Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-04826/USCOURTS-cand-3_14-cv-04826-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1132 E.R.I.S.A.: Employee Benefits

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United States District Court 

Northern District of Californi

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

THE BOARD OF TRUSTEES FOR THE 

CEMENT MASONS HEALTH & 

WELFARE TRUST FUND FOR 

NORTHERN CALIFORNIA, et al., 

Plaintiffs, 

v. 

SAMUEL MAGANA CASTILLO, et al., 

Defendants. 

Case No. 14-cv-04826-TEH 

ORDER GRANTING PLAINTIFF’S 

MOTION FOR DEFAULT 

JUDGMENT 

 

This matter is before the Court on Plaintiffs’ motion for default judgment. (Docket 

No. 26). Defendants provided no response, and oral argument was held before the Court 

on May 4, 2015. After carefully considering the written and oral arguments presented by 

Plaintiffs in light of applicable law, the Court hereby GRANTS Plaintiffs’ motion for 

default judgment. 

BACKGROUND 

Plaintiff’s Complaint in this case was filed with the Court on October 30, 2014. 

(Docket No. 1). The Complaint was served on Defendants on November 8, 2014, for 

which proof of service was filed with the Summons on November 14, 2014. (Docket Nos. 

6, 7). Defendants’ responsive pleading was due on December 1, 2014; however, no 

answer or other responsive pleadings were filed, and default was entered against 

Defendants on January 13, 2015. (Docket No. 16). 

Defendants are an employer within the meaning of ERISA §§ 3(5) and 515. 

Additionally, Defendants are an employer in an industry affecting commerce within the 

meaning of 29 U.S.C. § 185. 

For good cause, the Court finds that the allegations in Plaintiffs’ Complaint are true, 

including the following facts. On November 7, 2013, Defendants signed a Memorandum 

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Agreement with the District Council of Plasterers and Cement Masons of Northern 

California (“Memorandum Agreement”). Ex. A to Lauziere Decl. (Docket No. 22-1). The 

District Council of Plasterers and Cement Masons of Northern California is a labor 

organization within the meaning of 29 U.S.C. § 150. By executing the Memorandum 

Agreement, Defendants became bound to the 2013-2016 Cement Masons Master 

Agreement for Northern California (“Master Agreement”), which included a provision 

providing that Defendants were bound by any future modifications, changes, amendments, 

supplements, extensions or renewals of that agreement. Id. Defendants also agreed to and 

became bound to the obligations and duties in the Trust Agreements that govern the Trust 

Funds identified by the Master Agreement and incorporated therein by reference. Id. 

LEGAL STANDARD 

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

See Fed. R. Civ. P. 55. “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). The court 

considers 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). Generally, the factual 

allegations of the complaint, except those concerning damages, “will be taken as true.” 

Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977) (per curiam). 

DISCUSSION 

The Court determines that the Eitel factors support a finding in favor of Plaintiffs’ 

motion for default judgment. See Eitel, 559 F.2d at 560. However, the Court also finds it 

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necessary to address the liquidated damages and interest requested by Plaintiffs in this 

action. 

Plaintiffs contend that they are entitled to liquidated damages and interest pursuant 

to the Trust Agreements and ERISA. Mot. at 12 (Docket No. 26). Plaintiffs explain that 

they “calculated the liquidated damages and interest amounts due at the Trust Funds’ 

standard rate.” ERISA provides that liquidated damages shall be awarded 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 and Pipefitters 

Health & Welfare Fund v. United Mech. Contractors, Inc., 875 F.2d 212, 215 (9th Cir. 

1989). This Order provides for a judgment in favor of Plaintiffs for unpaid contributions 

that existed at the time of suit; therefore, factors one and two are met. However, while the 

plan provides for liquidated damages, the formula for calculating those liquidated damages 

is less than straightforward. 

Plaintiffs have demonstrated that Defendants failed to pay delinquent contributions 

in the amount of $98,706.42. Mot. at 2; Ex. D to Lauziere Decl. (Docket No. 22-6). 

Plaintiffs assert that these delinquent payments entitled them to liquidated damages in the 

amount of $600 and interest in the amount of $10,377.64, pursuant to the Parties’ 

agreements. Mot. at 2, 13. Additionally, Plaintiffs’ claim that Defendants’ late payments 

of contributions from February to April 2014 further entitle them to liquidated damages of 

$450 and interest of $110.62. Id. 

Plaintiffs’ liquidated damages and interest (hereafter collectively “liquidated 

damages”) calculation was initially predicated on Section 8(G) of the Master Agreement. 

Mot. at 4 (citing Ex. B to Lauziere Decl. § 8(G)(2) (Master Agreement) (Docket No. 22-

2)). Specifically, the liquidated damages calculation used by Plaintiffs is contained in 

Section 8(G)(2). However, this subsection clearly provides that liquidated damages are to 

be paid after an Individual Employer “is found to be delinquent as a result of an audit.” 

Master Agreement § 8(G)(2). Because the moving papers contained no evidence of an 

audit, the Court issued an Order instructing Plaintiffs to provide proof of audit. (Docket 

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No. 29). In response, Plaintiffs filed a Supplemental Declaration (Docket No. 30) 

explaining that no audit was conducted, but that liquidated damages were appropriate 

absent an audit pursuant to Master Agreement § 8(G)(3), which provides that the Master 

Agreement’s liquidated damages provisions (i.e. Section 8(G)(2)) are “independent of and 

in addition to any and all provisions for liquidated damages resulting from delinquencies 

contained in each of the Trust Agreements . . . .” Plaintiffs next pointed to Article II § 10 

of the Trust Agreements as the basis for awarding liquidated damages without an audit. 

Suppl. Decl. at 2 (Docket No. 30). 

However, Article II § 10 of the Trust Agreements, while authorizing liquidated 

damages, provides a formula different from the one utilized by Plaintiffs. Compare Ex. C 

to Lauziere Decl. at art. II § 10 (Trust Agreements) (Docket No. 22-3), with Mot. at 4. In 

fact, the formula offered by Plaintiffs is not contained anywhere other than Section 8(G)(2) 

of the Master Agreement. Additionally, Article II § 10 of the Trust Agreements does not 

provide for interest on the liquidated damages. On this point, Plaintiffs explained that “the 

rates utilized by the Trust Funds to calculate liquidated damages owed pursuant to Article 

II, Section 10 of each of the Trust Agreements were revised to be the same rates stated in 

Section 8(G)(2) of the Master Agreement.” Suppl. Decl. at 3. Plaintiffs further explained 

that while the Board of Trustees made this revision at a meeting on December 8, 2000, the 

modified liquidated damages formula is “not reflected yet in” the written Trust 

Agreements. Id. In other words, Plaintiffs contend that their proffered liquidated damages 

formula should be applied, despite the fact that it is not included in the written Trust 

Agreements, because it is pursuant to a 15-year old modification that simply has not made 

its way into writing. For obvious reasons, the Court finds this troubling. 

With few exceptions, modifications to a written contract must be made in writing. 

Cal. Civ. Code § 1698. Article XI § 1 of the Trust Agreements provides that modifications 

to the Trust Agreements may be made “at any time by mutual agreement of the Employer 

and the Union subject to the terms and conditions of the Collective Bargaining Agreement 

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and any applicable law or regulation.” The section further provides: “Any amendment or 

modification of the Trust Agreement may be executed in counterpart.” 

Here, the Court must rely upon Plaintiff’s assertion in the Supplemental Declaration 

that the proffered liquidated damages formula, which mirrors that contained in Master 

Agreement § 8(G)(2), was properly adopted as a modification to the Trust Agreements by 

the Board of Trustees. See Suppl. Decl. at 3 (Docket No. 30). It is upon this evidence that 

the Court approves Plaintiffs’ liquidated damages and interest calculation.1

 

CONCLUSION 

For the foregoing reasons, it is HEREBY ORDERED that Judgment be entered in 

favor of Plaintiffs and against Defendants as follows: 

1. Defendants are ORDERED to pay $98,706.42 in unpaid principal contributions 

based upon work performed by Defendants’ employees during the period of May to 

August 2014. 

2. Defendants are ORDERED to pay $600 in liquidated damages and $10,377.64 in 

interest relating to contributions reported to the Trust Funds but not paid during the period 

of May to August 2014. 

3. Defendants are ORDERED to pay $450 in liquidated damages and $110.62 in 

interest for late payments of contributions during the period of February to March 2014. 

4. Because Defendants have failed, neglected, or refused to submit to an audit as 

requested by Plaintiffs pursuant to the Master and Trust Agreements, Defendants are 

ORDERED to submit to an audit of their books and records covering the period January 1, 

2012 to the last completed quarter, by auditors selected by the Plaintiffs, at Defendants’ 

premises during business hours, or where the records are kept, at a reasonable time or 

 

1

 At oral argument, Plaintiffs also claimed the right to collect liquidated damages as the 

cost of collection under Article IV § 3 of the Trust Agreements. However, that section 

does not provide for liquidated damages (not to mention the fact that actual costs of 

collection would not constitute liquidated damages), and mentions not the costs of 

collection but the legal costs and expenses associated with the suit. Therefore, this section 

cannot be the basis for a recovery of liquidated damages and interest. 

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times, and to allow said auditors to examine and copy such books, records, papers, reports 

of Concrete by SMC that are relevant to the enforcement of the collective bargaining 

agreement or Trust Agreements. 

5. Defendants are ORDERED to pay all amounts found due and owing as a result of 

said audit, pursuant to the Trust Agreements. 

6. Defendants are ORDERED to pay reasonable attorneys’ fees in the amount of 

$8,148.75 and costs in the amount of $886.09 as provided by ERISA § 502(g)(2) and the 

Trust Agreements. 

7. IT IS FURTHER ORDERED that this Court shall retain jurisdiction of this 

matter to enforce the Order compelling an audit and payment of all amounts found due and 

owing. 

IT IS SO ORDERED.

Dated: 05/07/15 _____________________________________ 

THELTON E. HENDERSON 

United States District Judge 

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