Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_18-cv-05416/USCOURTS-cand-3_18-cv-05416-3/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1451 E.R.I.S.A.

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

AUTOMOTIVE INDUSTRIES PENSION 

TRUST FUND, et al.,

Plaintiffs,

v.

MACY AUTOMOTIVE, INC., et al.,

Defendants.

Case No. 18-cv-05416-KAW 

REPORT AND RECOMMENDATION 

TO GRANT PLAINTIFF'S MOTION 

FOR DEFAULT JUDGMENT; ORDER 

REASSIGNING CASE TO A DISTRICT 

JUDGE

Re: Dkt. No. 56

On September 30, 2019, Plaintiffs filed a motion for default judgment against Defendants 

Macy Automotive, Inc. (“Macy”) and Macy’s Automotive Pro’s (“Macy’s Pro’s”). (Pls.’ Mot., 

Dkt. No. 56.) Plaintiffs’ motion seeks payment of unpaid withdrawal liability pursuant to section 

4201 of the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1381. Plaintiffs 

also seek interest, liquidated damages, and attorney’s fees and costs, as well as injunctive relief 

ordering Macy to furnish information and documents pursuant to ERISA § 4219(a). (Id. at 1.)

On November 7, 2019, the Court held a hearing on Plaintiffs’ motion for default judgment, 

at which Defendants did not appear. Since Defendant Macy has not consented to the undersigned, 

the Court reassigns this action to a district judge and recommends that Plaintiffs’ motion be 

GRANTED.

I. BACKGROUND

Defendant Macy was an automotive transmission repair facility, operating at 5050 Pacheco 

Blvd., Martinez, California. (Compl. ¶ 13, Dkt. No. 1.) Defendant Macy was a participating 

employer in the Automotive Industries Pension Trust Fund (“Plan”) pursuant to collective 

bargaining agreement (“CBA”) with the International Association of Machinists & Aerospace 

Workers, Machinists Automotive Trade District No. 190, and Automotive Machinists Local 1173 

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(“Union”). (Compl. ¶ 12; see also Besocke Decl., Exh. A at 22 (signed master agreement), Dkt. 

No. 57.) Defendant Macy was obligated and did make contributions to the Plan on behalf of its 

employees that were covered under the CBA. (Compl. ¶ 12.)

In August 2017, Defendant Macy ceased operations and withdrew from the Plan. (Compl. 

¶ 14.) On October 18, 2017, Defendant Macy filed an Election for Dissolution with the California 

Secretary of State, thereby making a complete withdrawal per ERISA § 4203. (Compl. ¶ 14.)

In April 2017, Defendant Macy’s Pro’s registered with the California Secretary of State. 

(Compl. ¶ 16.) Defendant Macy’s Pro’s is owned jointly by Christina Morrison and Salamo Sua, 

Jr., former officers and employees of Defendant Macy. (Compl. at 2.) Defendant Macy’s Pro’s 

substantially continued the business of Defendant Macy at the same 5050 Pacheco Blvd. address, 

including performing the same type of services for the same customer base, using the same 

employees. (Compl. ¶¶ 17, 22; see also Do Decl., Exh. C, Dkt. No. 58.) Plaintiffs thus assert that 

Defendant Macy’s Pro’s is the successor of Defendant Macy. (Compl. ¶ 22.)

On November 22, 2017, Plaintiffs notified Defendant Macy that the assessed withdrawal 

liability was $258,187.00, payable as one lump sum payment or in quarterly payments of 

$5,792.00 starting on December 31, 2017. (Compl. ¶ 18; Do Decl., Exh. A at 3-4.) Plaintiffs also 

informed Defendant Macy that any request for review must be made within 90 days of receiving 

the notice of the withdrawal liability, and that any such request for review did not postpone the 

deadline for making either payment. (Compl. ¶ 18(b); Do Decl., Exh. A at 4.) Plaintiffs further 

notified Defendant Macy of ERISA’s mandatory arbitration requirement. (Compl. ¶ 18(c); Do 

Decl., Exh. A at 4.) Defendant Macy did not request review or initiate arbitration, nor did it make 

any payments. (Compl. ¶¶ 19-20.)

On February 9, 2018, Plaintiffs notified both Defendants that pursuant to Section IX of the 

Plan’s Withdrawal Liability Rules, the entire unpaid withdrawal liability was accelerated, plus 

interest at the rate of 7% simple interest per year. (Compl. ¶ 21; Do Decl., Exh. A at 2.) Plaintiffs 

also requested that Defendant Macy provide information under ERISA § 4219(a) regarding its 

ownership and financial records. (Id.) Defendants failed to make the payment or provide the 

documents. (Compl. ¶ 21.)

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On September 4, 2018, Plaintiffs filed the instant complaint, seeking the unpaid 

withdrawal liability of $258,187.00, 7% interest, liquidated damages, and attorney’s fees and 

costs. (Compl. at 8-9.) Plaintiffs also sought injunctive relief requiring Defendant Macy to 

provide furnish information related to its ownership and finances. (Compl. at 10-11.) On 

September 6, 2018, Plaintiffs served Defendants with the complaint by personally delivering 

copies of the complaint and summons to Ms. Morrison, the agent for service of process for 

Defendant Macy’s Pro’s and the CEO of Defendant Macy. (Dkt. Nos. 8, 13.)

Defendant Macy did not file an answer. On October 18, 2018, Plaintiffs moved for entry 

of default as to Defendant Macy. (Dkt. No. 14.) On October 19, 2018, the Clerk of the Court 

entered default against Defendant Macy. (Dkt. No. 15.)

On October 5, 2018, Defendant Macy’s Pro’s filed an answer. (Dkt. No. 9.) On April 24, 

2019, counsel for Defendant Macy Pro’s moved to withdraw because Defendant Macy’s Pro’s 

could not for the litigation. (Dkt. No. 36.) Counsel provided a declaration by Ms. Morrison, 

stating that Defendant Macy’s Pro’s did not need time to seek other counsel because there was no 

money to pay for an attorney. (Morrison Decl. ¶ 3, Dkt. No. 36-1.) On June 4, 2019, the Court 

granted the motion to withdraw as counsel.

On August 16, 2019, Plaintiffs filed a motion to strike Defendant Macy’s Pro’s answer 

because it was an unrepresented corporation. (Dkt. No. 48.) On September 17, 2019, the Court 

granted Plaintiffs’ motion and struck Defendant Macy’s Pro’s answer. (Dkt. No. 51.) On 

September 18, 2019, Plaintiffs moved for entry of default as to Defendant Macy’s Pro’s. (Dkt. 

No. 52.) That same day, the Clerk of the Court entered default against Defendant Macy’s Pro’s. 

(Dkt. No. 53.)

On September 30, 2019, Plaintiffs filed the instant motion for default judgment, seeking: 

(1) $258,187.00 in unpaid withdrawal liability; (2) $51,637.40 in liquidated damages at a rate of 

20%; (3) $31,636.89 in interest at a rate of 7% simple interest from December 31, 2017 through 

September 30, 2019, increasing by $49.51 per day after September 30, 2019; (4) $18,627.00 in 

attorney’s fees, and (5) $3,778.21 in costs. (Pls.’ Mot. at 15.) That same day, the motion and 

declarations in support were served on Defendants by mail. (See Dkt. Nos. 56-58.) To date, 

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Defendants have not filed an opposition.

II. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) permits a court to enter a final judgment in a case

following a defendant’s default. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 

995, 999 (N.D. Cal. 2001). Whether to enter a judgment lies within the court’s discretion. Id. at 

999 (citing Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986)).

Before assessing the merits of a default judgment, a court must confirm that it has subject 

matter jurisdiction over the case and personal jurisdiction over the parties, as well as ensure the 

adequacy of service on the defendant. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). If the court 

finds these elements satisfied, it turns to the following factors (“the Eitel factors”) to determine 

whether it should grant a default judgment:

(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 

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) (citation omitted). Upon entry of default, 

all factual allegations within the complaint are accepted as true, except those allegations relating to 

the amount of damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). 

Where a default judgment is granted, the scope of relief “must not differ in kind from, or exceed in 

amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c).

III. DISCUSSION

A. Jurisdiction and Service of Process

In considering whether to enter default judgment, a district court must first determine 

whether it has jurisdiction over the subject matter and the parties in the case. In re Tuli, 172 F.3d 

at 712 (“When entry of default is sought against a party who has failed to plead or otherwise 

defend, a district court has an affirmative duty to look into its jurisdiction over both the subject 

matter and the parties.”).

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i. Subject Matter Jurisdiction

This is a civil action brought by the fiduciary trustees alleging a violation of ERISA, a 

federal statute. Plaintiffs seek to enforce the provisions of ERISA and the terms of the Plan and 

redress Defendants’ violation of ERISA.

ii. Personal Jurisdiction and Venue

Personal jurisdiction over Defendants exists pursuant to ERISA § 502(e)(2), which allows 

an action to be brought against a defendant “in the district where the plan is administered, where 

the breach took place, or where a defendant resides or may be found . . . .” 29 U.S.C. § 

1132(e)(2). Thus, ERISA “provides for nationwide service of process. This means that service on 

a defendant in an ERISA case anywhere in the United States is sufficient to establish personal 

jurisdiction, and there is no need to engage in the ‘minimum contacts’ analysis.” Schuett v. FedEx 

Corp. Retirement Appeals Comm., Case No. 15-cv-189-PJH, 2015 WL 4484153, at *5 (N.D. Cal. 

July 22, 2015) (citing Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992); see 

also Bd. of Trustees v. Diversified Concrete Cutting, Inc., Case No. 17-cv-6938-MEJ, 2018 WL 

3241040, at *2 (N.D. Cal. July 3, 2018). 

Likewise, venue is proper as the trust funds are administered in this district and the breach 

took place here. See Schuett, 2015 WL 448153, at *5 (citing 29 U.S.C. § 1132(e)(2)). 

iii. Service of Process

When entry of default is requested, the Court must determine whether service of process 

was adequate. Bank of the West v. RMA Lumber Inc., Case No. 07-cv-6469-JSW, 2008 WL 

247650, at *2 (N.D. Cal. June 17, 2008). Per Federal Rule of Civil Procedure 4(h)(1)(B), a 

corporation may be served “by delivering a copy of the summons and of the complaint to an 

officer, a managing or general agent, or any other agent authorized by appointment or by law to 

receive service of process . . . .” Additionally, a party may serve a corporation “following state 

law for serving a summons in an action brought in courts of general jurisdiction in the state where 

the district court is located or where service is made.” Fed. R. Civ. P. 4(e)(1). Under California 

law, a summons can be served on a corporation by delivering a copy of the summons and 

complaint to a person designated as the agent for service of process, or by delivering a copy of the 

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summons and complaint to the president, chief executive officer, or other head of the corporation. 

Cal. Code Civ. Proc. § 416.10.

On September 6, 2018, Defendants were personally served by hand delivering a copy of 

the summons and complaint to Ms. Morrison, the CEO of Defendant Macy and the registered 

agent for service of process for Defendant Macy’s Pro’s. (Dkt. Nos. 8, 13.) The Clerk filed entry 

of default as to Defendant Macy on October 19, 2018, and as to Defendant Macy’s Pro’s on 

September 18, 2019. (Dkt. Nos. 15, 53.)

B. Application of Eitel Factors to the Case at Bar

i. First Factor: Possibility of Prejudice to Plaintiffs

Taking all of the factual allegations in the complaint as true, the first Eitel factor weighs in 

favor of granting default judgment on Plaintiffs’ claims. “Because ERISA provides that federal 

courts have exclusive jurisdiction for claims of this nature, denial of Plaintiffs’ Motion would 

leave them without a remedy.” Bd. of Trs. of U.A. Local No. 159 Health & Welfare Trust Fund v. 

RT/DT, Inc., Case No. 12-cv-5111-JSW, 2013 WL 2237871, at *4-5 (N.D. Cal. May 21, 2013). 

Accordingly, the first Eitel factor weighs in favor of granting a default judgment.

ii. Second and Third Factors: Merits of Plaintiffs’ Claims and the Sufficiency 

of the Complaint

The second and third Eitel factors address the merits and sufficiency of Plaintiffs’ claims 

pled in the complaint. “These two factors are often analyzed together.” Li v. A Perfect Day 

Franchise, Inc., Case No. 10-cv-1189-LHK, 2012 WL 2236752, at *6 (N.D. Cal. June 15, 2012). 

In considering the second and third factors, the Court takes all factual allegations in Plaintiffs’ 

complaint as true, except for those relating to damages. Televideo Sys., 826 F.2d at 917-18.

a. Defendant Macy’s Pro’s Successor Status

“[A] bona fide successor can be liability for its predecessor’s [Multiemployer Pension Plan 

Amendments Act (“MPPAA”)] withdrawal liability . . . so long as the successor had notice of the 

liability.” Resilient Floor Covering Pension Trust Fund Bd. of Trustees v. Michael’s Floor 

Covering, Inc., 801 F.3d 1079, 1095 (9th Cir. 2015). To determine whether a new business is the 

successor of the prior business, courts consider the following factors: 

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Whether there has been a substantial continuity of the same business 

operations; whether the new employer uses the same plant; whether 

the same or substantially the same work force is employed; whether 

the same jobs exist under the same working conditions; whether the 

same supervisors are employed; whether the same machinery, 

equipment, and methods of production are used; and whether the 

same product is manufactured or the same service is offered.

Id. at 1090-91 (internal quotation and modifications omitted). “[T]he successorship test is more 

functional than formal,” such that “the absence of one factor does not compel a particular 

conclusion.” Id. at 1091 (internal quotation and modifications omitted).

Here, the Court finds there is “substantial continuity” of business operations between 

Defendants, such that Defendant Macy’s Pro’s is Defendant Macy’s successor for purposes of 

successor liability under ERISA. Both Defendants perform the same types of services at the same 

address, using the same customer base and employees. (Compl. ¶ 17.) Defendant Macy’s Pro’s is 

also jointly owned by former officers and employees of Defendant Macy. (Compl. at 2.)

With regard to notice, under California law, “knowledge of one partner is imputed to all 

partners.” Cal. Corp. Code § 16102(f). Here, Ms. Morrison is the owner and/or officer of both 

Defendants, so her knowledge regarding withdrawal liability may be imputed to both companies. 

(Compl. ¶ 35.)

Accordingly, the Court finds that Plaintiffs have successfully pled successor liability as to 

Defendant Macy’s Pro’s.

b. Defendants’ Withdrawal Liability under ERISA

Per ERISA § 4201(a), “[i]f an employer withdraws from a multiemployer plan in a 

complete withdrawal or a partial withdrawal, then the employer is liable to the plan in the amount 

determined . . . to be the withdrawal liability.” 29 U.S.C. § 1381(a). Calculations are done 

pursuant to 29 U.S.C. § 1386 and 1389. See 29 U.S.C. § 1381(b). Once the plan sponsor notifies 

the employer of the amount of the liability, the employer may request a review of the amount of 

withdrawal liability due no later than 90 days after the employer receives the notice. 29 U.S.C. § 

1399(b). Disputes regarding the determination of the amount of withdrawal liability must be 

resolved through arbitration. 29 U.S.C. § 1401(a)(1). Arbitration must be initiated within 60 days 

of the earlier of: (1) the date of notification to the employer, or 120 days after the employer 

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requests review. Id. “If no arbitration proceeding has been initiated . . . the amounts demanded by 

the plan sponsor . . . shall be due and owing on the schedule set forth by the plan sponsor.” 29 

U.S.C. § 1401(b)(1). Thus, “‘[a]ny dispute over withdrawal liability as determined under the 

enumerated statutory provisions shall be arbitrated.’ If an employer fails to initiate arbitration, the 

employer waives the opportunity to assert any defenses that could have been raised before the 

arbitrator.” Pension Plan for Pension Trust Fund for Operating Eng’rs v. Weldway Constr., Inc., 

920 F. Supp. 2d 1034, 1044 (N.D. Cal. 2013) (quoting Teamsters Pension Trust Fund-Bd. of

Trustees of W. Conference v. Allyn Transp. Co., 832 F.2d 502, 504 (9th Cir. 1987).

Here, Plaintiffs have pled a cognizable claim based on Defendants’ failure to pay the 

withdrawal liability due. In or around August 2017, Defendant Macy made a complete withdrawal 

from participation in the Plan. (Compl. ¶ 14; see also Besocke Decl. ¶7.) Thereafter, Plaintiffs 

calculated the withdrawal liability. (Compl. ¶ 18(a); see also Besocke Decl. ¶ 8, Exh. F.) On 

November 22, 2017, Plaintiffs notified Defendant Macy of the amount of its withdrawal liability, 

provided a schedule for payment, and demanded payment. (Compl. ¶ 18(a); see also Do Decl., 

Exh. A at 3-4.) Defendant Macy did not make the payments, request review, or initiate arbitration. 

(Compl. ¶¶ 19-20.)

On February 9, 2018, Plaintiffs notified both Defendants that, pursuant to Section IX of the 

Withdrawal Liability Rules, Defendant Macy was in default as it had ceased operations and no 

payment had been received. (Compl. ¶ 21; Do Decl., Exh. A at 1-2.) Plaintiffs warned that failure 

to pay would result in Plaintiffs filing a lawsuit to collect the amount due, interest, liquidated 

damages, and attorney’s fees and costs. (Do Decl., Exh. A at 2.) Defendants still did not make 

any payments. Based on these facts, Defendant have failed to make the required withdrawal 

liability payment, and are barred from challenging Plaintiffs’ calculation of the withdrawal 

liability due.

Additionally, Plaintiffs have pled a cognizable claim based on Defendant’s failure to 

furnish the requested information. ERISA § 4219(a) requires: “[a]n employer shall, within 30 

days after a written request from the plan sponsor, furnish such information as the plan sponsor 

reasonably determines to be necessary to enable the plan sponsor to comply with the requirements 

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of this part [concerning withdrawal liability].” 29 U.S.C. § 1399(a). On February 9, 2018, 

Plaintiffs requested information and documents relating to withdrawal liability. (Compl. ¶ 21; Do 

Decl., Exh. A at 2.) Defendants did not provide the requested information. (Compl. ¶ 21.)

Taking the allegations in the complaint as true, Plaintiffs have successfully pled claims 

under ERISA entitling them to the unpaid withdrawal liability and information relating to 

withdrawal liability. Therefore, the second and third Eitel factors weigh in favor of granting their 

motion for default judgment.

iii. Fourth Factor: Sum of Money at Stake

The fourth Eitel factor addresses the amount of money at stake in relation to the 

seriousness of Defendants’ conduct. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1176 

(C.D. Cal. 2002). Default judgment is disfavored when the amount at stake is substantial or 

unreasonable in light of the allegations in the complaint. See Eitel, 782 F. 2d at 1472 (affirming 

denial of default judgment where the plaintiff sought $3 million in damages and the parties 

disputed material facts in the pleadings).

In their motion for default judgment, Plaintiffs seek the unpaid withdrawal liability, 7% 

interest, 20% liquidated damages, attorney’s fees, and costs, for a total of $363,866.50 (plus 

interest accruing daily). (Compl. ¶ 29; Pls.’ Mot. at 15.) As discussed below, Plaintiffs are 

entitled to these amounts as modified.

iv. Fifth Factor: Possibility of Dispute Concerning Material Facts

The fifth Eitel factor examines the likelihood of dispute concerning material facts in the 

case. Eitel, 782 F.2d at 1471-72. Upon entry of default, the defendant is “deemed to have 

admitted all well-pleaded factual allegations” in the complaint. DirectTV, Inc. v. Hoa Huynh, 503 

F.3d 847, 851 (9th Cir. 2007) (citing to Fed. R. Civ. P. 55(a)). 

Defendants had the opportunity to respond to the complaint and participate in these 

proceedings. In September 2018, Plaintiffs served Defendants with copies of the summons and 

complaint. (Dkt. Nos. 8, 13.) Defendants were also served with the instant motion for default 

judgment. (Dkt. Nos. 56-58.) Plaintiffs’ claims for withdrawal liability, liquidated damages, and 

interest are readily ascertainable, and Defendants are precluded from challenging the amount of 

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withdrawal liability per ERISA. See Weldway Constr., Inc., 920 F. Supp. 2d at 1044. 

Accordingly, this factor weighs in favor of default judgment.

v. Sixth Factor: Whether Default was a Result of Excusable Neglect

The sixth Eitel factor examines whether Defendants’ failure to respond to Plaintiffs’ 

complaint was due to excusable neglect. Eitel, 782 F.2d at 1471-72. Plaintiffs properly served 

Defendants with the summons and complaint in September 2018. (Dkt. Nos. 8, 13.) Plaintiffs 

also served Defendant with the instant motion for default judgment by mail on September 30, 

2019. (Dkt. No. 56.) Thus, Plaintiffs have properly served Defendants with all relevant pleadings 

to Plaintiffs’ cause of action and the relief sought, and there is no evidence that Defendants’ 

failure to appear and litigate this case is based on excusable neglect. See Shanghai Automation 

Instr. Co. v. Kuei, 194 F. Supp. 2d 995, 1005 (N.D. Cal. 2001). As such, this factor weighs in 

favor of granting default judgment.

vi. Seventh Factor: Policy Favoring a Decision on the Merits 

In Eitel, the Ninth Circuit stated that “[c]ases should be decided on the merits whenever 

reasonably possible.” Eitel, 782 F.2d at 1472. The courts have recognized, however, that “this 

preference, standing alone, is not dispositive.” PepsiCo, Inc., 238 F. Supp. 2d at 1177 (internal 

quotation omitted). The existence of Federal Rule of Civil Procedure 55(b) indicates that the 

“termination of a case before hearing the merits is allowed whenever a defendant fails to defend an 

action.” Id. Defendant Macy has never participated in the proceedings, while Defendant Macy’s 

Pro’s has stated it will not obtain an attorney. Thus, a decision on the merits will not otherwise be 

possible. In this situation, Rule 55(b) permits the court to grant default judgment.

After an examination of the Eitel factors in the aggregate, the Court finds that Eitel factors 

one through six outweigh the preference for a decision on the merits. The undersigned therefore 

recommends the entry of default judgment.

C. Damages

After entry of default, well-pleaded factual allegations in the complaint are taken as true, 

except as to the amount of damages. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 

2002). To recover damages after securing a default judgment, a plaintiff must prove the relief it 

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seeks through testimony or written affidavit. Bd. of Trs. of the Boilermaker Vacation Trust v. 

Skelly, Inc., 389 F. Supp. 2d 1222, 1226 (N.D. Cal. 2005); see PepsiCo, Inc., 238 F. Supp. 2d at 

1175.

Again, Plaintiffs in this case seek a total of $363,866.50, comprised of: (1) unpaid 

withdrawal liability in the amount of $258,187.00, (2) 20% liquidated damages in the amount of 

$51,637.40, (3) 7% simple interest on unpaid withdrawal liability in the amount of $31,636.89, 

increasing by $49.51 per day after September 30, 2019, (4) attorney’s fees in the amount of 

$18,627.00, and (5) costs in the amount of $3,778.21.

i. Unpaid Withdrawal Liability, Liquidated Damages, and Interest

Per ERISA § 4301(b), “[i]n any action . . . to compel an employer to pay withdrawal 

liability, any failure of the employer to make any withdrawal liability payment within the time 

prescribed shall be treated in the same manner as a delinquent contribution . . . .” 29 U.S.C. § 

1451(b). ERISA § 502(g), in turn, provides that in any action involving delinquent contributions, 

the court shall award the unpaid contributions, interest on the unpaid contributions, an amount 

equal to the greater of interest on the unpaid contributions or liquidated damages not in excess of 

20%, reasonable attorney’s fees and costs, and any other relief the court deems appropriate. 29 

U.S.C. § 1132(g). 

First, Plaintiffs are entitled to the unpaid withdrawal liability, in the amount of 

$258,187.00. (Compl. ¶ 18; Besocke Decl. ¶ 8.) The withdrawal liability was calculated based on 

a complete withdrawal, and applied a 20-year cap for payments pursuant to ERISA § 

4219(c)(1)(B). (Besocke Decl. ¶ 8, Exh. F.) Moreover, Defendants are no longer permitted to 

challenge the amount of the unpaid withdrawal liability, having failed to initiate arbitration. See 

Weldway Constr., Inc., 920 F. Supp. 2d at 1044. The undersigned recommends the award of 

$258,187.00 in unpaid withdrawal liability.

Second, ERISA provides that the Court must award interest on the unpaid liability at the 

rate provided by the Plan. 29 U.S.C. § 1132(g)(2). Plaintiffs’ “Withdrawal Liability Procedures,” 

effective June 21, 2006, provide for simple interest at the rate of 7% per annum on the unpaid 

withdrawal liability from the due date until payment is paid. (Besocke Decl. ¶ 6, Exh. E § 

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VIII(A).) Thus, interest began accruing as of December 31, 2017, the due date of the first 

installment payment not made. (Compl. ¶ 21; Do Decl. ¶ 10.) The undersigned recommends the 

award of interest of $18,073.09, and that interest shall continue to accrue at the daily rate of 

$49.51 after September 30, 2019 through the date of judgment.

Third, ERISA requires that the Court award an amount equal to the greater of interest on 

the unpaid liability or liquidated damages as provided by the Plan. 29 U.S.C. § 1132(g)(C). The 

Fund’s “Withdrawal Liability Procedures” provides for liquidated damages of an amount equal to 

the greater of the interest due on delinquent payments or 20% of the delinquent payments. 

(Besocke Decl. ¶ 6, Exh. E § XI(D)(3).) Because the contributions are unpaid, liquidated damages 

are due per § 502(g). Accordingly, the undersigned recommends the award of liquidated damages 

in the amount of $51,637.40.

ii. Attorney’s Fees 

Attorney’s fees incurred in actions brought to recover unpaid contributions are available 

under ERISA § 502(g). Federal courts have adopted the lodestar method for calculating the 

amount of reasonable attorney’s fees. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The 

lodestar figure is the product of the hours counsel reasonably spent on the case and a reasonable 

hourly rate. Id. To determine whether Plaintiffs’ claimed hours are reasonable, the Court must 

review an attorney’s time records to determine whether the hours are adequately documented in a 

manner that can be properly billed directly to clients. Id. at 434. The Court must assess whether 

the hours claimed are vague, block-billed, excessive and/or duplicative, or whether the hours in 

their entirety must be reduced because of limited success in the action. See Navarro v. Gen. 

Nutrition Corp., Case No. 03-cv-603-SBA, 2005 WL 2333803, at *4 (N.D. Cal. Sept. 22, 2005). 

Decisions by other courts regarding reasonableness of the rate sought may provide evidence to 

support a finding of reasonableness. See Widrig v. Apfel, 140 F.3d 1207, 1210 (9th Cir. 1998) 

(holding that rate based in part on the rate awarded to same attorney in another case was 

reasonable).

Plaintiffs submitted a declaration by their counsel detailing time spent seeking to recover 

the withdrawal liability at issue, as well as the associated liquidated damages and interest. (Do 

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Decl. ¶ 19, Exh. E.) Plaintiff seeks $18,627.00 in attorney’s fees, although they appear to have 

undercalculated the amounts due. The corrected amounts are as follows:

Attorney Fees

Name Hours Rate Amount

Anne Bevington 7.80 $230 $1,794.00

Tina Do 66.6 $230 $15,318.001

Attorney Fees Total: $17,112.00

Paralegal Fees

Name Hours Rate Amount

Edward Rowell 10.10 $135 $1,363.502

Nargis Shaghasi 2.7 $135 $364.503

Paralegal Fees Total $1,728.00

Total: $18,840.00

The undersigned finds that the billing records are reasonable. They include work spent 

trying to compel Defendants to comply with their obligations under the Plan, determining 

successor liability, communicating with Defendant Macy’s Pro’s regarding potential settlement, 

and litigating the instant suit. (Do Decl. ¶¶ 16, 19.) The billing rates are also reasonable. 

Counsels’ experience ranges from seventeen to forty years, while the paralegals’ experience 

ranges from one to eleven years. Given this experience, the requested rates of $230 for attorneys 

and $135 for paralegals are well within the range that courts have approved in similar cases. See 

Skelly Inc., 389 F. Supp. 2d at 1227-28 (N.D. Cal. 2005) (finding hourly rates of $210 and $345 to 

be reasonable). Moreover, Plaintiffs’ counsel was recently awarded these exact rates. See Bay 

Area Painters & Tapers Pension Trust Fund v. J&C Fuentes Painting & Decorating Co. Inc., 

Case No. 18-cv-4118-LB, 2019 WL 2649842, at *12 (N.D. Cal. May 31, 2019) (awarding Ms. 

Bevington $230/hour and Mr. Rowell $135/hour), adopted by Bay Area Painters & Tapers 

Pension Trust Fund v. J&C Fuentes Painting & Decorating Co. Inc., Case No. 18-cv-4118-WHO, 

2019 WL 2644126, at *1 (N.D. Cal. June 26, 2019). Thus, the undersigned recommends awarding 

Plaintiffs attorney’s fees of $18,840.00.

 

1 Plaintiffs erroneously calculated this amount as $15,203.00. (See Do Decl., Exh. E.)

2 Plaintiffs erroneously calculated this amount as $1,363.00. (See Do Decl., Exh. E.)

3 Plaintiffs erroneously calculated this amount as $266.50. (See Do Decl., Exh. E.)

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iii. Costs

Plaintiffs seek $3,778.21 in costs. (Do Decl. ¶ 14, Exh. F.) Counsel’s billing records 

reflect that Plaintiff paid $400 toward a filing fee and $1,663.57 for service of the summons and 

complaint, as well as other fees for legal research, chambers copies, investigation costs, and other 

service costs.4 Such filing fees, costs of service, legal research, and investigation costs are 

awardable in ERISA cases. See Pension Plan for Pension Trust Fund for Operating Eng’rs v. J & 

K Sweeping, Case No. 14-cv-1179-CW, 2014 WL 4626008, at *8 (N.D. Cal. Sept. 15, 2014) 

(“With respect to Plaintiffs’ request for costs for messenger service, legal research, and 

investigation, such costs are available on the basis that they are generally billed as attorneys’ 

fees”). Accordingly, the undersigned recommends awarding $3,778.21 in costs.

D. Injunctive Relief

“[A]n employer shall, within 30 days after a written request from the plan sponsor, furnish 

such information as the plan sponsor reasonably determines to be necessary to enable the plan 

sponsor to comply with the requirements of this part [concerning withdrawal liability].” 29 U.S.C. 

§ 1399(a). Plaintiffs requested information and documents relating to withdrawal liability, but 

Defendants did not provide the requested information. (Compl. ¶ 21.) Accordingly, the 

undersigned recommends that Defendant Macy be ordered to provide the information requested by 

Plaintiffs which is necessary for Plaintiffs to determine whether there are trades or businesses 

under common control with Defendant and whether any fraudulent transfers or improper 

transactions to evade or avoid withdrawal liability have occurred. Such information includes, 

without limitation: all fictitious business names used by Defendant Macy, all other trade and/or 

businesses in which Defendant Macy held an interest, lease agreements for Defendant Macy, 

financial statements for Defendant Macy, and the sale or transference of any assets valued in 

excess of $20,000.

 

4 After the hearing, Plaintiff filed supplemental briefing that clarified that certain costs were for 

service and mailing, rather than for processing or filing documents. (See Dkt. No. 67 at 4 

(explaining that $310.11 was for the cost of personal service of the October 18, 2018 request for 

entry of default and $68.67 was for the cost of delivering the April 22, 2019 joint request to 

continue the case management conference).

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IV. CONCLUSION

For the reasons stated above, the undersigned recommends that Plaintiffs’ motion for 

default judgment be GRANTED. Plaintiffs should be awarded:

(1) unpaid withdrawal liability in the amount of $258,187.00;

(2) liquidated damages in the amount of $51,637.40;

(3) interest in the amount of $18,073.09;

(4) attorney’s fees in the amount of $18,840.00; and

(5) costs in the amount of $3,778.21.

The undersigned also recommends that the amount of interest continue to accrue at the 

daily rate of $49.51 per day after September 30, 2019 through the date judgment is entered. The 

undersigned also recommends that the injunctive relief be granted, requiring that Defendant 

provide the information previously requested by Plaintiffs.

Any party may file objections to this report and recommendation with the district judge 

within 14 days of being served with a copy. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); 

N.D. Cal. Civil. L.R. 72-3. The parties are advised that failure to file objections within the 

specified time may waive the right to appeal the district court’s order. IBEW Local 595 Trust 

Funds v. ACS Controls Corp., Case No. 10-cv-5568-EDL, 2011 WL 1496056, at *3 (N.D. Cal. 

Apr. 20, 2011). 

Plaintiffs shall serve a copy of this report and recommendation on Defendants.

IT IS SO RECOMMENDED.

Dated: December 20, 2019

__________________________________

KANDIS A. WESTMORE

United States Magistrate Judge

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