Plumbers & Gasfitters Union Local No 75 Health Fund et al v. Marathon Plumbing Company

Filing 18

ORDER DISMISSING CASE signed by Chief Judge Pamela Pepper on 3/7/2025. 16 Defendant's motion for enlargement of time and leave to file answer DENIED. 7 Plaintiff's motion for default judgment GRANTED. (cc: all counsel)(cb)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN

PLUMBERS & GASFITTERS UNION LOCAL
NO. 75 HEALTH FUND, et al.,
Plaintiffs,
Case No. 24-cv-124-pp
v.
MARATHON PLUMBING COMPANY,
Defendant.
ORDER DENYING DEFENDANT’S MOTION FOR ENLARGMENT OF TIME
AND FOR LEAVE TO FILE ANSWER (DKT. NO. 16), GRANTING PLAINTIFFS’
MOTION FOR DEFAULT JUDGMENT (DKT. NO. 7) AND DISMISSING CASE

On January 30, 2024, the plaintiffs filed a complaint alleging that the
defendant violated §§502 and 515 of the Employee Retirement Income Security
Act of 1974 (ERISA) and §301 of the Labor Management Relations Act of 1947
by failing to make payments to benefit funds as required by the applicable
collective bargaining agreements. Dkt. No. 1. The plaintiffs’ affidavit of service
avers that the defendant’s registered agent was served on April 15, 2024. Dkt.
No. 3. Twenty-eight days later, on May 13, 2024, the plaintiffs asked the clerk
to enter default because the defendant had not answered or appeared. Dkt. No.
5. The clerk entered default that day, and a month later, the plaintiffs filed the
instant motion for default judgment. Dkt. No. 7.
On August 23, 2024, more than two months after the plaintiffs filed their
motion for default judgment, defense counsel filed a notice of appearance and a
motion asking the court to enlarge the time for the defendant to answer the
complaint. Dkt. Nos. 15, 16. The court will deny the motion to enlarge the time
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to answer the complaint, grant the plaintiffs’ motion for default judgment and
dismiss the case.
I.

Motion for Enlargement of Time to Answer (Dkt. No. 16)
The plaintiffs’ affidavit of service shows that the defendant’s registered

agent was served with the summons and complaint on April 15, 2024. Dkt. No.
3. Federal Rule of Civil Procedure 12(a)(1)(A)(i) requires a defendant to serve its
answer “within 21 days after being served with the summons and complaint.”
In this case, the defendant’s answer was due twenty-one days after the April
15, 2024 service date—by May 6, 2024. The defendant did not appear or file
anything until August 23, 2024—over four months after service, over three
months after the clerk entered default and over two months after the plaintiffs
filed the motion for default judgment.
Because the time to file an answer had expired when the defendant filed
its motion for an enlargement of time, the court must determine whether the
defendant has demonstrated excusable neglect for its failure to timely file the
answer:
[A] district court has the discretion to permit the defendants to file
their answer late “when the failure to act was the result of excusable
neglect.” Fed. R. Civ. P. 6(b). A finding of excusable neglect “is not
limited to situations where the failure to timely file is due to
circumstances beyond the control of the filer,” Pioneer Inv. Servs. Co.
v. Brunswick Assoc. Ltd., 507 U.S. 380, 391 . . . (1993), but extends
to some cases in which the delay is “caused by inadvertence,
mistake, or carelessness.” Id. at 388.
Lewis v. Sch. Dist. #70, 523 F.3d 730, 740 (7th Cir. 2008). In determining
whether neglect is excusable, the court considers the following factors: “the
danger of prejudice, the length of the delay and its potential impact on judicial
proceedings, the reasons for delay, including whether it was within reasonable
control of the movant, and whether the movant acted in good faith.” Comerica
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Bank v. Esposito, 215 F. App’x 506, 508 (7th Cir. 2007) (quoting Pioneer, 507
U.S. at 388).
The defendant concedes that it received the summons and complaint on
or about April 15, 2024. Dkt. No. 16-1 at 1. It claims that it “was unaware
what these documents were” and believed that they, and the process server,
were “intimidation tactics from Plaintiffs to accrue funds which Defendant had
no obligation to transfer to Plaintiffs.” Id. The defendant asserted that the
plaintiff has been “incessantly and consistently demanding payment from” the
defendant; it says that this caused the defendant “to have the reasonable belief
that this instance was yet another attempt to scare Defendant into paying
Plaintiffs funds, interest, and liquidated damages which Defendant does not
owe.” Id. at 1-2. The defendant states that in April 2024, it (the brief says “he,”
although the complaint alleges that the defendant is a corporation, Dkt. No. 1
at ¶8) was in the process of moving some 250 miles from West Allis, WI to Lake
Tomahawk, WI and “did not have a minute to spare” to consider “what he
believed to be another baseless threat from Plaintiffs.” Id. at 2. The defendant
asserts that “he” was extremely busy between early January and late April
2024, loading assets, driving them to the new location and unloading them. Id.
The defendant asserts that he “was sacrificing his weekends to move into his
new homestead,” trying to meet obligations in Milwaukee and trying to set up
shop in Lake Tomahawk. Id. The defendant says that he “did not have a minute
to spare during this time period, leading him to disregarding what he believed
to be another baseless threat from Plaintiffs.” Id. The defendant asserts that he
received notice of default judgment motion on or about June 13, 2024. Id. at 2.
The defendant said that he never had seen a document like the notice of
default judgment, never had been a party to a lawsuit, did not know what legal
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options were available and began contacting other contractors, asking for
referrals. Id. The defendant describes this process as “long and unfruitful,” but
says that “during the few moments of free time that he had,” the defendant
continued trying to find legal counsel, finally getting in touch with defense
counsel in late June 2024. Id. at 2-3.
The defendant contends that there is no prejudice to the plaintiffs
because the court has not yet decided the default judgment motion. Id. at 4. It
argues that the delay in filing was “mitigated as much as possible”—basically,
defense counsel argues that once he was contacted, he acted as quickly as he
could to investigate and prepare the motion for enlargement of time—and that
any delay is due to the time for counsel to obtain the information needed to file
the motion. Id. The defendant asserts the reasons for the delay were the
defendant’s move and the defendant’s confusion as to what the summons and
complaint were. Id. Defense counsel says that the defendant “now” has been
“educated on the difference between personal and mail service of documents,”
and that the defendant “understands the urgency required in federal actions.”
Id. The defendant argues that because it was served “in the middle of a lifealtering move—both for himself and the business,” the defendant “did not have
proper time to register and evaluate the difference in the served summons, and
all of the other paperwork that he had been sent.” Id. at 4-5. Finally, the
defendant argues that it has acted in good faith and has not intentionally
dodged or “tried to skirt his way out of this case.” Id. at 5. The defendant
argues that once it understood the severity of the situation, it acted quickly to
remedy the default. Id.
The defendant describes itself as a small business faced with litigation
for the first time, but the court cannot find excusable neglect when the
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defendant has conceded that it knew about this lawsuit but chose not to
respond. The court cannot know how the plaintiffs communicated their alleged
payment demands prior to April 2024, but a summons is an official court
document, with the name of the court at the top and a case name and docket
number in the caption. The defendant could have called the clerk’s office to ask
about the documents it received. It could have conducted an internet search of
the word “summons,” which would have alerted the defendant to its obligation
to appear and respond to the complaint.
The Seventh Circuit addressed exactly this situation in Casio Computer
Co., Ltd. v. Noren, 35 F. App’x 247 (7th Cir. 2002). In that case, the defendant
asserted that she didn’t “understand her obligation to either timely file an
answer specifically admitting or denying each of Casio’s allegations as required
by Federal Rule of Civil Procedure 8(b) or to assert a defense by motion
authorized under Federal Rule of Civil Procedure 12.” Id. at 250. The Seventh
Circuit explained that the “excusable neglect” standard “is reserved for
miscarriages of justice caused, for instance, by a judicial officer’s
misrepresentations, lost mail, or plausible misinterpretations of ambiguous
rules.” Id. The court emphasized that “[t]his is true even for litigants . . . who
appear pro se.” Id. (citations omitted). And although the defendant here is a
corporation, not an individual, the general proposition that “even pro se
litigants must follow rules of civil procedure” still applies. Cady v. Sheahan,
467 F.3d 1057, 1061 (7th Cir. 2006) (citing McNeil v. United States, 508 U.S.
106, 113 (1993)). The defendant had a legal obligation to respond to the
complaint; the facts that it did not immediately recognize that and did not
promptly make an effort to find out what its obligations were does not
constitute excusable neglect. See Marine Travelift, Inc. v. Toby Sexton Tire Co.,
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Case No. 08-C-601, 2009 WL 2421593, at *1 (E.D. Wis. Aug. 6, 2009)
(defendant could not establish excusable neglect when it simply chose not to
answer the complaint).
The other excusable neglect factors also weigh against enlarging the time
for the defendant to answer. The plaintiffs will be prejudiced if the court allows
the defendant to answer the complaint at this late stage. The plaintiffs’ motion
for default judgment is pending, and if the court’s docket was less burdensome,
it might have ruled on the motion before the defendant filed its request for
enlargement of time. The defendant did not file anything in this case for eight
months, several months after its answer deadline and several months after the
entry of default. The defendant asserts that it has acted in good faith; even
assuming that were true, that is not enough to establish excusable neglect.
Because the defendant cannot establish that its failure to timely file an
answer was due to excusable neglect, the court will deny its motion for an
enlargement of time to answer.
II.

Default Judgment Process
Federal Rule of Civil Procedure 55 requires a two-step process before the

entry of default judgment. A party first must seek an entry of default based on
the opposing party’s failure to plead. Fed. R. Civ. P. 55(a). This means that the
court must assure itself that the defendant was aware of the suit and still did
not respond.
A.

Entry of Default

The affidavit of service shows that the plaintiffs’ process server served
Jeffery T. Barachy, the defendant’s registered agent, with the summons and

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complaint on April 15, 2024.1 Dkt. No. 3. As stated above, the defendant has
acknowledged that he was served on or about this date but did not respond,
believing the summons and complaint to be an “intimidation tactic[].” Dkt. No.
16-1 at 1. The court is satisfied that the defendant was aware of this suit and
chose not to respond. The clerk’s entry of default was proper.
A court may set aside the entry of default “for good cause.” Fed. R. Civ. P.
55(c). “A party seeking to vacate an entry of default prior to the entry of final
judgment must show: “(1) good cause for the default; (2) quick action to correct
it; and (3) a meritorious defense to the complaint.’” Cracco v. Vitran Exp., Inc.,
559 F.3d 625, 630–31 (7th Cir. 2009) (quoting Sun v. Bd. of Trs. of the Univ. of
Ill., 473 F.3d 799, 810 (7th Cir. 2007)).
Although the defendant did not file a motion under FRCP 55(c) asking
the court to set aside the entry of default, its motion for enlargement of time to
answer implicitly asks the court to set aside the clerk’s entry of default. The
defendant asserts that it “has never been involved in litigation” and was
“utterly unaware” of how to obtain counsel. Dkt. No. 16-1 at 6–7. The
defendant claims that it did not “understand[] the urgency required in federal
actions” and believed that the summons and complaint were an attempt to
“strong-arm him.” Id. at 4. The defendant asserts that it was only after the
defendant received the default judgment motion that it realized the severity of
the situation. Id. at 5. The defendant argues that at that point, it immediately
began seeking counsel and any delay in responding to the motion for default

1 The Wisconsin Department of Financial Institutions website shows that

Barachy is the registered agent for Marathon Plumbing Company.
https://apps.dfi.wi.gov/apps/corpSearch/Details.aspx?entityID=M068908&ha
sh=529067088&searchFunctionID=cfe1dfcc-6355-4b39-aac235df5d583234&type=Simple&q=marathon+plumbing.
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judgment is due to exercising reasonable diligence in finding the right counsel
to represent it. Id. at 7. The defendant says that it has meritorious defenses to
the plaintiffs’ claims because it has withdrawn from the union and does not
owe anything to the funds. Id. The defendant also asserts several affirmative
defenses, including failure to exhaust administrative remedies, estoppel,
standing and that the defendant provided the plaintiffs with timely notice of
withdrawal from the union. Id.
The defendant has not demonstrated good cause to set aside the default.
The defendant willfully ignored the summons and complaint. See Cracco, 559
F.3d at 631 (an inadvertent failure to respond may constitute good cause while
willful disregard of the litigation may not). A lack of legal knowledge and the
defendant’s busy schedule do not constitute good cause. See Jones v. Phipps,
39 F.3d 158 (7th Cir. 1994) (pro se plaintiff’s incarceration and lack of legal
counsel was not good cause to set aside default); Medline Indus., Inc. v.
Medline Rx Fin., LLC, 218 F.R.D. 170 (N.D. Ill. 2003) (defendant could not
establish good cause where it was aware of complaint and decided not to
answer, even accounting for counsel’s schedule and health issues).
Nor has the defendant demonstrated the other two elements required by
Rule 55(c). Although the defendant asserts that it took quick action to respond
to the motion for default judgment, the defendant did not file anything until
over two months after the plaintiffs filed the motion. This is not “quick.” See
Oku v. Oyster Gaston5, LLC, Case No. 19 C 7673, 2020 WL 5763644, at *3
(N.D. Ill. Sept. 28, 2020) (month-long delay in responding was not “quick
action” absent evidence that the defendant was not timely notified about the
entry of default). Once the defendant had retained counsel, that counsel

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immediately could have filed a motion asking for time to investigate. That did
not happen.
The “meritorious defense” prong of the analysis requires the defendant to
do more than state more than “bare legal conclusions.” Wehrs v. Wells, 688
F.3d 886, 891 (7th Cir. 2012) (conclusory statement without factual support
insufficient); Breuer Elec. Mfg. Co. v. Toronado Sys. of Am., Inc., 687 F.2d 182,
186 (7th Cir. 1982) (general denial of liability insufficient for a showing of a
meritorious defense). The defendant asserts that it withdrew from the unions
and does not owe any of the claimed amounts but has not provided any specific
facts supporting these assertions. Nor does the proposed answer provide facts
supporting these assertions. See Dkt. No. 17. The defendant could have
provided an exhibit or affidavit supporting its claims, but it did not do so. The
remaining “meritorious defenses” are general boilerplate, of the type the
Seventh Circuit rejected in Breuer. The court cannot find that the defendant
has shown a meritorious defense to the default judgment.
Because the defendant has not shown good cause to set aside the entry
of default, the court will proceed to review the plaintiffs’ motion for default
judgment.
B.

Plaintiffs’ Motion for Default Judgment (Dkt. No. 7)

After the entry of default, the plaintiff may move for default judgment
under Rule 55(b). Fed. R. Civ. P. 55(b). When the court determines that a
defendant is in default, it accepts as true the well-pleaded allegations in the
complaint. e360 Insight v. The Spamhaus Project, 500 F.3d 594, 602 (7th Cir.
2007). “A default judgment establishes, as a matter of law, that defendants are
liable to plaintiff on each cause of action in the complaint.” Id. However, “even
when a default judgment is warranted based on a party’s failure to defend, the
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allegations in the complaint with respect to the amount of damages are not
deemed true.” Id. (quoting In re Catt, 38 F.3d 789, 793 (7th Cir. 2004)). A
district court “must conduct an inquiry in order to ascertain the amount of
damages with reasonable certainty. Id. Rule 55(b)(2) allows the district court to
conduct this inquiry through hearings or referrals, if necessary, to determine
the amount of damages. Fed. R. Civ. P. 55(b). Such proceedings are
unnecessary, however, if the “amount claimed is liquidated or capable of
ascertainment from definite figures contained in the documentary evidence or
in detailed affidavits.” e360 Insight, 500 F.3d at 602 (quoting Dundee Cement
Co. v Howard Pipe & Concrete Prods., Inc., 722 F2d 1319, 1323 (7th Cir.
1983)).
The well-pleaded allegations of the complaint demonstrate that Plumbers
Local 75 and the defendant were parties to a collective bargaining agreement
(CBA), as well as various trust agreements incorporated by reference in the
CBA. Dkt. No. 1 at ¶¶10, 13. Under both the CBA and the trust agreements,
the defendant was, among other things, obligated to submit monthly reports,
make benefit contributions, pay administrative costs in the event of
delinquency or untimely payment of contributions and submit to an audit. Id.
at ¶14. The complaint alleges that the defendant breached its obligations to the
plaintiffs by failing to make regular and timely payments to the plaintiff funds
and refusing to allow the funds’ auditor access to books and records necessary
to perform an audit for one of the funds. Id. at ¶15.
The well-pled allegations of the complaint and supporting exhibits
establish liability. e360 Insight, 500 F.3d at 602. ERISA entitles the plaintiffs to
damages consisting of unpaid contributions, liquidated damages, interest and
reasonable attorneys’ fees and costs of the suit. 29 U.S.C. § 1132(g)(2). The
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court must conduct an inquiry to determine whether the plaintiffs have
calculated the amount of damages with reasonable certainty. e360 Insight, 500
F.3d at 602. In support of their motion for default judgment, the plaintiffs
attached an itemization of damages. The plaintiff funds’ audit reports establish
that the defendant is delinquent in the amount of $2,653.73 to the Plumbers &
Gasfitters Union Local No. 75 Health Fund, $329.25 to the Plumbers Local 75
Education Fund, $54.81 to the Plumbing Industry Development Fund, Inc. and
$3,386.07 to the Building Trades United Pension Trust Fund for the period
January 1, 2020 to September 30, 2022 (inclusive of interest and liquidated
damages). Dkt. Nos. 8 at ¶8; 10 at ¶8. The plaintiffs assert that as the date of
their filing, the defendant had not made any payments towards these
delinquencies. Dkt. No. 13 at 4–5. The plaintiffs support this assertion with
affidavits from the third-party administrators of the plaintiff funds. Dkt. Nos. 9
at ¶4; 11 at ¶4.
As for attorneys’ fees and costs, the plaintiffs provided an affidavit from
their lawyer, Alex J. Sterling. Dkt. No. 12. Sterling’s affidavit includes a
breakdown of tasks completed and time spent on the case, calculating that he
expended a total 12.9 hours at a rate of $180 per hour for the three plaintiffs in
this case. Dkt. No. 13 at 5–6 (citing Dkt. No 12-2). This reflects a total of
$2,322 in attorneys’ fees and $580.40 in costs for case opening fees and service
of process. Dkt. No. 12 at ¶¶7–8. The court finds these fees and costs to be
reasonable.
The court will enter judgment in favor of the plaintiffs in the amount of
$9,326.26. The evidence provided by the plaintiffs sufficiently establishes these
calculations and total amounts, so a hearing is unnecessary. See e360 Insight,
500 F.3d at 602 (stating a hearing to determine damages is not necessary if the
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claimed amount is “capable of ascertainment from definite figures contained in
the documentary evidence or in detailed affidavits”).
IV.

Conclusion
The court DENIES the defendant’s motion for enlargement of time and

for leave to file an answer. Dkt. No. 16.
The court GRANTS the plaintiffs’ motion for default judgment. Dkt. No.
7.
The court ORDERS that the clerk must enter default judgment in favor
of the plaintiffs and against the defendant in the amount of $9,326.26 for
unpaid contributions, interest, liquidated damages and reasonable attorneys’
fees and costs.
The court ORDERS that this case is DISMISSED.
Dated in Milwaukee, Wisconsin this 7th day of March, 2025.
BY THE COURT:
_____________________________________
HON. PAMELA PEPPER
Chief United States District Judge

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