observing that § 1132(a)(3) may authorize an audit of an employer’s books and records).
IT IS THEREFORE ORDERED:
(1) that pursuant to Fed. R. Civ. P. 55(b)(2), Plaintiff’s request for default judgment against
Defendant is GRANTED. Defendant has violated the ERISA, 29 U.S.C. § 1145, for failing to pay
required contributions in accordance with its collective bargaining agreements on behalf of its
covered employees, and Plaintiffs are entitled to the relief specified in 29 U.S.C. § 1132(g)(2),
including the amount of the unpaid contributions, interest on the unpaid contributions or liquidated
damages, and reasonable attorney’s fees and costs; AND
(2) that the Defendant KCM Excavation & Landscaping, LLC shall submit within thirty (30)
days of the date of this Order to an audit of the company’s books and records by the Plaintiff Funds’
designated representative covering the period of April 1, 2011 to the present date for any and all
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employees of Defendant by mailing or emailing all pertinent records to Daniel Dahl, Field Auditor,
Combined Crafts Statewide Audit Program at 2901 West Beltline Highway, Suite 100, Madison,
WI 53713-4231 or [e-mail]; OR
(3) that the Defendant KCM Excavation & Landscaping, LLC shall submit within thirty (30)
days of the date of this Order to an on-site audit of the company’s books and records by the Plaintiff
Funds’ designated representative covering the period of April 1, 2011 to the present date for any and
all employees of Defendant; AND
(4) that the Defendant KCM Excavation & Landscaping, LLC shall pay the additional costs
and expenses incurred by the Plaintiff Funds’ field auditor necessitated by Defendant’s refusal to
produce all requested records on the original audit date; AND
(5) that the results of said audit shall be submitted to the court within ten (10) days of the
completion of the audit, no later than sixty (60) days after Plaintiff receives Defendant’s books and
records or commences an on-site audit. The court will then assess Plaintiffs’ damages and enter
judgment accordingly.
SO ORDERED this

3rd

day of April, 2014.

s/ William C. Griesbach
William C. Griesbach, Chief Judge
United States District Court

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