Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_03-cv-04468/USCOURTS-cand-3_03-cv-04468-0/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1132 E.R.I.S.A.

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PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW:

Case No. C 03-4468 JSW (MEJ)

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UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA

(SAN FRANCISCO DIVISION)

KEN WALTERS, DON DOSER, in their 

respective capacities as Trustees of the 

OPERATING ENGINEERS HEALTH AND 

WELFARE TRUST FUND FOR 

NORTHERN CALIFORNIA et al.,

 Plaintiffs,

vs.

ALAKHDEO PRASAD SINGH, individually

and doing business as STANDARD 

ENGINEERING,

Defendant.

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Case No.: C 03-4468 JSW (MEJ)

REPORT AND RECOMMENDATION

REGARDING PLAINTIFFS’ MOTION 

FOR ENTRY OF DEFAULT JUDGMENT 

BY COURT

Before the Court is Plaintiffs’ Motion for Entry of Default Judgment. Defendant filed no 

opposition and failed to appear at the May 26, 2005 hearing. Upon review of Plaintiffs’ motion, 

the Court hereby RECOMMENDS that the District Court GRANT Plaintiffs’ motion for the 

reasons set forth below.

FINDINGS OF FACT

1. On October 2, 2003, Plaintiffs filed a complaint seeking damages. The complaint 

primarily alleges breach of contract governed by Section 502 of the Employee Retirement 

Income Security Act (“ERISA”) (29 U.S.C. section 1132) and Section 301 of the Labor 

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PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW:

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Management Relations Act (“LMRA”) (29 U.S.C. section 185). The complaint alleges the 

following facts.

2. At all times material herein, plaintiffs had been trustees of the trust funds 

established under ERISA and LMRA (Compl. 4). Such trust funds are employee-benefit plans 

created by written trust agreements and funded by contributions made pursuant to the terms of 

written collective bargaining agreements (ibid.). Plaintiffs as trustees were to ensure that 

contributions were fully and correctly made to these trust funds pursuant to the collective 

bargaining agreements (id. at 6). 

3. The collective-bargaining agreement incorporated by reference the terms of the 

Operating Engineers Master Agreement for Northern California (“Master Agreement”) (id. at 7).

The Master Agreement provided that employers contribute and pay a set amount per month per 

covered employee into the said trust funds (id. at 8). 

4. The collective bargaining agreement also incorporated by reference the terms of 

the Trust Agreements. (ibid). The Master Agreement and Trust Agreements provide for an 

audit of the signatory employer’s books and records in order to permit the Trustees of the Trust 

Funds to ascertain whether fringe benefit contributions have been paid as required by the 

applicable labor agreement and laws. (id at 9).

5. The Defendant had been an employer who agr eed to be bound by the collectivebargaining agreement and thereby all the applicable provisions of the Master agreement and the 

Trust Agreements (see id. at 5 & 7).

6. A copy of the collective bargaining agreement signed by the Defendant was 

attached to the Declaration of Wayne McBride (submitted by Plaintiffs in support of their 

motion for entry of default judgment) as Exhibit A. The complaint alleged that an audit of the 

Defendant’s books and records conducted by the Trust Funds revealed that the Defendant failed 

to pay fringe benefit contributions in the amount of $10,454.00 and liquidated damages in the 

amount of $2,831.17 (id. at 10). After filing the complaint the Defendant made one payment in 

the amount of $2,052.18 toward the audit shortages; therefore, the outstanding amount of 

principal contributions owed, as revealed by the audit, is currently $8,407.25 (Decl. McBride at 

11, Exh. E).. 

7. The Trust Agreements provide that liquidated damages in the amount of thirtyfive dollars ($35.00) or fifteen percent (15%) of the outstanding amount owed, whichever is 

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PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW:

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greater, is assessed by the Trust Fund against the employer, if the employer remits the 

contributions late. Interest at the annual rate of twelve percent (12%) of the contributions until 

such amount is paid is assessed on delinquent contributions (id. at para. 5, Exhs. A and B 

sections 12.00.00 et seq.). 

8. Section 12.13.02 of the Master Agreement provides for the recovery of attorney’s 

fees and costs in an action to recover a delinquent balance due (id. at 12, Exh. B). Additionally, 

section 502(g)(2) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Section 

1132(g)(2) also provides for the recovery of attorney’s fees and costs incurred in an action to 

recover a delinquent balance due (Complaint at 11). Plaintiffs incurred $2,537.00 in attorney’s 

fees and costs relating to this action to recover the delinquent balance due to them for the audit 

shortages owed by the Defendant. (Decl. McBride at para. 13; Decl. Mainguy). 

9. Plaintiffs served the Defendant with the summons and complaint on October 22, 

2003. The Defendant did not serve plaintiff with a responsive pleading within twenty days, as 

required by FRCP 12(a)(1)(A), or otherwise appear in the case. Default was entered on 

February 3, 2004. 

10. The Defendant is not an infant or incompetent person and is not in the military or 

otherwise exempted under the Soldiers’ and Sailors’ Civil Relief Act of 1940. (Decl. McBride 

at para. 4).

11. The Court has personal jurisdiction over the Defendant because he conducted 

business in the jurisdiction. (id at paras. 4 & 6). Subject matter jurisdiction also exists under 28 

U.S.C. 1331.

CONCLUSIONS OF LAW.

1. Under Federal Rule of Civil Procedure 55(b)(2), a party may apply to the court 

for entry of default judgment. Whether to grant a motion for default judgment is within the 

discretion of the trial court. Lau Ah Yew v. Dulles, 236 F.2d 415, 416 (9th Cir. 1956). In the 

Ninth Circuit, a court is to consider 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 Rule of Civil Procedure favoring decisions on the merits.

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Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). These factors favor entry of 

default judgment in this action.

2. With respect to the merits and sufficiency of Plaintiffs’ complaint, after entry of 

default, well-pleaded allegations in the complaint regarding liability are taken as true, except as 

to the amount of damages. Fair Hous. v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Therefore, 

there can not be a dispute regarding the material facts. As such, the Court finds that Eitel

factors two, three and five weigh in favor of entry of default judgment. 

3. To prevail in an action for breach of contract, plaintiffs must show that (1) there 

is a contract, (2) plaintiff performed, (3) defendants breached, and (4) there is resulting damage. 

See Careau & Co. v. Security Pac. Business Credit, Inc., 222 Cal. App. 3d 1371, 1399 (1990). 

Where a collective bargaining agreement, as here, requires contributions on behalf of employees 

who performed covered work, it will be enforced. Agthos v. Starlite Motel, 977 F.2d 1500 (3rd 

Cir. 1992). Moreover, ERISA section 515, 29 U.S.C. section 1145, provides:

Every employer who is obligated to make contributions to a multi-employer plan 

under the terms of the plan or under the terms of a collectively bargained 

agreement shall, to the extent not inconsistent with the law, make such 

contributions in accordance with the terms and conditions of such plan or such 

agreement.

4. The complaint alleges that there was a valid collective bargaining agreement 

between the parties. A copy of the contract was attached as Exhibit A to the Declaration of 

Wayne E. McBride submitted in support of Plaintiffs’ motion for entry of default judgment by 

court. The complaint also alleges that the plaintiffs as trustees performed to insure contributions 

were made according to the contract by conducting an audit of the defendant’s books and 

records. Furthermore, the complaint alleges that the defendant failed to pay the principal 

contributions and liquidated damages owed for covered work performed under the collective 

bargaining agreement pursuant to the terms of the collective bargaining agreement and trust 

agreements. Finally, Plaintiffs seek to recover $13,775.42 in damages, including attorney’s fees 

and costs. Plaintiffs therefore have alleged and provided evidence of damages to support all of 

the elements for breach of contract. Therefore, they have made a strong showing of likelihood 

of success on the merits.

5. With respect to the remaining Eitel factors, such factors also favor entry of a 

default judgment in Plaintiffs favor. To deny Plaintiffs’ motion will leave Plaintiffs without a 

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remedy, thus causing prejudice. Plaintiffs seek $13,775.42 in damages, including attorney’s 

fees and costs. Although this is not a small sum, plaintiffs will be prejudiced if they are denied 

remedy considering the merits of the case. The Defendant has refused to litigate this action after 

being properly served with the complaint and the notice of default. It is unlikely that the default 

was the result of excusable neglect, especially in light of the fact that it was entered well in 

excess of a year ago. Although federal policy may favors decisions on the merits, Federal Rule 

of Civil Procedure 55(b) permits entry of default judgment in situations such as this where the 

defendant refuses to litigate. Consequently, consideration of the Eitel factors favor entry of 

default judgment. 

6. In regard to the damages, Plaintiffs seek damages of $11,238.42 for outstanding 

contributions and liquidated damages revealed as owed by the Defendant to the Plaintiffs by the 

audit. The Master Agreement and Trust Agreements contain specific provisions for calculating 

fringe benefits as well as liquidated damages for delinquent payments and attorney’s fees and 

costs for collection of those delinquent payments (decl. McBride para. 5, Exh. B at 12.00.00-

12.13.02). Plaintiffs filed the declaration of Wayne E. McBride with an attached Exhibit D that 

shows the history of Defendant’s account with Plaintiffs and an attached Exhibit G that shows 

the calculation of the audit shortages. Determinations of amounts due under the collective 

bargaining agreement requiring payments will be construed in favor of the funds. Irwin v. 

Carpenters Health and Welfare Trust Fund for California, 745 F.2d 553, 555-557 (9th Cir. 1984). 

With respect to liquidated damages owed under collective bargaining agreements, under federal 

common law, liquidated damages provisions, such as the one at hand, are enforceable and not 

void as a penalty. Idaho Plumbers v. United Mechanical Contractors, 875 F.2d 212, 216 (9th

Cir. 1989). 

7. Plaintiffs also request $2,537.00 in attorney’s fees and court costs incurred due to 

filing of an action in order to collect any delinquent payments. (Decl. McBride at paras. 21-

13). Plaintiffs’ Counsel has filed a declaration describing the tasks she performed in this 

action, her billing rate, and the costs incurred due to this legal action (Decl. Mainguy). 

8. Having evaluated Plaintiffs’ motion, supporting papers, and for good cause 

shown, the Court hereby RECOMMENDS that the District Court GRANT the entry of default 

judgment for damages of $11,238.42 and the award of $2,537.00 in attorney’s fees and costs.

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PROPOSED FINDINGS OF FACT AND CONCLUSIONS OF LAW:

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CONCLUSION

IT IS HEREBY RECOMMENDED:

(1) That Defendant shall pay Plaintiffs for the outstanding contributions to 

the trust funds and liquidated damages and interest, as revealed by the Trust Funds’ audit, in the 

sum of $11,238.42. 

(2) That Defendant shall Plaintiffs’ attorney’s fees and costs of suit herein in the sum 

of $2,537.00.

Pursuant to Federal Rule of Civil Procedure 72, a party may serve and file objections to 

this Report and Recommendation within ten days after being served with a copy of the report.

Dated: May 26, 2005 /s/ Maria-Elena James______________

HONORABLE MARIA-ELENA JAMES

MAGISTRATE JUDGE

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