Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-01053/USCOURTS-cand-3_07-cv-01053-3/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

---

United States District Court

For the Northern District of California

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

KEN WALTERS, et al.,

Plaintiffs,

v.

FRANK GEORGE SILVERIA, JR., et al.,

Defendants.

___________________________________/

No. C-07-1053 EMC

REPORT AND RECOMMENDATION

RE PLAINTIFFS’ MOTION FOR

DEFAULT JUDGMENT

(Docket No. 12)

Plaintiffs are various Trust Funds which, at all material times, were and now are employee

benefit plans within the meaning of the Employee Retirement Income Security Act (“ERISA”). The

Trust Funds filed suit against Defendants Frank George Silveria, Jr. and Silveria Construction,

pursuant to ERISA, see 29 U.S.C. § 1132, and the Labor Management Relations Act. See 29 U.S.C.

§ 185. After Defendants failed to respond to the Trust Funds’ complaint, default was entered on

May 23, 2007. See Docket No. 10. The Trust Funds thereafter moved for default judgment. Having

considered the Trust Funds’ briefs and accompanying submissions, as well as all other evidence of

record, the Court hereby recommends that the motion for default judgment be GRANTED.

I. FACTUAL & PROCEDURAL BACKGROUND

The Trust Funds sued Mr. Silveria and Silveria Construction on February 21, 2007. See

Docket No. 1. According to the complaint, pursuant to various agreements, Defendants are

obligated to, inter alia, make contributions to the Trust Funds and permit audits of Defendants’

books and records in order to permit the Trust Funds to ascertain whether all contributions have

been timely paid. See Compl. ¶¶ IV-V. Although the Trust Funds have asked for an audit,

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 1 of 10
United States District Court

For the Northern District of California

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

2

Defendants have failed, refused, or neglected to allow an audit. See id. ¶ IX. The Trust Funds

therefore have been unable to determine whether or not Defendants have made prompt and correct

payment of all contributions owed. See id. ¶ VIII.

Mr. Silveria, individually and doing business as Silveria Construction, was served with the

summons and complaint on March 21 and 22, 2007. After Mr. Silveria did not respond to the

complaint, the Trust Funds requested entry of default, and default was entered on May 23, 2007. 

See Docket No. 10. The Trust Funds thereafter filed the pending motion for default judgment on

June 11, 2007. In the motion, the Trust Funds ask for (1) an injunction directing Defendants to

submit to an audit of their books and records; (2) an order requiring Defendants to pay all amounts

found due and owing as a result of the audit; (3) an injunction requiring Defendants to timely submit

all required monthly contribution reports and contributions due and owing, plus interest and

liquidated damages; and (4) attorney’s fees and costs.

II. DISCUSSION

A. Adequacy of Service of Process

As a preliminary matter, the Court must first “assess the adequacy of the service of process

on the party against whom default is requested.” Board of Trustees of the N. Cal. Sheet Metal

Workers v. Peters, No. C-00-0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2,

2001). In the instant case, default judgment is sought with respect to two Defendants, Mr. Silveria

and Silveria Construction. However, because Silveria Construction appears to a sole proprietorship

only, see Supp. McBride Decl., Ex. A (business information for Silveria Construction provided by

California Contractors State Licensing Board), the basic question is whether Mr. Silveria, doing

business as Silveria Construction, was properly served. 

Service for individuals is governed by Federal Rule of Civil Procedure 4(e). Under Rule

4(e)(1), an individual may be served pursuant to the law of the state in which the district court is

located or in which service is effected -- in this case, California. See Fed. R. Civ. P. 4(e)(1). The

proof of service reflects that Mr. Silveria was served pursuant to California Code of Civil Procedure

§ 415.20(b). Under § 415.20(b),

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 2 of 10
United States District Court

For the Northern District of California

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 1

 The proof of service indicates that this address is also Mr. Silveria’s residence.

3

[i]f a copy of the summons and complaint cannot with reasonable

diligence be personally delivered to the person to be served, . . . a

summons may be served by leaving a copy of the summons and

complaint at the person’s dwelling house, usual place of abode, usual

place of business, or usual mailing address other than a United States

Postal Service post office box, in the presence of a competent member

of the household or a person apparently in charge of his or her office,

place of business, or usual mailing address other than a United States

Postal Service post office box, at least 18 years of age, who shall be

informed of the contents thereof, and by thereafter mailing a copy of

the summons and of the 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. Code Civ. Proc. § 415.20(b).

The Trust Funds have provided sufficient evidence showing that personal delivery on Mr.

Silveria was attempted with reasonable diligence. See Supp. Lozano-Batista Decl., Ex. A (reflecting

three attempts at personal delivery prior to resort to substitute service). Accordingly, the Trust

Funds were entitled to use substitute service as a means to serve the summons and complaint on Mr.

Silveria. The Trust Funds have also provided sufficient evidence showing that Mr. Silveria’s usual

place of business is 8585 Julie Lynne Circle, Tracy, California,1 see Supp. McBride Decl., Ex. A

(business information for Silveria Construction provided by California Contractors State Licensing

Board); that the summons and complaint were left with a person apparently in charge of the office;

and that the summons and complaint were thereafter mailed to Mr. Silveria at his office. 

Accordingly, service of process was properly effectuated.

B. Merits of Motion for Default Judgment

As noted above, Mr. Silveria’s default was entered on May 23, 2007. See Docket No. 10. 

After entry of default, a court may grant a default judgment on the merits of the case, so long as the

defendant is not an infant or incompetent person or a person in military service. See Fed. R. Civ. P.

55(b)(1); 50 App. U.S.C. § 521. The Trust Funds have provided adequate evidence that Mr. Silveria

is not an infant, incompetent person, person in military service, or person otherwise exempted under

the Soldiers’ and Sailors’ Civil Relief Act of 1940. See Supp. McBride Decl. ¶ 2. Accordingly, the

Court must decide, in its discretion, whether a default judgment is appropriate. See Aldabe v.

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 3 of 10
United States District Court

For the Northern District of California

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

4

Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (“The district court’s decision whether to enter a

default judgment is a discretionary one.”).

The following factors are considered by a court in deciding whether a default judgment is

proper:

(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). Because default has already been entered

in this case, the Court must take as true all factual allegations in the Trust Funds’ complaint except

for those related to the amount of damages. See Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915,

917-18 (9th Cir. 1987).

The majority of the above factors weigh in favor of default judgment. For example, if the

motion for default judgment were to be denied, then the Trust Funds would likely be without a

remedy. See Walters v. Shaw/Guehnemann Corp., No. C 03-04058 WHA, 2004 U.S. Dist. LEXIS

11992, at *7 (N.D. Cal. Apr. 15, 2004) (“To deny plaintiff’s motion [for default judgment] would

leave them without a remedy. Prejudice is also likely in light of the merits of their claims.”);

Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002) (“If Plaintiffs’ motion

for default judgment is not granted, Plaintiffs will likely be without other recourse for recovery.”). 

Notably, on July 6, 2006, the Trust Funds informed Silveria Construction that they needed to

conduct an audit to determine whether all contributions had been made but Silveria Construction

refused to allow the audit. See Compl. ¶ VIII & Ex. C (letter, dated July 6, 2006). Also, the sum of

money at stake in the action is appropriate as it is tailored to the specific misconduct of Mr. Silveria. 

See Pepsico, 238 F. Supp. 2d at 1176 (stating that “the court must consider the amount of money at

stake in relation to the seriousness of Defendant’s conduct”). Finally, because Mr. Silveria has not

filed an answer to the complaint, there is nothing to suggest that there is a possibility of a dispute

concerning material facts. Further, there is no indication that Mr. Silveria’s default was due to

excusable neglect.

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 4 of 10
United States District Court

For the Northern District of California

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

5

The only factors that deserve closer analysis are the second and third Eitel factors -- i.e., the

merits of the Trust Funds’ substantive claim and the sufficiency of the complaint. 

The Trust Funds have provided evidence that Silveria Construction entered into a

Construction Agreement with Operating Engineers Local Union No. 3. See McBride Decl., Ex. A

(Construction Agreement). In the agreement, Silveria Construction agreed to be bound by the terms

of the Master Agreement between the Union and the Associated General Contractors of California,

Inc. See id.; see also id., Ex. B (Master Agreement). The Master Agreement requires each

Individual Employer to “make [contributions to the Trust Funds] for each hour worked or paid each

Employee by an Individual Employer covered by this Agreement.” Id., Ex. B (Master Agreement §

12.01.00). If payment of contributions in full is not made within the time provided, then liquidated

damages are assessed “in the sum of thirty-five dollars ($35.00) or fifteen percent (15%) of the

amount due and unpaid to each such Trust, whichever is greater, for each failure to pay in full within

the time provided.” Id. (Master Agreement § 12.13.00). The liquidated damages become a part of

the amount due and unpaid “and the whole thereof shall bear interest at the rate of twelve percent

(12%) per annum until paid.” Id. (Master Agreement § 12.13.00). 

The Master Agreement also incorporates the terms of the Trust Agreements for the Trust

Funds at issue. See id. (Master Agreement § 12.01.00) (providing that “[e]ach Individual Employer

is bound by all the terms and conditions of each Trust Agreement [for the Trust Funds at issue] and

any amendment or amendments”). The Trust Agreements for the Trust Funds at issue provide for an

audit of the books and records of the individual employer so that the Trust Funds may determine if

the employer is making full and prompt payment of contributions. See id. ¶ 9 & Ex. D

(representative Trust Agreement Art. IV, § 6) (“Reasonable cause appearing therefor upon notice in

writing from the Board, a Contributing Employer must permit a certified public accountant

appointed by the Board to enter upon the premises of such employer during business hours, at all

reasonable time or times, and to examine and copy such books, records, papers or reports of such

Contributing Employer as may be necessary to determine whether such Contributing Employer is

making full and prompt payment of all sums required to be paid by him or it to this [Trust] Fund.”);

see also id., Exs. E-G (other Trust Agreements).

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 5 of 10
United States District Court

For the Northern District of California

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

6

The Trust Funds’ complaint alleges, and the court must accept as true, see Televideo Sys.,

Inc., 826 F.2d at 917, that the Trust Funds sought an audit from Mr. Silveria in order to determine

whether prompt and correct payment of contributions was being made and that Mr. Silveria failed to

allow the Trust Funds to conduct an audit, as required by the agreements described above. See

Compl. ¶ VIII. “Where a Fund’s trust documents, to which an employer has bound itself,

specifically provide that Fund trustees can examine any of the employer’s records, an employer must

comply with such agreed upon obligations.” Engineers Joint Welfare, Pension, Supplemental

Unemployment Benefit & Training Funds v. BDR, Inc., No. 05-CV 1385 (NAM/GHL), 2006 U.S.

Dist. LEXIS 70967, at *9 (N.D.N.Y. Sept. 29, 2006); see also Central States, Southeast &

Southwest Pension Fund v. Central Transport, Inc., 472 U.S. 559, 581 (1985) (in action in which

employee benefit plans asked for court order permitting their auditors to conduct an audit of

employers, concluding that the audit requested was “well within the authority of the trustees as

outlined in the trust documents”). Thus, the Trust Funds have successfully stated a claim for relief,

and the second and third Eitel factors also weigh in favor of default judgment.

For the foregoing reasons, the Court recommends that the Trust Funds’ motion for default

judgment be granted. 

C. Damages and Other Relief

Because the Court concludes that default judgment is warranted, it must determine what

damages or other relief is appropriate. In their motion, the Trust Funds ask for (1) an injunction

directing Defendants to submit to an audit of their books and records; (2) an order requiring

Defendants to pay all amounts found due and owing as a result of the audit; (3) an injunction

requiring Defendants to timely submit all required monthly contribution reports and contributions

due and owing, plus interest and liquidated damages; and (4) attorney’s fees and costs. The Trust

Funds have the burden of “proving up” their damages or the need for other requested relief. See

Board of Trustees of the Boilermaker Vacation Trust v. Skelly, Inc., No. 04-02841 CW, 2005 WL

433462, at *2 (N.D. Cal. Feb. 24, 2005) (“Plaintiff has the burden of proving damages through

testimony or written affidavit.”).

///

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 6 of 10
United States District Court

For the Northern District of California

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

7

1. Audit

The Trust Funds ask first for an order requiring Defendants to comply with the Trust Funds’

audit request. In light of the agreements described above and the Supreme Court’s Central States

opinion, the Court recommends that this relief be granted. That is, Defendants should be required to

“permit a certified public accountant appointed by the Board to enter upon the premises of

[Defendants] during business hours, at all reasonable time or times, and to examine and copy such

books, records, papers or reports of such Contributing Employer as may be necessary to determine

whether such Contributing Employer is making full and prompt payment of all sums required to be

paid by him or it to [the Trust Funds at issue].” McBride Decl., Ex. D (representative Trust

Agreement Art. IV, § 6).

Such relief would also be appropriate under ERISA, to the extent the audit is tailored to the

purpose of verifying that required contributions have been paid. See International Painters & Allied

Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., Inc., 239 F. Supp. 2d 26, 31 (D.D.C.

2002) (“ERISA authorizes the court to provide for other legal or equitable relief as the court deems

appropriate [under 29 U.S.C. § 1132(g)(2)(E)]. This relief can include an injunction requiring a

defendant to permit, and cooperate with, an audit of its books and records.”).

2. Delinquent Contributions, Liquidated Damages, and Interest

The Trust Funds ask next that the Court require Defendants to pay all amounts found due and

owing as a result of the audit. Under ERISA, a court shall award a fiduciary who prevails in a §

1145 claim, inter alia, (A) the unpaid contributions, (B) interest on the unpaid contributions, and (C)

an amount equal to the greater of the interest on the unpaid contributions or liquidated damages as

specified in the plan (generally not to exceed 20 percent of the unpaid contributions). See 29 U.S.C.

§ 1132(g)(2). Accordingly, the Court recommends that the presiding judge retain jurisdiction over

this case with regard to any contributions and damages determined owed to the Trust Funds after the

audit has been completed. See Walters v. Shaw/Guehnemann Corp., No. C 03-04058 WHA, 2004

U.S. Dist. LEXIS 11992, at *11-12 (N.D. Cal. Apr. 15, 2004) (“This Court retains jurisdiction over

this case with regard to contributions and damages determined owed to plaintiffs during the audit.”);

Carpenters 46 Northern Cal. Counties Conference Bd. v. San Jose Woodworking, Inc., No. C00-

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 7 of 10
United States District Court

For the Northern District of California

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

8

4690 TEH, 2001 WL 1671056 (N.D. Cal. Aug. 14, 2001) (“This Court shall retain jurisdiction of

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

owing.”).

3. Injunction

The Trust Funds further ask that the Court issue an injunction requiring Defendants to timely

submit all required monthly contribution reports and contributions due and owing, plus interest and

liquidated damages. As indicated above, an order requiring Defendants to timely submit all required

monthly contribution reports is appropriate under ERISA. See 29 U.S.C. § 1132(g)(2)(E)

(authorizing a court to order other legal or equitable relief). In addition, as indicated above, it is

appropriate for the presiding judge to retain jurisdiction of the case to determine whether, based on

the contribution reports, contributions are due and owing.

4. Attorney’s Fees

Finally, the Trust Funds request that the Court award them attorney’s fees in the amount of

$2,638.70, see Lozano-Batista Decl. ¶ 11, and costs in the amount of $847.69. See id. ¶ 13. 

A provision for fees and costs is a part of the Master Agreement. See McBride Decl., Ex. B

(Master Agreement § 12.13.02) (“If any Individual Employer defaults in the making of such

payments [i.e., contributions] and if either the Union, the Trusts or the Plan, or any of them, . . . files

or causes to be filed any suit or claim with respect thereto, there shall be added to the obligation of

the Employer who is in default all reasonable expenses incurred by the Union and the Trust in the

collection of same, including but not limited to, reasonable attorneys’ fees, auditors’ and accountants

fees, court costs and all other reasonable expenses incurred in connection with suit or claim . . . .”). 

Moreover, under ERISA, a court shall award a fiduciary who prevails in a § 1145 claim, inter alia,

reasonable attorney’s fees and costs. See 29 U.S.C. § 1132(g)(2)(D). Accordingly, the Trust Fund

is entitled to fees and costs; the only question is what the proper amount of fees and costs is.

As to fees, the Court concludes that the $2,638.75 incurred is reasonable with respect to this

litigation. The figure reflects an hourly rate of $225 for attorneys who worked on the matter for a

total of 10 hours and an hourly rate of $95 for paralegals who worked on the matter for 3.5 hours. 

See Lozano-Batista Decl. ¶¶ 4, 8. 

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 8 of 10
United States District Court

For the Northern District of California

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

9

As for costs, the Trust Funds ask to be compensated for the court filing fee, the cost of

service of process, and the cost of electronic research. See id. ¶ 12. According to the Trust Funds,

they have been billed for all of these costs. See id. ¶ 13. The Court recommends that the Trust

Funds be awarded all of their costs for a total of $847.69. The court filing fee and the cost of service

of process are identified as recoverable costs by 28 U.S.C. § 1920. Cf. Agredano v. Mutual of

Omaha Cos., 75 F.3d 541, 544 (9th Cir. 1996) (holding the allowance for costs under 29 U.S.C. §

1132(g)(1) “empowers courts to award only the types of ‘costs’ allowed by 28 U.S.C. § 1920, and

only in the amounts allowed by section 1920 itself, by 28 U.S.C. § 1821 [providing for witness fees]

or by similar such provisions”); see also 28 U.S.C. § 1920 (stating that a court may tax as costs fees

of the clerk and marshal). While the cost of electronic research is not a cost contemplated by §

1920, it is appropriate for the Trust Funds to be awarded this cost as other legal or equitable relief

under 29 U.S.C. § 1132(g)(2)(E), since the Master Agreement specified that reasonable expenses

incurred in connection with a suit would be recoverable. 

Accordingly, the Court recommends that the Trust Funds be awarded fees in the amount of

$2,638.75 and costs in the amount of $847.69.

///

///

///

///

///

///

///

///

///

///

///

///

///

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 9 of 10
United States District Court

For the Northern District of California

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

10

III. RECOMMENDATION

For the foregoing reasons, the Court recommends that the Trust Funds’ motion for default

judgment be granted. The Court further recommends that the presiding judge issue an order (1)

requiring Defendants to make available in the State of California to the Trustees or their agents, all

books, records, and papers necessary to conduct an audit to verify that the required contributions

have been paid; (2) directing Defendants to timely submit all required monthly contributions reports;

and (3) granting the Trust Funds fees in the amount of $2,638.75 and costs in the amount of $847.69. 

Finally, the Court recommends that the presiding judge retain jurisdiction over this case with regard

to any contributions and damages determined owed to the Trust Funds after the audit has been

completed and the monthly contribution reports provided. 

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. P. 72(b);

Civil L.R. 72-3.

IT IS SO ORDERED.

Dated: September 4, 2007

_________________________ EDWARD M. CHEN

United States Magistrate Judge

Case 3:07-cv-01053-CRB Document 26 Filed 09/04/07 Page 10 of 10