Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-05411/USCOURTS-cand-4_18-cv-05411-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1001 E.R.I.S.A.: Employee Retirement

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

OPERATING ENGINEERS' HEALTH 

AND WELFARE TRUST FUND FOR 

NORTHERN CALIFORNIA, et al.,

Plaintiffs,

v.

AG-TECH INC.,

Defendant.

Case No. 18-cv-05411-JSC 

ORDER REASSIGNING CASE AND 

REPORT AND RECOMMENDATION 

RE: MOTION FOR DEFAULT 

JUDGMENT

Re: Dkt. No. 22

Plaintiffs, several employee benefit plans and their trustees, the Heavy and Highway 

Committee, and the Operating Engineers Local Union No. 3 of the International Union of 

Operating Engineers AFL-CIO, allege Defendant Ag-Tech failed to pay contributions to the trust 

funds, as required by the parties’ bargaining agreements. Plaintiffs’ motion for default judgment 

requesting unpaid contributions, interest, liquidated damages, and attorneys’ fees and costs, is now 

pending before the Court. Although Plaintiffs have consented to the Court’s jurisdiction, 

Defendant has not, and the action must therefore be reassigned to a district judge. See Williams v. 

King, 875 F.3d 500, 501, 504 (9th Cir. 2017) (magistrate judge lacked jurisdiction to dismiss case 

on initial screening because unserved defendants had not consented to proceed before magistrate 

judge). Accordingly, the Clerk of the Court is ordered to REASSIGN this action to a district court 

judge and the Court RECOMMENDS that the district court GRANT Plaintiffs’ motion for default 

judgment.

BACKGROUND

A. Factual Background

Plaintiffs include employee benefit plans organized under the Employee Retirement 

Income Security Act of 1974 (“ERISA”), specifically, the Operating Engineers’ Health and 

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Welfare Trust Fund for Northern California, the Pension Trust Fund for Operating Engineers, the 

Pensioned Operating Engineers’ Health and Welfare Trust Fund, the Operating Engineers and 

Participating Employers Pre-apprentice, the Apprentice and Journeymen Affirmative Action 

Training Fund, and the Operating Engineers Local Union No. 3 Vacation, Holiday and Sick Pay 

Trust Fund (collectively the “Trust Funds”). (Dkt. No. 1 at ¶ 1.)1 Plaintiffs Russell E. Burns and 

James E. Murray are Co-Chairmen of the Joint Boards of Trustees of the Trust Funds “and have 

authority to act on behalf of all Trustees of those Funds.” (Id.) Also included as plaintiffs are the 

Heavy and Highway Committee, which “is a Trust established under the Labor Management 

Relations Act,” and the Operating Engineers Local Union No. 3 of the International Union of 

Operating Engineers, AFL-CIO (the “Union”). (Id. at ¶¶ 2-3.) Collectively, these parties are all 

referred to as “Plaintiffs.” Defendant Ag-Tech, Inc. (“Defendant”) “is an employer by virtue of 

ERISA § 3(5), 29 U.S.C. § 1002(5), and NLRA § 2(2), 29 U.S.C. § 152(2).” (Id. at ¶ 4.)

On July 1, 2013, the Union and the United Contractors, Associated General Contractors of 

California, Inc., Industrial Contractors, UMIC, Inc., and the Northern Alliance of Engineering 

Contractors entered into a new Master Agreement, to be effective from July 1, 2013 to June 20, 

2016. (Dkt. No. 23 at ¶ 8.) Subsequently, on July 1, 2016, the Union and the United Contractors, 

Associated General Contractors of California, Inc., Industrial Contractors, UMIC, Inc., and the 

Northern Alliance of Engineering Contractors entered into a new Master Agreement. (Id. at ¶ 9.) 

The 2016-2020 Master Agreement is effective from July 1, 2016 to June 30, 2020, and thus is still 

in effect. (Id.) These Master Agreements dictate the length of the Shop Agreements, discussed 

below. (Id. at ¶¶ 4, 6.) 

On August 24, 2015 the Union and Defendant entered into a collective bargaining 

agreement entitled “Independent Shop Agreement” (“2015 Shop Agreement”). (Id. at ¶ 3.) The 

2015 Shop Agreement was in effect from September 1, 2015 until it was superseded by a 

subsequent agreement, the “2017 Shop Agreement,” which is still in effect. (Id. at ¶ 4-6.) The 

Shop Agreements are subject to the requirement that they will automatically renew for the 

 

1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 

ECF-generated page numbers at the top of the documents.

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duration of the Master Agreements unless terminated. (Id. at ¶¶ 4, 6.) The 2015 and 2017 Shop 

Agreements “incorporate the terms of the Trust Agreements establishing the various Trust Funds.” 

(Id. at ¶ 12.) The 2015 and 2017 Shop Agreements provided Defendant would make payments to 

Plaintiffs’ Trust Funds. (Id. at ¶ 11.) The Trust Agreements also require payments into the Trust 

Funds and outline the procedures required if Defendant fails to make payments. (Id. at ¶ 12, Exs. 

A & B.) 

The 2015 and 2017 Shop Agreements state that Defendant must make benefit contributions

for hours worked by the 25th day of each following month. (Dkt. No. 23 at ¶ 13, Ex. E.) The 

Trust Agreements specify that if Defendant fails to do so, liquidated damages are set at 10% of the 

delinquent contributions prior to litigation. (Id. at ¶ 15, Ex. E.) After litigation has commenced, 

liquidated damages are calculated at 20%. (Id.) “[I]nterest accrues on the delinquent unpaid 

contributions at [10%] per annum calculated from the day contributions are considered delinquent 

until paid.” (Id.) The Trust Agreements also give the Trust Funds the power to adopt delinquency 

collection procedures, which “provide for the reimbursement of attorneys’ fees and costs 

incurred.” (Id. at ¶¶ 16-18, Ex. G.) 

Defendant is obligated to submit two contribution reports to the Trust Funds per month, 

which are labeled as account numbers 000733-84 and 000739-84. (Id. at ¶ 19.) The delinquency 

collection procedures adopted by the Trust Funds establish that “unreported contributions are 

calculated based on the average of the last three months with amounts reported due.” (Id. at ¶ 24.) 

Defendant “failed to report and pay contributions to account number 000733-84 for the 

months March 2016, April 2017 through May 2017, and August 2017 through March 2019.” (Id.

at ¶ 20.) The amount due for March 2016 and April 2017 through May 2017 is $2,611.04 per 

month, after calculating the average of the amounts reported by Defendant in November 2015, 

December 2015, and January 2016. (Id. at ¶ 25.) The amount due for August 2017 through 

March 2019 is $3,003.36 per month, after calculating the average of the amounts reported by 

Defendant in January 2016, June 2016, and July 2017. (Id. at ¶ 26.) 

Defendant “failed to report and pay contributions to account number 000739-84 for the 

months April 2017 through May 2017, and August 2017 through March 2019.” (Id. at ¶ 21.) The 

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amount due for April 2017 through May 2017 is $749.89 per month, after calculating the average 

of the amounts reported by Defendant in November 2015, December 2015, and January 2016. (Id. 

at ¶ 27.) The amount due for August 2017 through March 2019 is $579.21 per month, after 

calculating the average of the amounts reported by Defendant in December 2015, January 2016, 

and July 2017. (Id. at ¶ 28.) 

Defendant also paid a portion of its December 2015, January 2016, and July 2017 

contributions late. (Id. at ¶ 23.) Additionally, Defendant paid its September through November 

2015 contributions late. (Id.) Liquidated damages and interest are due on both delinquent 

contributions and partial late payments. (Id. at ¶¶ 22-23.) Plaintiffs assert the total for unpaid 

contributions is $84,715.07. (Id. at 8.) When interest and liquidated damages are added, the total 

is $114,356.44. (Id. at 8-9.) 

B. Procedural History 

Plaintiffs filed the Complaint on September 4, 2018, alleging that Defendant breached the 

Shop and Trust Agreements in violation of ERISA § 515, 29 U.S.C. § 1145, and LMRA § 301(a). 

(Dkt. No. 1 at ¶ 20.) Defendant failed to answer or otherwise appear, and Defendant’s default was 

entered by the Clerk on February 5, 2019. (Dkt. No. 22 at 13-14; Dkt. No. 16.) Plaintiffs filed the 

now pending motion for default judgment on May 16, 2019. (Dkt. No. 22.) On June 14, 2019, the 

Court Ordered Plaintiffs to Show Cause regarding the adequacy of service of process on 

Defendant. (Dkt. No. 28.) Plaintiffs filed their response on June 27, 2019. (Dkt. No. 29.) 

Having reviewed their response, and for the reasons set forth below, the Order to Show Cause is 

DISCHARGED. 

DISCUSSION

A. Jurisdiction 

When a court is considering whether to enter a default judgment it has “an affirmative duty 

to look into its jurisdiction over both the subject matter and the parties.” In re Tuli, 172 F.3d 707, 

712 (9th Cir. 1999). Here, the Court has subject matter jurisdiction pursuant to 29 U.S.C. § 1132

(empowering ERISA plan fiduciaries to bring civil actions to enforce plan terms). The Court has 

personal jurisdiction because Defendant is a registered California corporation. Business Search –

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Entity Detail, CALIFORNIA SECRETARY OF STATE, https://businesssearch.sos.ca.gov/ (select 

“Corporation Name” search type and search “ag-tech”) (last visited June 10, 2019). 

B. Service of Process

The Court must assess whether the defendant against whom default judgment is sought 

was properly served with notice of the action. Penpower Tech. Ltd. v. S.P.C. Tech., 627 F. Supp. 

2d 1083, 1088 (N.D. Cal. 2008) (internal quotation marks and citation omitted). Service on a 

corporation may be made by delivering a copy of the summons and complaint in accordance with 

state law where the district court is located. See Fed. R. Civ. Proc. 4(e)(1) & 4(h)(1)(A). 

California law states that service on a corporation may be made by serving “the person designated 

as agent for service of process.” Cal. Civ. Proc. Code § 416.10(a). Service may be completed by 

personal service or, if personal service cannot be accomplished after reasonable diligence, by 

leaving the summons and complaint:

during usual office hours in [the defendant’s] office or, if no physical 

address is known, at his or her usual mailing address, other than a United 

States Postal Service post office box, with the person who is apparently in 

charge thereof, and by thereafter mailing a copy of the summons and 

complaint by first-class mail, postage prepaid to the person to be served at 

the place where a copy of the summons and complaint were left.

Cal. Civ. Proc. Code §§ 415.10, 415.20(a); see also Pension Plan for Pension Tr. Fund for 

Operating Engineers v. Constr. Materials Testing, Inc., No. 15-CV-05325-DMR, 2017 WL 

5514293, at *4 (N.D. Cal. Oct. 25, 2017), report and recommendation adopted, No. 15-CV-05325-

YGR, 2017 WL 5495909 (N.D. Cal. Nov. 16, 2017). 

Here, Plaintiffs attempted personal service on Defendant’s registered agent for service 

Jordan L. Henne at the address listed with the California Secretary of State: 925 Timbell Rd.; 

Waterford, CA 95386 (the “Tim Bell Road” address), but were unsuccessful.

2

(Dkt. No. 6.) See

Business Search – Entity Detail, CALIFORNIA SECRETARY OF STATE, 

https://businesssearch.sos.ca.gov/ (select “Corporation Name” search type and search “ag-tech”) 

 

2 The Secretary of State website also listed Defendant’s mailing address as a post office box. (Id.) 

Plaintiffs could not have served Defendant at its mailing address listed on the Secretary of State 

website, because it is a post office box and is explicitly discounted as a viable option for service by 

Cal. Civ. Proc. Code 415.20(a). (Dkt. No. 29, Ex. O.) 

 

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(last visited June 10, 2019). The Proof of Service states that the Complaint and Summons were 

served on Jordan Henne by substitute service instead by leaving copies with Kristina Henne, wife 

of the agent for service, at 5476 Greenoaks Drive, Riverbank, CA 95367 (the “Greenoaks Drive”

address). (Dkt. No. 11.) Because this is not the address identified as that belonging to Mr. Henne, 

the registered agent for service, the Court Ordered Plaintiffs to show cause as to how service was 

proper. (Dkt. No. 28.) 

Plaintiffs’ response indicates that they hired a professional process server to serve Jordan 

Henne at Timbell Road, who subsequently determined that the proper address was “Tim Bell 

Road,” rather than “Timbell Road.” (Dkt. No. 29 at ¶¶ 5-6.) The process server noted that Tim

Bell Road was a gated residence and attempted service at this address on six occasions. (Id. at ¶¶ 

7-8, 20.) On the seventh attempt, the process server spoke to a woman who identified herself at 

Julie Henne, who refused to accept service and said Jordan Henne no longer lived at Tim Bell 

Road. (Id. at ¶ 9.) Plaintiffs then ran a person report on Jordan Henne, which is how Plaintiffs 

obtained the address ultimately used for service: the Greenoaks Drive address. (Id. at ¶ 10, 13.) 

The process server attempted service four times at this address without success. (Id. at ¶ 12.)

Plaintiffs then served Jordan Henne by substituted service by leaving copies of the Summons and 

Complaint with Kristina Henne, the wife of Jordan Henne, at Greenoaks Drive, as well as by mail 

at the same address. (Id. at ¶13.) 

The Court concludes that based on the foregoing Plaintiffs exercised reasonable diligence

when attempting to personally serve Jordan Henne. See Hong-Ming Lu v. Primax Wheel Corp., No. 

C 04-4170 JSW, 2005 WL 807048, at *3 (N.D. Cal. Apr. 7, 2005) (plaintiffs showed reasonable 

diligence by attempting to serve defendant numerous times, including through defendant’s counsel and 

personally serving defendant’s corporate officers); see also Aussieker v. M&S Green-Power Energy, 

Inc., No. 2:18-cv-03234-JAM-AC, 2019 WL 2183783, at *4 (E.D. Cal. May 21, 2019)

(recommending denial of motion for default judgment because plaintiffs did not attempt personal 

service two or three times before using substitute service). The process server attempted service

seven times at Tim Bell Road, which is Defendant’s principle executive office and principle 

business office, as listed on the most recent Statement of Information on the Secretary of State 

website. (Dkt. No. 29 at ¶ 20, Ex. O.) The process server was informed Jordan Henne did not live 

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at Tim Bell Road anymore, and Julie Henne refused to accept substitute service. Thus, it does not 

appear that Tim Bell Road was a viable office address for the purposes of Cal. Civ. Proc. Code § 

415.20(a), nor for accomplishing personal service on Jordan Henne. 

If a corporation’s business address is the same as the residential address for the person to 

be served, that address is adequate for substitute service. See Tech. Licensing Co. v. Noah Co. 

LLC, No. C-11-3498 EMC, 2012 WL 3860758, at *2 (N.D. Cal. Sept. 5, 2012) (finding substitute 

service adequate when a person who appeared in charge was served at the residence of defendant’s 

CEO and agent for service of process, which was also defendant’s business office). Plaintiffs’ use 

of Greenoaks Drive is satisfactory because Plaintiffs have shown they used reasonable diligence to 

determine Jordan Henne and Defendant’s alternate address at Greenoaks Drive, after running both 

a person report and a LexisNexis Comprehensive Business Report. (See Dkt. No. 29 at ¶¶10, 16d.) 

See Tech. Licensing Co., 2012 WL 3860758, at *2. 

When completing substitute service, the Summons and Complaint must be given to a 

person who is apparently in charge at the defendant’s usual office or mailing address. Cal. Civ. 

Proc. Code § 415.20(a). The person who appears in charge can simply be someone who will know 

what to do with the documents. See Hong-Ming Lu, 2005 WL 807048, at *3; see also Bein v. 

Brechtel-Jochim Grp., Inc., 6 Cal. App. 4th 1387, 1393-94 (1992) (holding that a guard of a gated 

residential community in which the defendant company's president resided was a person 

apparently in charge of a corporate office for purposes of substitute service where the relationship 

with the person to be served made it more likely than not that he would deliver process to the 

defednants). Plaintiffs’ substitute service on Jordan Henne’s wife was adequate given Plaintiffs’

reasonable diligence and substantial efforts to complete service of process on Mr. Henne 

personally and the reasonable expectation that Mr. Henne’s wife would convey the Complaint and 

Summons to him. See Pension Plan for Pension Tr. Fund for Operating Engineers, 2017 WL 

5514293, at *4 (finding Plaintiffs adequately completed substitute service on the son of 

Defendant’s agent for service of process by first making four attempts at personal service and then 

leaving the pleadings with the son at their home, which also serviced at Defendant’s business 

address). 

Given the totality of circumstances present here, the Court concludes that service of 

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process was adequately executed on Defendant.

C. Default Judgment 

After entry of default, a court may grant default judgment on the merits of the case. Fed. 

R. Civ. P. 55. Upon entry of default, the factual allegations of the complaint related to liability are 

accepted as true and deemed admitted by the non-moving party. TeleVideo Sys., Inc. v. 

Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). “The district court’s decision whether to enter 

a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 

1980). Courts consider the following factors in determining whether to enter 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 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). The majority of the Eitel factors support 

default judgment.

i. Likelihood of Prejudice to Plaintiffs

The first Eitel factor considers whether the plaintiff will suffer prejudice if default 

judgment is not entered. Eitel, 782 F.2d at 1471. Here, if the motion were to be denied, then 

Plaintiffs would likely be left without a remedy given Defendant’s failure to appear or otherwise 

defend this action. See Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 

2002). Thus, the first factor weighs in favor of default judgment. 

ii. Merits of Plaintiffs’ Substantive Claims/Sufficiency of the Complaint

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

as pleaded in the complaint. Courts often analyze these two factors together. See Dr. JKL Ltd. v. 

HPC IT Educ. Ctr., 749 F. Supp. 2d 1038, 1048 (N.D. Cal. 2010). In analyzing the second and 

third Eitel factors, the Court accepts as true all well-pleaded allegations regarding liability. See 

Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002) (internal citation omitted). 

Here, Plaintiffs assert claims under ERISA § 515, which provides that “[e]very employer who is 

obligated to make contributions to a multiemployer plan under the terms of the plan or under the 

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terms of a collectively bargained agreement shall... make such contributions in accordance with 

the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. As such, Plaintiffs 

must prove that “(i) the trusts are multiemployer plans as defined by 29 U.S.C. § 1002(37); (ii) the 

collective bargaining agreement obligated Defendant to make contributions; and (iii) Defendant 

did not make the required contributions.” Operating Eng’rs Health and Welfare Trust Fund for N. 

Cal. V. Breneman, Inc., No. 17-cv-05172-EDL, 2018 WL 5099250, at *4 (N.D. Cal. Aug. 15, 

2018). 

Here, Plaintiffs’ allege that the Trust Funds are employment benefit plans under 29 U.S.C. 

§ 1002(3), that under the applicable agreements Defendant was obligated under the Shop 

Agreements to pay contributions to the Trust Funds, and that Defendant failed to do so. (Id. at ¶¶

1, 12, 15-16.) This is sufficient to state a claim under ERISA § 515. Thus, the second and third 

factors weigh in favor of default judgment.

iii. Amount of Money at Stake

Under the fourth Eitel factor, courts should consider “the amount of money at stake in 

relation to the seriousness of Defendant’s conduct.” PepsiCo, Inc., 238 F. Supp. 2d at 1176. 

“When the money at stake is substantial, default judgment is discouraged.” Bd. of Trs. v. Core 

Concrete Constr., Inc., No. 11-02532 LB, 2012 WL 380304, at *4 (N.D. Cal. Jan. 17, 2012)

(internal citation omitted). However, when “the sum of money at stake is tailored to the specific 

misconduct of the defendant, default judgment may be appropriate.” Id. (internal citation 

omitted). To determine whether the amount of money at stake is reasonable, courts consider the 

plaintiff’s “declarations, calculations, and other documentation of damages.” Truong Giang Corp. 

v. Twinstar Tea Corp., No. C 06–03594 JSW, 2007 WL 1545173, at *12 (N.D. Cal. May 29, 

2007). 

Here, Plaintiffs allege they are entitled to judgment in the amount of $114,356.44 in unpaid 

contributions, liquidated damages, and interest. (Dkt. No. 23 at ¶ 29.) They also allege they are 

entitled to $6,505.50 in attorneys’ fees and $1,064.79 in costs, for a total of $121,926.73. (Dkt. 

No. 24 at ¶¶ 27-28.) The amount at stake is reasonable given that the damages for the unpaid 

contributions are directly tailored to Defendant’s misconduct, and the liquidated damages and 

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interest are specified in the Trust Agreements. (See Dkt. No. 23 at ¶¶ 15, 29, Ex. E.) Further, the 

amount requested, while not nominal, is not as much as other ERISA cases in which default 

judgment was granted. See, e.g., Bd. of Trs. Of Laborers Health and Welfare Trust Fund for N. 

Cal. v. Cal-Kirk Landscaping, Inc., No. C–08–3292 EMC, 2012 WL 5869619, at *5 (N.D. Cal. 

Nov. 19, 2012) (awarding $230,1130.27 for damages and $434,853.63 for attorneys’ fees and 

costs). Thus, this factor weighs in favor of default judgment. 

iv. Possibility of Dispute Involving Material Facts

The fifth Eitel factor considers the possibility that material facts may be in dispute. Eitel, 

782 F.2d at 1471-72. Here, it is unlikely there is a dispute as to material facts because Plaintiffs 

properly served Defendant’s agent for service of process with both the Complaint and Summons, 

and the Clerk’s Notice of Entry of Default, but Defendant failed to respond. Additionally, taking 

Plaintiffs’ allegations as true, they notified Defendant prior to filing the Complaint that Defendant 

was delinquent on its contributions, but Defendant did not respond. (Dkt. No. 22 at 14.) See 

TeleVideo Sys., 826 F.2d at 917-18. Thus, this factor also weighs in favor of default judgment. 

v. Excusable Neglect

The sixth Eitel factor asks whether a defendant’s default may have been due to excusable 

neglect. Eitel, 782 F.2d at 1471. Plaintiffs properly served Defendant with the Summons and 

Complaint, and the Clerk’s Notice of Default, but Defendant did not respond or request that the 

Default be set aside. (Dkt. No. 22 at 14.) Thus, it is unlikely there was excusable neglect and this 

factor weighs in favor of default judgment.

vi. Policy Favoring Decision on the Merits

Finally, the seventh Eitel factor, which favors decisions on their merits, weighs against 

default judgment. Eitel, 782 F.2d at 1472. “However, the mere existence of [Rule] 55(b) 

indicates that this preference, standing alone, is not dispositive.” PepsiCo, 238 F. Supp. 2d at 

1177. A defendant’s failure to answer “makes a decision on the merits impractical, if not 

impossible.” Id. Here, Defendant failed to respond to any of the papers served on it.

Taken together, the Eitel factors weigh in favor of default judgment. 

D. Relief Sought

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Having determined that the motion for default judgment should be granted, the next issue 

is the manner of relief to which Plaintiffs are entitled. In assessing the appropriate amount of 

damages on default judgment, the Court does not presume the truth of any factual allegations 

related to the amount of damages. TeleVideo Sys., 826 F.2d at 917-18. Thus, Plaintiff is required 

to prove all damages sought in the Complaint, and the Court must ensure the amount is reasonable 

as demonstrated by the evidence. Fed. R. Civ. P. 55(b); Televideo Sys., 826 F.2d at 917-18; 

PepsiCo Inc., 238 F. Supp. 2d at 1175.

Under ERISA, an employee benefit plan that obtains judgment in its favor in an action 

under 29 U.S.C. § 1132 shall be entitled to the following forms of relief: (1) unpaid contributions; 

(2) interest on the unpaid contributions; (3) liquidated damages, not in excess of 20% of the 

unpaid contributions; (4) reasonable attorney’s fees and costs; and (5) other legal or equitable 

relief in the discretion of the court. See 29 U.S.C. § 1132(g)(2) (stating that the court “shall 

award” these types of relief) (emphasis added). Plaintiffs request the first four forms of relief 

under 29 U.S.C. § 1132: unpaid contributions, liquidated damages, interest on late-paid and 

unpaid contributions, and attorneys’ fees and costs. (Dkt. No. 22 at 7.) 

a. Damages

Here, Plaintiffs seek to recover unpaid contributions for the following months: December 

2015-January 2016, March 2016, April-May 2017, and July 2017-March 2019, totaling 

$84,715.07. (See Dkt. No. 23 at ¶¶ 20-29.) The Complaint alleged payments due for December 

2015-January 2016, March 2016, April-May 2017, and July 2017-June 2018. (Dkt. No. 1 at ¶ 15.) 

Plaintiffs also alleged at the time of filing that Defendant could become delinquent on the July 

2018 contributions, which it did. (Id.; see also Dkt. No. 22 at 12.) In addition, Plaintiffs seek 

unpaid contributions for August 2018-March 2019 which became due after the Complaint was 

filed. (See Dkt. Nos. 1 & 22.) Although the contributions for these months were not specifically 

alleged in the Complaint, having been incurred after the Complaint was filed, courts in this 

District have granted relief for delinquent contributions that come due after the filing of the 

complaint, without requiring amendment of the complaint. See Local 81 v. Wedge Roofing, 811 F. 

Supp. 1398, 1401–02 (N.D. Cal. 1992); see also Bay Area Painters v. Alta Specialty, 2008 WL 

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114931, at *4 (N.D. Cal. Jan. 10, 2008) (“Courts in the Ninth Circuit have made a limited 

exception to [the requirement that default judgment be constrained by the remedies sought in the 

complaint] for delinquent contributions that come due after a complaint is filed on the basis that 

such an approach is consistent with the legislative intent underlying ERISA.”). Thus, the Court 

may grant Plaintiffs the unpaid contributions that have been incurred as of the date of their motion 

for default judgment. The Court therefore recommends granting the requested award of 

$84,715.07 for the months with unpaid contributions. 

Plaintiffs also request liquidated damages and interest on unpaid and late-paid 

contributions. (Dkt. No. 22 at 8.) For December 2015-January 2016, March 2016, April-May 

2017, and July 2017-March 2019, they request 20% liquidated damages and 10% interest incurred 

on all unpaid contributions, totaling $16,943.02 and $9,247.71, respectively. (Id.) For prior latepaid contributions from September 2015-January 2016, and July 2017, Plaintiffs request 10% 

liquidated damages at $2,445.22, and 10% interest at $1,005.49, totaling $3,450.71. (Id.) 

Plaintiffs are entitled to liquidated damages and interest under ERISA, 29 U.S.C. § 1132(g), and 

the Trust Agreements. (Dkt. No. 23 at ¶ 15, Ex. E.) 

ERISA requires an award of liquidated damages if “(1) the fiduciary obtains a judgment in 

favor of the plan, (2) unpaid contributions exist at the time of suit, and (3) the plan provides for 

liquidated damages.” Idaho Plumbers & Pipefitters Health & Welfare Fund v. United Mech. 

Contractors, Inc., 875 F.2d 212, 215 (9th Cir. 1989) (emphasis in original). Here, those 

requirements are met. If this Report and Recommendation is adopted, then Plaintiffs will have 

obtained a judgment in their favor. As stated by the complaint and the motion for default 

judgment, contributions remain unpaid. (Dkt. Nos. 1 at ¶ 15 & 22 at 8.) The Trust Agreements 

dictate that liquidated damages will be calculated at 10% prior to litigation, but after a lawsuit is 

filed will be calculated at 20%. A rate of 20% for liquidated damages is reasonable because it 

only increases from 10% to 20% once a lawsuit is filed, and the Trust Agreements explain that the 

change reflects the harm caused by delinquent contributions. See Idaho Plumbers & Pipefitters 

Health & Welfare Fund, 875 F.2d. at 218. 

In addition, the Trust Agreements state that “unpaid contributions shall accrue late interest 

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charges from the delinquent date until paid at a rate of 10% per year.” (Dkt. No. 23, Ex. E.) 

Courts in this District have previously upheld higher contractual interest rates in ERISA defaults. 

See, e.g., Bd. of Trustees of Pipe Trades Dist. Council No. 36 Health & Welfare Tr. Fund v. 

Clifton Enterprises, Inc., No. 11-05447 JST JSC, 2013 WL 2403573, at *11 (N.D. Cal. May 31, 

2013) (12% annual interest). 

Accordingly, the Court grants Plaintiffs’ request for $19,388.24 in liquidated damages and 

$10,253.20 in interest.

b. Attorneys’ Fees and Costs 

Plaintiffs also seek attorneys’ fees in the amount of $6,505.50. (Dkt. No. 22 at 23.) An 

award of fees is mandatory because contributions are unpaid, and the Delinquency Collection 

Procedures provide for fees and costs. (Dkt. No. 24 at ¶ 11, Ex. B.) See Northwest 

Administrators, Inc. v. Albertsons, Inc., 104 F.3d 253, 257-58 (9th Cir. 1996). To determine a 

reasonable fee award, federal courts use the lodestar method. Grove v. Wells Fargo Financial 

Cal., Inc., 606 F.3d 577, 582 (9th Cir. 2010). The court calculates a “lodestar amount” by 

multiplying the number of hours counsel reasonably spend on the litigation by a reasonable hourly 

rate. Id. A reasonable hourly rate is the prevailing rate in the community for similar work

performed by attorneys of comparable skill, experience, and reputation. Camacho v. Bridgeport 

Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). 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).

Here, Plaintiffs’ counsels’ rates are $135 per hour for a paralegal, $230 per hour for an 

associate attorney, and $235 per hour for a shareholder attorney. (Dkt. No. 24 at ¶¶ 16-19.) The 

Ninth Circuit has found that rates between $375-$400 were in line with rates charged by ERISA 

counsel in 2007. See, e.g., Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 947 (9th Cir. 2007).

Thus, given that Plaintiffs’ counsels’ rates are well below this range, they are reasonable. Next, 

the Court looks at the reasonableness of the hours billed. Counsel billed a total of 31.3 hours of 

legal work, including 3.8 by shareholder attorney Michele Stafford, 10.7 hours by associate 

Jugpreet S. Mann, 9.3 by associate Matthew P. Misner, 5.9 hours by paralegal Alicia Wood, and 

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1.6 hours by paralegal Karen Andrade. (Id. at ¶¶ 20-25.) The declaration of Michele Stafford 

outlines in detail the work done by attorneys Stafford, Mann, and Misner, including preparing 

motion papers and meeting with clients. (Id. at ¶¶ 20-22.) The hours of work performed by 

Plaintiff’s attorneys are reasonable, however, “[f]ees for law clerks and paralegals are 

compensable as attorney’s fees so long as the work is legal rather than clerical in nature.” 

Jacobson v. Persolve, LLC, No. 14-CV-00735-LHK, 2016 WL 7230873, at *7 (N.D. Cal. Dec. 14, 

2016). The 1.6 hours worked by paralegal Ms. Andrade are purely clerical and thus not 

compensable (Dkt. No. 24 at ¶¶ 24-25 (listing work performed as reviewing ECF filings, 

calendaring deadlines, and reviewing case management documents)). Plaintiffs state paralegal 

Ms. Wood spent 5.9 hours on:

Intra-office conferences regarding case status and further handling; 

Finalize and issue demand letter to Employer; Finalize complaint and 

ancillary documents; E—file same; Receive ECF notices and 

calendar deadlines; Draft and e-file ADR Certification; Draft and efile proof of service of summons; Finalize and e-file request to 

continue; Issue proposed order to proposed order unit; Issue 

chambers copies; Research employer status via Lexis, California 

Secretary of State, and Contractor’s License Board.

(Dkt. No. 24 at ¶ 23.) While researching defendant’s employer status may be legal in nature, the 

other work performed by Ms. Wood is clerical. The Court recommends allotting Plaintiffs’ 

counsel one hour for Ms. Wood’s research and not compensating counsel for the remaining 4.9 

hours of clerical work performed by Ms. Wood. Thus, the Court recommends granting attorneys’ 

fees totaling $5,628.00.

Finally, Plaintiffs request $1,064.79 in costs which consists of the filing fee, messenger 

and service fees, and legal research fees. Because these costs are reasonable and both ERISA, 29 

U.S.C. §1132(g)(2)(D), and the Trust Agreements and Delinquency Collection Procedures provide 

for recovery of costs, the Court recommends that Plaintiffs be awarded costs in the amount of 

$1,064.79.

CONCLUSION

For the reasons stated above, the Court recommends that the district court GRANT 

Plaintiffs’ motion for default judgment and Plaintiffs should be awarded $114,356.50 in damages, 

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$5,628.00 in attorneys’ fees, and $1,064.79 in costs, for a total judgment of $121,049.30.

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

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

Civ. L.R. 72-3. Failure to file an objection may waive the right to review of the issue in the 

district court.

IT IS SO ORDERED.

Dated: July 19, 2019

JACQUELINE SCOTT CORLEY

United States Magistrate Judge

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