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Iron Workers District Council of Southern Ohio & Vicinity Benefit Trust v. Millennium Steel, Inc.

United States District Court, S.D. Ohio, Western Division, Dayton

January 6, 2017

IRON WORKERS DISTRICT COUNCIL OF SOUTHERN OHIO & VICINITY BENEFIT TRUST, et al., Plaintiffs,
v.
MILLENNIUM STEEL, INC., Defendant.

          SHARON L. OVINGTON MAGISTRATE JUDGE.

          ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

          THOMAS M. ROSE UNITED STATES DISTRICT JUDGE.

         Before this Court, Plaintiffs Iron Workers District Council of Southern Ohio & Vicinity Benefit Trust, Iron Workers District Council of Southern Ohio & Vicinity Pension Trust, Iron Workers District Council of Southern Ohio & Vicinity Annuity Trust (collectively “Trusts” or “Plaintiffs”) submitted a Motion for Default Judgment against the Defendant Millennium Steel, Inc. (“Millennium”). This Court now grants the Plaintiffs' Motion for Default Judgment pursuant to 55(b) of the Federal Rules of Civil Procedure against Defendant Millennium in its entirety.

         I. BACKGROUND FACTS

         The Trusts are three employee welfare and pension benefit plans. Aff. of Peggy Gotthardt ¶¶ 5-10. Defendant Millennium is bound to the terms of the collective bargaining agreement (“CBA”) with Iron Workers Local No. 22, Indianapolis, Indiana and Iron Workers Local No. 70, Louisville, Kentucky. ECF #1, ¶ 14, Complaint. Defendant Millennium executed a participation agreement (“Participation Agreement”) on April 2, 2001 which bound it to the Plaintiffs' Agreements and Declarations of Trust (“Trust Agreements”). Id. at ¶¶ 18-19. Pursuant to the Trust Agreements, Millennium is required to allow the Trusts' authorized agent access to its payroll records for the purpose of a payroll audit. Id. at ¶ 17. After refusing to undergo an audit which caused the Plaintiffs to file this action, Defendant Millennium finally succumbed to the Plaintiffs' insistence and on or around September 30, 2016, an audit was performed by the Plaintiffs' auditors, Clark Schaefer Hackett (“Audit”). Aff. of Peggy Gotthardt ¶ 19. The Audit found Defendant Millennium owed $235, 361.43 in unpaid fringe benefit contributions, and the Trusts' have calculated Defendant Millennium owes $48, 024.09 in liquidated damages, $48, 896.79 in interest assessments from those contributions. Id. at ¶¶ 21-27. Additionally, pursuant to the Trust Agreements, Defendant Millennium has met the shortage threshold necessary to be liable for the costs of the audit, making it liable thereof, in the amount of $5, 420.00. Id. at ¶ 28. Defendant Millennium has failed to timely fulfill its contribution obligation in violation of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and is liable for the Trusts' reasonable attorneys' fees pursuant to Section 502(g) of ERISA. 29 U.S.C. § 1132(g) in the amount of $8, 863.86. Id. at ¶ 29.

         II. PROCEDURAL HISTORY

         On July 13, 2016, Plaintiffs filed the Complaint to compel an audit and collect all amounts discovered owing against Defendant. ECF #1, Complaint. On July 14, 2016, the summons was issued by this Court. ECF # 2, Summonses. On or around July 19, 2016-but no later than July 21, 2016 when the certified mail receipt was received by this law firm-service was executed on Defendant. ECF # 3, Summonses Returned Executed. Defendant had twenty-four (24) days after service was executed to answer the Complaint pursuant to Rules 6(d) and 12(a)(1)(A) of the Federal Rules of Civil Procedure, meaning their Answer was due August 15, 2016. As of this date, no answer, motion, or responsive pleading has been filed. See Dkt.

         III. STATEMENT OF FACTS

         A. Plaintiffs Are Multiemployer Employee Benefit Plans Under ERISA.

         The Benefit Trust provides life insurance, weekly accident and sickness benefits, hospitalization coverage, medical and surgical coverage, and dental coverage for the benefit of participating employees and their families, and is an employee welfare benefit plan within the meaning of Section 3(1) of ERISA, 29 U.S.C. § 1002(1). Aff. Gotthardt ¶¶ 5-6; see ECF #1, Complaint ¶ 3. The Pension Fund was created for the purpose of providing pension, retirement, and death benefits for participating employees and their beneficiaries, and is an employee pension benefit plan within the meaning of Section 3(2) of ERISA, 29 U.S.C. § 1002(2). Aff. Gotthardt ¶¶ 7-8; see ECF #1, Complaint ¶ 5. The Annuity Trust was created for the purpose of providing pension, retirement, and death benefits for participating employees and their beneficiaries, and is an employee pension benefit plan within the meaning of Section 3(2) of ERISA, 29 U.S.C. §1002(2). Aff. Gotthardt ¶¶ 9-10; see ECF #1, Complaint ¶ 7.

         Plaintiffs have been established pursuant to the Benefit Trust Agreement, the Pension Trust Agreement, and the Annuity Trust Agreement (collectively the “Trust Agreements”) that were entered into by various Iron Worker local unions representing field construction iron workers in Ohio, Kentucky, Indiana, and West Virginia (collectively the “Iron Worker Local Unions”), and various employers having collective bargaining agreements with one or more of the Iron Worker Local Unions. Aff. Gotthardt ¶¶ 11-12. Plaintiffs are maintained pursuant to one or more collective bargaining agreements between the Iron Worker Local Unions and more than one signatory employer. Id. Plaintiffs are multi-employer plans within the meaning of Section 3(37)(A) of ERISA, Title 29 U.S.C. § 1002(37)(A). Aff. Gotthardt ¶ 11.

         B. Defendant Millennium Was Obligated To Submit To An Audit And Pay All Contributions Found Owing To The Plaintiffs.

         Among the terms and conditions of employment in the CBA and Trust Agreements is the requirement that Defendant Millennium make employer contributions to the Plaintiffs on behalf of covered employees. ECF #1, ¶ 16, Complaint. At all times relevant to this action Defendant Millennium has been party to at least one collective bargaining agreement which binds it to the Trust Agreements. Aff. Gotthardt ¶ 13. Defendant Millennium employed workers whose wages, hours, and terms and conditions of employment are set forth in the CBA and all predecessor collective bargaining agreements. Id. Pursuant to the Trust Agreements, Defendant Millennium is liable for both liquidated damages and interest assessments if fringe benefit contributions are not timely remitted as required. Aff. Gotthardt ¶ 15.

         Additionally, pursuant to the Trust Agreements, Defendant Millennium is required to allow the Plaintiffs' authorized agent access to its payroll records for the purpose of a payroll audit. ECF #1, ¶ 21, Complaint. On September 30, 2016, an audit was performed by the Plaintiffs' auditors, Clark Schaefer Hackett (“Audit”). Aff. of Peggy Gotthardt ¶ 19. The Audit found Defendant Millennium owed $235, 361.43 in unpaid fringe benefit contributions and from those delinquent amounts, the Funds' office determined Defendant Millennium owes $48, 024.09 in liquidated damages and $48, 896.79 in interest assessments. Id. at ΒΆΒΆ 21-27. The contributions result from the improper underreporting of contributions owed by Defendant Millennium, making it liable for those amounts. Ms. ...


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