Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_05-cv-00654/USCOURTS-cand-4_05-cv-00654-3/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

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BOARD OF TRUSTEES OF THE

SHEET METAL WORKERS, et al.,

Plaintiff(s),

v.

TGW METAL, INC., et al.,

Defendant(s).

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No. C05-0654 BZ

REPORT AND RECOMMENDATION ON

PLAINTIFFS’ MOTION FOR ENTRY

OF DEFAULT JUDGMENT

Before me is plaintiffs’ motion for entry of default

judgment against defendant TGW Metal, Inc. (“defendant”). 

Defendant has never appeared in this action and did not

respond to plaintiffs’ motion. As defendant has not consented

to my jurisdiction, the following is a report and

recommendation for entry of default judgment.

On February 11, 2005, plaintiffs filed a complaint under

Section 301(c)(1) of the Labor-Management Relations Act of

1947 (“LMRA”), 29 U.S.C. § 185(a), and Section 502 of the

Employee Retirement Income Security Act of 1974 (“ERISA”), 29

U.S.C. § 1132, alleging that defendant violated a collective

bargaining agreement and certain Trust Agreements that

Case 4:05-cv-00654-PJH Document 31 Filed 01/04/06 Page 1 of 7
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required defendant to make regular contributions to the Sheet

Metal Workers Health Care Plan of Northern California, Sheet

Metal Workers Pension Trust of Northern California, Sheet

Metal Workers Local 104 Vacation, Holiday Savings Plan

(collectively, “Trust Funds”), of which plaintiffs are

trustees. Compl. ¶ 2. According to the complaint, the

collective bargaining agreement obligates defendant to pay

regular monthly contributions for all of its employees covered

by the Trust Funds. Compl. ¶¶ 1, 5. The complaint seeks

damages for unpaid contributions, liquidated damages,

interest, attorneys’ fees and costs. Compl. Prayer ¶ 1. 

Defendant paid the full amount of delinquent contributions

following the filing of this lawsuit. 

Plaintiffs effected service of process on March 4, 2005. 

Defendant failed to answer the complaint or otherwise defend

the action. On June 21, 2005, 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 averments 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. § 521. As a corporation, TGW Metal, Inc. satisfies

this requirement. Compl. ¶¶ 3-4.

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

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

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

hearing is not required for a court to render a default

judgment. Davis v. Fendler, 650 F.2d 1154 (9th Cir. 1981). 

Section 1132(g) of ERISA 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) an amount equal to the greater of – 

(I) interest on the unpaid contributions,

or

(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

mandatory if the following requirements are satisfied: (1)

the employer is delinquent at the time the action is filed;

(2) the district court has entered a judgment against the

employer; and (3) the plan provides for such an award. 

Northwest Adm’rs, Inc. v. Albertson’s, Inc., 104 F.3d 253, 257

(9th Cir. 1996) (citing Idaho Plumbers and Pipefitters Health

and Welfare Fund v. United Mechanical Contractors, Inc., 875

F.2d 212, 215-16 (9th Cir. 1989). A mandatory award is

available under section 1132(g)(2) “notwithstanding the

defendant’s post-suit, pre-judgment payment of the delinquent

contributions.” See Northwest Adm’rs, Inc., 104 F.3d at 258

(quoting Carpenters Amended and Restated Health Benefit Fund

v. John W. Ryan Constr. Co., Inc., 767 F.2d 1170, 1175 (5th

Cir. 1985)); see also Iron Workers Dist. Council v. Hudson

Steel Fabricators & Erectors, Inc., 68 F.3d 1502, 1507 (2nd

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Cir. 1995); Board of Trustees of the Sheet Metal Workers v.

General Facilities, Inc., 2003 WL 1790837, at *2 (N.D. Cal.

March 31, 2003) (citing Carpenters & Joiners Welfare Fund v.

Gittleman Corp., 857 F.2d 476, 478 (8th Cir. 1988)). As

plaintiffs have satisfied the statutory requirements, they are

entitled to an award under section 1132(g). See Iron Workers

Dist. Council, 68 F.3d at 1507. 

Plaintiffs have the burden of proving damages. To prove

damages, plaintiffs have submitted a declaration from Bonnie

Maraia, Fund Manager of Benesys, administrators of the Trust

Funds, and custodian of the books and records for the Trust

Funds. See Declaration of Bonnie Maraia in Support of

plaintiffs’ Motion for Default Judgment (“Maraia Decl.”) ¶ 1.

Maraia’s declaration establishes that defendant failed to

make contributions for the months of November 2004 and

December 2004 when due to the Trust Funds in the amount of

$14,996.16. Maraia Decl., Exs. 3, 4. Defendant paid the full

amount of delinquent contributions on February 15, 2005. 

Plaintiffs seek $2,999.23 in liquidated damages because

the contributions for November 2004 and December 2004 were not

received in a timely manner. Maraia Decl., ¶¶ 3, 10. 

Liquidated damages are recoverable under ERISA, as provided in

the plan, in an amount not to exceed twenty percent. See 29

U.S.C. § 1132(g)(2). Section III(C) of the Sheet Metal

Workers Pension Trust of Northern California Agreement and

Declaration of Trust (the “Trust Agreement”) provides for the

assessment of liquidated damages on delinquent contributions

at the rate of 20 percent if a lawsuit is filed to collect

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delinquent contributions. See Maraia Decl., Ex. 2. As the

amount plaintiffs seek is permitted by contract and statute, I

recommend that plaintiffs recover a total of $2,999.23 in

liquidated damages.

Plaintiffs also seek interest of fifteen percent on the

contributions for the time they were delinquent. Under ERISA,

the Trust may recover interest based on the rate set by the

Trust Agreement. See 29 U.S.C. 1132(g)(2). However,

plaintiffs submitted plan materials that state the interest

rate as being ten percent. Maraia Decl., Ex. 2. Section 3 of

the Proposed New Collection Procedures for Sheet Metal Trust

provides, “If legal proceedings are instituted, interest at

10% annually will be assessed from the delinquency date (the

20th of Month 1).” Maraia Decl., Ex. 2. When questioned at

the hearing about this discrepancy, plaintiffs’ counsel agreed

to reduce their request for interest to two-thirds of $253.73,

which equals $169.15. I therefore recommend that plaintiffs

recover $169.15 in interest for the delinquent contributions.

Plaintiffs also request that the Court enter a limited

judgment reserving their rights to audit defendant’s books for

any periods not previously audited, including for the same

time period covered in this default judgment, and to collect

by subsequent legal action any sum found to be due after an

audit. For the reasons cited in this Court’s Report and

Recommendation dated June 16, 2005, in Board of Trustees of

the Bay Area Roofers Health and Welfare Trust Fund, et al., v.

Ace Roofing Company, No. C04-3098 MJJ, I recommend that

plaintiffs’ request for entry of such a judgment be denied.

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1 Plaintiffs’ counsel agreed at the hearing to reduce

the requested amount for costs from $350 to $250. The record

establishes that plaintiffs’ counsel has incurred $150 in

filing fees and $100 in service costs. Carroll Decl. ¶ 2 and

Exh. 5. 

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Plaintiffs also seek $740 in attorneys’ fees and $350 in

costs. Reasonable attorneys’ fees and costs of the action may

be awarded to a Trust Fund that receives a judgment in its

favor. See 29 U.S.C. 1132(g)(2)(D). Michael J. Carroll,

plaintiffs’ counsel, in his Declaration in Support of Motion

for Default Judgment (“Carroll Decl.”), calculates that he

spent in excess of four hours prosecuting this action at a

rate of $185.00 per hour. See Carroll Decl. ¶ 5. Mr. Carroll

spent this time preparing a Motion for Entry of Default with

Supporting Declaration, Plaintiff’s Case Management Statement,

a Declaration Requesting that Case Management Conference be

Continued, and Plaintiffs’ Motion for Default Judgment and

Attorneys’ Fees. Id. This time was reasonable and necessary

to obtain a default judgment in his client’s favor, and is

therefore recoverable. See id. The rate charged is also

reasonable in relation to work performed. See id. Plaintiffs

also incurred $250 in costs consisting of filing fees and

costs associated with service of process.1 Id. ¶2. Based on

the declaration submitted in support of plaintiffs’

application, I find that these amounts are reasonable and

recommend that plaintiffs recover $740 in attorneys’ fees and

$250 in costs.

For the foregoing reasons, I recommend that Judgment be

entered in plaintiffs’ favor against TGW Metal, Inc. for

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$4,158.38. This amount includes $2,999.23 in liquidated

damages, $169.15 in interest on delinquent contributions, $740

in attorneys’ fees and $250 in costs. 

Dated: December 22, 2005

 Bernard Zimmerman 

 United States Magistrate Judge

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