Pat Nilsen and John Nesse v. Top Down Construction LLC
Pat Nilsen and John Nesse, as Trustees of the Carpenters and Joiners Welfare Fund, and Wayne Nordin and Pat Nilsen, as Trustees of the Carpenters and Joiners Apprenticeship and Journeymen Training Trust Fund, and each of their successors v. Top Down Construction LLC, a/k/a top down construction L.L.C.
- Eric Tostrud
- 0:25-cv-03174
- U.S. District Court · District of Minnesota
- 13
In Nilsen v. Top Down Construction LLC, Judge Tostrud granted in part the plaintiff union benefit funds' motion for a default order requiring Top Down Construction LLC to hand over payroll and employment records for an audit covering January 1, 2023 through the date of the order, while declining to grant an open-ended request for any additional records the funds' representatives might later deem necessary.
Multi-employer union benefit fund trustees who are trying to audit a construction company's payroll records; construction employers bound by collective bargaining agreements who have ERISA obligations to contribute to benefit funds; parties facing default judgment proceedings in ERISA cases.
What happened
In Nilsen v. Top Down Construction LLC (Case No. 25-cv-3174), union benefit fund trustees sued Top Down Construction LLC, a Minnesota construction company, alleging it violated a collective bargaining agreement and a federal law called the Employee Retirement Income Security Act (ERISA) by refusing to hand over payroll and employment records needed for an audit. Top Down never responded to the lawsuit or appeared in court, so the clerk formally recorded its default. This is actually the third lawsuit the funds have brought against Top Down; earlier cases resulted in money judgments against the company for unpaid benefit contributions covering different time periods.
The court accepted the facts in the funds' amended complaint as true (the standard when a defendant defaults) and found that those facts established a valid legal claim. The funds showed that Top Down had signed a collective bargaining agreement requiring it to make monthly payments into the benefit funds for covered employees and to provide payroll records on demand. Because Top Down ignored the funds' repeated requests for records covering the period from January 1, 2023 to the present, it breached its obligations under both the agreement and ERISA. The court also considered whether earlier court rulings in the prior two lawsuits would block this new action under a legal doctrine called res judicata (claim preclusion, which bars parties from relitigating claims already decided). The court concluded that because Top Down defaulted and never raised that defense, and because the defense belongs to the defendant to assert, it would not apply res judicata on its own initiative at this stage.
Judge Tostrud granted the motion in part. He ordered Top Down to produce a specific, detailed list of payroll and employment records—including payroll journals, time cards, tax forms, bank statements, and similar documents—within ten days of being served with the order, for the audit period of January 1, 2023 through the date of the order. However, the court denied the funds' request for any additional records their representatives might decide are necessary later, because court orders must describe what is required with specificity and an open-ended request does not meet that standard. Once the audit is complete, the funds may file a further motion asking the court to enter a money judgment for any unpaid contributions, penalties, interest, and attorneys' fees.
The detailed version
- Nilsen v. Top Down Construction LLC, No. 25-cv-3174 (ECT/LIB)
- Eric C. Tostrud
- February 23, 2026
Parties and Background
Plaintiffs are the trustees of two multi-employer employee benefit plans—the Carpenters and Joiners Welfare Fund and the Carpenters and Joiners Apprenticeship and Journeymen Training Trust Fund (collectively, the 'Funds')—governed by ERISA, 29 U.S.C. § 1145, and the Labor Management Relations Act. Defendant Top Down Construction LLC is a Minnesota limited liability company operating in the construction industry. This is the third federal lawsuit the Funds have brought against Top Down. The first (Nilsen I, No. 24-cv-162) resulted in a default judgment for delinquent contributions covering September–December 2023, which was satisfied. The second (Nilsen II, No. 24-cv-3650) resulted in a default judgment for contributions owed from May 2024 and remittance reports for June–November 2024.
Legal Framework
On April 22, 2022, Top Down signed a collective bargaining agreement (CBA) with the North Central States Regional Council of Carpenters. The CBA and incorporated Trust Agreements require Top Down to (1) make monthly fringe benefit contributions for covered employees, (2) submit monthly remittance reports to Wilson-McShane Corporation (the funds' administrative agent), and (3) produce all payroll and employment records for examination on demand. Failure to comply triggers liquidated damages (10% of contributions owed, or twice the interest if greater), interest, and attorneys' fees. ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), authorizes injunctive and other equitable relief to enforce plan terms.
Procedural History in This Case
The Funds served the Summons and Amended Complaint on Top Down on December 4, 2025. Top Down never responded or appeared. The Clerk entered Top Down's default. The Funds moved for a default order and injunction (their second such motion; the first raised questions about the audit period and preclusion that prompted an amended complaint and supplemental briefing). A hearing was held February 23, 2026; Top Down did not appear.
Factual Allegations (Accepted as True on Default)
On February 21, 2025, Wilson-McShane requested payroll and employment records for May 2020–February 2025. On July 15, 2025, the Funds sent a formal demand letter for the same period. In November 2025, the Funds learned Top Down had previously been audited through December 31, 2022. The Funds therefore narrowed their audit request to January 1, 2023 through the present (the 'Audit Period'). Top Down has not responded to these requests.
Default Judgment Analysis
Under Eighth Circuit precedent (Marshall v. Baggett, 616 F.3d 849 (8th Cir. 2010)), a defendant in default admits all well-pleaded factual allegations but not mere legal conclusions. The court found the Funds' taken-as-true allegations establish a valid cause of action: Top Down is an ERISA employer, it is bound by the CBA and Trust Agreements, those agreements require production of payroll records on demand, and Top Down has refused to comply. The court relied on Raines v. Phoenix Corp., No. 19-cv-2552, 2020 WL 814189 (D. Minn. Feb. 19, 2020), for the proposition that ERISA permits injunctive relief compelling record production and audit cooperation.
Relief Granted and Denied
The court granted the motion in part. It ordered Top Down to produce—within ten days of service of the order—a specific list of twelve categories of records for the Audit Period (January 1, 2023 through February 23, 2026), including payroll journals, time cards, IRS 941 quarterly reports, Form 1099s and 1096s, W-2 and W-3 forms, documents evidencing payments to individuals for labor or services (whether classified as employees or subcontractors), cash disbursement reports, bank statements, Minnesota SUTA forms, monthly remittance reports, and records identifying the type of work performed. Records are to be produced to Wilson-McShane Corporation in Bloomington, Minnesota.
The court denied the open-ended request for 'additional records as deemed necessary by the Funds' representatives,' citing Federal Rule of Civil Procedure 65(d)(1)(B), which requires an injunction's terms to be stated specifically.
The order also establishes a process for a subsequent money judgment: once the audit is complete, the Funds may move for default judgment covering unpaid contributions, liquidated damages, interest, and attorneys' fees; Top Down has ten days to respond; the court will rule on the papers without a hearing unless it orders otherwise.
Preclusion Analysis
The court addressed whether res judicata (claim preclusion—the doctrine barring relitigation of claims already decided in prior suits) could block the current action, given that Nilsen I and Nilsen II covered overlapping time periods. The court acknowledged that (1) courts may raise res judicata on their own initiative to prevent judicial waste (Emerald Pointe, LLC v. Taney County, 78 F.4th 428 (8th Cir. 2023)), and (2) federal res judicata bars claims arising from the 'same nucleus of operative fact' (Regions Bank v. J.R. Oil Co., 387 F.3d 721 (8th Cir. 2004)), not merely identical claims as the Funds argued. However, the court declined to apply res judicata sua sponte (on its own initiative) because: res judicata is an affirmative defense that a defendant must generally raise or waive (Bechtold v. City of Rosemount, 104 F.3d 1062 (8th Cir. 1997)); Top Down defaulted and never raised the defense; and in default judgment proceedings, judicial economy concerns carry less weight. The court also agreed with the Funds that issue preclusion (collateral estoppel) does not apply because default judgments do not constitute actual litigation of issues, citing Arizona v. California, 530 U.S. 392, 414 (2000).
Outcome
Motion for Default Order and Injunction GRANTED IN PART. Top Down is ordered to produce specified records within ten days. The open-ended records request is denied. A process for a future money judgment motion is established.
Reviewer note from the AI+
Read the full 13-page opinion on CourtListener, the free public archive maintained by the Free Law Project.