Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_06-cv-03078/USCOURTS-cand-4_06-cv-03078-23/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

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

CALIFORNIA SERVICE EMPLOYEES HEALTH &

WELFARE TRUST FUND, MIKE GARCIA,

Trustee, CHARLES GILCHRIST, Trustee,

RAYMOND C. NANN, Trustee, LARRY T.

SMITH, Trustee,

Plaintiffs,

v.

ADVANCE BUILDING MAINTENANCE and

FORREST NOLIN,

Defendants.

 /

No. C 06-3078 CW

ORDER GRANTING

PLAINTIFFS' MOTION

FOR LEAVE TO FILE A

SECOND AMENDED

COMPLAINT AND

GRANTING IN PART

PLAINTIFFS'

APPLICATION FOR WRIT

OF ATTACHMENT

Plaintiffs California Service Employees Health & Welfare Trust

Fund (Trust) and trustees Mike Garcia, Charles Gilchrist, Raymond

Nann and Larry Smith have filed a motion for leave to file a second

amended complaint (SAC) and an application for a right to attach

order and for a writ of attachment. Defendant Advance Building

Maintenance opposes the issuance of a right to attach order. 

Defendants Advance and Forrest Nolin filed a statement of nonopposition to the motion for leave to file a SAC. The motions were

decided on the papers. Having considered all of the papers filed

by the parties, the Court grants Plaintiffs' motion to file an SAC

and grants in part Plaintiffs' application for a writ of

attachment.

BACKGROUND

As discussed in the Court's earlier orders, the Trust is a

Case 4:06-cv-03078-CW Document 268 Filed 01/08/08 Page 1 of 8
United States District Court

For the Northern District of California

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non-profit, neutral third-party established to administer health

and welfare benefits to members of various unions pursuant to

collective bargaining agreements with employers including Advance. 

Nolin is the CEO and sole shareholder of Advance. This dispute

arises out of successive collective bargaining agreements (CBAs),

also called Maintenance Contractors Agreements (MCAs), between

Advance and members of Local 1877 (previously Local 399) of the

Service Employees International Union (SEIU). Under the

agreements, Advance was required to make contributions to the Trust

for health and welfare benefits for covered employees.

On May 8, 2006, Plaintiffs filed this complaint against

Advance, alleging various unpaid benefits, late benefits and

related claims for interest and liquidated damages due for the time

period January, 1999 through December, 2002 and on two accounts for

the time period August, 2003 through December, 2003. On November

1, 2007, the Court granted in part Plaintiffs' motion for summary

judgment, finding that the only remaining question on the merits of

Plaintiffs' claims is whether Defendant Advance is entitled to

credit for a $1,825.48 overpayment. The Court also granted

Plaintiffs' request for injunctive relief and entered a preliminary

injunction preventing Advance from paying any dividends, bonuses or

extraordinary salary to its officers or directors until after

$647,382.02 owed to Plaintiffs is paid in full. Finally, the Court

granted Plaintiffs leave to file an amended complaint alleging four

additional causes of action, adding Nolin as a Defendant and adding

the Trust derivatively on behalf of Advance as a Plaintiff. On

December 26, 2007, the Court denied Nolin's motion to dismiss the

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United States District Court

For the Northern District of California

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amended complaint.

Plaintiffs now move pursuant to Federal Rule of Civil

Procedure 15(d) to supplement their complaint to allege delinquent

payments for the time period January, 2003 through July, 2007. In

addition, Plaintiffs move pursuant to Federal Rule of Civil

Procedure 15(a) and (d) to add a claim for relief for a writ of

attachment and move for such a writ.

DISCUSSION

I. Motion for Leave to File a SAC

Rule 15(d) provides: "Upon motion of a party the court may,

upon reasonable notice and upon such terms as are just, permit the

party to serve a supplemental pleading setting forth transactions

or occurrences or events which have happened since the date of the

pleading sought to be supplemented." Fed. R. Civ. P. 15(d); see

also Cabrera v. City of Huntington Park, 159 F.3d 374, 382 (9th

Cir. 1998). The purpose of Rule 15(d) is to promote as complete an

adjudication of the dispute between the parties as is possible. 

LaSalvia v. United Dairymen of Ariz., 804 F.2d 1113, 1119 (9th Cir.

1986). "Rule 15(d) is intended to give district courts broad

discretion in allowing supplemental pleadings. The rule is a tool

of judicial economy and convenience. Its use is therefore

favored." Keith v. Volpe, 858 F.2d 467, 473 (9th Cir. 1988)

(citation omitted). The allegations contained in a supplemental

pleading need not arise out of the same transaction or occurrence

as the original; they need only bear some relationship to the

subject of the original pleading. See id. at 474.

The Court may deny leave to supplement a complaint on grounds

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United States District Court

For the Northern District of California

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1

This standard also applies to motions to motions for leave to

amend pursuant to Rule 15(a). See Foman v. Davis, 371 U.S. 178,

182 (1962). 

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of undue delay, prejudice to the opposing party, or futility. See

id.1 Futility exists where no set of facts can be proved which

would state a valid claim, or where the claim would be subject to

dismissal. See Saul v. United States, 928 F.2d 829, 843 (9th Cir.

1991); Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir.

1988). 

Plaintiffs seek to supplement their complaint to include

allegations related to the delinquent payments for the period

January 1, 2003 through July 31, 2007 identified in an audit

completed in November, 2007 (2007 audit). As stated above,

Defendants do not oppose the motion for leave to file a SAC. 

Plaintiffs have demonstrated a relationship between the claims for

delinquent payments identified in the 2007 audit and the claims in

the current complaint and there is no indication that Defendants

will be prejudiced by the amendment, that the amendment would be

futile or that Plaintiffs have delayed in seeking this amendment. 

Similarly, Plaintiffs' proposed claim for relief for a writ of

attachment is related to the existing claims and there is no reason

that such an amendment should be disallowed. Plaintiffs' motion

for leave to file a SAC is granted.

II. Writ of Attachment

 Plaintiffs have also filed an application for a writ of

attachment based on two amounts: (1) $597,382.08, the amount

awarded to Plaintiffs in the Court's November 1, 2007 order

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United States District Court

For the Northern District of California

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granting summary judgment, less the $50,000 in payments made by

Advance between January and May, 2007 and (2) $172,469.17, the sum

of the $104,463.96 in delinquent payments identified by Plaintiffs

in the 2007 audit report not disputed by Advance and the related

liquidated damages and interest.

The California Code of Civil Procedure provides a remedy for a

prejudgment writ of attachment. See Cal. Civ. Proc. Code 

§§ 481.010-493.060. Under California Code of Civil Procedure 

§ 484.090, a writ of attachment shall be granted upon a showing

that: 

(1) The claim upon which the attachment is based is one

upon which an attachment may be issued. 

(2) The plaintiff has established the probable validity

of the claim upon which the attachment is based.

(3) The attachment is not sought for a purpose other

than the recovery on the claim upon which the

attachment is based. 

(4) The amount to be secured by the attachment is

greater than zero.

Id. at § 484.090(a). Attachments may only be issued on claims for

money based on express or implied contracts where the amount of the

claim is fixed or readily ascertainable. Cal. Civ. Proc. Code 

§ 483.010(a). That is so here. Defendant Advance argues that

Plaintiffs have not demonstrated that the attachment is sought only

for the purpose of recovery on the claims upon which it is based. 

Advance has filed a declaration stating Nolin's belief that the

purpose of the writ is to harass Defendants and jeopardize

Advance's ability to sustain its business. See Nolin Decl. ¶¶ 5-

11. However, the declaration does not demonstrate that Plaintiffs

seek anything beyond the delinquent payments, which Advance already

conceded. See Nolin Decl., Ex. A (letter from Advance to

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United States District Court

For the Northern District of California

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Plaintiffs stating, "According to our corrective schedules, the

underpayment total is $104,463.96."). 

Advance also argues that, even if the Court finds that a right

to attach order is warranted in this case, Plaintiffs have not

demonstrated the "probable validity" of their claim as required by

§ 484.090. Advance argues that Plaintiffs have not demonstrated

that they are likely to obtain judgment on the amount based on the

2007 audit because they have not provided an evidentiary foundation

for the delinquent payments. However, as discussed above, Advance

concedes the underpayment of $104,463.96 on which Plaintiffs now

seek a writ of attachment. This is enough to demonstrate that

Plaintiffs likely will obtain judgment on this amount and the

related interest and liquidated damages mandated by statute. 

Advance next argues that, even if Plaintiffs have made a

showing that they are entitled to a writ of attachment, the amount

should be reduced by $124,171,49, comprising $62,193.39 and

$61,193.39, the amounts that Advance argues it over-paid during the

periods covered by the 2004 and 2007 audits respectively. 

California Code of Civil Procedure section 483.015(b) provides that

the amount to be secured by an attachment shall be reduced by the

"amount of any claim of the defendant asserted as a defense in the

answer pursuant to Section 431.70 if the defendant's claim is one

upon which an attachment could be issued had an action been brought

on the claim when it was not barred by the statute of limitations." 

Advance has asserted an over-payment defense in its answer to the

FAC and states its intent to do so in its answer to the SAC. 

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United States District Court

For the Northern District of California

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Therefore, the Court reduces the amount of the writ of attachment

by $124,171.49 to $645,679.76.

CONCLUSION

For the foregoing reasons, the Court GRANTS Plaintiffs' motion

for leave to file a SAC (Docket No. 229) and GRANTS IN PART

Plaintiffs' application for a writ of attachment (Docket No. 235). 

Plaintiffs shall file their SAC within five days of the date of

this order. Upon payment of a $7,500 undertaking by Plaintiffs,

the clerk shall issue a writ of attachment to secure $645,679.76 of

Advance's assets. 

The hearing and case management conference scheduled for

January 10, 2008 are hereby VACATED. The Court grants the parties'

request to modify the case management schedule. All dates,

beginning with the date for case-dispositive motions, shall be

extended by three weeks. The parties' case-dispositive motions

will be heard at 2:00 P.M. on March 20, 2008. A case management

conference will be held at that time whether or not casedispositive motions are filed. The parties shall address in their

case management statement whether any of their claims gives rise to

a right to a jury trial. 

The Court is informed that the parties have cancelled their

settlement conference and will fail to meet the alternative dispute

resolution deadline set for today. The Court is also informed that

Magistrate Judge James has offered January 23 or January 28 as

dates on which the conference maybe rescheduled. The Court hereby 

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For the Northern District of California

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orders the parties to select one of those two dates and confirm

their selection with Judge James by January 9, 2008.

IT IS SO ORDERED.

1/8/08

Dated: ________________________ 

CLAUDIA WILKEN

United States District Judge

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