Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_04-cv-04772/USCOURTS-cand-4_04-cv-04772-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:185 Employee Pension Plan

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

JOSE MORENO, et al.,

Plaintiff(s),

v.

CANYON SPRING ENTERPRISES, a

California Corp., and ROBERT

STANLEY HAMILTON, an

Individual,

Defendant(s).

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No. C04-4772 BZ

REPORT AND RECOMMENDATION ON

PLAINTIFFS’ MOTION FOR ENTRY

OF DEFAULT JUDGMENT

Before me is plaintiffs’ motion for entry of default

judgment against defendants Canyon Springs Enterprises

(“Canyon Springs”) and Robert Stanley Hamilton. Defendants

have never appeared in this action and did not respond to

plaintiffs’ motion. As defendants have not consented to my

jurisdiction, the following is a report and recommendation for

entry of default judgment.

On November 10, 2004, plaintiffs filed a complaint under

§ 301 of the Labor Management Relations Act of 1947 (“LMRA”),

29 U.S.C. § 185(a), and § 502 of the Employee Retirement

Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1132. The

Case 4:04-cv-04772-PJH Document 27 Filed 07/15/05 Page 1 of 9
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1 In their motion, plaintiffs only seek relief pursuant

to 29 U.S.C. § 1132(g).

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complaint alleges that defendants violated a collective

bargaining agreement that required defendants to make regular

contributions and to submit reports of its employees’ work

hours to the Laborers Health and Welfare Trust Fund for

Northern California, the Laborers Vacation-Holiday Trust Fund

for Northern California, the Laborers Pension Trust Fund for

Northern California, and the Laborers Training and Retraining

Trust Fund for Northern California (collectively, “Trust

Funds”), which plaintiffs administer.1 Compl. ¶¶ 3, 8-9. 

According to the complaint, the collective bargaining

agreement obligates defendants to pay regular monthly

contributions for all of its employees covered by the Trust

Funds and also binds defendants to the provisions of the

Memorandum Agreement with the Northern California District

Council of Day Laborers (“Memorandum Agreement”) and the

Laborers’ Master Agreement for Northern California (“Laborers’

Master Agreement”). Id. at ¶8. The complaint seeks

$32,024.47 in damages, plus attorneys fees and costs. The

complaint also requests an audit of defendants’ books and

records.

Plaintiffs effected service of process on December 9,

2004. Defendants failed to answer the complaint or otherwise

defend the action. On February 7, 2005, upon plaintiffs’

request, the Clerk of this court entered defendants’ default

under Rule 55(a). By its default, defendants are deemed to

have admitted the well-pleaded averments of the complaint

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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. The corporate defendant, Canyon Springs, is not

subject to this limitation. Although plaintiffs allege that

Hamilton owns, operates, and controls Canyon Springs, they

have not established that he is a competent adult not in

military service, even though they were reminded of this

requirement in my scheduling order. See Fed. R. Civ. P.

55(b)(2); 50 App. U.S.C. § 521. I therefore recommend that

plaintiffs’ motion for default judgment with respect to

Hamilton be denied.

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 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

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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: (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 Cir. 1995); Bd. of Trs. of the

Sheet Metal Workers v. Gen. 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)). “[A] plaintiff may receive judgment for contributions

which became due after the lawsuit was filed and remain unpaid

at the time of judgment.” See Bd. of Trs. of the Sheet Metal

Workers, 1790837 at *2. Plaintiffs have satisfied the

statutory requirements and are entitled to relief for all

unpaid contributions that have not yet been satisfied. See

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

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Plaintiffs have the burden of proving damages through

testimony or written affidavit. Prior to the May 4, 2004

hearing, plaintiffs submitted the declaration of James P.

Watson (“Watson Decl.”), plaintiffs’ counsel, that summarily

stated the amounts due and owing, and contained insufficient

documentation to support plaintiffs’ damages. At the hearing

on May 4, 2005, I granted Watson leave to submit a

supplemental declaration detailing plaintiffs’ damages

calculations. On May 18, 2005, plaintiffs filed supplemental

papers, including a supplemental declaration from Watson. 

See Declaration of James P. Watson in Supp. of Pls.’ Mot. for

Entry of Default Judgment filed on May 18, 2005 (“Watson Supp.

Decl.”). Watson’s supplemental declaration contained amounts

that were inconsistent with plaintiffs’ previous damages

request, and again failed to adequately explain plaintiffs’

damages calculations. I ordered Watson to personally appear

on June 15, 2005, at 10:00 a.m., and to be prepared to answer

a list of specific questions regarding plaintiffs’ damages

request. Watson failed to appear at the hearing, as ordered,

apparently due to an inadvertent error within his law firm. I

continued the hearing to 1:30 p.m., at which time Watson

appeared. As Watson was unable to answer the questions that I

had ordered him to be prepared to answer, I again granted

plaintiffs’ leave to file supplemental papers.

On June 29, 2005, plaintiffs filed a supplemental

memorandum; the declaration Andrea J. Kirkpatrick in support

of plaintiffs’ motion for entry of default judgment and

supplemental briefing in connection therewith (“Kirkpatrick

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Decl.”); and the declaration of John Hagan in support of

plaintiffs’ motion for entry of default judgment and

supplemental briefing in connection therewith (“Hagan Decl.”). 

Kirkpatrick is counsel for plaintiffs and Hagan is the manager

of the Accounts Receivable Department for the Laborers’ Funds

Administrative Office of Northern California, which provides

administrative services for the Trust Funds. See Kirkpatrick

Decl. ¶ 1; Hagan Decl. ¶ 1. As part of his duties the manager

of the Accounts Receivable Department, Hagan monitors employer

compliance with collective bargaining agreements underlying

the Trust Funds and oversees the records of employer’s

enrollment, submission of monthly employer reports, and

employer’s payment of monthly fringe benefit contributions. 

Hagan Decl. ¶ 1. 

Based on the declarations submitted, plaintiffs have

established that Canyon Springs failed to make contributions

to the Trust Funds, as required by Section 28 of the Laborers’

Master Agreement, in the amount of $32,024.47. Watson Decl.

at ¶ 4; Watson Supp. Decl. ¶ 4; Hagan Decl. ¶ 3, Ex. A. 

Factoring in payments made by defendants since filing this

lawsuit, Canyon Springs still owes a total of $9,288.28 in

unpaid contributions for April through June 2004 and February

2005. Hagan Decl. ¶ 5, Exs. B-F. I recommend that plaintiffs

recover $9,288.28 in unpaid contributions from Canyon Springs

for these months.

Plaintiffs also request $6,869.62 in interest on the

unpaid contributions through March 25, 2005. Under section

1132(g)(2)(B), the Trust may recover interest on unpaid

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contributions. See 29 U.S.C. § 1132(g)(2)(B). Interest is

calculated based on the rate provided for under the plan, or,

if none, the rate prescribed under section 6621 of Title 26. 

See 29 U.S.C. § 1132(g)(2). Section 28A of the Laborers’

Master Agreement provides for interest on delinquent

contributions at the rate of one and one-half percent. See

Hagan Decl., Ex. A. Based on this rate, plaintiffs are

entitled to $6,869.62 in interest. See id. at ¶¶ 11, 13-14,

Exs. G, H. I recommend that they recover this amount from

Canyon Springs.

Plaintiffs seek $2,850.00 in liquidated damages. Section

1132(g)(2)(C) provides that plaintiffs may recover “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.” See 29

U.S.C. § 1132(g)(2)(C). The Laborers’ Master Agreement

provides for liquidated damages at a flat rate of $150.00 per

month. See Hagan Decl., Ex. B. Plaintiffs have demonstrated

that they are entitled to liquidated damages for August 2003

through July 2004 and September 2004 through March 2005. 

See id., ¶ 12, Exs. G, H. The $150.00 flat fee for each of

these months does not exceed 20 percent of the unpaid

contributions. See Kirkpatrick Decl. ¶ 8, Ex. B; Hagan Decl.

¶¶ 12-14, Exs. G, H. I therefore recommend that plaintiffs

recover $2,850.00 in liquidated damages from Canyon Springs.

Plaintiffs also seek $2,812.50 in attorneys’ fees and

$381.90 in costs. Reasonable attorneys’ fees and costs of the

action may be awarded to a Trust Fund that receives a judgment

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

that through March 14, 2005, he spent 12.5 hours prosecuting

this action at a rate of $225.00 per hour. See Watson Supp.

Decl. ¶¶ 8-9, Ex. E. His time primarily consisted of

reviewing plaintiffs’ records, and drafting the complaint,

this motion, and the supporting declarations. This time was

reasonable and necessary to obtain a default judgment in his

clients’ favor, and is therefore recoverable. See id. The

rate charged is reasonable in relation to the work performed. 

See id. ¶¶ 1,3,7; Ex. E. Plaintiffs also incurred $381.90 in

costs primarily consisting of filing fees and costs associated

with service of documents. See id. ¶ 6, Ex. D. Although

plaintiffs have spent a number of additional hours on this

case since the March 14, 2005, they have not requested

attorney’s fees or costs for this time. Plaintiffs’ request

for $2,812.50 in attorneys’ fees and $381.90 in costs against

Canyon Springs is reasonable and should be awarded.

Plaintiffs also request that defendants submit to an

audit to determine the extent of defendants’ delinquency. 

Where a collective bargaining agreement grants the right to

audit the employer’s books, that right shall be enforced. 

Cent. States, Southeast and Southwest Areas Pension Fund v.

Cent. Transp., Inc., 472 U.S. 559, 581 (1985). Section 7 of

the Laborers’ Master Agreement provides for an audit of

defendant Canyon Springs’ books and records. Kirkpatrick

Decl., ¶ 7, Ex. A. I therefore recommend that Canyon Springs

be required to submit to an audit under the conditions

expressed in the Laborers’ Master Agreement.

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For the foregoing reasons, I recommend that judgment be

entered in plaintiffs’ favor against Canyon Springs for total

award of $22,202.30. This amount includes: $9,288.28 in

unpaid contributions, $6,869.62 in interest on unpaid

contributions, $2,850.00 in liquidated damages, $2,812.50 in

attorneys’ fees, and $381.90 in costs. I further recommend

that Canyon Springs submit to an audit under the conditions

expressed in the Laborers’ Master Agreement. I recommend that

plaintiffs motion for default judgment with respect to Robert

Stanley Hamilton be denied.

Dated: July 15, 2005

Bernard Zimmerman 

 United States Magistrate Judge

G:\BZALL\-BZCASES\MORENO\ORDER2.wpd

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