Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_15-cv-02387/USCOURTS-cand-3_15-cv-02387-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1131 E.R.I.S.A. Collection of Delinquent Trust Funds

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

BOARD OF TRUSTEES OF THE 

NORTHERN CALIFORNIA 

PLASTERERS HEALTH AND WELFARE 

TRUST FUND, et al.,

Plaintiffs,

v.

HINDS BROS. COMPANY, INC.,

Defendant.

Case No. 3:15-cv-02387-JD 

ORDER RE MOTION FOR PARTIAL 

SUMMARY JUDGMENT

Re: Dkt. No. 46

Plaintiff Board of Trustees of the Northern California Plasterers Health and Welfare Trust 

Fund, and other related parties (“Trusts”), moved for summary judgement. Dkt. No. 46. Plaintiffs

contend they are entitled to liquidated damages for contributions that were paid, but in an untimely 

manner, by defendant Hinds Bros. Company (“Hinds”) prior to the filing of the original complaint 

in May 2015. Dkt. No. 49. While their initial motion brief is titled a “motion for summary 

judgment,” Dkt. No. 46, the Trusts subsequent filing said that they had filed for “partial” summary 

judgment, Dkt. No. 49. The Court grants the motion.

BACKGROUND

Plaintiffs are union multi-employer benefit plans to whom employers make contributions 

pursuant to certain -- Local Union No. 66 and Local Union No. 300 -- collective bargaining 

agreements (“CBAs”). Dkt. No. 44 ¶ 3. Defendant Hinds is engaged in lathing and plastering 

work in Sonoma County and is a signatory to the CBAs. Id. ¶¶ 6-12. The owner, Scott Hinds, 

declares he signed the “Plasterers Agreement” in 2000. Dkt. No. 47-1 ¶ 2. Plaintiffs allege that 

defendant has either failed to make the required contributions or, as relevant here, made untimely 

payments to the Trusts. Dkt. No. 44 ¶¶ 13-14. 

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This is the second time the Court has been presented with this question. At a case 

management conference, defendant was advised to file a motion for summary judgment on 

liquidated damages. Dkt. No. 24. The resulting briefing presented three questions: “whether 

Hinds must pay: (1) liquidated damages for contributions unpaid as of the time of the complaint’s 

filing; (2) liquidated damages for late contributions paid by the time of filing; and (3) liquidated 

damages for late contributions after the time of filing.” Dkt. No. 29 at 1. The Court held 

“plaintiffs can recover liquidated damages under ERISA for both (1) unpaid contributions as of 

filing and (3) late contributions after filing.” Id. at 2. The Court concluded that “ERISA does not, 

however, mandate liquidated damages for (2) late contributions paid by time of filing,” and that 

“the terms of the trust agreement’s liquidated damages provision control” that question. Id.

LEGAL STANDARDS

Summary judgment is appropriate when no genuine issue exists as to any material fact, and 

the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). A genuine issue 

exists if the evidence is such that a reasonable jury could find for the nonmoving party. Anderson 

v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A disputed fact is material if it might affect the 

outcome of the suit such that a finding of that fact is necessary and relevant to the proceeding. Id. 

A trust agreement’s liquidated damages provision is enforceable as a matter of law if it 

meets the test established by our circuit in Idaho Plumbers and Pipefitters Health and Welfare 

Fund v. United Mechanical Contractors, 875 F.2d 212 (9th Cir. 1989). The test is whether (1) the 

harm of breach is “very difficult or impossible to estimate” and (2) the damages are “a reasonable 

forecast of just compensation for the harm caused.” Id. at 217. Idaho Plumbers also voids

unreasonable stipulated damages provisions on public policy grounds. Id. at 218.

DISCUSSION

The first step of the Idaho Plumbers test is met since the harm to the trusts is difficult to 

estimate. This Court has previously recognized that district courts “have consistently found that 

the first prong is satisfied by untimely contributions to trusts.” Dkt. No. 29 at 2. This is because 

when “an employer is delinquent in paying contributions into a fringe benefit trust fund, the fund 

suffers some kinds of harms that are very difficult to gauge.” Bd. of Trs. v. Udovch, 771 F. Supp. 

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United States District Court

Northern District of California

1044, 1049 (N.D. Cal. 1991). For example, untimely payments require the fund to redistribute 

resources, including working hours, in order to ensure that payments are collected and that 

benefits can be paid out.

The second step of our circuit’s test requires the liquidated damages provision to be a

“reasonable forecast of just compensation for the harm caused.” Idaho Plumbers, 875 F.2d at 217. 

This portion of the inquiry looks to the “parties’ intentions” and requires that they made “a good 

faith attempt to set an amount equivalent to the damages they anticipate.” Id.; see also Parkhurst 

v. Armstrong Steel Erectors, Inc., 901 F.2d 796, 798 (9th Cir. 1990). 

The liquidated damages provision of the CBA is enforceable because the parties intended it 

to compensate for the harms they anticipated would be caused by untimely payments. The best 

evidence of parties’ intentions is the contract itself. The Local Union No. 300 CBA declares that 

delinquent employers “shall be assessed, by way of liquidated damages, for the additional expense 

resulting from the delinquency, and not as a penalty, ten percent (10%) of the amount due and 

unpaid or $200.00, whichever is greater.” Dkt. No. 46-3 at ECF p. 16. The Local Union No. 66 

CBA contains very similar language. Dkt. No. 46-6 at ECF p. 34. These contracts strongly 

indicate that the parties who drafted the liquidated damages provisions were considering how to 

compensate the Trusts for the harm that results from late payments. 

Other courts have found similar contractual language to be dispositive of the second step in

Idaho Plumbers. See, e.g., Tr. of Bricklayers Local No. 3 Pension Tr. v. Huddleston, No. 10-cv1708-JSC, 2013 WL 2181532, at *6 (N.D. Cal. May 20, 2013). Another court upheld the

enforceability of the Local Union No. 66 CBA at issue in this case because the textual evidence 

“supports an inference that the parties made a good faith effort to establish a liquidated damages 

rate that would be a reasonable forecast of just compensation when entering into the agreement.” 

Bd. of Trs. of the N. Cal. Plasterers Health and Welfare Tr. Fund v. Davidson Plastering, Inc., No. 

15-cv-2386-PJH (DMR), 2016 WL 2937462, at *6 (N.D. Cal. Mar. 22, 2016) (internal quotation 

and citation omitted), report and recommendation adopted, 2016 WL 2913544 (N.D. Cal. May 19, 

2016). 

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The liquidated damages in this case, 10% of the contributions owed, or $200, whichever is 

greater, are not unreasonable by the standards of Idaho Plumbers. Dkt. No. 46-1 at 19. In that 

case, the circuit panel relied on, and approvingly cited, the Seventh Circuit’s decision in United 

Order of American Bricklayers and Stone Masons Union No. 21 v. Thorlief Larsen and Son, Inc., 

519 F.2d 331, 337 (7th Cir. 1975), which had enforced a 10% liquidated damages provision as 

reasonable.

Defendant does not dispute any of the relevant facts. While Hinds raises the decision in 

Lemos Concrete Construction, Inc. v. Laborers Health and Welfare Trust Fund for Northern 

California, No. 97-04229-MHP, as something of a defense, that case is neither controlling 

authority, nor does it persuasively point to different result. See Dkt. No. 25-2, Ex. C. In Lemos, 

there was no evidence that the parties had considered the anticipated harms of untimely payments 

when they formed the contract -- there were only “hindsight studies.” Id. at ECF p. 17. That is 

not the case here where there is dispositive evidence that the parties to the agreements have 

engaged in a good faith attempt to estimate anticipated damages.

CONCLUSION

Summary judgment on liquidated damages is granted in favor of plaintiffs. They are 

entitled to liquidated damages for untimely payments, but payments ultimately made, before the 

filing of the original complaint in May 2015. 

IT IS SO ORDERED.

Dated: September 3, 2019

JAMES DONATO

United States District Judge

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