Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-03286/USCOURTS-cand-3_06-cv-03286-1/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

For the Northern District of California

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United States District Court

For the Northern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

BOARD OF TRUSTEES OF THE SHEET

METAL WORKERS,

Plaintiff,

 v.

JIM WEIBERT,

Defendant. /

No. C-06-03286 EDL

REPORT AND RECOMMENDATION

Plaintiff’s application for default judgment against Defendant Jim Weibert, personal

guarantor of Kelleher & Weibert, Inc., d/b/a Cardinal, came on for hearing on April 3, 2007. 

Michael J. Carroll appeared for Plaintiff. Defendant has neither appeared in this matter nor

consented to magistrate judge jurisdiction pursuant to 28 U.S.C. § 636(c). Notice of this hearing

may not have reached Defendant. See April 3, 2007 Supp. Carroll Decl., ¶ 3. However, notice of an

application for judgment is not required unless the party against whom default is sought has

appeared in the action, unlike here. See Fed.R.Civ.P. 55(a)(2). This matter is therefore ripe for

determination and will be reassigned to a district judge with the following report and

recommendation for default judgment. 

On May 18, 2006, Plaintiff filed a complaint under sections 502 and 515 of the Employee

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132 and 1145, and section 301

of the Labor-Management Relations Act, 29 U.S.C. § 185(a), alleging that Cardinal violated a

collective bargaining agreement by failing to make regular, timely contributions to the Plaintiff

Trustees. The complaint sought payment of delinquent contributions, liquidated damages, interest,

costs, and attorney’s fees. 

Case 3:06-cv-03286-SI Document 28 Filed 04/06/07 Page 1 of 4
United States District Court

For the Northern District of California

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On September 2, 2006, Defendant was served with the complaint. Defendant failed to

answer the complaint or otherwise defend the action. On October 23, 2006, upon Plaintiffs’ request,

the Clerk of this court entered Defendant’s default under Rule 55(a). By its default, Defendant is

deemed to have admitted the well-pleaded allegations of the complaint except those as to the amount

of damages. See Fed. R. Civ. P. 8(d).

A court may not enter a default judgment against an unrepresented minor, an incompetent

person, or a person in military service. See Fed. R. Civ. P. 55(b)(2); 50 App. U.S.C. § 520. 

Defendant Jim Wiebert is not an unrepresented minor, an incompetent person or a person in military

service, or otherwise exempted from default judgment. April 3, 2007 Supp. Carroll Decl., ¶ 2.

Plaintiff has the burden of proving its damages through testimony or written affidavit. To

prove Plaintiff’s damages, Plaintiff submitted the declaration of Bonnie Maraia, a manager of the

administration of the Trust Funds and custodian of Plaintiff’s books and records as they relate to

Cardinal, and the declaration of Michael Carroll, counsel to Plaintiff. These declarations establish

that, as of July 1, 1989, Cardinal was bound by the terms of the Standard Form of Union Agreement

Sheet Metal, Roofing, Ventilating, and Air Conditioning Contracting Divisions of the Construction

Industry, which required Cardinal to complete regular, timely reporting forms and make pension

fund contributions. Maraia Decl., ¶ 2 and Ex. 2. The Standard Form of Union Agreement

incorporates by reference the Sheet Metal Workers Pension Trust of Northern California. See

Maraia Decl., Exs. 2, 3. Cardinal never contested the execution of this agreement, and

acknowledged its contractual obligations by previously paying contributions as required by the

agreement. Mariaia Decl., ¶ 2. 

In 2002, Cardinal fell behind in its payments to the Sheet Metal Workers Trust Funds. 

Carroll Decl., ¶ 2. Cardinal arranged with the Sheet Metal Workers Trust Funds to pay $12,770.17

in past due contributions by installment payments. Id., ¶ 2. As one of the inducements to the Trust

Fund to accept this plan, the individuals involved in the company, Jim Weibert, Martin Smith, and

Dave Hensley, executed a personal guaranty of Cardinal’s obligations. Id., ¶ 2 and Ex. 1 (agreeing

to personally guarantee $12,770.17). Cardinal made some payments but subsequently filed a

Chapter 11 bankruptcy proceeding, which has been concluded with no distributions to creditors. Id.,

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United States District Court

For the Northern District of California

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¶ 3. Two small sums of $1,080.09 due for April 2002, and $1,438.88 due for May 2002, remained

owing and unpaid pursuant to the Personal Guaranty. Id., ¶ 4. 

The Trust Agreement provides for liquidated damages at the rate of 20%, attorney’s fees and

court costs in the event of a suit. See Maraia Decl., ¶ 3. These Trust Agreement complies with 29

U.S.C. § 1132 (g), which provides that in an action to enforce payment of delinquent contributions,

“the court shall award the plan - (A) the unpaid contributions, (B) interest on the unpaid

contributions, (C) . . . (ii) liquidated damages provided for under the plan in an amount not in excess

of 20 percent . . . of the amount determined by the court under subparagraph (A), (D) reasonable

attorney’s fees and costs . . . .” 29 U.S.C. § 1132(g)(2). An award under section 1132(g)(2) is

appropriate based on the amount of contributions that were delinquent at the time of suit, even if the

defendant tendered the unpaid contributions prior to judgment. See Northwest Adm’rs, Inc. v.

Albertson’s, Inc., 104 F.3d 253, 258 (9th Cir. 1996). Plaintiff, however, seeks only to recover the

remaining unpaid contributions pursuant to the Personal Guaranty, attorney’s fees, and costs. See

Proposed Order (Doc. No. 24). 

Under ERISA, a written document is required for a party to be bound to pay fringe benefit

contributions. See 29 U.S.C. § 1145. The personal guaranty executed by Defendants fulfills this

requirement. Accordingly, demand was made on all three guarantors for the remaining delinquent

contributions. Id., ¶ 4. Plaintiff agreed to accept pro rata shares of the remaining unpaid

contributions from each Defendant. Carroll Decl., ¶ 4. Defendants Hensley and Smith have worked

out payments of their shares of the amounts due, and Plaintiff is dismissing the claims against them. 

Id., ¶ 5; Motion at 3:5-6. The Hensley and Smith payments paid off all sums due for April 2002, and

left a remaining balance of $1,259.48 due for May 2002. See Maraia Decl., ¶ 4, March 15, 2007

Supp. Carroll Decl., ¶ 2. Plaintiff seeks this amount from Weibert. Carroll Decl., ¶ 5, March 15,

2007 Supp. Carroll Decl., ¶ 2.

Attorney’s fees and costs of action may be awarded to a Trust Fund or Employee Benefit

Plan that receives a judgment in its favor. See 29 U.S.C. § 1132(g)(2)(D). Plaintiffs have submitted

the declaration of attorney Michael Carroll to prove attorney’s fees and costs. Mr. Carroll calculates

that he spent in excess of hours prosecuting this action at a rate of $185.00 per hour, for a total of

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United States District Court

For the Northern District of California

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$555.00. Carroll Decl., ¶ [8]. The amount of time expended and the billing rate are reasonable

given the work performed. Mr. Carroll calculates Plaintiff’s costs for prosecuting this action to be

$500.00, consisting of filing fees, and costs for service of documents. Id., ¶ 6.

For the foregoing reasons, the Court hereby RECOMMENDS that judgment be entered in

Plaintiff’s favor for $1,259.48 in unpaid contributions, $555.00 in attorney’s fees, and $500.00 in

costs, for a total amount of $2,314.48. Any party may file objections to this report and

recommendation with the District Judge within ten days after being served with a copy. See 28

U.S.C. § 636(b)(1)(B); Fed. R. Civ. Proc. 72(b); Civil Local Rule 72-3. 

IT IS SO RECOMMENDED.

Dated: April 5, 2007

 

ELIZABETH D. LAPORTE

United States Magistrate Judge

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