Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_17-cv-00896/USCOURTS-cand-3_17-cv-00896-1/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

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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.

JS TAYLOR CONSTRUCTION, INC., A 

CALIFORNIA CORPORATION, et al.,

Defendants.

Case No. 17-cv-00896-EMC 

ORDER DENYING DEFENDANT’S 

MOTION FOR SUMMARY 

JUDGMENT, PARTIALLY GRANTING 

PLAINTIFFS’ MOTION FOR 

SUMMARY JUDGMENT, AND 

ORDERING DEFENDANTS TO SHOW 

CAUSE WHY SUMMARY JUDGMENT 

AS TO THE SECOND AUDIT SHOULD 

NOT ISSUE

Docket Nos. 47, 56

I. INTRODUCTION

Plaintiffs are multiemployer benefits plans and their respective trustees, who have filed suit 

against JS Taylor Construction, Inc. (a corporation) and Joshua Thiel (a principal shareholder). 

The suit alleges a breach of the parties’ collective bargaining agreement, and Plaintiffs seek 

unpaid contributions, interest, liquidated damages, and other relief. Defendants filed a Motion for 

Summary Judgment, arguing that Mr. Thiel cannot be held personally liable for the obligations of 

JS Taylor. Plaintiffs filed a Cross Motion for Summary Judgment, seeking an order from the 

Court directing Defendants to pay the outstanding benefit contributions, interest, and liquidated 

damages, as well as attorneys’ fees and costs. 

II. BACKGROUND

A. Factual Background

“This action arises under the Employee Retirement Income Security Act of 1974 

(‘ERISA’) and out of an alleged breach of a collective bargaining agreement (‘CBA’) for unpaid 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 1 of 22
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

contributions.” Defendant’s Motion for Summary Judgment (“Mot.”) at 1, Docket No. 47. 

“Plaintiffs are multiemployer employee benefit plans and their respective trustees” (collectively 

“Plaintiffs”). Opposition and Cross Motion for Summary Judgment (“Opposition”) at 2, Docket 

No. 56. Defendants are JS Taylor Construction, Inc., a California corporation, and Joshua Thiel, 

an individual. Complaint at 1, Docket No. 1. Mr. Thiel was the sole proprietor of JW Taylor (a 

sole proprietorship) and is now a principal shareholder of JS Taylor Construction (a corporation). 

Opposition at 10–11.

In July 2014, Defendant Thiel entered into the Independent Northern California 

Construction Agreement (“Independent Agreement”) with the Union on behalf of JW Taylor 

Construction. Opposition at 2 (citing Declaration of Nate Tucker (“Tucker Decl.”) ¶ 2, Docket 

No. 60; Declaration of Dan Reding (“Reding Decl.”) ¶ 2, Docket No. 58). That Agreement 

“incorporates the Master [Bargaining] Agreement” between the Union and several contractor 

groups. Complaint at 3. The Master Bargaining Agreement in turn incorporates the Trust 

Agreements, under which Defendants were “required to pay certain contributions to: the Operating 

Engineers’ Vacation and Holiday Pay Plan; Contract Administration Fund; Job Placement Center 

and Market Area Committee Administration Market Preservation Fund; Industry Stabilization 

Fund; and Business Development Trust Fund.” Id. at 4. The Agreement also “require[d] 

Defendants to pay . . . contributions to . . . the Union for union dues, . . . plus liquidated damages 

and interest on late-paid fringe benefit contributions, plus attorneys’ fees and costs.” Opposition 

at 1. The debts allegedly owed were incurred only by JS Taylor, the corporate entity that JW later 

became.

At the time he entered into the Independent Agreement (July 2014), Mr. Thiel “advised the 

Union that he would be incorporating his business and would notify the Union once he had 

incorporated.” Opposition at 2 (citing Tucker Decl., ¶ 3). In December 2014, “JW Taylor 

Construction stopped doing business.” Mot. at 3 (citing Haefele Declaration (“Haefele Decl.”), 

Exh. G (“Thiel Depo.”) at 53:10–25; 54:1–9, Docket No. 69). The following month, JS Taylor

“started doing business” and Mr. Thiel informed the union that JS Taylor “was taking over for JW 

Taylor Construction.” Id. Defendants state that, upon receiving this information from Mr. Thiel, 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 2 of 22
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

the Union “simply changed the employer name in their system . . . and began accepting monthly 

contribution payments from [JS Taylor]” rather than having Mr. Thiel “re-sign the Independent 

Agreement on behalf of [JS Taylor].” Id. 

During this transition, neither JS Taylor nor JW Taylor was purchased by or merged with 

the other entity. Defendant’s Reply in Support of Motion for Summary Judgment (“Reply”) at 3, 

Docket No. 67. JS Taylor was never paid to complete work that JW Taylor was hired to perform. 

Thiel Depo. at 35. Nor did JS Taylor buy or acquire equipment or tools from JW Taylor. Id. at 

30–32. However: (1) Mr. Thiel put the Union on “early notice that Mr. Thiel was going to be 

incorporating,” Reply at 6; (2) he also stated in his deposition that “when JW ceased to exist, JS --

JS took over,” Thiel Depo. at 23; (3) Mr. Thiel also testified that employees were “transferred” 

from JW Taylor to JS Taylor, id. at 58; (4) Mr. Thiel believes that JS Taylor is obligated to make 

trust fund contributions because of the bargaining agreement [which had been signed previously 

only on behalf of JW Taylor], see id. at 37; (5) ownership of the entities was largely identical: Mr. 

Thiel went from sole proprietor of JW Taylor to principal shareholder of JS Taylor, see id. at 27;

and (6) the addresses of the two entities were the same, namely Mr. Thiel’s home address, see id.

at 54. 

Plaintiffs assert that “by early 2017, Defendants had become delinquent in their 

contribution payments.” Mot. at 3–4 (citing Haefele Decl., Ex. I, Plaintiffs’ Response to 

Defendant’s Interrogatories, Set One (“PRDI”) at 7–8, Docket No. 69). Specifically, Plaintiffs 

allege unpaid contributions now at issue were owed by JS Taylor for “February through April, and 

July through November 2016; and January 2017.” Complaint at 5. Plaintiffs assert one cause of 

action against Defendants, Mot. at 2, contending that Defendants have “breached the Bargaining 

and Trust Agreements and are in violation of ERISA § 515, 29 U.S.C. § 1145, and [the Labor 

Management Relations Act (“LMRA”)] § 301(a),” Complaint at 5. 

Plaintiffs seek “any unpaid contributions, due at time of Judgment,” “liquidated damages 

on all late-paid and unpaid contributions,” “interest on all late-paid and unpaid contributions,” and 

“reasonable attorneys’ fees and costs of this action, including any audit fees.” Complaint at 6–7. 

Defendants, on the other hand, argue that Mr. Thiel has no liability for JS Taylor’s unpaid 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 3 of 22
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

contributions or any related payments because he only signed the Independent Agreement on 

behalf of JW Taylor, a sole proprietorship, which ceased doing business in 2014. Mot. at 4. 

Because Mr. Thiel never signed a new Agreement with the Union after JS Taylor incorporated and 

began doing business, he argues that he is not personally liable for the unpaid contributions owed 

by JS Taylor. Id.

Plaintiffs contend that Mr. Thiel “personally guaranteed all amounts” owed, i.e., the 

contributions and other moneys which accrued against JS Taylor, pursuant to the Independent 

Agreement. Complaint at 4; Mot. at 2. They rely on Paragraph 12 of the Independent Agreement, 

which states:

If the Individual Employer is a corporation, its principal 

shareholder(s) or if the individual Employer is a partnership, its 

general partners personally guarantee all payment of wages and 

fringe benefits, including fringe benefit contributions, liquidated

damages, interest and collection costs, including, but not limited to, 

attorney’s fees and auditor/accountant fees.

Tucker Decl., Exh. A at 1, Docket No. 60-1. However, Mr. Thiel disputes the imposition of 

personal liability because JW Taylor was never a corporation or a partnership, and Paragraph 12 

does not impose individual liability on sole proprietors. Mot. at 6–8. In addition, Mr. Thiel never 

signed a subsequent agreement subjecting himself to personal liability for JS Taylor’s corporate 

obligations. Id. at 4. 

III. DISCUSSION

A. Legal Standard

1. Motion for Summary Judgment

Federal Rule of Civil Procedure 56 provides that summary judgment shall be rendered on a 

claim or defense, or part of a claim or defense, “if the movant shows that there is no genuine

dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 

Civ. P. 56(a). A fact is material if it could affect the outcome of the suit under the governing law. 

Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49 (1986). A dispute is genuine “if the 

evidence is such that a reasonable jury could return a verdict” for either party. Id. “The mere 

existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 4 of 22
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

jury could reasonably find for the [non-moving party].” Id. at 252. On a summary judgment 

motion, a court must view the evidence in the light most favorable to the non-moving party, 

drawing all justifiable inferences in that party’s favor. Id. at 255. 

The party moving for summary judgment always bears the initial burden of demonstrating 

the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 

(1986). When the movant also bears the ultimate burden of proof at trial, it can meet this initial 

burden of production by “com[ing] forward with evidence which would entitle it to a directed 

verdict if the evidence went uncontroverted at trial.” C.A.R. Transp. Brokerage Co. v. Darden 

Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000). This requires the movant to affirmatively 

demonstrate that there is no genuine dispute as to every essential element of its claim. See River 

City Mkts., Inc. v. Fleming Foods W., Inc., 960 F.2d 1458, 1462 (9th Cir. 1992). In contrast, 

where the movant does not bear the ultimate burden of proof, it can meet its initial burden by 

demonstrating the non-moving party’s failure “to make a showing sufficient to establish the 

existence of an element essential to [the non-moving party’s] case.” Celotex, 477 U.S. at 322. 

Once the movant meets its initial burden of production, the burden shifts to the non-moving party 

to “produce evidence to support its claim or defense.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz 

Cos., Inc., 210 F.3d 1099, 1103 (9th Cir. 2000). “If the nonmoving party fails to produce enough 

evidence to create a genuine issue of material fact, the moving party wins the motion for summary 

judgment.” Id. (citing Celotex, 477 U.S. at 322). Conversely, if the nonmoving party “produces 

enough evidence to create a genuine issue of material fact, the nonmoving party defeats the 

motion.” Id.

In resolving a summary judgment motion, the court “rel[ies] on the nonmoving party to 

identify with reasonable particularity the evidence that precludes summary judgment”; it is not the 

court’s task “to scour the record in search of a genuine issue of triable fact.” Keenan v. Allan, 91 

F.3d 1275, 1279 (9th Cir. 1996) (citation omitted).

2. Contract Interpretation

The Court applies federal common law when deciding cases under ERISA. See, e.g., 

Menhorn v. Firestone Tire & Rubber Co., 738 F.2d 1496, 1500 (9th Cir. 1984) (“The courts are 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 5 of 22
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

directed to formulate a nationally uniform federal common law to supplement the explicit 

provisions and general policies set out in ERISA, referring to and guided by principles of state law 

when appropriate, but governed by the federal policies at issue.”); see also Hamner v. Unum Life 

Ins. Co. of Am., No. C 96-1973 TEH, 1997 WL 257515, at *4 (N.D. Cal. May 6, 1997) 

(recognizing “uniform federal common law informing interpretation of ERISA governed insurance 

contracts” (internal quotation marks omitted) (citing Saltarelli v. Bob Baker Group Medical Trust,

35 F.3d 382, 386 (9th Cir.1994))). “Interpretation of a contract is a matter of law, including 

whether [a] contract is ambiguous.” United States v. King Features Entm’t, Inc., 843 F.2d 394, 

398 (9th Cir. 1988); see also Brobeck, Phleger & Harrison v. Telex Corp., 602 F.2d 866, 871 (9th 

Cir. 1979) (“the determination of whether a written contract is ambiguous is a question of law that 

must be decided by the court”). 

A court seeking “to ascertain the meaning of [an ambiguous] collective bargaining 

agreement” must “first examine its express written terms.” Nw. Administrators, Inc. v. B.V. & 

B.R., Inc., 813 F.2d 223, 225 (9th Cir. 1987). When that language is unclear, “the court must 

determine the ‘parties’ actual intent’ at the time of the agreement’s execution.” Id.at 226. “When 

a plan is ambiguous a court may, and usually does, consider extrinsic evidence to interpret it.” 

Hamner v. Unum Life Ins. Co. of Am., No. C 96-1973 TEH, 1997 WL 257515, at *4 (N.D. Cal. 

May 6, 1997). The Ninth Circuit has explained: “If we find a contract to be ambiguous, we 

ordinarily are hesitant to grant summary judgment because differing views of the intent of parties 

will raise genuine issues of material fact. This circuit has not, however, adopted a rigid rule 

prohibiting reference to extrinsic evidence in resolving a contractual ambiguity on a summary 

judgment motion.” San Diego Gas & Elec. Co. v. Canadian Hunter Mktg. Ltd., 132 F.3d 1303, 

1307 (9th Cir. 1997). Where the parties’ “actual intent raises issues of material fact” even after 

reference to extrinsic evidence, summary judgment is improper. Nw. Administrators at 226. 

However, as San Diego Gas & Electric instructs, in the absence of ambiguity which persists after 

considering the extrinsic evidence, summary judgment may be appropriate.

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 6 of 22
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

B. Analysis

1. Mr. Thiel’s Personality Liability for JS Taylor’s Obligations

The first key issue is whether Mr. Thiel can be held personally liable for the obligations of 

JS Taylor, the corporation. Normally, when a sole proprietorship incorporates and “cease[s] to be 

the employer,” the corporation alone becomes “responsible for the unpaid contributions after it 

became the employer.” Operating Engineers Pension Tr. v. Reed, 726 F.2d 513, 515 (9th Cir. 

1984). Here, JW Taylor—the sole proprietorship—stopped doing business in December 2014. 

Thiel Depo. at 53, 54. It also ceased having employees at that time. Id. at 53–54.1 JS Taylor—

the corporation—began performing work the following month in January of 2015. Id. at 25. JS 

Taylor did not take over any projects from JW Taylor. Around the time JS Taylor began 

performing work, Mr. Thiel notified the Union that his business had been incorporated and was 

changing its name to JS Taylor Construction. Id. at 57. Thus, it would appear at first blush that 

Mr. Thiel—in his role as sole proprietor of JW Taylor—bears no responsibility for the unpaid 

contributions of JS Taylor.

However, the Ninth Circuit has recognized that “special circumstances” (such as a contract 

that modifies the normal rules) may sometimes compel a different outcome. Reed, 726 F.2d at 

515. Here, the parties disagree as to the effect of the Independent Agreement. The parties focus 

on the text of Paragraph 10 of the Independent Agreement. That paragraph provides: 

If the Individual Employer sells or transfers any or all of its assets, 

stock, and/or operations, it will provide as a term of the sale or 

transfer that the buyer or transferee shall recognize the Union as the

Employees’ bargaining agent and will assume this Agreement.

Independent Agreement ¶ 10. Plaintiffs argue that “once [Mr. Thiel] transferred JW Taylor’s 

operations to JS Taylor, JS Taylor assumed all of the terms of the Independent Agreement.” 

Opposition at 12. Once there is a transfer of the Independent Agreement to JS Taylor, the 

corporation, Paragraph 12 of the Agreement imposes personal liability for the payment of wages 

and fringe benefits onto the principal shareholder(s) of the corporation. Paragraph 12 states: “If 

 

1 However, it does still have an active license. Id. at 53.

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 7 of 22
8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

the Individual Employer is a corporation, its principal shareholder(s) . . . personally guarantee all 

payment of wages and fringe benefits, including fringe benefit contributions, liquidated damages, 

interest and collection costs, including, but not limited to, attorney’s fees and auditor/accountant 

fees.” Independent Agreement ¶ 12. 

Defendants counter that Paragraph 10 is ambiguous and cannot be applied. Defendants 

also contend there is no evidence that JW Taylor transferred operations to JS Taylor.2 Reply at 8. 

Defendants also assert that Paragraph 12 is inapplicable because “JW Taylor and [JS Taylor] are 

separate entities,” Reply at 3, and the Independent Agreement was never “signed by an officer of 

[JS Taylor] on behalf of [JS Taylor],” Reply at 4. 

As to ambiguity, a court seeking “to ascertain the meaning of [an ambiguous] collective 

bargaining agreement” must “first examine its express written terms.” Nw. Administrators, 813 

F.2d at 225. When that language is unclear, “the court must determine the ‘parties’ actual intent’ 

at the time of the agreement’s execution.” Id. at 226. Defendants argue that the contract is 

ambiguous because “[a]pplied literally, [the successor clause] would require any transferred 

‘operation’ of JW Taylor (which could include any operation performed outside of the Union’s 

Northern California territory—e.g. accounting duties, tool or equipment transfers, human 

resources, leased space, etc.—whether it has to do with activities covered by the CBA or not) to 

require the new buyer or transferee to assume the Independent Agreement.” Reply at 8. However, 

the hypothetical transfer situations discussed by Defendants are a far cry from the situation before 

this Court. JW Taylor did not transfer a small subset of its operations outside of the Union’s 

territory. To the contrary, JW Taylor informed the Union of its intent to incorporate, did

incorporate, and then the new corporate entity continued to conduct the same type of business 

under essentially the same leadership with many of the same employees. Thus, whatever the 

precise contours of the term “transfers,” the term encompasses the continuance of core operations 

 

2 Defendants object to this argument on the grounds that Plaintiffs had previously identified only 

Paragraph 12 as the basis for personal liability. No mention was made of ¶ 10 being a predicate to 

the application of ¶ 12. However, Defendants had fair notice of this theory because (1) the 

transfer of obligations between JW Taylor and JS Taylor is the very heart of this case, (2) 

interrogatory questions examined the Independent Agreement and which entities were bound by it, 

and (3) Mr. Thiel spoke about transferring his business during his deposition.

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 8 of 22
9

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

by a new entity located at precisely the same address with substantially similar ownership and 

overlapping employees as the old entity. In particular, as noted above, (1) Mr. Thiel put the Union 

on “early notice that Mr. Thiel was going to be incorporating,” which informed the Union that it 

would be dealing with a different entity in the future; (2) he also stated in his deposition that 

“when JW ceased to exist, JS – JS took over” (Thiel Depo. at 23); (3) Mr. Thiel testified that 

employees were “transferred” from JW Taylor to JS Taylor (id. at 58); and (4) Mr. Thiel believes 

that JS Taylor is obligated to make trust fund contributions because of the bargaining agreement 

(which was signed only on behalf of JW Taylor), see id. at 37. Indeed, once incorporation had 

been finalized and the Union notified, JS Taylor began making contributions to the trust funds. Id. 

Thus, JW Taylor and JS Taylor recognized the transfer of obligations owed to the Trust Fund. 

This recognition and performance of obligations to the Trust Funds by JS Taylor not only 

establishes there was a “transfer” under Paragraph 10, it also independently establishes a 

contractual obligation through JS Taylor’s course of conduct. “A contract may be formed in any 

manner sufficient to show a meeting of the minds of the parties, including conduct by both parties 

that recognizes the existence of an agreement,” Avel Pty. Ltd. v. Breaks, 985 F.2d 571 (9th Cir. 

1993).

Under these circumstances, to conclude otherwise would permit “a company can rid itself 

of a bothersome set of labor obligations merely by arranging for its management employees to 

execute a few legal documents.” Hardin’s Bakery, Inc. v. Retail, Wholesale, & Dep’t Store Union, 

AFL-CIO, 877 F.2d 1541, 1549 (11th Cir. 1989), reh’g granted and opinion vacated, 893 F.2d

1188 (11th Cir. 1990) (Kravitch, J., dissenting). 

Having established the undisputed evidence establishes there was a “transfer” of JW 

Taylor’s operations to JS Taylor under any reasonable interpretation of Paragraph 10, Paragraph 

12 applies. Under Paragraph 12, there is no question that Mr. Thiel is a “principal shareholder” of 

JS Taylor. He is the sole owner. Mr. Thiel is thus personally liable as guarantor of JS Taylor’s 

obligations to pay all wages and fringe benefits. 

To the extent that Defendants argue that personal liability for JS Taylor’s obligations 

cannot be imposed on Mr. Thiel in the absence of a new Independent Agreement signed by Mr. 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 9 of 22
10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Thiel in his role as principal shareholder of JS Taylor, the argument is unavailing. It is true that 

“where courts have considered whether to uphold personal liability provisions in collective 

bargaining agreements, the question of whether the officer at issue signed the contract has been a 

key consideration.” Employee Painters’ Tr. Health & Welfare Fund v. Landon Const. Grp., No. 

C11-0068-JCC, 2011 WL 5864648, at *3 (W.D. Wash. Nov. 22, 2011). But the undisputed facts 

establish the application of ¶ 12 here. Moreover, cases have emphasized that notice is the main 

factor in looking to a signature. See, e.g., Employee Painters’ Tr. v. J & B Finishes, 77 F.3d 1188, 

1192 (9th Cir. 1996) (enforcing personal liability on signatory who was “familiar with the basic 

operation of counterpart agreements”); Employee Painters Tr. Health & Welfare Fund v. Pro-Tec 

Fireproofing, Inc., No. C06-1267RSL, 2008 WL 5262775, at *2 (W.D. Wash. Dec. 16, 2008) 

(declining to impose personal liability where another party signed the agreement and defendant 

had not seen the document at the time it was signed). In this case, Mr. Thiel signed the Agreement 

in his role as sole proprietor of JW Taylor, and obviously had notice of the Agreement and its 

personal liability provision. The lack of his formal signature as principal shareholder of JS Taylor 

does not negate his liability here.

The Court DENIES Defendant’s Motion for Summary Judgment. 

2. Plaintiffs’ Cross Motion for Summary Judgment

Plaintiffs bring a Cross Motion for Summary Judgment. See Docket No. 56. As noted 

above, the undisputed evidence establishes Mr. Thiel’s personal liability for payments due under 

the Independent Agreement as a matter of law. 

Based on their own records, Plaintiffs seek $172,357.03 in unpaid contributions, liquidated 

damages, and interest from Defendants. Opposition at 8. In addition, as a result of two payrollinspection audits, Plaintiffs seek to recover from Defendants’ additional unpaid contributions, 

liquidated damages, and interest in the amount of $464,513.23 (covering a time period from 

October 2014 to March 2019). Opposition at 8. They also seek $99,332.11 in attorneys’ fees and 

costs. Id. at 7–8. 

a. Plaintiffs’ Claims Based on Internal Records (Non-Audit Claims)

Plaintiffs seek contributions and compensation based on two audits, as well as 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 10 of 22
11

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

contributions based on Plaintiffs’ own recordkeeping (i.e. records independent of the audits). 

Looking first to the compensation Plaintiffs seek as a result of their own recordkeeping, the claim 

is for $172,357.03 in unpaid contributions, liquidated damages, and interest for numerous months 

between July 2015 and December 2018. Opposition at 7–8. The breakdown is as follows:

Id. Thus, unpaid contributions amounts to $36,548.84 (which came due after the lawsuit was filed 

in 2017), while the bulk of what is sought (pursuant to Plaintiffs’ records) is liquidated damages 

and interest. Defendants do not appear to dispute the unpaid contributions from September, 

October, and November of 2018 or the interest owed from various months (neither category is 

objected to in Defendants’ opposition brief and neither was specifically objected to at the hearing). 

Instead, Defendants object to the imposition of liquidated damages. 

Defendant first lodges evidentiary objections to these claims. Opposition to Plaintiffs’ 

Cross Motion for Summary Judgment (“CMSJ Opp.”) at 2–6, Docket No. 68. In particular, 

Plaintiffs rely on a declaration by Ryan Ilacqua (the VP for a third-party administrator for the 

funds) to substantiate the information in the above table. Declaration of Ryan Ilacqua (“Ilacqua 

Decl.”), Docket No. 61. Mr. Ilacqua explains throughout his declaration: “Since these 

contributions became delinquent after Counsel for the Trust Funds filed the Complaint in this 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 11 of 22
12

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

matter, Counsel calculated liquidated damages at 20%.” See, e.g., Ilacqua Decl. ¶ 28 (repeated 

through declaration). Defendants contend that “Mr. Ilacqua provides no foundation or basis for 

knowing what Counsel for the Trust Funds might have done, including calculating liquidated 

damages at 20%. Further, this is inadmissible hearsay without any readily apparent exception.” 

CMSJ Opp. at 5. However, at the summary judgment stage, evidence need not be presented in an 

admissible form, as long as it could be presented in such a form at trial. See Block v. City of Los 

Angeles, 253 F.3d 410, 418–19 (9th Cir. 2001). Mr. Ilacqua has sufficient knowledge to lay a 

foundation for the information in his declaration. He collects contribution reports, works with 

Plaintiffs’ Benefit Administrator computer system, and is familiar with the Delinquency 

Collection Procedures. See, e.g., Ilacqua Decl. ¶¶ 1, 18, 22. It is likely that his records (which are 

received by employers on a monthly basis) would be admissible through the business records 

exception. Thus, the Court rejects Defendants’ evidentiary objections. 

Plaintiffs seek liquidated damages that fall into three camps: (1) liquidated damages 

(assessed at 10%) for contributions that were late, but paid prior to the filing of this lawsuit, (2) 

liquidated damages (assessed at 20%) for contributions that were late and unpaid as of the filing of 

this lawsuit, and (3) liquidated damages (assessed at 20%) for contributions that came due after the 

filing of this lawsuit. Opposition at 7; see also Ilacqua Decl. at 18. 

i. Category 1

With respect to the first category, Plaintiffs do not seek statutory liquidated damages of 

20%, but only liquidated damages of 10% pursuant to the terms of the Master Agreements. See

Opposition at 7–8; Reply at 9. This is consistent with current practice in the Northern District of 

California, wherein “[C]ourts award damages on contributions that were paid, but paid late on the 

basis of contract law and federal common law rather than ERISA statutory law.” Bd. of Trustees 

of Laborers Health & Welfare Tr. Fund for N. California v. Perez, No. C-10-2002 JSW JCS, 2011 

WL 6151506, at *11 (N.D. Cal. Nov. 7, 2011), report and recommendation adopted as modified 

sub nom. Bd. of Trustees of Laborers Health v. Perez, No. C 10-02002 JSW, 2011 WL 6149518 

(N.D. Cal. Dec. 12, 2011). The Master Agreements provide for liquidated damages assessed at 

10% of unpaid contributions. Tucker Decl., Exhs. B and C (“Master Agreements”), §12.13.01 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 12 of 22
13

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

(“the amount of liquidated damages . . . resulting from any Individual Employer’s default . . . shall 

be 10% of the unpaid contributions as of the delinquent date”). Thus, the parties’ contracts entitle 

Plaintiffs to 10% liquidated damages for the months of July, September, October, November, and 

December of 2015, as well as January and June 2016. See Opposition at 8. As a result, the Court 

GRANTS Plaintiffs’ Motion as it pertains to the liquidated damages associated with contributions 

that were late but paid prior to the filing of this lawsuit (assessed at 10%).

ii. Category 2

Next, the Court turns to the second category of liquidated damages: those assessed for 

contributions that were late and unpaid as of the filing of this lawsuit. Plaintiffs seek liquidated 

damages assessed at 20% for this category, claiming both a statutory and contractual basis for 

doing so. See 29 U.S.C. 1132(g) (when “a judgment in favor of the plan is awarded, the court 

shall award the plan . . . liquidated damages provided for under the plan in an amount not in 

excess of 20 percent”); Reding Decl. ¶ 10 (citing Sections 12.13.01-12.13.0 of each Master

Agreement (“if a lawsuit to collect delinquent contributions has been filed, the amount of 

liquidated damages on the unpaid contributions shall be increased to an amount equal to the 

greater of 20% of the unpaid contributions”)). 

Taking the statutory basis first, “[i]t is settled Ninth Circuit law that [ERISA’s liquidated 

damages] provision is mandatory and not discretionary.” Operating Engineers Pension Tr. v. 

Beck Eng’g & Surveying Co., 746 F.2d 557, 569 (9th Cir. 1984). To receive liquidated damages 

pursuant to this provision, three requirements must be met: “(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). At the time Plaintiffs filed their complaint in 

February 2017, they alleged that unpaid contributions were owed for “February through April, and 

July through November 2016; and January 2017.” Complaint at 5. Through the declaration of 

Mr. Ilacqua (the VP for a third-party administrator for the funds), Plaintiffs have provided 

evidence that unpaid contributions did exist at the time of the lawsuit. See Ilacqua Decl. ¶¶ 42–44, 

46–50 (addressing all aforementioned months, except January 2017). As noted in the previous 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 13 of 22
14

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

section, a judgment will also issue in favor of Plaintiffs as to unpaid contributions at the time of 

the suits. This fulfills requirements (1) and (2) of the Idaho Plumbers framework. Requirement 

(3) is also fulfilled as the Master Agreements contemplate liquidated damages. This result is in 

line with the decision of other courts. See, e.g., Trustees of Bricklayers Local No. 3 Pension Tr. v. 

Huddleston, No. 10-1708 JSC, 2013 WL 2181532, at *5 (N.D. Cal. May 20, 2013) (citing Bd. of 

Trs. of Laborers Health & Welfare Trust Fund for N. Cal. v. Perez, 2011 WL 6151506, at * 11 

(N.D.Cal. Nov.7, 2011)). 

Even if ERISA did not compel statutory liquidated damages, “a court may still enter 

judgment including liquidated damages pursuant to contract as mandated by federal common 

law.” Opposition at 19. For such a contractual provision to be enforceable, “the harm caused by a 

breach must be very difficult or impossible to estimate. . . [And] the amount fixed must be a 

reasonable forecast of just compensation for the harm caused.” Idaho Plumbers & Pipefitters 

Health & Welfare Fund v. United Mech. Contractors, Inc., 875 F.2d 212, 217 (9th Cir. 1989). 

With respect to the first prong, courts have repeatedly held that “[w]hen an employer is delinquent 

in paying contributions into a fringe benefit trust fund, the fund suffers some kinds of harms that 

are very difficult to gauge.” Bd. of Trustees v. Udovch, 771 F. Supp. 1044, 1049 (N.D. Cal. 1991). 

Thus, it appears that the first prong has been fulfilled. With respect to the second prong, courts 

look to whether Plaintiffs made “a good faith attempt to set an amount equivalent to the damages 

they anticipate.” Idaho Plumbers, 875 F.2d at 217. Here, Plaintiffs explain that their auditor 

conducted a study in 2009 in order “to evaluate the harm caused to the Trust Funds by 

delinquencies and devise percentage amounts of liquidated damages that bore a rational 

relationship to the harm.” See Declaration of Michele Stafford (“Stafford Decl.”) ¶ 6, Docket No. 

59. The results of that study led to Plaintiffs’ approval “of liquidated damages to be assessed in 

the event an individual employer is delinquent, including the 20% to be assessed when a lawsuit 

must be filed to collect delinquent contributions.” Id. In addition, 20% is in line with the statutory 

maximum contemplated by ERISA. See 29 U.S.C. 1132(g). This suggests that Plaintiffs’ 

liquidated damages provisions were intended to compensate them for the challenges that 

accompany recouping unpaid contributions; thus, the second prong is also fulfilled. 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 14 of 22
15

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

Thus, the Court GRANTS Plaintiffs’ Motion as it pertains to the liquidated damages 

associated with contributions that had come due but were unpaid at the time the lawsuit was filed.

iii. Category 3

The Court turns to the third category of liquidated damages: those assessed for 

contributions that came due after the filing of this lawsuit. While Defendants are correct that the 

Ninth Circuit has not “has not addressed whether ERISA allows damages for contributions that 

became delinquent after the filing of an action,” CMSJ Opp. at 8, district courts have frequently 

decided that—for reasons of efficiency—it is appropriate to award damages for contributions that 

became delinquent after the filing of an action. See Trustees of Bricklayers Local No. 3 Pension 

Tr. v. Huddleston, No. 10-1708 JSC, 2013 WL 2181532, at *4 (N.D. Cal. May 20, 2013) (“the 

Court notes that while some of the liquidated damages were incurred after the filing of this 

lawsuit, the Court may nonetheless award Plaintiffs those damages”); see also Roofers Local 

Union No. 81 v. Wedge Roofing, Inc., 811 F. Supp. 1398, 1402 (N.D. Cal. 1992) (“In order to 

accomplish the policy goals of 29 U.S.C. 1132 in a fair and efficient manner, this court, thus, will 

allow Plaintiff Trust Funds to recover unpaid contributions which came due after the lawsuit was 

filed.”). The Court agrees and reaches the issue of liquidated damages assessed for contributions 

that came due after the filing of this lawsuit. 

Defendants offer no objection to these liquidated damages aside from noting (1) that the 

Ninth Circuit has not addressed this issue specifically, and (2) that Defendants believe several 

equities-based reasons counsel against imposition of these damages. With respect to the latter 

point, Defendants first contend that, just prior to the filing of the Complaint, Plaintiffs “were in the 

final stages of completing the paperwork (conditional releases) necessary to receive . . . [a] check 

for over $211,000” that would have “satisfied all outstanding principal contributions, leaving only 

liquidated damages, interest and attorneys fees as the outstanding issues.” CMSJ Opp. at 11. As a 

result, they argue there was no need to maintain this lawsuit and that Plaintiffs filed it simply to 

claim the “20% liquidated damages that they claim they are entitled to once a lawsuit is filed.” Id.

at 11–12. Plaintiffs respond (1) that the “payment had not been promised and was uncertain, thus 

resulting in the filing of the Complaint,” (2) that the possibility of an imminent payment is 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 15 of 22
16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

irrelevant because “Plaintiffs were entitled to file their Complaint the day Defendants’ 

contributions were not paid timely,” and (3) additional amounts were still owed, above and 

beyond the amount of the check. Plaintiffs’ Reply at 11–12. These facts are not disputed. 

Plaintiffs thus had good reason to file a lawsuit, and the Court rejects the argument that the 

possibility of an impending payment obviated the need for this lawsuit. 

Defendants also argue that “Plaintiffs’ claims were settled in June 2017 with an attorney 

who is no longer in the employ of Plaintiffs’ counsel’s law firm. Had Plaintiffs’ counsel 

memorialized the settlement agreement at or near that time, there would have been no need to 

incur litigation fees after June 2017.” Id. at 12. Plaintiffs respond that Defendants never actually 

settled the case by remitting any payment and that they have instead prolonged the need for 

litigation by failing to pay benefit contributions beyond the time of the purported settlement 

agreement. Plaintiffs’ Reply at 12. As with the previous point, Defendants’ actions appear to 

undermine their own argument; the possibility of a tentative settlement agreement does not 

prohibit the Court from imposing liquidated damages. As a result, the Court GRANTS Plaintiffs’ 

Motion as it pertains to liquidated damages for contributions that came due after the filing of this 

lawsuit.

In addressing the awards Plaintiffs are seeking based on their own recordkeeping, the 

Court must also address the unpaid contributions and interest claimed (in addition to the liquidated 

damages discussed above). As noted above, courts—in the interest of ensuring fair and efficient 

adjudication of claims—have allowed Trust funds to “recover unpaid contributions which came 

due after the lawsuit was filed.” Wedge Roofing, 811 F. Supp. at 1402. Plaintiffs claim 

$36,548.84 in unpaid contributions for the months of September, October, and November of 2018. 

See Mot. at 8. Defendants do not dispute this amount in their response, aside from noting that “the 

Ninth Circuit has not addressed whether ERISA allows damages for contributions that became 

delinquent after the filing of an action, and the district courts are split on this issue.” CMSJ Opp. 

at 8. In the absence of any additional objection from Defendants, the Court AWARDS Plaintiffs 

these unpaid contributions. 

Similarly, Plaintiffs also seek to collect the interest accrued by Defendants on their unpaid 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 16 of 22
17

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

contributions (at a rate of 10% from the date that each contribution became delinquent through the 

date it was paid in full). See Opposition at 8. Plaintiffs note: “Pursuant to the Master Agreements 

and Trust Agreements, interest accrues on the delinquent unpaid contributions at ten percent 

(10%) per annum calculated from the day fringe benefit contributions are considered delinquent . . 

. until paid.” Opposition at 4; see also Tucker Decl. ¶ 11 (citing Section 12.13.01-12.13.02 of the 

Master Agreements). Plaintiffs also note that parties may recover interest on any unpaid 

contributions pursuant to ERISA. See Opposition at 18 (citing ERISA § 502 (g), 29 U.S.C. 

1132(g)). Here, too, Defendants do not offer anything in the way of a response to the issue of 

interest in their opposition papers. As a result, the Court AWARDS Plaintiffs the interest they 

request based on their internal recordkeeping. The Court will issue further order as to the amount 

of interest awarded and briefing thereon.

b. Plaintiffs’ Claims Based on First Audit

Within the Ninth Circuit, once “trustees produce evidence raising genuine questions about 

the accuracy of the employer’s records and the number of hours worked by the employees, the 

burden shifts to the employer to come forward with evidence of the precise amount of work 

performed.” Brick Masons Pension Tr. v. Indus. Fence & Supply, Inc., 839 F.2d 1333, 1338 (9th 

Cir. 1988). In order to shift the burden to the employer, the trustees must show: (1) that the 

employer failed to keep adequate records, (2) that some employees performed covered work that 

was (3) unreported to the trust funds. Motion Picture Indus. Pension & Health Plans v. N.T. 

Audio Visual Supply, Inc., 259 F.3d 1063, 1066 (9th Cir. 2001). In N.T. Audio, the court found 

there was “little doubt that the Trustees met their first threshold burden” because they had 

submitted declarations from the auditors who had examined the records (including payroll records, 

timecards, and W–2s) and those auditors testified that the records were unclear and did not include 

required details about the nature of the work completed. N.T. Audio, 259 F.3d at 1066. Here, too, 

Plaintiffs have submitted a declaration from their auditor indicating that records kept by JS Taylor 

were inadequate and that the company owed contributions for hours that were not reported to the 

Trust Funds. See Declaration of Andrea Williams (“Williams Decl.”) at 2, Docket No. 57. The 

auditor’s declaration states that records (specifically union contribution reports, timecards, payroll 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 17 of 22
18

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

registers, certified payroll, and 1099 forms) were inspected “to ascertain if the employee is 

working in a classification covered by the collective bargaining agreement”; the audits concluded 

that covered work had been underreported and therefore that contributions were due. Williams 

Decl. at 3, 4. 

However, Defendants note that both Ms. Williams (the auditor) and Mr. Ilacqua (one of the 

third-party administrators of the trust funds) concede that—although JS Taylor was found to have 

$24,067.23 in unpaid obligations during the period corresponding to the first inspection—it was 

owed a credit of $26,015.37. 

See Opposition at 6, 8; Williams Decl. at 3; Ilacqua Decl. at 6, Docket No. 61. According the 

Defendants, given these amounts, “it is unclear how Plaintiffs can possibly be entitled to anything 

as a result of the first payroll inspection.” CMSJ Opp. at 7. According to Plaintiffs, “despite the 

$26,015.37 credit, Defendants owed additional amounts for liquidated damages and interest

incurred as a result of Defendants’ underpayments on contributions.” Plaintiffs’ Reply in Support 

of Cross Motion for Summary Judgment (“Plaintiffs’ Reply”) at 6, Docket No. 70. Essentially, 

Defendants contend that the credit should offset the contribution underpayments prior to the 

imposition of liquidated damages and interest, while Plaintiffs contend that the damages and 

interest should be imposed prior to the credit offsetting unpaid obligations. At the hearing, 

Plaintiffs conceded that there is nothing in the Master Agreements specifying how such credits 

should be applied. In the absence of a rule specifying an alternative arrangement, the Court finds 

it fair and logical to apply the outstanding credit to the outstanding balance at the time the 

contributions were owed, rather than after the imposition of penalties stemming from those unpaid 

contributions. Since the amount of the credit owed to JS Taylor would more than offset the 

contribution underpayments identified by the audit, no award of liquidated damages or interest 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 18 of 22
19

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

would be appropriate. As a result, the Court DENIES Plaintiffs’ Cross Motion for Summary 

Judgment as it pertains to the debts identified by the first audit. 

c. Plaintiffs’ Claims Based on Second Audit

With respect to the second audit, the dispute focuses on the issuance of IRS 1099 forms by 

JS Taylor. In particular, the auditor inspected “Federal Tax Form 1099s for work performed by 

non-signatory subcontractors and compensation paid by Defendants for bargaining unit work 

(covered by the Collective Bargaining Agreement) paid outside the payroll system.” Williams 

Decl. at 3. The auditor includes the following information about those payments:

• Sierra National Construction dba Sierra National Asphalt - $568,350.00 for 

“Bottom Lift Fire Lane, paving contract, grind/overlay”;

• Autreys Water Truck & Sweeper Service Inc - $39,997.50 for “Sweeper Services”;

• California Cut & Core - $4,637.50 for “Flat Sawing - Asphalt & Concrete, 150 lft x 

5" DP AC over 6" DP C/C, 150 Lft x 8" DP A/C, 900 Lft x 7" Thick A/C, Water 

Control, Mobilization”; and 

• Sierra National Construction dba Sierra National Asphalt - $532,459.80 for 

“Bottom Lift Fire Lane, paving contract, grind/overlay.”

See Docket No. 57, Exh. A-B. Based on the 1099 forms, the auditor concluded that “Defendants 

failed to report contributions due in the total amount of $437,491.84 for hours worked by nonsignatory subcontractors.” Id. 

However, JS Taylor contends that the 1099s at issue do not reflect “hours worked,” but 

instead reflect payments made “mainly for equipment rental and materials.” CMSJ Opp. at 8; 

Letter from JS Taylor, Docket No. 69, Exh. J. In assessing Defendants’ contentions as to the 1099 

forms, the Court makes two observations. First, Defendants have not produced the 1099s, nor any 

back-up documentation showing that the payments were not for covered work, nor any testimony 

from the entities who received payment showing payment was for materials and equipment rentals

and not labor. The documentation provided by Defendants – nothing more than an email from Mr. 

Thiel to Plaintiffs’ counsel, see Docket No. 69, Exh. J. – is “nothing but conclusory statements 

without any evidence to support a legitimate audit dispute.” Plaintiffs’ Reply at 7. Second, the 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 19 of 22
20

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

letter from Mr. Thiel states that the 1099 forms are “mainly for equipment rental and materials,” 

which further suggests that the 1099s are at least partially for labor. Mr. Thiel’s email does little 

to negate the conclusion reached by the auditor. 

Counsel for Defendants referred the Court to the Brick Masons case as the controlling 

authority. Pursuant to Brick Masons, “once the trustees produce evidence raising genuine 

questions about the accuracy of the employer’s records and the number of hours worked by the 

employees, the burden shifts to the employer to come forward with evidence of the precise amount 

of work performed.” Brick Masons, 839 F.2d at 1338. Through their audit, the trustees have 

produced evidence raising genuine questions about the accuracy of JS Taylor’s records, but 

Defendants have not come forward with evidence of the precise amount of hours worked. “Under 

an ordinary summary judgment analysis, . . . [Defendant’s] Declaration might be enough to 

establish a dispute of material fact.” Dist. Council 16 N. California Health & Welfare Tr. Fund v. 

CreteGuard, Inc., No. C 10-00023 CRB, 2011 WL 996726, at *3 (N.D. Cal. Mar. 21, 2011). 

However, “ERISA requires every employer to maintain records on its employees ‘sufficient to 

determine the benefits due or which may become due to such employees.’” Id. (quoting 29 

U.S.C. § 1059(a)(1)); see also California Serv. Employees Health & Welfare Tr. Fund v. Advance 

Bldg. Maint., No. C 06-3078 CW, 2007 WL 3232444, at *5 (N.D. Cal. Nov. 1, 2007) (granting 

summary judgment after finding that Defendant did not meet its burden to rebut audit evidence 

where it presented mere conclusory statements). 

Here, Defendants have not produced sufficient evidence—not in response to the audit, not 

as part of their opposition to Plaintiffs’ Motion for Summary Judgment, not at the hearing—to

meet the requirements laid out in Brick Masons. It is “Defendant’s burden to show the records it 

kept were adequate to determine the amount it needed to contribute to the plan. Unless it meets 

this burden, Plaintiff is entitled to summary judgment.” CreteGuard, 2011 WL 996726, at *4 n.7 

(citing N.T. Audio, 259 F.3d at 1066). Because JS Taylor’s records do not show how much in 

contributions is owed, the Court finds that it has failed to carry its burden. However, given the 

enormous magnitude of the money allegedly owed for non-signatory subcontractor work 

($458,292.23), Defendants’ assertions that these payments were not included in their payroll 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 20 of 22
21

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

because they was mainly for equipment rental and materials rather than labor, and because 

Defendants’ counsel argued that the 1099s were found outside the payroll system precisely 

because they were did not reflect labor costs, the Court—out of an abundance of caution—permits 

Defendants to come forward with evidence that shows the precise amount of hours worked under 

the contested 1099 forms. Any such evidence must be specific and demonstrate why summary 

judgment as to the second audit should not issue. 

As a result, the Court ORDERS Defendants to show cause why Summary Judgment as it 

pertains to the debts identified by the second audit should not issue. 

d. Plaintiffs’ Claim for Interest, Liquidated Damages, Attorneys’ Fees, and 

Costs

Plaintiffs also seek to collect interest, liquidated damages, and attorneys’ fees and costs 

stemming from the findings of the two audits. See Opposition at 13–25. Given the Court’s order 

to show cause why summary judgment as to the second audit should not issue, the Court will 

maintain this part of Plaintiffs’ Cross-Motion for Summary Judgment under submission, pending 

resolution of the issues associated with the second audit.

IV. CONCLUSION

In summary, the Court DENIES Defendant’s Motion for Summary Judgment. The Court 

also GRANTS in part and DENIES in part Plaintiffs’ Motion for Summary Judgment as follows:

• GRANTS Plaintiffs’ Motion as it pertains to the liquidated damages associated with 

contributions that were late but paid prior to the filing of this lawsuit ($16,785.06);

• GRANTS Plaintiffs’ Motion as it pertains to the liquidated damages associated with 

contributions that were unpaid at the time the lawsuit was filed ($39,298.31); 

• GRANTS Plaintiffs’ Motion as it pertains to the liquidated damages associated with 

contributions that came due but were unpaid after the lawsuit was filed ($65,075.74); 

• GRANTS Plaintiffs’ Motion as it pertains to the unpaid contributions from the months of 

September, October, and November 2018 ($36,548.84); 

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 21 of 22
22

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

United States District Court

Northern District of California

• GRANTS Plaintiffs’ Motion as it pertains to the interest accrued by Defendants on their 

unpaid contributions; the Court will issue further order as to the amount of interest 

awarded;

• DENIES Plaintiffs’ Motion as it pertains to the first audit; and

• ORDERS Defendants to SHOW CAUSE why Plaintiffs’ Motion for Summary Judgment 

as it pertains to the second audit should not issue (any response from Defendants to this 

Order must be filed with the Court and served upon Plaintiffs within three weeks of the 

filing of this Order and any opposition to that filing from Plaintiffs must be filed within 

one week of the filing of Defendants’ papers with the Court).

Where relevant, liability is imposed on both JS Taylor and Mr. Thiel individually. 

The Court also HOLDS UNDER SUBMISSION Plaintiffs’ Cross Motion as it pertains to 

the requested attorneys’ fees, costs, liquidated damages, and interest stemming from the second 

audit.

This order disposes of Docket Nos. 47 and 56. 

IT IS SO ORDERED.

Dated: November 18, 2019

______________________________________

EDWARD M. CHEN

United States District Judge

Case 3:17-cv-00896-EMC Document 80 Filed 11/18/19 Page 22 of 22