Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-01269/USCOURTS-ca7-15-01269-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 15-1269

CENTRAL ILLINOIS CARPENTERS HEALTH AND WELFARE TRUST 

FUND, et al.,

Plaintiffs-Appellees,

v.

CON-TECH CARPENTRY, LLC,

Defendant-Appellant.

____________________

Appeal from the United States District Court

for the Central District of Illinois.

No. 14-CV-3293 — Colin S. Bruce, Judge.

____________________

ARGUED NOVEMBER 6, 2015 — DECIDED NOVEMBER 24, 2015

____________________

Before WOOD, Chief Judge, and POSNER and EASTERBROOK,

Circuit Judges.

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 

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2 No. 15-1269

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. (ConTech 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. ConTech 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; ConTech 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, 

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No. 15-1269 3

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 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, e.g., Moje v. Federal Hockey 

League, LLC, 792 F.3d 756 (7th Cir. 2015).

Con-Tech filed a Rule 60(b) motion on January 15. The 

motion also invoked Rule 55(c), but too late. Con-Tech told 

the district judge that it had not ignored the suit but had instead started negotiating with plaintiffs’ lawyers, seeking a 

satisfactory settlement. The judge replied that Con-Tech may 

not have ignored the plaintiffs’ demands, but that it had ignored the litigation. The judge observed that it is impossible 

to handle a suit in which a litigant unilaterally decides to 

march to the beat of its own drum. A defendant can both file 

an answer and try to negotiate a settlement; doing the latter 

does not eliminate the need to do the former. The judge denied the Rule 60(b) motion, and Con-Tech appealed.

Con-Tech repeats in this court the argument the district 

judge rejected, but the district court did not abuse its discretion in holding Con-Tech to the Civil Rules’ requirements. 

Con-Tech could have filed an answer and asked the district 

court to stay the litigation while the parties negotiated. It 

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was not free to keep silent and hope that the equivalent of a 

stay would be afforded retroactively. Con-Tech’s brief in this 

court ignores the need to show excusable neglect; it argues 

instead that it had “good cause” for proceeding as it did. 

That’s the Rule 55(c) standard, and we have explained why 

Rule 55(c) is not now relevant. Con-Tech has forfeited its 

opportunity to make an argument under the applicable legal 

standard. At all events, its conduct was not “neglect” of any 

kind. Con-Tech made a deliberate decision to disregard the 

pending suit. No district judge has to put up with that, or 

excuse it in retrospect.

Con-Tech thinks that plaintiffs were not chivalrous in 

seeking a default judgment while negotiations continued, 

and that may be so, but Con-Tech could have protected itself 

easily—and district judges are entitled to protect the judicial 

system from litigants such as Con-Tech who choose to play 

by their own rules. Con-Tech also complains that plaintiffs’ 

motions were served on non-lawyers (Con-Tech’s corporate 

officers and agents for service of process) and should have 

been sent to counsel. Yet until counsel files an appearance, 

which did not happen until December 30, adverse parties are 

supposed to serve the litigant itself, just as plaintiffs did.

Fed. R. Civ. P. 5(b). Plaintiffs went beyond their legal requirements, for “[n]o service is required on a party who is in 

default for failing to appear.” Fed. R. Civ. P. 5(a)(2).

In this court, Con-Tech maintains that it was legally required to spurn the judicial process. It asserts that, if it had 

filed an answer or any other substantive paper, it would 

have waived its right to arbitrate under the Federal Arbitration Act (which it mistakenly invokes, although 29 U.S.C. 

§1401(a)(1), part of the Multiemployer Pension Plan 

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No. 15-1269 5

Amendment Act, is the governing statute). Nonsense. True, 

a litigant cannot attempt to prevail in court, then seek arbitration only as a fallback. See, e.g., Sharif v. Wellness International Network, Ltd., 376 F.3d 720, 726 (7th Cir. 2004); Cabinetree of Wisconsin, Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388, 

391 (7th Cir. 1995); St. Mary's Medical Center of Evansville, Inc. 

v. Disco Aluminum Products Co., 969 F.2d 585, 589 (7th Cir. 

1992). But nothing prevents a defendant from filing an answer that demands arbitration and offers other reasons why 

plaintiffs should not receive judicial relief. See, e.g., Kawasaki

Heavy Industries, Ltd. v. Bombardier Recreational Products, Inc., 

660 F.3d 988, 993–98 (7th Cir. 2011).

Con-Tech’s remaining arguments have been considered 

but do not require discussion. All but one concern the merits, which the district court did not reach. The one exception 

is a contention that the district court did not have “jurisdiction” to award damages that could benefit a non-party. That 

is an argument about the real party in interest, see Fed. R. 

Civ. P. 17(a), not about subject-matter jurisdiction.

AFFIRMED

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