Opinion
ORDER GRANTING PLAINTIFFS' APPLICATION FOR ENTRY OF DEFAULT JUDGMENT AND VACATING HEARING
WILLIAM HASKELL ALSUP, District Judge.
INTRODUCTION
In this ERISA action, plaintiffs have applied for entry of default judgment against defendant who has never appeared in this action. Review of the Eitel factors favors entry of default judgment. This order GRANTS plaintiffs' application.
STATEMENT
On October 30, 2003, plaintiffs filed a complaint seeking damages and injunctive relief for an alleged breach of contract governed by Section 502 of the Employee Retirement Income Security Act of 1974, 29 U.S.C. 1132, and Section 301 of the Labor Management Relations Act of 1947, 29 U.S.C. 185.
At all times material herein, plaintiffs were trustees of certain trust funds organized under ERISA and the LMRA. These trust funds were employee-benefit plans created by written trust agreements and a collective-bargaining agreement. In July 2002, defendant Gervasio Environmental Systems, also known as Gervasio Environmental Systems, Inc., entered into a collective-bargaining agreement with the Sheet M Workers International Association Local Union No. 104. The collective-bargaining agreement expressly incorporated by reference the trust agreements. As such, defendant was required to make regular health and welfare, pension and other fringe-benefit contributions on behalf of its employees for all hours worked. If contributions were not timely made, the subject agreements provided for an assessment of damages and interest. The agreements also provided for payment of all legal fees and costs incurred in any suit for unpaid contributions.
On May 13, 2003, a grievance was filed against defendant for failing to pay wage and fringe benefits as required by the collective-bargaining agreement. On June 20, 2003, the parties settled their grievance. The settlement required, among other things, that defendant pay to the union's health care plan the sum of $899.20 in unpaid contributions. Contribution payments were due July 24, 2003, August 28, 2003, September 25, 2003, and October 23, 2003. Defendant paid the first installment of $224.80. It has failed to tender the remainder.
On October 16, 2003, plaintiffs sent defendant a letter notifying it of its delinquency. Defendant did not respond. On October 30, 2003, plaintiffs filed the instant action. Plaintiffs served defendant with the summons and complaint on February 23, 2004, after experiencing some difficulty at the outset in locating defendant. Defendant did not serve plaintiffs with a responsive pleading within twenty days as required by Rule 12(a)(1)(A), or otherwise appear in this action. Default was entered on March 16, 2004. Plaintiffs filed the instant application for entry of default judgment on April 20, 2004, seeking damages equivalent to the remaining unpaid contributions, interest, and attorney's fees and costs. They seek a total of $1, 955.82.
ANALYSIS
Under Rule 55(b)(2), a party can apply to the court for entry of judgment by default. Whether to grant the application is within the discretion of the trial court. Draper v. Coombs, 792 F.2d 915, 924 (9th Cir. 1986). In the Ninth Circuit, a court considers the following factors in exercising this discretion:
(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action, (5) the possibility of a dispute concerning material facts, (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.
Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). These factors favor entry of default judgment in this case.
1. MERITS AND SUFFICIENCY OF THE COMPLAINT.
After entry of default, well-pleaded allegations in the complaint as to liability are taken as true, except as to the amount of damages. Fair Housing of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Thus, there can be no dispute as to the material facts. Consequently, this order finds that Eitel factors two, three and five weigh in favor of entry of default judgment.
The elements of a claim for unpaid contributions are: (1) the trust fund is a multi-employer plan as defined by 29 U.S.C. 1002(37); (2) the defendant is an employer obligated to contribute under the plan's terms; and (3) the defendant failed to contribute in accordance with the plan. In this case, the complaint alleges facts in support of finding every necessary element.
According to the complaint, the trust funds were set up as employment-benefit plans under ERISA and the LMRA. Defendant agreed, via its written collective-bargaining agreement with the local union as well as the settlement agreement dated June 6, 2003, to pay $899.20 in delinquent trust contributions to plaintiffs. Thereafter, defendant breached its contractual obligations by paying one installment of the total delinquent amount but refusing to pay the remainder. Accepting all factual contentions as true at this stage of default, plaintiffs have made a strong showing of likelihood of success on the merits.
2. THE REMAINING EITEL FACTORS.
This order finds that on balance the remaining Eitel factors likewise favor entry of default judgment. To deny plaintiffs' application would leave plaintiffs without a remedy. Moreover, defendant has refused to litigate this action after being properly served with the complaint and summons. It is unlikely that the default was the result of excusable neglect. Although federal policy may favor decisions on the merits, Rule 55(b) permits entry of default judgment in situations, such as this, where the defendant refuses to litigate.
3. THE DETERMINATION OF DAMAGES.
Plaintiffs seek $674.40 in delinquent trust contributions. In addition, plaintiffs seek $66.42 in interest due. The collective-bargaining agreement and related trust agreements contain specific provisions for calculating the contributions to be made as well as the interest to be paid for delinquent payments. Plaintiffs have filed declarations with appended exhibits breaking down the damages and interest calculations.
Plaintiffs also request $740.00 in attorney's fees and costs of $475.00 pursuant to Article III, Section E, of the Sheet M Workers Health Care Trust of Northern California Agreement (Hislop Decl. Exh. 3, at 12-13). That section allows trustees to recover reasonable attorney's fees, costs and other reasonable expenses incurred in filing an action such as this to collect any delinquent payment. Plaintiffs' counsel has filed a declaration describing the tasks he performed in this action and his billing rate (Carroll Decl. ¶ 5).
This order notes that to the extent the complaint additionally sought injunctive relief, plaintiffs have abandoned the request. Plaintiffs' application seeks no relief aside from the relief described above. On the current record, plaintiffs are not entitled to injunctive relief.
CONCLUSION
For good cause shown, this order GRANTS entry of default judgment for damages of $674.40, interest of $66.42, attorney's fees of $740.00, and $475.00 in costs. A judgment so providing shall issue under separate cover. The total award is $1, 955.82. The hearing of May 27, 2004, is hereby VACATED.
IT IS SO ORDERED.