Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-02500/USCOURTS-cand-3_07-cv-02500-2/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

SHOP IRONWORKERS LOCAL 790

PENSION TRUST, et al.,

Plaintiff(s),

v.

COFAB STEEL CORP., et al.,

Defendant(s).

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No. CV 07-2500 JSW (BZ)

REPORT AND RECOMMENDATION ON

PLAINTIFFS’ MOTION FOR

DEFAULT JUDGMENT AND

ATTORNEYS’ FEES

On June 21, 2007, the Honorable Jeffrey White referred

this case to me for a report and recommendation on plaintiffs’

motion for entry of default judgment. Plaintiffs seek entry

of default judgment against defendants Cofab Steel

Corporation, Arcmatic Integrated Systems, Inc., Charles Bock,

and Irma Bock. On August 15, 2007, I held a hearing at which

the plaintiffs were present, but the defendants failed to

appear.

On May 9, 2007, plaintiffs filed this suit to enforce the

parties’ December 19, 2006 agreement settling litigation filed

by plaintiffs under ERISA to recover funds allegedly owed to

Case 3:07-cv-02500-JSW Document 22 Filed 08/16/07 Page 1 of 7
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1 According to the complaint, defendants made a

“complete withdrawal” from the Pension Trust, Compl. ¶ 9, and

refused to make payments with respect to its withdrawal

liability, id. at ¶ 11, thus prompting the initial litigation. 

Id. at ¶ 12.

2

the Trust Fund (“Settlement Agreement”).1 Shop Ironworkers

Local 790 Pension Trust et al. v. Cofab Steel Corporation et

al, Case No. C06-4067 MMC. Service was effected on May 11,

2007, Docket No. 3, and defendants failed to answer

plaintiff’s complaint. On May 25, 2007, upon plaintiffs’

request, the Clerk of this Court entered defendants’ default

under Rule 55(a) of the Federal Rules of Civil Procedure. 

Docket No. 6. By their default, defendants are deemed to have

admitted the well-pleaded averments of the complaint except

those as to the amount of damages. See Fed. R. Civ. P. 8(d). 

Defendant failed to make any payments required by the

Settlement Agreement. Id. at ¶¶ 15, 16. Plaintiffs now seek

to recover the full employee benefit contribution of

$862,682.00, liquidated damages at $43,134.10, interest for

the period from January 2, 2007 through August 15, 2007

totaling $42,354.16, attorneys’ fees in the amount of

$11,959.25, and costs in the amount of $2,432.00. Stafford

Supp. Decl. ¶ 10.

Pursuant to Rule 55(b)(2), the court may enter a default

judgment against a party against whom default has been

entered. The decision to grant or deny a default judgment

under Rule 55(b) is within the discretion of the court. Eitel

v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 

A court may not, however, enter a default judgment

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3

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. § 521. Plaintiffs’ counsel has declared under

penalty of perjury that she has personal knowledge that the

individual defendants are not infants, incompetent persons, or

persons in military service. Stafford Supp. Decl. ¶¶ 3, 4.

She has also submitted a Military Status Report from the

Department of Defense Manpower Data Center to satisfy the

requirements under the Service Members’ Civil Relief Act. Id.

¶ 4, Exs. A, B. This evidence is sufficient to conclude that

neither of the individual defendants are infants, incompetent,

or persons in military service. 

Plaintiffs have the burden of proving damages through

testimony or written affidavit. Board of Trustees of the

Boilermaker Vacation Trust v. Skelly, Inc., 389 F.Supp.2d

1222, 1225 (N.D. Cal. 2005). To prove damages, plaintiffs

have submitted declarations from Michelle Stafford and Kristen

McCulloch, attorneys for plaintiffs. 

Under the Settlement Agreement, default is deemed to have

occurred if the defendants fail to make any payment when due

and the failure is not cured within sixty days of receiving

written notification from the Trust Fund. McCulloch Decl. ¶

1, Ex. A, 2.1(b)(2). Defendants failed to make their first

payment to the Trust Fund on January 2, and have not yet made

any of the scheduled payments. Compl. ¶¶ 13, 15. Plaintiffs

sent written notification to defendants on January 17, 2007,

id. at ¶ 16, Ex. K, but defendants did not cure the default. 

Compl. ¶ 16. The Settlement Agreement specifically provides

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2 In the complaint, plaintiffs request liquidated

damages assessed at 20%, see Prayer for Relief C, but in

subsequent declarations and calculations request only 5%. 

Plaintiffs explain that pension plan documents provide for

recovery of liquidated damages on delinquent payments in the

amount of 5%. Stafford Decl. ¶ 5.

3 Section 1132(g)(2)(C)(ii) of ERISA provides that

plaintiffs may recover “liquidated damages provided for under

the plan in an amount not in excess of 20 percent.” See 29

U.S.C. § 1132(g)(2)(C). 

4 In the Settlement Agreement, parties “agree that the

provisions of ERISA with respect to withdrawal liability,

specifically section 4219 shall apply with regard to the

payments to be made in this matter.” McCulloch Decl. ¶ 1, Ex.

A, 2.1(b); see ERISA Section 4219, 29 U.S.C. § 1399. According

to 29 U.S.C. § 1451(b), failure to make withdrawal liability

payments shall be treated in the same way as delinquent

contributions. 29 U.S.C. § 1451(b). 29 U.S.C. § 1145 governs

delinquent contributions under ERISA, and damages in actions to

enforce § 1145 are calculated under 29 U.S.C. § 1132(g).

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that in the event of default, the withdrawal liability due to

the Trust Fund shall be $862,682.59. I recommend that

plaintiffs recover this amount.

Plaintiffs seek $43,134.10 in liquidated damages,

calculated at 5% of delinquent contributions.2 Stafford Decl.

¶ 5. The Settlement Agreement provides for liquidated damages

in the event of a default, but does not specify at what

percentage these damages will be calculated.3 McCulloch Decl.

¶ 1, Ex. A, 2.1(b)(3). It does, however, incorporate the

provisions of ERISA with respect to withdrawal liability.4

Id. at 2.1(b). Since plaintiffs’ requested 5% is below

ERISA’s 20% ceiling and apparently in keeping with the pension

plan’s terms, I recommend that plaintiffs recover $43,134.10

in liquidated damages from defendants. 

Plaintiffs have requested interest on the unpaid

contributions, calculated at the IRS underpayment rate of 8%

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5 Under § 1132(g)(2)(B), the Trust Fund may recover

interest on unpaid contributions. See 29 U.S.C. §

1132(g)(2)(B).

6 Under ERISA, reasonable attorneys’ fees and costs of

the action may be awarded if the Trust Fund receives a judgment

in its favor. See 29 U.S.C. 1132(g)(2)(D).

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per month. I.R.C. § 6621; Rev. Rul. 2007-16. This amounts to

$42,354.16 in interest on the unpaid contributions through

August 15, 2007.5 Stafford Decl. ¶ 4; Stafford Supp. Decl. ¶

9. The Settlement Agreement clearly states that plaintiffs

will be entitled to interest if the defendants default. 

McCulloch Decl. ¶ 1, Ex. A, 2.1(b)(3). I recommend that

plaintiffs recover $42,354.16 in interest from defendants. 

Plaintiffs also seek $11,959.25 in attorneys’ fees and

$2,432.00 in costs.6 The request is based on attorney and

paralegal hours incurred prior to May 31, 2007 and amounting

to $10,767.75, Stafford Decl. ¶ 2, and $1,191.50 incurred on

or after May 31. Stafford Supp. Decl. ¶ 6. Generally, the

attorneys’ activities consisted of correspondence,

negotiations, legal research and analysis, and the preparation

of motions and complaints. Stafford Decl. ¶ 2; Stafford Supp.

Decl. ¶ 6. Paralegal hours were spent in preparation,

service, and e-filing of the documents prepared by the

attorneys. Stafford Decl. ¶ 2. 

At the hearing, plaintiffs admitted that some portion of

the fees incurred prior to May 31, related to a failed attempt

to enforce the agreement before Judge Chesney and to

defendants’ counsel’s ex parte request to withdraw as counsel

in that matter. See Stafford Decl. ¶ 2; Shop Ironworkers

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7 Judge Chesney concluded in part that she lacked

subject matter jurisdiction to entertain plaintiffs’ motion to

enforce the agreement. Shop Ironworkers Local 790 Pension

Trust et al., Case No. C06-4067 MMC, Docket No. 38. I conclude

that the Court has subject matter jurisdiction over this

separate action to enforce the terms of the Settlement

Agreement, the resolution of which requires the application of

federal ERISA law. See, e.g., Board of Trustees of Hotel and

Restaurant Employees Local 25 v. Madison Hotel, Inc., 97 F.3d

1479, 1483-84 (D.C. Cir. 1996).

8 In this regard, the tasks detailed in the declaration

appear necessary to the successful litigation of the case, and

the rates charged appear reasonable.

6

Local 790 Pension Trust et al., Case No. C06-4067 MMC, Docket

No.’s 30-39. Judge Chesney specifically found that

plaintiffs’ attempt to enforce the agreement was without

support in law or in the agreement itself. See id., Docket

No. 38.7 I recommend not recompensing plaintiffs for these

hours. Because plaintiffs provide no breakdown as to the

amount of time spent on work performed in that litigation, I

recommend that their request as to attorneys’ and paralegal

fees incurred prior to May 31 be denied. See 29 U.S.C.

1132(g)(2)(D) (allowing for “reasonable attorney’s fees and

costs of the action) (emphasis added); see also Cortes v.

Metropolitan Life Ins. Co., 380 F. Supp. 2d 1125, 1132 (C.D.

Cal. 2005) (in ERISA action, stating that the party requesting

fees bears the burden of producing adequate documentation). 

The $1,191.50 in fees incurred on or after May 31, however,

appear reasonable. See Stafford Supp. Decl. ¶ 6.8 I

therefore recommend awarding this amount. 

Plaintiffs also incurred $2,432.00 in costs, consisting

of the “title company fee,” filing fees, and messenger fees. 

Stafford Decl. ¶ 3. The filing and messenger fees are selfCase 3:07-cv-02500-JSW Document 22 Filed 08/16/07 Page 6 of 7
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explanatory and reasonable. As to the title company fee,

plaintiff explains that the fee was related to a deed of trust

made a part of the settlement agreement. Id. at ¶ 2;

McCulloch Decl. ¶ 1, Ex. A, 2.1(d). I find this fee also to

be reasonable and compensable, and therefore recommend that

the Court grant plaintiffs’ request for $2,432.00 in costs. 

For the foregoing reasons, I recommend that judgment be

entered in plaintiffs’ favor against defendants for a total

award of $951,793.76. This amount includes: $862,682.00 in

unpaid liability, $42,354.16 in interest on unpaid

contributions, $43,134.10 in liquidated damages, $1,191.50 in

attorneys’ fees, and $2,432.00 in costs. 

Dated: August 16, 2007 

 Bernard Zimmerman 

 United States Magistrate Judge

G:\BZALL\-REFS\Shop Ironworkers v. Cofab\DEF.JUDG.ORD3.wpd

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