Opinion
3:21-cv-97-JR
05-04-2021
TIMOTHY J. GAUTHIER AND GARTH BACHMAN, TRUSTEES OF THE OREGON AND SOUTHWEST WASHINGTON NECA-IBEW ELECTRICAL WORKERS AUDIT COMMITTEE, Plaintiffs, v. VITRO ELECTRIC, LLC, a Limited Liability Company, and JOHN VITRO, an individual, Defendants.
FINDINGS & RECOMMENDATION
Jolie A. Russo United States Magistrate Judge
Plaintiffs bring this action under the Employee Retirement Income Security Act (ERISA), 29 U.S.C.§ 1132 alleging defendant Vitro Electric failed to timely file employee benefit contributions under the terms of the collective bargaining agreement in violation of 29 U.S.C. § 1145. Plaintiffs additionally assert breach of fiduciary duty against John Vitro in violation of ERISA for failing to fund fringe benefit contributions. Plaintiffs also assert a state law claim for breach of contract against defendant Vitro Electric to pay union dues, political action committee contributions, vacation funds, and administrative funds in accordance with the collective bargaining agreement (CBA). Finally, plaintiffs assert a state law claim for conversion against both defendants related to the failure to pay vacation funds and union dues to the union.
Plaintiffs initiated this action on January 21, 2021 and served defendants on February 1, 2021. Defendants failed to respond to the complaint and on February 25, 2021, the Court granted plaintiffs' motion for entry of default. Plaintiffs now seek a default judgment as follows:
1) Under Plaintiffs' First Claim for Relief [ERISA ACTION FOR OUTSTANDING TRUST FUND CONTRIBUTIONS AND SPECIFIC ENFORCEMENT OF THE CBA], from Defendant Vitro Electric LLC, unpaid contributions in the amount of $49,085.30, liquidated damages of $9,817.06, and interest through March 10, 2021, in the amount of $1,382.41.
2) Under Plaintiffs' Second Claim for Relief [PENDANT CLAIM FOR BREACH OF CONTRACT], from Defendant Vitro Electric LLC, wage withheld funds in the sum of $6,971.93, and interest on outstanding wage withholdings of $176.80 calculated through March 10, 2021.
3) Under Plaintiffs' Third and Fourth Claims for Relief [BREACH OF FIDUCIARY DUTY BY JOHN VITRO and CONVERSION CLAIM AGAINST DEFENDANTS UNDER OREGON LAW], from Defendant John Vitro, unpaid wage withholdings in the sum of $6,971.93, and interest on outstanding wage withholdings of $176.80 calculated through March 10, 2021.
4) Under all claims Plaintiffs, Oregon and Southwest Washington NECA-IBEW Electrical Workers Audit Committee, Comprised of Timothy G. Gauthier and Garth Bachman, acting on Behalf of Harrison Electrical Workers Trust Fund; Edison Pension Trust; National Electrical Benefit Fund; International Brotherhood of Electrical Workers District No. 9 Pension Plan; Barnes Labor-management Cooperation Committee and on Behalf of the Trustees of Said Trust Fund, and on Behalf of the International Brotherhood of Electrical Workers, Local 48, a reasonable attorney's fee against Defendants, in the sum of $4,410.50 and Plaintiffs court costs in the sum of $465.00.Motion for Judgment (ECF 12) at p. 2.
Entry of default is appropriate “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend.” Fed.R.Civ.P. 55(a). A party has no duty to defend, however, unless the plaintiff properly served the defendant with the summons and complaint, or waives such service, pursuant to Federal Rule of Civil Procedure 4. See Murphy Bros., Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344, 350 (1999) (“one becomes a party officially, and is required to take action in that capacity, only upon service of a summons”). Before the Court decides whether to grant default judgment, Federal Rule of Civil Procedure 55(b)(2) requires the Clerk's entry of default. However, entry of a defendant's default does not automatically entitle plaintiff to a court-ordered judgment. See Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986). Indeed, a district court has discretion in deciding whether to enter a default judgment. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising this discretion, the court may consider a number of factors: (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 (the Eitel factors). See Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Additionally, when a party seeks entry of default judgment, courts have a duty to examine their own jurisdiction-both subject matter and personal. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999).
Here there is subject matter jurisdiction pursuant to sections 502 and 515 of ERISA, 29 U.S.C. §§ 1132 and 1145, and pursuant to 29 U.S.C. §185. Defendant Vitro Electric is an Oregon LLC authorized to do business in Oregon and defendant John Vitro is the managing member of Vitro Electric and a resident of Clackamas County, Oregon. Compl. (ECF 1) at ¶¶ 11-12. In addition, defendants executed the CBA which provides that legal proceedings may be initiated in Multnomah County, Oregon. Id.at ¶ 18. Moreover, as noted above, service of process was accomplished in Portland, Oregon. See Affidavits of Service (ECF 4 and 5).
However, plaintiffs' motion for entry of default judgment does not address all of the Eitel factors. In addition, the Court has concerns regarding the fiduciary status of defendant John Vitro for purposes of ERISA and whether the state law claims are preempted. Accordingly, the motion for entry of default judgment should be denied without prejudice to file an amended motion for default judgment addressing the Eitel factors and other noted issues.
CONCLUSION
Plaintiffs' motion for judgment of default (ECF 12) should be denied without prejudice.
This recommendation is not an order that is immediately appealable to the Ninth Circuit Court of appeals. Any notice of appeal pursuant to Rule 4(a)(1), Federal Rules of Appellate Procedure, should not be filed until entry of the district court's judgment or appealable order. The parties shall have fourteen (14) days from the date of service of a copy of this recommendation within which to file specific written objections with the court. Thereafter, the parties shall have fourteen (14) days within which to file a response to the objections. Failure to timely file objections to any factual determination of the Magistrate Judge will be considered as a waiver of a party's right to de novo consideration of the factual issues and will constitute a waiver of a party's right to appellate review of the findings of fact in an order or judgment entered pursuant to this recommendation.