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Iron Workers District Council of Southern Ohio and Vicinity Benefit Trust v. Coit

July 28, 2010

IRON WORKERS DISTRICT COUNCIL OF SOUTHERN OHIO AND VICINITY BENEFIT TRUST; IRON WORKERS DISTRICT COUNCIL OF SOUTHERN OHIO AND VICINITY PENSION TRUST; IRON WORKERS DISTRICT COUNCIL OF SOUTHERN OHIO AND VICINITY ANNUITY TRUST, PLAINTIFFS,
v.
FRANK MICHAEL COIT, AN INDIVIDUAL AND DOING BUSINESS AS LONE STAR DEVELOPMENT, DEFENDANT.



The opinion of the court was delivered by: Hayes, Judge

AMENDED ORDER

The matter before the Court is Plaintiffs' Motion for Default Judgment. (Doc. # 12).

BACKGROUND

On September 22, 2009, Plaintiffs Iron Workers District Council of Southern Ohio and Vicinity Benefit Trust, Iron Workers District Council of Southern Ohio and Vicinity Pension Trust, and Iron Workers District Council of Southern Ohio and Vicinity Annuity Trust (collectively the "Trust Funds") initiated this action by filing their complaint. (Doc. # 1). The complaint alleges Defendant Frank Michael Coit, doing business as Lone Star Development ("Lone Star"), failed to pay contributions to Plaintiffs pursuant to three Trust Agreements. Id. at 2-3. The complaint alleges Coit and Lone Star Development, formerly a corporation, are alter-egos of one another and that Coit is therefore liable for the business's failure to pay these contributions. Id. at 8-9. The complaint alleges four claims: (1) breach of a collective bargaining agreement with Iron Workers Local 22, which required Coit to adhere to the Trust Agreements with Plaintiffs; (2) breach of the Trust Agreements; (3) violation of the Employee Retirement Income Security Act ("ERISA"); and (4) "damages for alter ego violations establishing liability for Defendant." Id. at 9-11. Plaintiffs seek $86,685.89 in actual damages for Defendant's failure to pay the trust fund, liquidated damages, interest, in addition to attorney's fees and costs. Id. at 12. On October 7, 2009, the Trust Funds served Coit. (Doc. # 4 at 2). Coit failed to file an answer to the complaint. On November 2, 2009, the Trust Funds requested an entry of default. (Doc. # 5). On November 3, 2009, the Clerk of the Court entered default against Coit. (Doc. # 6). On January 26, 2009, the Court issued an Order to Show Cause as to why this case should not be dismissed for failure to timely move for default judgment. (Doc. # 7). The order permitted the Trust Funds to move for default judgment within thirty days. Id. at 2.

On February 2, 2010, the Trust Funds filed their first Motion for Default Judgment. (Doc. # 8). On April 27, 2010, the Court denied the motion without prejudice. (Doc. # 11). The Court held that the factual allegations of the complaint were sufficient to sustain the causes of action pleaded in the complaint, but the Trust Funds had failed to establish damages by a preponderance of the evidence because of errors in the calculations presented to the Court and failure to provide sufficient evidence of attorney's fees. Id. at 6. The Court allowed the Trust Funds to file an amended Motion for Default Judgment within thirty days. Id. at 7. On May 24, 2010, the Trust Funds filed their current Motion for Default Judgment. (Doc. # 12).

ALLEGATIONS OF THE COMPLAINT

Coit is the owner and operator of Lone Star, a commercial construction business. (Doc. # 1 at 3). Although Lone Star "was previously organized and existed as a corporation under the laws of the State of California, its corporate status has been suspended" and Coit now operates it as a sole proprietorship. Id. Lone Star's principal place of business is in El Cajon, California, within this Court's jurisdiction. Id. Coit is an employer in an industry affecting commerce pursuant to ERISA and the Labor Management Relations Act ("LMRA"). Id. Coit is "responsible for running the day-to-day operations and is responsible for all decisions pertaining to contributions to the Trust Funds, including decisions whether or not to pay such contributions." Id.

"Coit, through Lone Star, is bound to the terms" of a collective bargaining agreement with the Iron Workers Local 22, a union in Indianapolis, Indiana, which is affiliated with the International Association of Bridge, Structural, and Ornamental Iron Workers. Id. at 4. The bargaining agreement, along with trust agreements with each of the Trust Funds, required Coit to "file monthly remittance reports by the tenth day of the month following the month in which such contributions were earned by the employees' labor." Id. Coit was aware of these obligations. Id. Coit is also a party to a Participation Agreement with each of the Trust Funds, which required Coit to "accept and be bound to the terms and provisions" of each of the trusts and to make contributions to each of the trusts "as required by the collective bargaining agreements" with the union. Id. at 4-5. Coit signed the Participation Agreement as an individual owner of Lone Star. Id. at 5

Pursuant to the terms of the agreements with each of the trusts, "an employer who fails to make timely reports and contributions is responsible for liquidated damages and/or interest in the following amounts:"

(a) Liquidated Damages

(1) For the late filing of reports: 5% of the amount of the contribution covered by the report, per month or fraction thereof, and

(2) For late payment of contributions: 1.5% per month or fraction thereof, not to exceed 50 months, except that for the first five months of concurrent late reporting and also late payment, this 1.5% shall be deemed to be included in the 5% in (1) above, and

(3) The total amount of liquidated damages owed by an Employer shall be an amount ...


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