Opinion
20-cv-04143-LB
12-03-2021
OPERATING ENGINEERS' HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, et al., Plaintiffs, v. EURO-TECH CONSTRUCTION & TRUCKING, INC., a California Corporation, et. al., Defendants.
ORDER FOR REASSIGNMENT; REPORT AND RECOMMENDATION TO GRANT MOTION FOR DEFAULT JUDGMENT
RE: ECF NO. 36
LAUREL BEELER, UNITED STATES MAGISTRATE JUDGE.
INTRODUCTION
The plaintiffs - benefits plans and trustees (collectively, the Plans) - sued the defendants, John Charles Feeley and Euro-Tech Construction, for failing to make contributions to the benefits plans as required by the parties' collective bargaining agreement, the trust agreement, the Labor Management Relations Act (LMRA) and the Employee Retirement Income Security Act of 1974 (ERISA). The defendants did not appear in the case and, after the Clerk entered their default, the Plans moved for default judgement. The court held a hearing on December 2, 2021. They did not appear. 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 directs 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 plaintiff's proposed form of judgment at ECF No. 40: $61,024.16 for unpaid contributions, liquidated damages, interest through August 31, 2021 (and daily simple interest at ten percent thereafter), attorney's fees, and costs.
STATEMENT
1. The Parties
The plaintiffs are employee benefit plans and their respective trustees as defined in the ERISA. The defendants 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). In February 2007, Euro-Tech Construction incorporated and transferred its operations to the newly formed corporate entity, Euro-Tech Construction & Trucking, Inc.
Compl. - ECF No. 1 at 1 (¶ 1), 3-4 (¶ 9); Mot. - ECF No. 36 at 9; Minser Decl. - ECF No. 39 at 2 (¶ 5). Citations refer to the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents.
2. The Agreements
The defendants signed the bargaining agreement on June 16, 2006, and it remains in effect. The Plans are third-party beneficiaries of the bargaining agreement. The bargaining agreement incorporates the trust agreement, thus binding the defendants to the terms and conditions of the trust agreement. Each month, employers self-report the hours worked by their employees in a report called a Contribution Report that they submit to the plan administrator. Employers must make contributions - to the plans described in the bargaining agreement and to the union for union dues - based on the hours that their employees worked. An employer's contributions to the trust are due by the 15th day of the month following the month that hours were worked and are delinquent if they are not received or postmarked by the 25th day of that month.
Mot. - ECF No. 36 at 9-10.
Brown Decl. - ECF No. 37 at 3 (¶ 7); Tr. Agreement, Ex. D to id. - ECF No. 37-4 at 2, 4.
Brown Decl. - ECF No. 37 at 2-3 (¶¶ 4-5, 7); Indep. N. Cal. Constr. Agreement, Ex. A to id. - ECF No. 37-1 at 1.
Brown Decl. - ECF No. 37 at 3 (¶ 8); Master Agreement (2016-2020), Ex. B to id. - ECF No. 37-2 at 51; Master Agreement, Ex. C to id. - ECF No. 37-3 at 51; Tr. Agreement, Ex. D to id. - ECF No. 37-4 at 5-6.
The bargaining and trust agreements required employers like the defendants to pay liquidated damages and interest on delinquent contributions. Liquidated damages on unpaid contributions initially are ten percent of unpaid contributions. They increase to twenty percent if the trust refers collection of unpaid contributions to “Collection Counsel.” Interest on delinquent contributions is ten percent, calculated from the day that the contributions are delinquent. Employers also must pay reasonable attorney's fees and other expenses incurred in connection with delinquent payments.
Brown Decl. - ECF No. 37 at 3-4 (¶¶ 8-9); Master Agreement (2016-2020), Ex. B to id. - ECF No. 37-2 at 58-59; Master Agreement, Ex. C to id. - ECF No. 37-3 at 57-58; Tr. Agreement, Ex. D to id. - ECF No. 37-4 at 5-6.
The agreements provide that the Plans' trustees may establish rules as part of the Collection Procedure Guidelines on how Liquidated Damages, Interest and other charges are assessed when amounts are determined to be owed as a result of a payroll audit. The agreements' collection procedures provide that when an employer fails or refuses to submit missing contribution reports, unreported contributions are estimated based on the greater of (1) the last report submitted, (2) the average of the last three months reported, or (3) the average of the last three months.
Master Agreement. - ECF No. 37 at 58.
Minser Decl. - ECF No. 39 at 5-6 (¶ 20).
3. Unpaid Contributions
The plaintiffs scheduled an audit of the defendants covering the period January 1, 2015 through December 31, 2018. On or about January 22, 2019, the plaintiffs' Fringe Benefits Collection Office sent the defendants an audit notification letter. On or about February 7, 2019, the Plans' auditors contacted the defendants by phone to schedule the audit inspection. The defendants' representative, however, hung up on the auditors when they introduced themselves. The auditors called back and left a voicemail message. Thereafter, the auditors called the defendants on February 14 and February 22, 2019. Each time, the auditors left a voicemail message because no one for the defendants answered the phone.
Brown Decl. - ECF No. 37 at 5 (¶ 14); Quackenbush Decl. - ECF No. 38 at 2 (¶ 3).
Brown Decl. - ECF No. 37 at 5 (¶ 14); Audit Notification Letter, Ex E to id. - ECF No. 37-5.
Quackenbush Decl. - ECF No. 38 at 2 (¶ 5).
The auditors called the defendants again on March 12, 2019. This time, “Tracey” answered. After the auditors explained the purpose of their call, Tracey said that she was “new” and would need to investigate further before scheduling an inspection.
Id.
The Plans referred the matter to the Plans' counsel, Saltzman & Johnson. Counsel sent two letters to the defendants on September 25 and October 18, 2019, notifying them of their obligations, including complying with an audit. On October 22, 2019, the defendants said that they would schedule the audit. They scheduled the audit for November 19, 2019, but on November 18, 2019 at 4:35 p.m., they emailed the auditors to cancel the audit. An auditor appeared for the inspection on November 19, 2019, but the defendants turned the auditor away.
Id. at 2 (¶ 6); Brown Decl. - ECF No. 37 at 5-6 (¶ 16); Minser Decl. - ECF No. 39 at 2 (¶ 6).
Minser Decl. - ECF No. 39 at 3 (¶¶ 7-8).
Id. at 3 (¶ 9).
Id. at 3 (¶ 10); Quackenbush Decl. - ECF No. 38 at 2 (¶ 7).
On March 6, 2020, the auditors told the Plans' counsel that the defendants provided some documents by server upload on November 18, 2019, but some documents had not been received. The missing documents included job classifications, business cards, hire letters, and dispatch slips to support the defendants' classification of six employees (Christine Cortina, Barry Cooper, Brian Young, Rudy Rovetti, Michelle Burch, and Alan Moore). The defendants also did not submit contribution reports and payments for December 2018; January, March, May, November, and December 2019; and January, February, and March 2020.
Quackenbush Decl. - ECF No. 38 at 2 (¶ 8); Minser Decl. - ECF No. 39 at 3-4 (¶ 12).
Quackenbush Decl. - ECF No. 38 at 2 (¶ 8); Minser Decl. - ECF No. 39 at 3-4 (¶ 12); Emails, Ex. D to id. - ECF No. 39-4 at 1.
Minser Decl. - ECF No. 39 at 3-4 (¶ 12).
On April 17, 2020, counsel sent a letter to the defendants demanding the missing documents. On April 27, 2020, the defendants acknowledged receipt of the letter by email and asked questions about compliance. That day, counsel responded to the defendants' email, answered all questions, and reiterated the defendants' obligation to comply with the document requests. To date, the defendants have not supplied all of the missing documents.
Id. at 4 (¶¶ 13-14).
Id. at 4 (¶ 14); Email to Ohn Eely, Ex F to id. - ECF No. 39-6.
Minser Decl. - ECF No. 39 at 4 (¶ 14); Quackenbush Decl. - ECF No. 38 at 4 (¶ 11).
The Plans ultimately filed this lawsuit and served the complaint. The parties tried to settle the dispute. On or about January 5, 2021, the defendants scheduled an inspection of the missing documents. On or about February 12, 2021, the auditors asked the defendants to upload the documents to the auditors' server in lieu of an on-site inspection of the documents. The defendants did not provide the missing documents. On April 2, 2021, the Plans' counsel sent a final demand letter asking for (1) submission to an audit of the missing documents; (2) production of payroll records for the period from January 1, 2015 through December 31, 2018, including documentation to enable the Plans to determine the source of variances between hours worked and hours reported for several employees; and (3) $9,139.16 for attorney's fees and costs through March 17, 2021. To date, the defendants have not responded to the letter or produced the requested items.
Minser Decl. - ECF No. 39 at 4-5 (¶¶ 15, 17); Compl. - ECF No. 1; Summons Returned - ECF No. 18.
Minser Decl. - ECF No. 39 at 5 (¶ 18).
Id.; Quackenbush Decl. - ECF No. 38 at 2 (¶ 9).
Quackenbush Decl. - ECF No. 38 at 2-4 (¶¶ 10-11).
Minser Decl. - ECF No. 39 at 5 (¶ 19); Letter to Defendants, Ex. H to id. - ECF No. 39-8.
Because the defendants did not allow a full audit of their records, the Plans estimated the amount and concluded that the defendants owed $44,091.00 in unpaid contributions, liquidated damages and interest. The estimated unpaid contributions are $33,088.50, liquidated damages are $6,617.70, and interest is $4,384.80 (at ten percent through October 7, 2021). The Plans also seek attorney's fees of $14,937.50 and costs of $1,995.66.
Compl. - ECF No. 1 at 5 (¶¶ 13-15); Minser Decl. - ECF No. 39 at 9 (¶ 37).
Minser Decl. - ECF No. 39 at 14-15 (¶¶ 54-56); Billing Rec., Ex. K to id. - ECF No. 39-11 at 14.
In sum, the total amounts that the Plans seek is $61,024.16, calculated as follows:
Work Period Estimated Liquidated 10% Interest to Subtotal
| Work Period | Estimated Unpaid Contrib. | Liquidated Damages | 10% Interest to 10/7/2021 | Subtotal |
| 12/2018 | $2,205.90 | $441.18 | $591.60 | $3,238.68 |
| 1/2019 | $2,205.90 | $441.18 | $573.00 | $3,220.08 |
| 3/2019 | $2,205.90 | $441.18 | $537.60 | $3,184.68 |
| 5/2019 | $2,205.90 | $441.18 | $501.00 | $3,038.28 |
| 11/2019 | $2,205.90 | $441.18 | $391.20 | $3,038.28 |
| 12/2019 | $2,205.90 | $441.18 | $372.60 | $3,019.68 |
| 1/2020 | $2,205.90 | $441.18 | $354.00 | $3,001.08 |
| 2/2020 | $2,205.90 | $441.18 | $336.60 | $2,983.68 |
| 8/2020 | $2,205.90 | $441.18 | $226.20 | $2,873.28 |
| 11/2020 | $2,205.90 | $441.18 | $171.60 | $2,818.68 |
| 12/2020 | $2,205.90 | $441.18 | $153.00 | $2,800.08 |
| 3/2021 | $2,205.90 | $441.18 | $99.00 | $2,746.08 |
| 6/2021 | $2,205.90 | $441.18 | $44.40 | $2,672.88 |
| 7/2021 | $2,205.90 | $441.18 | $25.80 | $2,672.88 |
| 8/2021 | $2,205.90 | $441.18 | $7.20 | $2,654.28 |
| Subtotal | $33,088.50 | $6,617.70 | $4,384.80 | $44,091.00 |
| Subtotal: | $44,091.00 | |||
| Attorney's Fees: | $14,937.50 | |||
| Costs: | $1,995.66 | |||
| TOTAL: | $61,024.16 |
4. Procedural History
The Plans filed the complaint on June 23, 2020. The defendants were personally served with the summons and complaint on October 13, 2020. The defendants did not respond to the complaint or otherwise appear in the action. The Clerk of Court entered the plaintiff's default, and the Plans moved for default judgment, serving the defendants with copies of all documents. The defendants have not formally appeared or asked to set aside the default, and they did not appear at the December 2, 2021 hearing.
Compl. - ECF No. 1.
Minser Decl. - ECF No. 39 at 5 (¶ 17); Summons Returned - ECF No. 18.
Entry of Default - ECF No. 20; Proof of Serv. - ECF No. 21; Minser Decl. - ECF No. 39 at 5 (¶ 17).
Minser Decl. - ECF No. 39 at 5 (¶ 17).
JURISDICTION 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). 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.
ANALYSIS
Under Federal Rule of Civil Procedure 55(b)(1), a plaintiff may apply to the district court for - and the court may grant - a default judgment against a defendant who has 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); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). 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). 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:
(1) the possibility of prejudice to the plaintiff, (2) the merits of [the] 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). “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) (internal quotation marks omitted) (citing cases).
The Eitel factors favor entry of default judgment against the defaulting defendants.
1. The Possibility of Prejudice to the Plaintiff (First Eitel Factor)
The first Eitel factor considers whether the plaintiff will suffer prejudice if default judgment is not entered, and whether such potential prejudice to the plaintiff weighs in favor of granting default judgment. Eitel, 782 F.2d at 1471; Craigslist, Inc. v. Naturemarket, Inc., 694 F.Supp.2d 1039, 1054-55 (N.D. Cal. 2010). This factor weighs in favor of granting default judgment because the Plans have no recourse otherwise due to the defendants' apparent unwillingness to comply with the audit.
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 [plaintiffs] 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 cause of action 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).
Here, the Plans 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 Plans 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, 29 U.S.C. § 1145, by failing to timely pay contributions. The defendants are “employers” under ERISA, have signed and are 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), report and recommendation adopted, 2019 WL 3779682 (N.D. Cal. Aug. 12, 2019). These factors weigh in favor of granting default judgment.
3. The Sum of Money at Stake (Fourth Eitel Factor)
The fourth Eitel factor considers the amount of money at stake in the litigation. Eitel, 782 F.2d at 1471. When the money is substantial or unreasonable, default judgment is discouraged. Id. at 1472 (three-million-dollar judgment, considered in light of parties' dispute as to material facts, supported decision not to enter default judgment); Tragni v. Souther Elec. Inc., No. C 09-32 JF (RS), 2009 WL 3052635, at *5 (N.D. Cal. Sept. 22, 2009); RBS Wash. Blvd., 2010 WL 145097, at *3. 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-10-2212 EMC, 2011 WL 2600898, at *3 (N.D. Cal. June 30, 2011) (the amount of unpaid contributions, liquidated damages, and attorney's fees were appropriate because they were supported by adequate evidence provided by the plaintiffs).
The Plans ask for $61,024.16 in unpaid contributions, liquidated damages, interest, costs, and attorney's fees. 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. The amount sought here is appropriate for default judgment. 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”).
4. Factual Dispute or Excusable Neglect (Fifth and Sixth Eitel Factors)
The fifth and sixth Eitel factors consider the potential of factual disputes and whether a defendant's failure to respond likely was due to excusable neglect. Eitel, 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 Plans sent the defendants the audit, gave them an opportunity to dispute it, and served them with all papers related to the lawsuit. The defendants failed to comply with the audit and have not responded. These factors weigh in favor of default judgment.
5. The Strong Policy Favoring Decisions on the Merits (Seventh Eitel Factor)
The seventh Eitel factor is the strong policy favoring decisions on the merits. Eitel, 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. Default judgment is thus 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 weigh in favor of entering default judgment.
6. Relief Sought
The first issue is whether the Plans gave fair notice of the damages they seek. 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 as to whether or not it is in his best interest to answer. McDonald v. Checks-N-Advance, Inc. (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 Trs. of the Sheet Metal Workers Loc. 104 Health Care Plan v. Total Air Balance Co., No. 08-2038 SC, 2009 WL 1704677, at *4 (N.D. Cal. June 17, 2009) (the 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”).
In the complaint, the Plans sought damages in the form of (1) unpaid and delinquent trust fund contributions, (2) liquidated damages and interest on these contributions, (3) liquidated damages and interest on late-paid contributions, and (4) attorney's fees and costs. 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) (collecting cases); accord, e.g., Total Air Balance, 2009 WL 1704677, at *4-5.
Compl. - ECF No. 1 at 6-7.
Here, the complaint and the Clerk's entry of default give notice of the defendants' responsibility for unpaid contributions reflected on employee payroll records or through audits. The defendants failed to comply with the audit. Counsel sent letters demanding payment. The default-judgment motion summarizes the calculations, and the supporting documents prove them. The Plans gave fair notice to the defendants about the damages they seek. Cf. Martin, 2014 WL 1998047, at *3-4 (in an ERISA case, held that “Plaintiffs are entitled to recover the full scope of damages requested” where “Plaintiffs have kept Defendant apprised of the scope of his alleged liability, ” “served Defendant by mail with all the filings in this case, including the motion for default judgment and the supplemental [] declaration, a fact that weights in favor of awarding post-complaint damages, ” and “communicated with Defendant by phone, email, and letter regarding his delinquent contribution reports before and after the complaint was filed”); Total Air Balance, 2009 WL 1704677, at *5 (“find[ing] it appropriate in this case to consider all damages that had occurred by the time that default was entered against [defendant]” where defendant's continued nonpayment rendered amount of delinquency a “moving target”).
Compl. - ECF No. 1; Entry of Default - ECF No. 20; Proof of Serv. - ECF No. 21; Minser Decl. - ECF No. 39 at 5 (¶ 17).
Quackenbush Decl. - ECF No. 38 at 4 (¶ 11).
Minser Decl. - ECF No. 39 at 5 (¶ 19); Letter, Ex. H to id. - ECF No. 39-8 at 4.
Mot. - ECF No. 36 at 8.
The second issue is whether the Plans established the amount of their 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 Tr. Fund for N. Cal. v. A & B Bldg. Maint. Co., No. C 13-00731 WHA, 2013 WL 5693728, at *4 (N.D. Cal. Oct. 17, 2013); accord Cannon v. City of Petaluma, No. C 11-0651 PJH, 2011 WL 3267714, at *2 (N.D. Cal. July 29, 2011) (“In order to ‘prove up' damages, a plaintiff is generally required to provide admissible evidence (including witness testimony) supporting damage calculations.”) (citations omitted); see Bd. of Trs. of Bay Area Roofers Health & Welfare Tr. Fund v. Westech Roofing, 42 F.Supp.3d 1220, 1232 n.13 (N.D. Cal. 2014) (“It is Plaintiffs' burden on default judgment to establish the amount of their damages.”).
As summarized in the table in the Statement, the Plans seek $61,024.16 comprised of $33,088.50 in unpaid contributions, $6,617.70 in liquidated damages, $4,384.80 in interest through October 7, 2021 (calculated at ten percent), $14,937.50 in attorney's fees, and $1,995.66 in costs. The Plans proved the damages and 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.
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 26.29 U.S.C. § 1132(g)(2).
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.
6.1 Unpaid Contributions, Liquidated Damages, and Interest
The Plans seek $33,088.50 in unpaid contributions, $6,617.70 in liquidated damages, and $4,384.80 in interest (calculated at ten percent), for a total of $44,091.00. Where, as here, the employer is delinquent and the plan provides for it, an award of unpaid contributions, interest, and liquidated damages “is mandatory and not discretionary.” Nw. Adm 'rs, Inc. v. Albertson's, Inc., 104 F.3d 253, 257 (9th Cir. 1996) (quotation omitted). The undersigned recommends the court award the Plans $44,091.00.
Minser Decl. - ECF No. 39 at 9 (¶ 37).
6.2 Attorney's Fees
The Plans seek $14,937.50 in attorney's fees. An award of reasonable attorney's fees is mandatory under 29 U.S.C. § 1132(g)(2). Albertson's, 104 F.3d at 257. To determine a reasonable fee award in a case like this, federal courts use the lodestar method. Grove v. Wells Fargo Fin. Cal, Inc., 606 F.3d 577, 582 (9th Cir. 2010). The court calculates a “lodestar figure” by multiplying the number of hours counsel reasonably spent on the litigation by a reasonable hourly rate. Id. 6.2.1 Reasonable Hourly Rate 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 here is the Northern District of California. Camacho, 523 F.3d 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 rates of attorneys Matthew Minser ($230 through April 1, 2020; $235 through April 30, 2020; $250 since May 1, 2020), Michele Stafford ($250), Tino Do ($230 through April 30, 2020; $245 since May 1, 2020), Craig Schechter ($230 through April 30, 2020; $245 since May 1, 2020), Jessica Melgar ($245), Siddharth Jhans ($245), and paralegals Elise Cotterill ($135 through April 30, 2020; $145 since May 1, 2020) and Melissa Huang ($145). The Plans' counsel's expertise regarding ERISA is extensive:
Minser Decl. - ECF No. 39 at 11-15 (¶¶ 43-56).
Saltzman & Johnson has specialized in the representation of multiemployer, collectively bargained employee benefit plans for over 40 years in both the private and public sectors. Over 90% of its work involves the representation of employee benefit plans. All of the attorneys have extensive experience resolving legal issues pertaining to multiemployer collectively bargained benefit plans which are jointly managed by representatives of labor and management.
Id. at 10 (¶ 41).
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 $700 and paralegal hourly rates of $125 are reasonable in an ERISA case).
6.2.2 Reasonable Hours Expended
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 Plans request attorney's fees for 46.4 hours of attorney time and 26.4 hours of paralegal time for tasks that include preparing the complaint, accompanying documents, the request for entry of default, the default-judgment documents, and other filings. The hours are reasonable.
Minser Decl. - ECF No. 39 at 14 (¶ 54); Billing Reps., Exs. J-K to id. ECF Nos. 39-10-39-11.
* * *
In sum, the Plans' submissions establish that the fees are reasonable, and the undersigned recommends $14,937.50 in attorney's fees.
6.3 Costs of Suit
The Plans asks for costs of $1,995.66: (1) a $400 filing fee; (2) $1579.16 for costs of service; and (3) $16.50 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.
Minser Decl. - ECF No. 39 at 14-15 (¶¶ 55-56); Billing Rep., Ex. K to id. ECF No. 39-11 at 14.
CONCLUSION
The court directs the Clerk of Court to reassign the case to a district judge and recommends entry of default judgment against the defendants and in favor of the Plans in the amount of $61,024.16 (as summarized in the table in the Statement and in the Plans' proposed judgment at ECF No. 40). The court also recommends entry of the proposed form of judgment at ECF No. 40, which also requires the defendants to comply with the audit of their payroll records.
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 directs the Plans to serve the defendants by mail with a copy of this Report and Recommendation and to file proof of service within three business days.
IT IS SO ORDERED AND RECOMMENDED.