The opinion of the court was delivered by: Magistrate Judge James S. Gallas
REPORT AND RECOMMENDATION OF MAGISTRATE JUDGE (Regarding ECF #12)
On March 12, 2010, the Court entered default judgment against defendant Eskay Floor Covering, Inc. in this matter involving unpaid and uncollected fringe benefits due and owing to plaintiff health and welfare plans and pension plans. Plaintiffs moved on April 12, 2010, for the court to hold defendant, Eskay Floor Covering, Inc., and its president Raymond Skutnik in contempt. (ECF# 12). Plaintiffs seek pursuant to FRCP 70(e) appropriate sanctions be imposed to obtain compliance with the Court's judgment. This matter was referred on May 19, 2010 to the undersigned for the purpose of holding a civil contempt hearing, certifying the facts, and providing a Report and Recommendation for the Court.
The matter was set for contempt hearing on June 15, 2010, and notices were mailed on May 20, 2010 to plaintiffs' counsel and to Eskay Floor Covering, Inc., and Raymond Skutnik at the defendant business' current address. None of the notices were returned as undeliverable. The hearing on the motion for contempt was held as scheduled in the notice. Defendant and Raymond Skutnik failed to appear. Counsel Julie A. Wagner of Rotatori Bender Co. L.P.A. appeared for plaintiffs. She supported her case with her affidavit, the affidavit of Ron Newrones, (See ECF # 15 and 15-1), her unobjected to proffers of fact, and the testimony of Cindi Moore. paralegal.
Ron Newrones, auditor of the plaintiff plans, is permitted to conduct monthly audits of Eskay Floor Covering, Inc. pursuant to the Letter Agreement signed by defendant's representative which states that defendant is bound by the Collective Bargaining Agreement between the Ohio and Vicinity Regional Council of Carpenters, United Brotherhood of Carpenters and Joiners of America, AFL-CIO, the Carpenter Contractors' Association of Cleveland, Ohio, the Construction Employers Association of Cleveland, the Ohio Building Chapter-AGC, Cleveland Division, the Building Association of Eastern Ohio and Western Pennsylvania, the AGC of Ohio, Akron Division, and the Building Exchange of East Central Ohio, Labor Relations Division. (Newrones Aff. ¶ 2).
Mr. Newrones made several requests to defendant to provide access to the defendant's records for an audit via letter and telephone calls. (Newrones. Aff. ¶8). Mr. Raymond Skutnik, president of Eskay Floor Covering, Inc., cancelled the audits for November 18, 2009 and November 24, 2009. (Newrones Aff. ¶9; Ms. Wagner's unopposed proffer).
Mr. Newrones was able to commence an audit of defendant's records on December 8, 2009, but the records provided were incomplete and the audit could not be concluded.
(Newrones Aff. ¶10). Raymond Skutnik stated that the necessary records were unavailable. (Id.). His excuse to Mr. Newrones was that the missing records were maintained in the company's computer, but Raymond Skutnik claimed that he did not know how to access them. With what he had to work with Mr. Newrones performed an incomplete preliminary audit disclosing $3,747.36 in unpaid fringe benefits and $117.19 in unpaid working dues for the period of October 2008 through December 2009. (Plaintiffs' Ex. 2).
Raymond Skutnik was provided a list by Mr. Newrones of the missing records necessary to complete the audit, and Raymond Skutnik promised that he would send the missing records to him. (Ms. Wagner's unopposed proffer).
During the week of December 14, 2009, Mr. Newrones made several telephone calls to defendant Eskay Floor Covering repeating the request for the necessary additional information, but received no compliance. On December 21, 2009, Mr. Newrones contacted plaintiffs' counsel with his complaint, and counsel sent a demand letter to Eskay Floor Covering, Inc. demanding access to its records in order to complete the audit. (Wagner Aff. ¶8).
On January 14, 2010 plaintiffs filed their complaint under the Employee Retirement Income Security Act of 1974 (29 U.S.C. §1132 et seq.) and the Labor-Management Relations Act of 1947 (29 U.S.C. §185 et seq.), against defendant Eskay Floor Covering, Inc.. This action included a claim for audit and ERISA payments.
Default was entered on February 24, 2010, followed by judgment in plaintiffs' favor on March 12, 2010. The March 12, 2010 judgment ordered defendant Eskay Floor Covering, Inc., to pay all liabilities and future contributions and withholdings pursuant to terms of Letter Agreement and Collective Bargaining Agreement, which were presented as evidence in support of plaintiffs' motion for default judgment. (ECF #1, 9) The judgment specifically further ordered defendant "to permit an audit of its books, records, and reports as necessary to determine whether Defendant has been complying with its obligations to make contributions and withholdings." (ECF # 10).
The March 12, 2010 judgment entry was sent by certified U.S. mail to defendant and a certified mail return receipt was returned ...