Opinion
22-cv-05479-LB
02-23-2024
OPERATING ENGINEERS' HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, et al., Plaintiff v. WILLIAMS TREE SERVICE, INC., a California Corporation, et al., Defendants.
ORDER FOR REASSIGNMENT; REPORT AND RECOMMENDATION TO GRANT DEFAULT JUDGMENT
Re: ECF No. 27
LAUREL BEELER, UNITED STATES MAGISTRATE JUDGE
INTRODUCTION
The plaintiffs - benefits plans and trustees - sued the defendants for an audit of their payroll records and for unpaid fringe-benefit contributions, liquidated damages, and interest pursuant to the parties' collective bargaining and trust agreements, the Labor Management Relations Act (LMRA), and the Employee Retirement Income Security Act of 1974 (ERISA). The defendants did not appear in the case, the Clerk of Court entered their default, and the plaintiffs moved for default judgment. Because not all parties have appeared and consented to the undersigned's jurisdiction, the case must be reassigned. Williams v. King, 875 F.3d 500, 503-04 (9th Cir. 2017). The court asks the Clerk of Court to assign the case to a district judge and recommends that the newly assigned judge grant the motion and enter judgment in the plaintiffs' proposed form of judgment at ECF No. 40, with this proviso. The amount is $1,161,445.00, which includes $52,839.50 attributable to a judgment in Case No. 14-cv-1123-PJH. The plaintiffs acknowledged at the hearing that they have their collection remedy for the earlier judgment in the PJH case, but they are interested in the efficiencies that attach a single judgment. Possibly a solution is to relate the cases for debt-collection purposes. On this record, the court recommends entry of a judgment that does not include the $52,839.50, which results in a total judgment of $1,108,606.50.
Supp. Br. - ECF No. 38 a5 2. Citations refer to the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents.
STATEMENT
1. The Parties
The plaintiffs are employee benefit plans as defined in ERISA § 3(3), 29 U.S.C. § 1002(3), “multiemployer plans” as defined in ERISA §§ 3(37) and 4001(a)(3), 29 U.S.C. §§ 1002(37) & 1301(a)(3)), trustees authorized to bring this action on behalf of the plans under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3), and trusts under LMRA 302(c)(9), 29 U.S.C. § 186(c)(9). The defendants are Adam Williams and Williams Tree. They are employers within the meaning of the ERISA § 3(5), 29 U.S.C. § 1002(5), and the National Labor Relations Act § 2(2), 29 U.S.C. § 152(2).
Compl. - ECF No. 1 at 2 (¶¶ 1-3), 3 (¶ 9); Minser Decl. - ECF No. 27-4 at 1-2 (¶¶ 2-3).
2. The Agreements
On May 30, 2013, Mr. Williams, on behalf of Williams Tree Service, signed the collectivebargaining agreement that applies here. The plaintiffs are third-party beneficiaries of the agreement. The agreement incorporates the trust agreement, thus binding the defendants to the terms and conditions of both agreements.
Compl. - ECF No. 1 at 4 (¶10); Brown Decl. - ECF No. 27-2 at 2 (¶ 6), 5 (¶ 18); Master Agreement (2016-2020), Ex. B to Brown Decl. - ECF No. 27-3 at 53 (§ 12.01.03).; Master Agreement, Ex. C to Brown Decl. - ECF No. 27-3 at 157 (§ 12.01.03).
Employers must make contributions to the plaintiffs based on the hours that their employees work and must comply with an audit to verify their contributions. Under the agreement, if an individual employer is a corporation, its principal shareholder guarantees payment of wages, fringe-benefits contributions, liquidated damages, interest, and collection costs. The contribution payments are due on the fifteenth day of the month following the month when hours were worked and are delinquent if not received by the twenty-fifth day of the month. The agreements' collection procedures provide that if an employer does not submit monthly contribution reports with hours worked and fringe-benefits due, then the trust funds can estimate the unreported amounts based on the greater of the last report submitted, an average of the last three months reported, or the average of the last three months.
Compl. - ECF No. 1 at 4 (¶ 10); Brown Decl. - ECF No. 27-2 at 2 (¶ 3); Agreement, Ex. A to Brown Decl. - ECF No. 27-3 at 1 (§ 1, ¶ 12).
Compl. - ECF No. 1 at 4-5 (¶ 12); Brown Decl. - ECF No. 27-2 at 3 (¶ 12); Master Agreement (2016-2020), Ex. B to Brown Decl. - ECF No. 27-3 at 52-53 (§ 12.01.02); Master Agreement, Ex. C to Brown Decl. - ECF No. 27-3 at 157 (§ 12.01.02).
Brown Decl. - ECF No. 27-2 at 5 (¶ 17); Delinq. Collection Proc., Ex. E to id. - ECF No. 27-3 at 233.
If contributions are delinquent, employers pay interest and liquidated damages. Liquidated damages are ten percent of unpaid contributions and increase to twenty percent after a lawsuit is filed. Interest at ten percent per annum is calculated from the day the contributions are delinquent. The agreements provides for reimbursement of attorney's fees and costs, audit fees, and all expenses incurred in connection with the collection of delinquent contributions.
Brown Decl. - ECF No. 27-2 at 4 (¶¶ 13-15); Master Agreement (2016-2020), Ex. B to id. - ECF No. 27-3 at 59-60 (§§ 12.13.01, 12.13.06); Master Agreement, Ex. C to id. - ECF No. 27-3 at 163-64 (§§ 12.13.01, 12.13.06); Tr. Agreement, Ex. D to id. - ECF No. 27-3 at 215-16.
3. Unpaid Contributions and Refusal of Audit
On December 24, 2019, the plaintiffs' Collection Office sent a letter to the defendants notifying them of a payroll audit for January 1, 2015, through October 31, 2019, providing a list of required documents, and saying that the auditor (Miller Kaplan LLP) would contact them for an appointment. In Miller Kaplan's subsequent call with Donovan Williams on January 22, 2020, the audit was scheduled for January 30, 2020, at 9 a.m. On January 24, 2020, Donovan Williams told the auditors that, at the direction of Dennis Williams (the CFO of Williams Tree Service), Williams Tree was refusing the audit because it had a “right for refusal.”
Brown Decl. - ECF No. 27-2 at 6 (¶ 20); Letter, Ex. F to id. - ECF No. 27-3 at 236-37.
Quackenbush Decl. - ECF No. 27-1 at 2 (¶ 4).
Id. at 2 (¶ 5).
On February 26, 2020, the plaintiffs' counsel sent the defendants a demand letter asking that they comply with the audit of their payroll records, pay their contributions from August 2017 through December 2019, and pay interest and liquidated damages on the unpaid contributions. The defendants did not respond.
Minser Decl. - ECF No. 27-4 at 3 (¶ 7); Letter, Ex. B to id. - ECF No. 27-5 at 5-6.
On June 9, 2023, the plaintiffs' counsel sent the defendants another demand letter. In it, they warned that the plaintiffs would file a default-judgment motion if the defendants did not comply with the audit, report and pay outstanding contributions, and pay a judgment (“pursuant to the issued writ”) in an earlier case, Operating Eng'rs Health & Welfare Tr. Fund v. Williams Tree Serv. Inc., No. 14-cv-1123-PJH. In the PJH case, the court retained jurisdiction in September 2015 to enforce a roughly $40,000 stipulated judgment against Williams Tree Service and Billie Ruth Williams and issued a default judgment against Adam Williams in the same amount as a “precautionary measure in case the other two defendants did not comply with the stipulated judgment,” meaning, the plaintiffs in the PJH case were “not permitted to collect from Adam Williams any amounts satisfied by his codefendants under the stipulated judgment.”
Minser Decl. - ECF No. 27-4 at 3 (¶ 8). In OperatingEng'rs Health & Welfare Tr. Fund v. Williams Tree Serv. Inc., No. 14-cv-1123-PJH, the court entered a stipulated judgment against Williams Tree Service and Billie Ruth Williams for $40,117.70 and retained jurisdiction (ECF Nos. 48, 53) and entered default judgment against Adam Williams (essentially as a backup measure of recovery for any amounts that were not recovered by the stipulated judgment) (ECF Nos. 60, 63, 64) (no retention of jurisdiction). ECF Nos. 68 and 71 show the collection efforts.
On June 16, 2023, plaintiffs' counsel “received a voicemail from ‘Laura' of Williams Tree Service” requesting a callback at two phone numbers. One was a cellphone with a full voicemail box. The other was Williams Tree Service's office number, and counsel left a message with the receptionist on June 16, 2023. There has been no response to date.
Id. at 4-5 (¶¶ 19-20).
Because they could not audit Williams Tree Service, the plaintiffs estimated the amounts due from January 2019 to December 2019 and February 2020 through April 2023. The full calculations are in the Minser declaration. The liquidated damages and interest are a math problem: ten-percent liquidated damages until the filing of the lawsuit, twenty percent after, and ten-percent interest. The formula (discussed above) for estimated delinquent contributions is the greater of the last report submitted, an average of the last three months reported, or the average of the last three months. This results in the following estimated contributions.
Mot. - ECF No. 27 at 15.
Id.; Minser Decl. - ECF No. 27-4 at 5-6 (¶¶ 24-25, 27).
First, the last reported contributions were in June 2014 for $15,152.53.
Second, the average of the last three months where contributions were reported was $5,188.10.
Third, because $15,152.53 exceeds $5,188.10, the estimated amount for each month where the defendants did not submit a contribution report is $15,152.53 (for January 2019 to December 2019 and February 2020 to April 2023). That math equals $772,779.03 in estimated contributions.
Fourth, the liquidated damages calculations on the formula above is twenty percent: $15,152.53 times 20% is $3,030.51 for 51 delinquent months equals $154,556.01.
Fifth, adding in the prior stipulated judgment (after recovery), that's an extra $38,619.45 plus daily interest of $10.58, less a levy of $1,872.32, resulting in $52,839.20.
That math results in a total of $1,165.310.19.
Minser Decl. - ECF No. 27-4 at 5-9 (¶¶ 23-27).
The court ran its own calculations and found two possible errors, both trivial: the calculation of interest on the writ of execution in the earlier case and the calculation of interest on estimated unpaid contributions. The court then asked the plaintiffs to check their numbers. They did, submitting updated numbers and submitted updated numbers totaling1,161,445.00, which includes $52,839.50 attributable to a judgment in Case No. 14-cv-1123-PJH.
Order - ECF No. 36.
4. Procedural History
The plaintiffs filed the complaint on September 26, 2022. On December 14, 2022, they personally served Mr. Williams and Williams Tree Service at their business address in Watsonville with the summons and complaint. The defendants did not respond to the complaint or otherwise appear in the action. The Clerk of Court entered default against Williams Tree Service on February 14, 2023, and against Mr. Williams on March 31, 2023. The plaintiffs served the defendants with copies of the Clerk's Notices of Entry of default and filed proof of service on April 20, 2023. The plaintiffs moved for default judgment on September 20, 2023.They sent copies of the motion and the clerk's notice setting a Zoom hearing to the defendants.The court held a hearing on November 2, 2023. The defendants did not appear.
Compl. - ECF No. 1. The complaint also named Adam Williams as a defendant but then the plaintiffs voluntarily dismissed him as a defendant. Dismissal - ECF No. 17.
Returned Summons - ECF No. 12.
Entry of Default - ECF No. 18; Entry of Default - ECF No. 20.
Minser Decl. - ECF No. 27-4 at 4 (¶ 16); Proof of Serv. - ECF No. 21.
Mot. - ECF No. 27.
Proofs of Serv. - ECF Nos. 29, 30.
Min. Entry - ECF No. 31.
JURISDICTION, VENUE, AND SERVICE
Before entering default judgment, a court must determine whether it has subject-matter jurisdiction over the action and personal jurisdiction over the defendant. In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). A court must also ensure the adequacy of service on the defendant. Timbuktu Educ. v. Alkaraween Islamic Bookstore, No. C 06-03025 JSW, 2007 WL 1544790, at *2 (N.D. Cal. May 25, 2007).
First, the court has federal-question subject-matter jurisdiction under ERISA and the LMRA. 29 U.S.C. § 1132; 29 U.S.C. § 185; see 28 U.S.C. § 1331(a). Second, the court has personal jurisdiction over the defendants, who are in Watsonville. Third, the plaintiffs served the defendants personally in Watsonville.
See Statement.
Venue is proper in this district because the plans are administered here and the plaintiffs have their principal place of business here. 29 U.S.C. § 1132(e)(2); 29 U.S.C. § 185(a).
Compl. - ECF No. 1 at 3 (¶¶ 7-8).
ANALYSIS
Under Federal Rule of Civil Procedure 55(b)(2), a plaintiff may apply to the district court for - and the court may grant - a default judgment against a defendant who failed to plead or otherwise defend an action. After entry of default, well-pleaded allegations in the complaint regarding liability and entry of default are taken as true except as to damages. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). The court need not make detailed findings of fact. Combs, 285 F.3d at 906. “A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
“A defendant's default does not automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002) (cleaned up). The decision to grant or deny a default judgment lies within the court's discretion. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986).
In deciding whether to enter a default judgment, the court considers seven factors:
(1) [T]he possibility of prejudice to the plaintiff; (2) the merits of [the] plaintiff's substantive claims; (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). “Of all the Eitel factors, courts often consider the second and third factors to be the most important.” Mohanna v. Bank of Am., N.A., No. 16-cv-01033-HSG, 2017 WL 976015, at *3 (N.D. Cal. Mar. 14, 2017) (cleaned up).
The Eitel factors favor entry of default judgment against the defendants.
1. The Possibility of Prejudice to the Plaintiffs (First Eitel Factor)
The first Eitel factor considers whether the plaintiffs would suffer prejudice if the court does not enter default judgment, and whether such potential prejudice to them weighs in favor of granting a default judgment. Eitel, 782 F.2d at 1471; Craigslist, Inc. v. Naturemarket, Inc., 694 F.Supp.2d 1039, 1054 (N.D. Cal. 2010). Without a judgment, the plaintiffs have no remedy. This factor weighs in favor of default judgment.
2. The Merits and Sufficiency of the Claims (Second and Third Eitel Factors)
The second and third Eitel factors consider the merits of the claim and the sufficiency of the complaint. Eitel, 782 F.2d at 1471. “The Ninth Circuit has suggested that [these factors] . . . require that plaintiffs' allegations ‘state a claim on which the [plaintiff] may recover.'” Kloepping v. Fireman's Fund, No. C 94-2684 TEH, 1996 WL 75314, at *2 (N.D. Cal. Feb. 13, 1996) (quoting Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).
29 U.S.C. § 1145 states that “[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or . . . a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.” Section 1145 creates a claim for relief against employers who do not make timely contributions that are required under a collective bargaining agreement. Bd. of Trs. v. RBS Wash. Blvd. LLC, No. C 09-0660 WHA, 2010 WL 145097, at *2 (N.D. Cal. Jan. 8, 2010); Trustees of Screen Actors Guild-Producers Pension & Health Plans v. NYCA, Inc., 572 F.3d 771, 776 (9th Cir. 2009).
The plaintiffs must prove the following: (1) the trusts are multiemployer plans as defined by 29 U.S.C. § 1002(37); (2) the collective bargaining agreement obligated the defendants to make contributions; and (3) the defendants did not make the required contributions. 29 U.S.C. § 1145; Bd. of Trs. of the Sheet Metal Workers Health Care Plan of N. Cal. v. Gervasio Env't Sys., No. C 03-4858 WHA, 2004 WL 1465719, at *2 (N.D. Cal. May 21, 2004).
The allegations and declarations set forth by the plaintiffs establish that they are multiemployer plans as defined by 29 U.S.C. § 1002(37) and that the defendants breached the bargaining agreement and their statutory duties under ERISA § 515 by failing to timely pay contributions. The defendants are “employers” under ERISA, are signed parties to the bargaining agreement (and the incorporated trust agreement), owe contributions under the agreements, and are liable under the agreements for the unpaid contributions, liquidated damages, interest, and reasonable attorney's fees and expenses. Operating Eng'rs' Health & Welfare Tr. Fund for N. Cal. v. Redline Directional, Inc., No. 17-cv-07345-JSC, 2019 WL 3782205, at *5-6 (N.D. Cal. July 3, 2019), R. & R. adopted, 2019 WL 3779682 (N.D. Cal. Aug. 12, 2019). These factors favor default judgment.
3. The Sum of Money at Stake (Fourth Eitel Factor)
The fourth Eitel factor considers the sum of money at stake in the action. Substantial or unreasonable monetary demands weigh against default judgment. Eitel, 782 F.2d at 1472 (three-million-dollar judgment, considered in light of the parties' dispute as to material facts, supported decision to not enter default judgment); Tragni v. Southern Elec. Inc., No. 09-32 JF (RS), 2009 WL 3052635, at *5 (N.D. Cal. Sept. 22, 2009); Bd. of Trs. v. RBS Wash. Blvd., LLC, No. C 0900660 WHA, 2010 WL 145097, at *3 (N.D. Cal. Jan. 8, 2010). When the sum of money at stake is tailored to the specific misconduct of the defendant, default judgment may be appropriate. Bd. of Trs. of the Sheet Metal Workers Health Care Plan of N. Cal. v. Superhall Mech., Inc., No. C 102212 EMC, 2011 WL 2600898, at *2-3 (N.D. Cal. June 2011) (the amount of unpaid contributions, liquidated damages, and attorney's fees were appropriate as they were supported by adequate evidence provided by the plaintiffs).
The plaintiffs ask for the amounts set forth in the Statement for unpaid contributions, liquidated damages, an unpaid writ, interest, attorney's fees, and costs. This amount is tailored to the defendants' specific misconduct (in the form of their failure to pay contributions) and is supported by evidence in the record. As set above, the $52,839.50 attributable to the earlier PJH judgment should not be included. In that earlier case, there are additional defendants, a stipulated judgment and retention of jurisdiction, and a backup default judgment against Mr. Williams, a defendant here. If anything, sorting that landscape out here does not seem particularly efficient for the court and seems to militate against consolidation. Moreover, the plaintiffs cite no authority that definitively permits consolidating the earlier judgment. The court thus does not recommend including the $52,839.50 in the judgment here. For the remaining $1,108,606.50, although it is substantial amount, default judgment is appropriate. Cf. Bd. of Trs. of the Pac. Coast Roofers Pension Plan v. Fryer Roofing Co., No. 16-CV-02798-LHK, 2017 WL 6539868, at *5 (N.D. Cal. Dec. 21, 2017) (fourth Eitel factor weighed in favor of default judgment of $2.4 million in ERISA case where “[a]lthough substantial, these sums of actual and statutory damages are tailored to Defendant's ‘specific misconduct' of complete withdrawal from the Plan and other damages required under ERISA”).
See Statement.
Judges in this district have allowed estimated contributions under the same operative agreements. Operating Eng'rs Health & Welfare Tr. Fund for N. Cal. v. Euro-Tech Constr. & Trucking, Inc., No. 20-cv-04143-RS (LB), 2021 WL 6053835, at *3, 5 (N.D. Cal. Dec. 3, 2021), R. & R. adopted, 2021 WL 4153-RS (N.D. Cal. Dec. 21, 2021); Operating Eng'rs Health & Welfare Tr. Fund for N. Cal. v. Garrett Thompson Constr., Inc., No. 19-cv-02314-JSW (DMR), 2020 WL 9422329 (N.D. Cal. Aug. 17, 2020), R. & R. adopted, 2020 WL 9422401-JSW (N.D. Cal. Sept. 2, 2020); Mot., No. 19-cv-02314-JSW (DMR) - ECF No. 25 at 11 (estimating contributions under the plan); Brown Decl., No. 19-cv-02314-JSW (DMR) - ECF No. 26 at 4 (¶ 12) (same).
This factor favors default judgment.
4. The Possibility of a Dispute or Excusable Neglect (Fifth and Sixth Eitel Factors)
The fifth and sixth Eitel factors consider the possibility of a dispute concerning material facts and whether a defendant's failure to respond was likely due to excusable neglect. 782 F.2d at 1471-72. In Eitel, there was a factual dispute and excusable neglect. Id. at 1472. The defendant disputed material facts in the (untimely) answer and counterclaim. Id. Moreover, the defendant's response was late because the parties had previously agreed to “what appeared to be a final settlement agreement,” and “[the defendant] reasonably believed that the litigation was at an end.” Id. Because of his reasonable reliance and prompt response when the agreement dissolved, there was excusable neglect for the defendant's untimely response. Id.
No facts suggest excusable neglect. The plaintiffs notified the defendants of the mandatory audit, gave notice of the delinquent contributions, and served them with all papers related to the lawsuit. These factors favor default judgment.
5. The Strong Policy Favoring Decisions on the Merits (Seventh Eitel Factor)
The seventh Eitel factor favoring decisions on the merits. 782 F.2d at 1472. Although default judgment is disfavored, “[t]he very fact that F.R.C.P. 55(b) exists shows that this preference, standing alone, is not dispositive.” Kloepping, 1996 WL 75314, at *3. “While the Federal Rules do favor decisions on the merits, they also frequently permit termination of cases before the court reaches the merits[,] . . . [as] when a party fails to defend against an action[.]” Id.
The defendants have not appeared or responded to the lawsuit. Litigation on the merits is not possible. Thus, default judgment is appropriate. Fed.R.Civ.P. 55(a); RBS Wash. Blvd., 2010 WL 145097, at *4. This factor supports default judgment.
* * *
In sum, the Eitel factors favor default judgment.
6. Relief Sought
The plaintiffs ask for the amounts set forth above, which includes $52,839.50 attributable to the judgment in the PJH case, $10,892.50 in attorney's fees, and $1,908.71 in costs.
Mot. - ECF No. 27 at 9.
Under Federal Rule of Civil Procedure 54(c), “[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c). The purpose of this rule is to ensure that a defendant is put on notice of the damages being sought against him so that he may make a calculated decision about whether it is in his best interest to answer. In re Ferrell, 539 F.3d 1186, 1192-93 (9th Cir. 2008) (rejecting requests for damages and fees because the prayer for relief lacked the “requisite specificity to put defendants on notice that the [plaintiff] sought attorneys' fees and costs on the default judgment”); Bd. of Trustees of the Sheet Metal Workers Local 104 Health Care Plan v. Total Air Balance Co., Inc., No. 08-2038 SC, 2009 WL 1704677, at *4 (N.D. Cal. June 17, 2009) (defaulting defendant's due-process rights were not violated “because the defendant had been served with all of the papers justifying the pension fund's request and leading up to the final determination”).
The complaint provides fair notice of the damages: the delinquent contributions, liquidated damages and interest, and attorney's fees and costs. Soo too did the notices along the way and the unpaid writ in the PJH case.
Although the complaint did not allege a specific amount in damages, “[c]ourts have awarded damages not specifically mentioned in complaints in ERISA cases where the defaulting defendants were on notice of the post-complaint amounts sought.” Bricklayers Loc. No. 3 Pension Tr. v. Martin, 13-CV-04293-VC, 2014 WL 1998047, at *3 (N.D. Cal. May 12, 2014); Total Air Balance, 2008 WL 1704677, at *4-5.
The issue then is the calculation of damages.
“To recover damages after securing a default judgment, a plaintiff must prove the relief it seeks through testimony or written affidavit.” Bd. of Trs. of the Laborers Health & Welfare Trust Fund for N. Cal. v. A&B Bldg. Maint. Co. Inc., No. C 13-00731 WHA, 2013 WL 5693728, at *4 (N.D. Cal. Oct. 17, 2013); see Cannon v. City of Petaluma, No. C 11-0651 PJH, 2011 WL 3267714, at *2 (N.D. Cal. July 29, 2011) (requires admissible evidence, including witness testimony); Bd. of Trs. of Bay Area Roofers Health & Welfare Trust Fund v. Westech Roofing, 42 F.Supp.3d 1220, 1232 n.13 (N.D. Cal. 2014) (the plaintiff has the burden to establish damages).
If the plaintiffs establish damages, they are entitled to them under ERISA:
In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan -
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of -
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),
(D) reasonable attorney's fees and costs of the action, to be paid by the defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
ERISA § 515 provides that “[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145.
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of Title 26.
As summarized in the Statement, the plaintiffs estimated the delinquent contributions and calculated interest and liquidated damages. They are entitled to those damages, albeit without the $52,839.50 attributable to the PJH case (for the reasons set forth above), resulting in a total of $1,108,606.50. See Fed.R.Civ.P. 54(c) (“A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.”)
The next issue is whether the plaintiffs are entitled to $10,892.50 in attorney's fees and $1,908.71 in costs. They are.
Mot. - ECF No. 27 at 9; Brown Decl. - ECF No. 27-2 at 3-4 (¶¶ 10-16); Minser Decl. - ECF No. 27-4 at 5-9 (¶¶ 24-27).
An award of reasonable attorney's fees is mandatory under 29 U.S.C. § 1132(g)(2). NW Admin'rs, Inc. v. Albertson's, Inc., 104 F.3d 253, 257 (9th Cir. 1996). To determine a reasonable fee award, courts use the lodestar method by multiplying the number of hours reasonably spent on the litigation by a reasonable hourly rate. Grove v. Wells Fargo Fin. Cal., Inc., 606 F.3d 577, 582 (9th Cir. 2010).
A reasonable hourly rate is that prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation. Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008); Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). The relevant community is “the forum in which the district court sits,” which is the Northern District of California in this case. Id. at 979. The party requesting fees must produce satisfactory evidence - in addition to the attorney's own affidavits or declarations - that the rates are in line with community rates. Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984); Jordan v. Multnomah Cnty., 815 F.2d 1258, 1263 (9th Cir. 1987).
Here, the motion described the qualifications and hourly rate of attorneys of attorneys Matthew Minser ($230 through April 1, 2020, $235 through April 30, 2020, $250 through December 31, 2021, $285 through December 31, 2022, and $305 since May 30, 2023), Eric K. Iwasaki ($230), Tino X. Do ($245), Luz E. Mendoza ($265 through December 31, 2022, and $285 since January 1, 2023), Nargis Shaghasi ($135 through April 30, 2020, and $145 through December 31, 2021), and Alicia Wood ($135 through April 30, 2020, $145 through December 31, 2021, $165 through December 31, 2022, and $175 since January 1, 2023). They have substantial ERISA expertise.
Minser Decl. - ECF No. 27-4 at 9-11 (¶ 30).
Id. at 9 (¶ 28).
Based on the submissions and the court's knowledge about prevailing rates, the rates are reasonable. Cf., e.g., Echague v. Metro. Life Ins. Co., 69 F.Supp.3d 990, 996 (N.D. Cal. 2014) (associate hourly rates of $250 and paralegal hourly rates of $150 are reasonable in an ERISA case); Reyes v. Bakery & Confectionary Union and Indus. Int'l Pension Fund, 281 F.Supp.3d 833, 853 (N.D. Cal. 2017) (attorney hourly rates of $200 to $675 and paralegal hourly rates of $125 are reasonable in an ERISA case).
Reasonable hours expended on a case are hours that are not “‘excessive, redundant, or otherwise unnecessary.'” McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). A party must provide detailed time records documenting the tasks completed and the time spent. Hensley, 461 U.S. at 437, 440; McCown, 565 F.3d at 1102; Welch v. Metro. Life Ins. Co., 480 F.3d 942, 945-46 (9th Cir. 2007).
The total attorney hours are 33.30 hours, and paralegal hours are 14.20 hours. All were for tasks related to the lawsuit, including preparing the complaint and the other court filings. The hours are reasonable.
Id. at 12 (¶ 37).
The plaintiffs ask for costs of $1,908.71 compromised of (1) a $402 filing fee, (2) $1,144.87 for costs of service, (3) $125.10 for the filing of the judgment lien, (4) $5 for obtaining documents from the Secretary of State website, and (4) $231.74 for legal research. An award of reasonable costs is mandatory under 29 U.S.C. § 1132(g)(2). Albertson's, 104 F.3d at 257. The costs are reasonable.
Id. at (¶ 38); Billing Rec., Ex. D to id. - ECF No. 27-5 at 17, 22-23.
CONCLUSION
The court directs the Clerk of Court to reassign the case to a district judge and recommends entry of default judgment requiring an audit of the defendants' records and damages of $1,108,606.50, which is the amount in the proposed form of judgment at ECF No. 40 of $1,161,445.00 less the $52,839.50 uncollected judgment from the PJH case. The court asks the plaintiffs to serve this on the defendants in the same manner that they served the motion.
Pls. Proposed Form of Judgment - ECF No. 40.
Any party may file objections to this Report and Recommendation with the district judge within fourteen days after being served with a copy. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); N.D. Cal. Civ. L.R. 72. Failure to file an objection may waive the right to review of the issue in the district court. The court asks the plaintiffs to serve this report and recommendation on the defaulting defendants in the same manner it did for the default-judgment motion and to file proof of service on the docket.
IT IS SO ORDERED AND RECOMMENDED.