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Cent. Ill. Carpenters Health & Welfare Trust Fund v. Con-Tech Carpentry, LLC

United States Court of Appeals, Seventh Circuit

November 24, 2015

CENTRAL ILLINOIS CARPENTERS HEALTH AND WELFARE TRUST FUND, et al., Plaintiffs-Appellees,
v.
CON-TECH CARPENTRY, LLC, Defendant-Appellant

Decided November 6, 2015

Appeal from the United States District Court for the Central District of Illinois. No. 14-CV-3293 -- Colin S. Bruce, Judge.

For Mid-Central Illinois Regional Council of Carpenters-Joint Apprenticeship & Training Committee, West Central Illinois Building & Construction Trades Council, CENTRAL ILLINOIS CARPENTERS HEALTH AND WELFARE TRUST FUND, By and through its Board of Trustees James Richard Kimmey III, Attorney Plaintiff - Appellee, Carpenters Local 904 Building Fund, Mid-Central Illinois Regional Council of Carpenters, Plaintiffs - Appellees: James Richard Kimmey III, Attorney, Cavanagh & O'Hara LLP, Fairview Heights, IL.

For Con-Tech Carpentry, Llc., Defendant - Appellant: Lawrence P. Kaplan, Attorney, St. Louis, MO.

Before WOOD, Chief Judge, and POSNER and EASTERBROOK, Circuit Judges.

OPINION

Page 936

EASTERBROOK, Circuit Judge.

Several multi-employer health and welfare funds filed this suit under the Employee Retirement Income Security Act (ERISA), seeking about $70,000 in what they labeled delinquent contributions. The suit was filed on September 25, 2014, and Con-Tech Carpentry, the assertedly delinquent employer, was served on October 14. Service started a 21-day period for an answer, see Fed.R.Civ.P. 12(a)(1)(A)(i), giving Con-Tech until November 4. It did not meet that deadline, and on November 5 plaintiffs filed and served a motion asking the district court to find Con-Tech in default.

Con-Tech did not respond to that motion. After a hearing on December 1, which Con-Tech did not attend, Magistrate Judge Bernthal entered an order finding Con-Tech in default and giving plaintiffs 14 days to prove their damages. (Con-Tech has not argued that, by entering a default rather than recommending this step to the district judge, the magistrate judge exceeded his powers under 28 U.S.C. § 636.) At this point Con-Tech could have asked the district court to vacate the default, which under Fed.R.Civ.P. 55(c) it may do for " good cause." But Con-Tech ignored the December 1 order, as it had ignored the earlier procedural steps.

Plaintiffs filed documents showing to the district judge's satisfaction that Con-Tech was delinquent in payment. Con-Tech did not reply to these documents. On January 13, 2015, the court entered a judgment in the funds' favor, awarding them about $70,000 in past-due contributions, $14,000 in interest, $7,000 in liquidated damages, $3,000 in audit costs, and $4,000 in attorneys' fees.

Meanwhile, Con-Tech had belatedly begun filing papers. Counsel for Con-Tech filed an appearance on December 30, 2014. On the same date he also filed a motion for an extension of time to answer the complaint. Given the entry of default, however, an answer was not what was required; Con-Tech needed to file a Rule 55(c) motion to vacate the default. Plaintiffs helpfully told Con-Tech just this in a document filed on January 5. Instead of filing a Rule 55(c) motion, however, Con-Tech filed a motion for a stay in favor of arbitration. So by January 13, when the district judge turned to the subject of damages, the complaint

Page 937

had not been answered, a default had been entered, no Rule 55(c) motion had been filed, and Con-Tech had not contested the plaintiffs' evidentiary submissions about relief. And once the district court entered its judgment, the time to seek relief for " good cause" under Rule 55(c) expired.

Rule 55(c) says that to set aside a default judgment a litigant must file a motion under Fed.R.Civ.P. 60(b). The requirements under that rule are steeper (for example, relief under Rule 60(b)(1) depends on excusable neglect), and appellate review is deferential. See, ...


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