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Richards v. C&C Sheet Metal

United States District Court, D. Utah

May 30, 2019

STEPHEN RICHARDS, JAMES PAULL, TONY ERICKSEN, RICHARD MARKER, CODY LEAMASTER, MARK KAUFFMAN, CHAD BUNTING and BRENNAN COCHRAN as TRUSTEES OF THE UTAH SHEET METAL WELFARE TRUST FUND; UTAH SHEET METAL PENSION TRUST FUND; UTAH SHEET METAL VACATION AND HOLIDAY FUND; UTAH SHEET METAL EDUCATION AND TRAINING FUND; SHEET METALMARKET RECOVERY FUND; UTAH SHEET METAL CONTRACTORS INDUSTRY FUND; and SHEET METAL WORKERS LOCAL UNION NO. 312; Plaintiffs;
v.
C&C SHEET METAL and Y JONES JR.; Defendants.

          MEMORANDUM DECISION AND ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR DEFAULT JUDGMENT

          Jill N. Parrish United States District Court Judge

         District Judge Jill N. Parrish

         The plaintiff trust funds sued defendants C&C Sheet Metal and Casey Jones Jr., alleging that they failed to make required contributions to various employee and owner-member benefit trust funds. The defendants defaulted. Before the court is the plaintiffs' motion for the entry of a default judgment. [Docket 24.]

         The court ordered the plaintiffs to provide additional evidence and argument regarding the proper amount of a default judgment. The court also held an evidentiary hearing on the amount of damages in this case. Jones appeared pro se at the hearing. The plaintiffs argued that that they were entitled to $31, 104.31 in unpaid contributions. They also argued that they were entitled to prejudgment interest, liquidated damages, attorney fees, costs, and administrative fees. As described below, the court awards some, but not all, of the amounts requested by the plaintiffs.

         I. UNPAID CONTRIBUTIONS

         Under the Employee Retirement Income Security Act of 1974 (ERISA), a successful plaintiff is entitled to an award of any unpaid contributions owed by an employer to a multiemployer employee benefit plan. 29 U.S.C. §§ 1132(g)(2), 1145. ERISA defines an “employer” broadly to include “any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan.” 29 U.S.C. § 1002(5).

         The plaintiffs argue that C&C Sheet Metal and Jones owe unpaid contributions to several employee benefit plans. The defendants failed to make payments due on March 10, 2018, April 10, 2018, and May 10, 2018. The missed payments totaled $7, 364.51. On June 6, 2018, the plaintiffs sued C&C Sheet Metal and Jones for the unpaid contributions. The complaint alleged that the plaintiffs “are entitled to conduct an employer payroll audit of Defendants in order to determine the amount of contributions that are due from Defendants to Plaintiffs for the period of January 1, 2017 through the present.” The complaint requested a judgment for “[t]he unpaid contributions to the Trust Funds.”

         After the plaintiffs filed the complaint, the defendants missed several more payments. But the defendants started making contributions again for the September, October, November, and December 2018 due dates. In fact, the defendants overpaid in an attempt to catch up on the missed contributions. The defendants paid an additional $4, 887.21 to be attributed to the overdue amounts owed. Bur for the January 2019 through April 2019 due dates, the defendants again made inadequate payments or did not make a payment at all.

         From March 10, 2018 through April 10, 2019, the defendants underpaid on the contributions owed by a total of $31, 104.31. The plaintiffs argue that they are entitled to a default judgment for this entire amount. But as the court noted at the evidentiary hearing, most of this sum is attributable to payments that were missed after the plaintiffs filed their complaint. Thus, the court must decide whether the plaintiffs are entitled to default judgment for amounts owed based upon events that occurred after the complaint was filed.

         A w a r d i n g amounts in a default judgment that were not demanded in the complaint raises due process concerns. “A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c). “The purpose of this rule is to provide defending parties with adequate notice of the potential damages for which they may be liable.” Boilermaker-Blacksmith Nat. Pension Fund v. A & B Welding & Const., Inc., No. 10-cv-2664-CM, 2011 WL 5151965, at *1 (D. Kan. Oct. 28, 2011).

The theory of this provision is that the defending party should be able to decide on the basis of the relief requested in the original pleading whether to expend the time, effort, and money necessary to defend the action. It would be fundamentally unfair to have the complaint lead defendant to believe that only a certain type and dimension of relief was being sought and then, should defendant attempt to limit the scope and size of the potential judgment by not appearing or otherwise defaulting, allow the court to give a different type of relief or a larger damage award.

10 Charles Alan Wright, et al., Fe d e r a l Practice and Procedure § 2663 (4th ed. 2014).

         In their complaint, the plaintiffs demanded a judgment for amount's owed “for the period of January 1, 2017 through the present, ” i.e., the date the complaint was filed. See Greater St. Louis Const. Laborers Welfare Fund v. A.L.L. Const., LLC, No. 4:12-CV-1511 CAS, 2014 WL 1648731 at *5 (E.D. Mo. Apr. 23, 2014) (“The Complaint in the instant case seeks an audit for the period from April 1, 2007 ‘to the present,' which the Court interprets as the date the Complaint was filed . . . .”). Thus, the defendants were given notice in the complaint that they could be held liable for unpaid contributions owed up until June 6, 2018. If the plaintiffs wished to give notice of additional amounts sought, they could have filed and served a supplemental pleading seeking amounts for payments that were missed after the original complaint was filed. See Fed. R. Civ. P. 15(d) (“On motion and reasonable notice, the court may, on just terms, permit a party to serve a supplemental pleading setting out any transaction, occurrence, or event that happened after the date of the pleading to be supplemented.”). Because the plaintiffs did not file and serve a supplemental pleading, they are only entitled to amounts that were owed when the complaint was filed: $7, 364.51. See Const. Laborers Welfare Fund, 2014 WL 1648731 at *5.

         The defendants are also entitled to an offset for amounts that were paid towards the missed payments. In late 2018 and early 2019, the defendants paid an additional $4, 887.21 towards the past due amounts. The court attributes these extra payments to the oldest amounts due first: the March, April, and ...


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