UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF MICHIGAN 

SOUTHERN DIVISION 

TRUSTEES OF BOILERMAKERS’ AND 

BLACKSMITHS’ LODGE 169 VACATION 

FUND, TRUSTEES OF BOILERMAKERS’ 

AND BLACKSMITHS’ LODGE 169 EMPLOYEE 

SECURITY FUND, TRUSTEES OF 

BOILERMAKERS’ AND BLACKSMITHS’ 

LODGE 169 SICK AND DISABLED FUND, Civil Action No. 14-14477 

TRUSTEES OF BOILERMAKERS’ AND Honorable Stephen J. Murphy, III 

BLACKSMITHS’ LODGE 169 TRAINING Magistrate Judge David R. Grand 

AND WELDING CERTIFICATION FUND, 

TRUSTEES OF BOILERMAKERS’ AND 

BLACKSMITHS’ LODGE 169 SUPPLEMENTAL 

WELFARE FUND, and BOILERMAKERS’ 

AND BLACKSMITHS’ LODGE 169, 

 

 Plaintiffs, 

 

v. 

 

CREATIVE COMPOSITES, INCORPORATED 

and BRAD McPHEE, 

 

 Defendants. 

__________________________________/ 

REPORT AND RECOMMENDATION TO GRANT 

PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT [12] 

I. RECOMMENDATION 

Before the Court is Plaintiffs’ motion for entry of default judgment against Defendants 

Creative Composites, Incorporated and Brad McPhee (collectively “Defendants”) (Doc. #12), 

which was referred to this Court for a Report and Recommendation pursuant to 28 U.S.C. 

§636(b)(1)(B) (Doc. #13). Defendants have not appeared in this matter, nor have they filed a 

response to Plaintiffs’ motion. 

For the following reasons, the Court RECOMMENDS that Plaintiffs’ motion for entry of 

default judgment (Doc. #12) be GRANTED. 

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II. REPORT 

 A. Background 

As Defendants have not appeared or otherwise responded in this action, for purposes of 

this motion all of Plaintiffs’ alleged facts are taken as true. See Ford Motor Co. v. Cross, 441 F. 

Supp. 2d 837, 846 (E.D. Mich. 2006) (citing Visoneering Constr. v. U.S. Fidelity and Guaranty, 

661 F.2d 119, 124 (6th Cir. 1981)). 

Most of the plaintiffs in this action are benefit trust funds that are established and 

administered pursuant to Section 302 of the Labor Management Relations Act, 29 U.S.C. §186, 

and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §1001 et seq. 

(Doc. #1 at ¶1). These plaintiffs include: Trustees of the Boilermakers’ and Blacksmiths’ Lodge 

No. 169 Vacation Fund; Trustees of the Boilermakers’ and Blacksmiths’ Lodge No. 169 

Employee Security Fund; Trustees of the Boilermakers’ and Blacksmiths’ Lodge No. 169 Sick 

and Disabled Fund; Trustees of the Boilermakers’ and Blacksmiths’ Lodge No. 169 Training and 

Welding Certification Fund; and Trustees of the Boilermakers’ and Blacksmiths’ Lodge No. 169 

Supplemental Welfare Fund (collectively the “Funds”). (Id.). The remaining plaintiff – the 

Boilermakers’ and Blacksmiths’ Lodge No. 169 (“Local 169”) is a labor organization, as defined 

in the National Labor Relations Act, 29 U.S.C. §152(5). (Id. at ¶2). 

On November 24, 2014, Plaintiffs brought suit against Defendants, seeking delinquent 

fringe benefit contributions required to be paid under the terms of a collective bargaining 

agreement (“CBA”) entered into on August 31, 2013, between Local 169 and Creative 

Composites, Incorporated (of which Defendant McPhee is the principal owner and officer). 

(Docs. #1, 12-1). According to Plaintiffs, Creative Composites is required to contribute certain 

set sums to the Funds for every hour worked by its employees. (Doc. #12 at 4). Plaintiffs assert 

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that Creative Composites has failed to comply with its contractual and statutory obligations by 

failing to file fringe benefit reports, and by failing to pay the fringe benefit contributions due on 

behalf of each employee. (Id.). Plaintiffs further assert that Defendants have failed to pay to the 

Funds monies held in trust and covered by the Michigan Building Contract Fund Act, M.C.L. 

§570.151, et seq. Finally, Plaintiffs allege that McPhee has breached his fiduciary duty under 

ERISA by directing that Creative Composites’ assets, which were owed to the Funds, be paid to 

other creditors. (Doc. #1). In their complaint, Plaintiffs seek to compel an audit to determine the 

amounts owed to the Funds by Defendants, and an order directing payment of such amounts. 

(Id.). 

Copies of the summons and complaint were served on Defendants on December 16, 

2014. (Docs. #5, 6). On January 26, 2015, the Clerk entered defaults against Defendants, 

pursuant to Fed. R. Civ. P. 55(a), for their failure to respond to the summons and complaint. 

(Docs. #10, 11). On June 17, 2015, Plaintiffs filed the instant motion for entry of default 

judgment. (Doc. #12). In their motion, Plaintiffs seek a judgment requiring Defendants to: (a) 

submit to an audit; (b) submit contribution reports for the period of August 30, 2013, to the 

present; and (c) remit benefit contributions due for the same period. (Id.). Defendants have not 

responded to this motion. The Court has carefully considered the relevant briefing and pleadings 

and dispenses with oral argument pursuant to E.D. Mich. L.R. 7.1(f)(2). 

B. Legal Standards 

“When a party against whom a judgment for affirmative relief is sought has failed to 

plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must 

enter the party’s default.” Fed. R. Civ. P. 55(a). After default has been entered, the party 

seeking relief from the defaulting party may apply for a default judgment. See Fed. R. Civ. P. 

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55(b). An application for a default judgment may be made to the Clerk “[i]f the plaintiff’s claim 

is for a sum certain or a sum that can be made certain by computation . . .” Fed. R. Civ. P. 

55(b)(1). “In all other cases, the party must apply to the court for a default judgment.” Fed. R. 

Civ. P. 55(b)(2). Unless the party against whom a default judgment is sought is a minor or 

incompetent, notice of the motion is not required. See Fed. R. Civ. P. 55(b)(2). 

Although Rule 55(b)(2) does not provide a standard to determine when a party is entitled 

to a judgment by default, case law indicates that the Court must exercise “sound discretion” 

when determining whether to enter a judgment. State Farm Bank v. Sloan, 2011 WL 2144227, 

*2 (E.D. Mich. May 31, 2011); 10A Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, 

Federal Practice & Procedure §2685 (3d ed. 1998). As set forth above, once a default is 

entered, well-pleaded allegations in the plaintiff’s complaint, except those pertaining to the 

amount of damages, are taken as true. Alfa Corp. v. Alfa Mortgage, Inc., 560 F. Supp. 2d 1166, 

1174 (M.D. Ala. 2008) (citing Nishimatsu Constr. Co. Ltd. v. Houston Nat’l Bank, 515 F.2d 

1200, 1206 (5th Cir. 1975)); Comdyne I, Inc. v. Corbin, 908 F.2d 1142, 1149 (3d Cir. 1990); see 

also Trice v. Lake & County Real Estate, 1987 WL 38852, at *2 (6th Cir. Oct. 29, 1987) (quoting 

Dundee Cement Co. v. Howard Pipe & Concrete Prods., 722 F.2d 1319, 1323 (7th Cir. 1983) 

(“Upon default, the well-pleaded allegations of a complaint relating to liability are taken as 

true.”)). Nevertheless, the Court still has an obligation to assess whether the factual allegations 

are legally sufficient to state the alleged cause of action. See In re Industrial Diamonds Antitrust 

Litig., 119 F. Supp. 2d 418, 420 (S.D.N.Y. 2000) (“While a default constitutes an admission of 

all the facts ‘well pleaded’ in the complaint, it does not admit any conclusions of law alleged 

therein, nor establish the legal sufficiency of any cause of action .... [I]t remains for the court to 

consider whether the unchallenged facts constitute a legitimate cause of action, since a party in 

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default does not admit mere conclusions of law.”).

C. Analysis 

1. Jurisdiction

Before entering a default judgment, the Court must determine whether it has jurisdiction 

over the case and the parties. See Ford Motor Co., 441 F. Supp. 2d at 845. Here, the Court first 

finds that it has subject matter jurisdiction; Plaintiffs have sufficiently alleged federal question 

jurisdiction, as their claims allege violations of federal law (ERISA). (Doc. #1). The Court must 

also “determine whether it has jurisdiction over the defendant before entering a judgment by 

default against a party who has not appeared in the case.” Ford Motor Co., 441 F. Supp. 2d at 

845. In this case, the Court concludes that it has personal jurisdiction over the Defendants.1

 

Defendant Creative Composites is a Michigan corporation, doing business in Rapid River, 

Michigan. (Doc. #1 at ¶3). And, Defendant Brad McPhee, as the principal owner and officer of 

Creative Composites, also does business in the state of Michigan, and was served at Creative 

Composites’ business address within the state. (Id. at ¶4; Doc. #5 ). Therefore, the Court finds it 

appropriate to exercise personal jurisdiction over Defendants. 

 2. Liability and Damages 

As outlined above, Defendants have, by default, admitted all well-pleaded allegations 

Plaintiffs’ complaint. The Court finds that the allegations set forth in Plaintiffs’ complaint, as 

discussed in detail above, are sufficient to establish that Defendants violated ERISA by: (a) 

failing to file fringe benefit reports; (b) failing to pay required fringe benefit contributions; and 

(c) failing to pay to the Funds monies held in trust and covered by the Michigan Building 

 

1

 The Court also has personal jurisdiction over the Plaintiffs. Local 169 is a labor organization 

with its principal place of business in Michigan, and the Funds are joint trust funds established to 

serve Local 169’s members. (Doc. #1 at ¶1). Moreover, Plaintiffs have consented to this Court’s 

jurisdiction by filing an action here. 

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Contract Fund Act. 

The total sum of money involved in the dispute between Plaintiffs and Defendants in this 

case is not susceptible of precise enumeration at this point. However, the monies at issue consist 

of nearly two years of fringe benefit contributions on behalf of Creative Composites’ employees. 

Under the circumstances, then, it certainly appears that there has been a complete and purposeful 

failure to comply with the obligations imposed upon Defendants by both the CBA and by 

ERISA. Plaintiffs’ members have been (and continue to be) prejudiced by Defendants’ failure to 

contribute to the Funds. For these reasons, it is appropriate to order Defendants to: (1) produce 

the books and records necessary to conduct an audit and submit to such an audit; (2) submit 

contribution reports for the period of August 30, 2013, to the present; and (3) remit benefit 

contributions due for the same period. 

III. CONCLUSION

For the foregoing reasons, the Court RECOMMENDS that Plaintiffs’ Motion for Entry 

of Default Judgment [12] be GRANTED and that judgment be entered in favor of Plaintiffs and 

against Defendants in this matter. IT IS FURTHER RECOMMENDED that Defendants be 

ORDERED to: (1) produce the books and records necessary to conduct an audit and submit to 

such an audit; (2) submit contribution reports for the period of August 30, 2013, to the present; 

and (3) remit benefit contributions due for the same period. 

Dated: August 12, 2015 s/David R. Grand 

Ann Arbor, Michigan DAVID R. GRAND 

 United States Magistrate Judge 

NOTICE TO THE PARTIES REGARDING OBJECTIONS 

 The parties to this action may object to and seek review of this Report and 

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Recommendation, but are required to act within fourteen (14) days of service of a copy hereof as 

provided for in 28 U.S.C. § 636(b)(1) and Fed.R.Civ.P. 72(b)(2). Failure to file specific 

objections constitutes a waiver of any further right of appeal. Thomas v. Arn, 474 U.S. 140 

(1985); Howard v. Secretary of HHS, 932 F.2d 505, 508 (6th Cir.1991); United States v. Walters, 

638 F.2d 947, 949–50 (6th Cir.1981). The filing of objections which raise some issues, but fail 

to raise others with specificity, will not preserve all the objections a party might have to this 

Report and Recommendation. Willis v. Secretary of HHS, 931 F.2d 390, 401 (6th Cir.1991); 

Smith v. Detroit Fed'n of Teachers Local 231, 829 F.2d 1370, 1373 (6th Cir.1987). Pursuant to 

E.D. Mich. LR 72.1(d)(2), a copy of any objections is to be served upon this magistrate judge. A 

party may respond to another party’s objections within 14 days after being served with a copy. 

See Fed. R. Civ. P. 72(b)(2); 28 U.S.C. §636(b)(1). Any such response should be concise, and 

should address specifically, and in the same order raised, each issue presented in the objections. 

CERTIFICATE OF SERVICE

 The undersigned certifies that the foregoing document was served upon counsel of record 

via email addresses the court has on file. 

 s/Eddrey O. Butts 

 EDDREY O. BUTTS 

 Case Manager

Dated: August 12, 2015 

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