Opinion
19-cv-02921-EMC
07-02-2021
THE BOARD OF TRUSTEES, et al., Plaintiffs, v. JAMES ISLAND PLASTERING, INC., Defendant.
ORDER DENYING PLAINTIFFS' MOTION FOR ORDER TO SHOW CAUSE RE CONTEMPT
Docket No. 35
EDWARD M CHEN, United States District Judge.
In the pending motion, Plaintiffs ask for Defendant James Island Plastering, Inc. (“JIP”) to be found in civil contempt for failure to submit to an audit, as required by the Court's prior order granting default judgment. The motion is hereby DENIED without prejudice.
Plaintiffs have established by clear and convincing evidence that JIP failed to submit to an audit. By failing to submit an audit, JIP violated a specific and definite order of this Court.
That being said, there are also factors that weigh against finding JIP in contempt at this juncture in the proceedings. First, JIP did agree to an audit initially; however, the pandemic prevented the audit from moving forward. Second, although JIP rejected Plaintiffs again in June 2020, that may well have been because the pandemic was still ongoing. Third, the last audit demand that Plaintiffs made was in October 2020 which was essentially close to the height of the pandemic. There is no indication that Plaintiffs have reached out to JIP since October 2020 (although they did serve a copy of the pending motion on JIP).
Accordingly, the Court shall not at this time find JIP to be in contempt. Nevertheless, that does not mean that Plaintiffs are not entitled to any relief under the circumstances. The Court hereby orders as follows:
1. JIP is ordered to submit to a full audit by Plaintiffs, as required by the Court's prior order, by July 20, 2021.
2. JIP is ordered to make the following records available to Plaintiffs as part of the audit.
• Individual Earnings Records: including Compensation/Payroll of all employees.
• W-2/W-3 Forms: Unredacted copies of all W-2 and W-3 reports for the applicable period.
• 1096 and 1099 Forms: Copies of all 1099 forms issued to vendors and subcontractors. Copies of all 1096 forms for the same period.
• Reporting Forms for all Trust Funds: If the employer is signatory to other Trust Funds, they will need to request copies of his fringe reports from the appropriate Trust Fund.
• State DE-9 DE-9C Tax Report: Copies of all DE-9 and DE-9C forms for the applicable period.
• Form 1120-C: Copies of the unredacted 1120-C forms for the relevant period.
• Form 1040 and/or Partnership Tax Returns: Copies of the Form 1040 or Partnership Tax Returns for the relevant period.
• Worker's Compensation Insurance Monthly reports: Copies of these forms for all employees for the relevant period.
• Sub-contractor Invoices: Copies of all subcontractor invoices for the relevant period.
3. If the records above are no longer in the possession of JIP, then it must obtain the records from the agencies and individuals with whom the documents were filed or with whom it did business.
4. As noted above, JIP has until July 20, 2021, to comply with the terms of this order, absent good cause. JIP is forewarned that, if it fails to comply, then the Court shall, upon motion by Plaintiffs, (a) find JIP in civil contempt and (b) impose on JIP a fine of $300 per day, payable to the Clerk of the Court, until JIP complies with the terms of the order. The Court is also likely to grant Plaintiffs the reasonable attorneys' fees they incurred in bringing the motion for contempt.
Plaintiffs are ordered to immediately serve a copy of this order on JIP. If Plaintiffs have other means by which to communicate with JIP, such as email or telephone, they are ordered to immediately contact JIP to notify it of this order and/or provide a copy of the order. Within one day of the issuance of this order, Plaintiffs shall file a proof of service and/or declaration, certifying that service of this order was made and describing any other communication, or attempted communication, with JIP to notify it of this order.
This order disposes of Docket No. 35.
IT IS SO ORDERED.