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Directors of the Ohio Conference of Plasterers v. Akron Insulation and Supply, Inc.

United States District Court, N.D. Ohio, Eastern Division

May 8, 2018

DIRECTORS OF THE OHIO CONFERENCE OF PLASTERERS & CEMENT MASONS COMBINED FUNDS, INC., PLAINTIFF,
v.
AKRON INSULATION AND SUPPLY, INC., DEFENDANT.

          MEMORANDUM OPINION AND ORDER

          HONORABLE SARA LIOI UNITED STATES DISTRICT JUDGE.

         The Court previously denied the motion of plaintiff Directors of the Ohio Conference of Plasterers & Cement Masons Combined Funds, Inc. (“plaintiff”) for default judgment against defendant Akron Insulation and Supply, Inc. (“defendant”), and ordered plaintiff to show cause why this case should not be dismissed. (See Doc. No. 12 (Memorandum Opinion and Order [“MOO”]).) Now before the Court is plaintiff's response to the Court's show cause order. (Doc. No. 13 [“Resp.”].)

         A. Background

         The background of this case is detailed in the Court's ruling denying the motion for default judgment, and familiarity therewith is assumed. But in order to provide context, that background is briefly summarized here.

         On June 30, 2016, plaintiff filed suit against defendant pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., and Section 301(a) of the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185(a), for violating a collective bargaining agreement by failing to make fringe benefit contributions. (Doc. No. 1 [“Compl.”] ¶ 1.) Plaintiff asserts six claims for relief. (Id. ¶¶ 5-44.) A collective bargaining agreement signed by defendant is attached as Exhibit A to the complaint. (Doc. No. 1-2 [“CBA”].) The time period covered by the CBA is June 1, 2007 to May 31, 2010. (See CBA at 13.[1]) Defendant did not answer or otherwise respond to the complaint, and default was entered. (Doc. No. 9.)

         Plaintiff argues in the motion for default judgment that defendant failed to file reports and make timely contributions under the CBA for the months of “October 2014, December 2014, January 2015, March 2015 through May 2015, August 2015, September 2015, November 2015, and December 2015[, ]” and seeks an order requiring defendant to submit to an audit from January 1, 2014 to present, as well as attorney fees and costs in the amount of $5, 142.00. (See Doc. No. 10 [“Mot.”] at 110-113.) Defendant did not oppose the motion.

         The Court construed defendant's admission to the facts alleged in the complaint as a result of its default to pertain to the CBA attached to the complaint, which did not on its face cover time periods in 2014, 2015, and beyond. Thus, the Court denied the motion because plaintiff failed to show it is entitled to default judgment against defendant for breach of a collective bargaining agreement in 2014 and 2015, or entitled to an audit from January 1, 2014 to present. Plaintiff was granted leave to show cause why this case should not be dismissed. (MOO at 128.)

         B. Plaintiff's Response to the Show Cause Order

         In response to the show cause order, plaintiff argues that the allegations in the complaint support the default judgment sought from 2014 to present even though the CBA attached to the complaint covers the time period 2007-2010. Plaintiff advances four points in support.

         First, plaintiff maintains that it “pleaded that Defendant was bound by a CBA at ‘all times relevant herein, ' plainly referring to the dates of contractual breaches, which included dates in 2014 and 2015.” (Resp. at 131.) As an initial matter, defendant's default does not establish as true conclusory allegations. Thirty Eight St., Inc. v. Chatur Corp., No. 1:08CV716, 2009 WL 10689657, at *4 (N.D. Ohio Aug. 10, 2009) (“[A] default does not establish as true any conclusory allegations in the complaint.”) (citing Flagstar Bank, FSB v. Caribbean Mort. Corp., No. CV08-2108, 2009 WL 910835, at *3 (E.D.N.Y. Mar. 12, 2009)). The complaint does not contain factual allegations that, if admitted by defendant because of default, result in the conclusion that defendant was bound by the CBA during the period of time for which plaintiff seeks default judgment.

         Moreover, the complaint alleges that defendant was bound by a specific collective bargaining agreement-the CBA attached to the complaint as Exhibit A. All six counts begin with the allegation: “For all times relevant herein, Defendant was a party to and agreed to abide by the terms of a Collective Bargaining Agreement (“CBA”) (Exhibit A).” (Compl. ¶¶ 6, 13, 20, 25, 30, 38 (emphasis in original).) The CBA attached to the complaint as Exhibit A covers the time period from June 1, 2007 to May 31, 2010, and shows that defendant is a signatory to that agreement. (CBA at 13, 30.) There are no factual allegations in the complaint that defendant was bound by a collective bargaining agreement other than the agreement attached to the complaint, or that the CBA remained in effect for the time periods at issue. The only reference to 2014 and 2015 in the complaint appears in counts V and VI, alleging that “[f]or the periods of October 2014, December 2014, January 2015, March 2015 through May 2015, August 2015, September 2015, November 2015, and December 2015, Defendant failed to timely pay contributions.” (See Compl. ¶¶ 33, 41.)

         With respect to those allegations in counts V and VI, plaintiff argues that “[a]s noted in [the] Complaint, Defendant continued to make its monthly contributions after June 1, 2010. In the Complaint, it is alleged that for the months of October 2014, December 2014, January 2015, March 2015 through May 2015, August 2015, September 2015, November 2015, and December 2015, Defendant did not timely remit their fringe benefit contributions that provide earned benefits for employees of Defendant.” (Resp. at 134, citing Compl. at ¶ 33.) According to plaintiff, “[i]t is implicit in that allegation and the related request for relief that the Defendant did eventually remit the actual contributions, but Defendant did so after the contributions' due date, causing liquidated damages to accrue. This means that at a minimum, Defendant remitted contributions through December 2015, four and a half years after the June 1, 2010 date in the CBA. Defendant's course of performance indicates that it was Defendant's understanding that its obligations from the CBA continued to be in effect well after the June 1, 2010 date.” (Id. at 135 (emphasis added).) But plaintiff's argument that defendant eventually remitted the contributions for the 2014 through December 2015 time period appears to be contradicted by the affidavit of Tim Myers, administrator for plaintiff Funds. (Doc. No. 10-1 [“Myers Aff.”].) According to Myers, defendant has not paid the contributions for this period. (See id. ¶¶ 3-6.) Myers does aver, however, that defendant paid liquidated damages in the amount of $2, 654.12 for the months of October 2014, December 2014, January 2015, March 2015 through May 2015, August 2015, September 2015, November 2015, and December 2015. (Id.)

         Next, plaintiff contends that even though the CBA is dated June 1, 2007 to May 31, 2010, it contains an evergreen clause in Article XIII, which states that

This Agreement represents a complete and final understanding on all bargain able (sic) issues between the Employer and the Union, and it shall be effective as of June 1, 2007, and remain in full force and effect, with any modifications and/or amendments, until June 1, 2010, and thereafter from year to year unless sixty (60) days prior to said expiration date, or any anniversary date thereof, either ...

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