Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_03-cv-01399/USCOURTS-cand-4_03-cv-01399-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:185 Labor/Mgt. Relations (Contracts)

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

LARRY TOTTEN, et al.,

Plaintiffs,

v.

HAWORTH IRRIGATION, et al.,

Defendants.

___________________________________/

No. C-03-1399 CW (EMC)

REPORT AND RECOMMENDATION

RE PLAINTIFFS’ MOTION FOR

DEFAULT JUDGMENT

(Docket No. 53)

Plaintiffs filed suit against Defendants Haworth Irrigation, Irrigation Incorporated, Golden

State Landscape Company (“Golden State”), and Marshall Gordon Haworth, asserting claims for (1)

breach of contract and (2) mandatory injunction. See Docket No. 40 (Plaintiffs’ fourth amended

complaint, hereinafter “4AC”). Golden State was dismissed from the case on November 11, 2004. 

See Docket No. 41. Plaintiffs thereafter completed service of the summons and complaint on the

remaining Defendants. See Docket Nos. 46, 47, 49. After Defendants failed to respond to Plaintiffs’

complaint, default was entered on April 19, 2005. See Docket No. 51. Plaintiffs subsequently filed a

motion for default judgment, which Judge Wilken referred to the undersigned for a report and

recommendation. 

Having considered Plaintiffs’ brief and accompanying submissions, the Court hereby

recommends that the motion for default judgment be GRANTED.

I. FACTUAL & PROCEDURAL BACKGROUND

Plaintiffs initially filed their suit on April 2, 2003. See Docket No. 1. Thereafter, Plaintiffs

amended their complaint several times. The fourth amended complaint was filed on October 19,

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 The agreement was actually between Haworth Irrigation (with Mr. Haworth signing as “ownerpartner”) and the union. However, as demonstrated by the evidence submitted by Plaintiffs, Haworth

Irrigation is a sole proprietorship doing business under Contractor’s License No. 294242, which is the

license number for Mr. Haworth. See 4AC, Ex. A; Leigh Decl., Ex. B; see also id., Ex. A at 23

(deposition of Mr. Haworth’s son) (stating that Haworth Irrigation is a sole proprietorship). In other

words, Haworth Irrigation and Mr. Haworth are one and the same. See Black’s Law Dictionary 1398

(7th ed. 1999) (defining “sole proprietorship” as “[a] business in which one person owns all the assets,

owes all the liabilities, and operates in his or her personal capacity”).

2

 Based on evidence submitted by Plaintiffs, it appears that Irrigation Incorporated was dissolved

as of February 1, 2003. See Leigh Decl., Ex. C.

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2004. See Docket No. 40. According to the complaint, in August 1987, Haworth Irrigation and Mr.

Haworth entered into an agreement with a union called the Northern California District Council of

Laborers .1 See 4AC ¶ 17. Pursuant to that agreement, Haworth Irrigation and Mr. Haworth agreed

to make contributions into several trust funds, which are employee benefit plans under the Employee

Retirement Income Security Act (“ERISA”). See id. ¶¶ 6, 20. Haworth Irrigation and Mr. Haworth,

however, failed to make the required contributions; in addition, they failed to submit to an audit so

that Plaintiffs could determine the amount of any delinquency. See id. ¶ 22. Irrigation Incorporated

is also responsible for the above failures because Mr. Haworth is the alter ego of Irrigation

Incorporated, and the entity form was adopted in order to avoid contractual relations.2 See id. ¶¶ 12-

13, 19; see also id., Ex. A (Memorandum Agreement) (providing that Haworth Irrigation and Mr.

Haworth were bound by the agreement “regardless of the name, style or method of organization of

any individual employer entity and specifically applies to any company, firm, or corporation in the

construction industry with which or to which the undersigned has any connection of any nature or

kind whatsoever”).

On November 11, 2004, Plaintiffs asked Judge Wilken for leave to serve Defendants by

publication. See Docket No. 42. That motion was granted on December 15, 2004. See Docket No.

45. The order provided that service of the summons by publication was appropriate and also

required service of the summons and complaint (as well as the order itself) on Defendants at the last

known Post Office Box address and to the residential or business address if ascertained before

expiration of the time prescribed for publication of the summons. On December 16, 2004, Plaintiffs

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served Defendants by mail at the last known address. See Docket Nos. 46-47. Service of the

summons by publication was completed by February 1, 2005. See Docket No. 49.

After Defendants failed to respond, Plaintiffs asked for entry of default, which was issued on

April 19, 2005. See Docket No. 51. Plaintiffs subsequently moved for default judgment against

Defendants.

II. DISCUSSION

A. Timeliness of Plaintiffs’ Motion for Default Judgment

As a preliminary matter, the Court notes that Plaintiffs did not timely file their motion for

default judgment. In an order filed on April 25, 2005, Judge Wilken instructed Plaintiffs to file their

motion for default judgment within thirty days. See Docket No. 52. Although Plaintiffs failed to do

so, in the interest of justice and in the absence of any prejudice to Defendants because of the late

filing of the motion for default judgment, this Court shall still provide a report and recommendation

on the merits of Plaintiffs’ motion.

B. Service of Process

In deciding whether to grant or deny a default judgment, a 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, Plaintiffs served the summons and

complaint on Defendants by publication as well as by mail at the last known address. Judge Wilken

expressly permitted this service after receiving briefing on the matter. Consequently, and consistent

with Judge Wilken’s prior ruling, the Court concludes that service of process on Defendants was

sufficient.

C. Eitel Factors and Default Judgment

Federal Rule of Civil Procedure 55(b)(2) authorizes a court to enter judgment against a

defendant against whom a default has been entered. The determination to grant or deny a motion for

default judgment is within the trial court’s discretion. See Aldabe v. Aldabe, 616 F.2d 1089, 1092

(9th Cir. 1980). Factors to guide a court’s discretion include: 

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(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). Generally, upon entry of default, the

factual allegations of the plaintiff’s complaint will be taken as true, except for those relating to the

amount of damages. See TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987).

As Plaintiffs argue in their motion for default judgment, 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 Plaintiffs would likely be left 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 plaintiffs’ motion [for default judgment] would leave them without a remedy. Prejudice is also

likely in light of the merits of their claim.”); 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, evidence in the record indicates that Mr.

Haworth has had knowledge of this lawsuit but has tried to evade responsibility. See generally Leigh

Decl., Ex. A (deposition of Mr. Haworth’s son). Also, the sum of money at stake in the action is

appropriate, tailored to the specific misconduct of Defendants. 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”). Furthermore, because Defendants have not filed an answer to Plaintiffs’

complaint, there is little to suggest that there is a possibility of a dispute concerning material facts. 

Finally, it is unlikely that Defendants’ default was due to excusable neglect given that Plaintiffs

served not only the summons and complaint but also the request for entry of default and motion for

default judgment on Defendants (at the last known address) but still received no response. More

important, it is unlikely that the default was due to excusable neglect given that Mr. Haworth has had

actual knowledge of the lawsuit. Mr. Haworth’s son testified at a deposition that he and his father

live at the same dwelling and that he told his father about the lawsuit when it was first filed. See

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Leigh Decl., Ex. A at 29-31, 84-85 (deposition of Mr. Haworth’s son). (In their original complaint,

Plaintiffs mistakenly named Mr. Haworth’s son as a defendant instead of Mr. Haworth.)

The only factors that deserve closer analysis are the second and third factors -- in essence, the

legal sufficiency of the complaint. In their fourth amended complaint, Plaintiffs assert claims for (1)

breach of contract and (2) a mandatory injunction. Because Plaintiffs have alleged -- and the Court

must accept as true, see Televideo, 826 F.2d at 917 (stating that, upon entry of default, all wellpleaded facts in the complaint are taken as true, except those relating to damages”) -- that the trust

funds are employee benefit plans under ERISA, Plaintiffs’ claim for breach of contract is preempted

by ERISA. See Aetna Life Ins. Co. v. Bayona, 223 F.3d 1030, 1034 (9th Cir. 2000) (noting that

ERISA preempts state law claims that “relate to” employee benefit plans; citing 29 U.S.C. §

1144(a)). As for Plaintiffs’ claim for a mandatory injunction, an injunction is a form of relief and

not a cause of action. To the extent that Plaintiffs have properly stated a claim for relief under

ERISA, the Court shall consider whether injunctive relief is possible as a remedy. See Part II.E,

infra. The first issue, however, for the Court to address is whether Plaintiffs have adequately pled a

claim for relief under ERISA.

Exhibit A attached to the fourth amended complaint is a copy of the agreement entered into

between Haworth Irrigation (signed by Mr. Haworth) and the union. As discussed in footnote 1,

supra, Haworth Irrigation is a sole proprietorship owned by Mr. Haworth, and so Haworth Irrigation

and Mr. Haworth are one and the same. The agreement, dated and effective on August 27, 1987,

provided that Haworth Irrigation would be bound by the Laborers Master Agreement and any

extension or renewal thereof. The agreement also provided that Haworth Irrigation would be bound

by any applicable Trust Agreement.

Pursuant to the relevant Master Agreements, Haworth Irrigation was responsible for making

contributions to several trust funds, and the trust funds had the right to enforce that obligation in any

court of competent jurisdiction if Haworth Irrigation were to become delinquent in the payment of

any contribution. See Donida Decl., Exs. A-C. The Master Agreement for 2002-2006 provided for

additional remedies if there were any delinquency on the part of Haworth Irrigation. See id., Ex. C. 

More specifically, effective November 1, 2002, see Leigh Decl. ¶¶ 20-21 & Ex. D, “[a]ny Individual

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Employer who is found to be delinquent as a result of an audit will pay and satisfy such delinquency

with accrued interest and in addition pay liquidated damages. All delinquent contributions shall bear

simple interest at the rate of one and one-half percent (1.5%) per month until receipt of payment. 

Subject to accounting verification, liquidated damages shall be assessed on delinquent contributions

at a flat rate of one hundred and fifty dollars ($150.00) per month . . . .” Donida Decl., Ex. C. 

Moreover, pursuant to the relevant Trust Agreements, “[i]f any individual employer defaults in the

making of such contributions or payments, and if the Board [of Trustees] consults or causes to be

consulted legal counsel with respect thereto, there shall be added to the obligation of the individual

employer who is in default, reasonable attorneys fees, court costs and all other reasonable expenses

incurred in connection with such suit or claim . . . .” Leigh Decl., Ex. E.

The fourth amendment complaint alleges -- and the Court must accept as true, see Televideo,

826 F.2d at 917 (stating that, upon entry of default, all well-pleaded facts in the complaint are taken

as true, except those relating to damages”) -- that Haworth Irrigation failed to make the contributions

to the trust funds as required by the agreements. See 4AC ¶¶ 22-23. Haworth Irrigation also failed

to submit to an audit of its books and records so that Plaintiffs could determine the amount of any

delinquency. See id. ¶ 22. Thus, Plaintiffs have successfully stated a claim for relief under ERISA. 

See 29 U.S.C. § 1145 (providing that “every employer who is obligated to make contributions to a

multiemployer plan under the terms of the plan or under the terms of a collectively bargained

agreement shall, to the extent not inconsistent with the law, make such contributions in accordance

with the terms and conditions of such plan or such agreement”); id. § 1132(a)(3) (authorizing, inter

alia, a fiduciary to bring a civil action to enforce an employer’s § 1145 obligation). 

Accordingly, the Court finds that the second and third Eitel factors, like the other Eitel

factors discussed above, weigh in favor of default judgment -- at least with respect to Haworth

Irrigation and Mr. Haworth. The only issue remaining is whether there is valid claim asserted

against Irrigation Incorporated who was not a signatory to the agreement between Haworth Irrigation

and the union. 

The Court concludes that there is not. Although Plaintiffs alleged in their complaint that Mr.

Haworth is the alter ego of Irrigation Incorporated and that the entity form was adopted in order to

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 Since Irrigation Incorporated was dissolved as of February 1, 2003, there are unlikely to be any

assets available whether through Mr. Haworth’s ownership of stock or under an alter ego analysis.

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avoid contractual relations, see 4AC ¶¶ 12-13, 19, Plaintiffs have not provided any specific facts or

evidence sufficient to pierce the corporate veil under the alter ego theory. There are no factual

allegations asserting, e.g., disregard of corporate form, undercapitalization, co-mingling of funds,

and so forth. The allegation of alter ego rests on a legal conclusion only. See Cotton v. Mass. Mut.

Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005) (noting that legal conclusions, as opposed to

well-pleaded factual allegations, are not deemed admitted as a result of a default); see also 10A

Wright & Miller, Fed. Prac. & Proc. Civ. 3d § 2688 (“Even after default, . . . it remains for the court

to consider whether the unchallenged facts constitute a legitimate cause of action, since a party in

default does not admit mere conclusions of law.”). In practical terms, denial of a default judgment

against Irrigation Incorporated may make little difference since a judgment against Mr. Haworth

could lead to execution against his assets, including any ownership interest in Irrigation

Incorporated.3 

Plaintiffs suggest that Irrigation Incorporated should be held liable because the agreement

signed by Haworth Irrigation and the union specified that the individual employer would be bound

by the agreement “regardless of the name, style or method of organization of any individual

employer entity” and that the agreement “specifically applies to any company, firm, or corporation

in the construction industry with which or to which the undersigned has any connection of any

nature or kind whatsoever.” 4AC, Ex. A (emphasis added). Absent a demonstration of alter ego

liability, this provision should not be read so broadly so as to hold Irrigation Incorporated liable. The

reach of such provision could be boundless.

For the foregoing reasons, the Court recommends that Plaintiffs’ motion for default judgment

be granted as to Haworth Irrigation and Mr. Haworth, but not as to Irrigation Incorporated.

D. Damages

Having concluded that default judgment is appropriate in this case, the Court now turns to the

issue of damages. ERISA provides that a court shall award a fiduciary who prevails in a § 1145

claim (A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an amount equal to

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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), (D) reasonable attorney’s fees and

costs, and (E) other appropriate legal or equitable relief. See 28 U.S.C. § 1132(g)(2). Plaintiffs have

the burden of “proving up” their damages. 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.”). 

1. Unpaid Contributions

Because Defendants have not been willing to submit to an audit, Plaintiffs have not been able

to determine all of the unpaid contributions owed by Defendants. However, Plaintiffs claim that,

based on examination of records from a general contractor, Quality Landscaping, and a project

owner, the Salinas High School District, Defendants owe at least $115,279.98 in unpaid

contributions. See 2d Supp. Donida Decl. ¶¶ 12-13.

a. Contribution Rates

Plaintiffs have provided sufficient evidence establishing what the proper hourly contribution

rates were during the relevant time period. See Donida Decl., Exs. A-C (Master Agreements for

years 1996 to 2006); Supp. Donida Decl., Exs. A-C (modifications to Master Agreements); 2d Supp.

Donida Decl., Ex. A (modification to Master Agreement). Those rates are as follows:

Year Beginning 6/24/96 6/30/97 6/29/98 6/28/99

Health &

Welfare

2.24 2.24 2.24 2.24 + 0.30

Pension/

Annuity

2.16 2.16 + 0.05 =

2.21

2.16 + 0.05 +

0.10 = 2.31

2.16 + 0.20

Vacation &

Holiday

2.10 2.10 2.10 + 0.05 +

0.05 = 2.20

2.20

Training &

Retraining

0.33 0.33 0.33 0.34

TOTALS $6.83 $6.88 $7.08 $7.44

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Year Beginning 6/26/00 6/25/01 6/24/02 6/30/03

Health &

Welfare

2.24 + 0.30 +

0.10

2.54 + 0.30 3.29 + 0.30 3.29 + 0.30 +

0.95

Pension/

Annuity

2.16 + 0.20 +

0.21

2.16 + 0.51 2.16 + 0.71 2.16 + 0.71

Vacation &

Holiday

2.20 + 0.01 2.28 2.28 2.28

Training &

Retraining

0.34 0.34 0.34 0.34

TOTALS $7.76 $8.13 $9.08 $10.03

See also 2d Supp. Bonida Decl., Ex. A (summarizing hourly contribution rates).

b. Hours for Quality Landscaping

Plaintiffs have also provided sufficient evidence establishing the number of hours worked by

Defendants’ employees with respect to Quality Landscaping from1999 to 2001. More specifically,

Plaintiffs have provided to the Court the invoices which specify the number of hours worked. See

Supp. Bonida Decl., Exs. D-F (invoices for 1999 through 2001). The Court notes that, in totaling

these hours, Plaintiffs have not always taken a consistent approach to rounding numbers; however,

the different approaches have all been reasonable. Therefore, the total number of hours calculated by

Plaintiffs is appropriate.

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1999 2000 2001

1/99 344.9 1/00 45.5 1/01 115.5

2/99 N/A 2/00 1120.5 2/01 218.5

3/99 300 3/00 57.5 3/01 394.5

4/99 102 4/00 291 4/01 356.5

5/99 56.5 5/00 228.5 5/01 657

6/99 225.8 6/00 361 6/0 1017.5

7/99 59 7/00 189.5 7/01 364.5

8/99 384.5 8/00 219 8/01 411.5

9/99 217.5 9/00 533 9/01 156

10/99 35 10/00 545 10/01 430

11/99 415.5 11/00 491 11/01 141.5

12/99 419 12/00 886 12/01 466.5

See also 2d Supp. Bonida Decl., Exs. B-D (summarizing number of hours worked with respect to

Quality Landscaping).

c. Hours for Salinas High School District

Finally, Plaintiffs have provided sufficient evidence establishing the number of hours worked

by Defendants’ employees with respect to the Salinas High School District from 2001 to 2003. More

specifically, Plaintiffs have provided to the Court the invoices. See Supp. Bonida Decl., Exs. G-I

(invoices for 2001 through 2003). Most of the invoices specify the number of hours worked;

however, some do not. For those invoices that do not specify the number of hours worked, Plaintiffs

have provided an estimate of the number of hours worked. 

The second supplemental Bonida declaration explains how Plaintiffs estimated the number of

hours worked. See 2d Supp. Bonida Decl. ¶¶ 9-11. More specifically, for each month, Plaintiffs

took the amount charged to the Salinas High School District and estimated that 33% of that amount

was attributable to the cost of labor. (Plaintiffs determined that 33% was an appropriate figure to use

taking into account what it knew about the actual percentage for labor costs for Quality Landscaping

and the Salinas High School District.) Plaintiffs then divided that figure by the average hourly rate

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for landscape workers in Monterey County (where Salinas is located) for the relevant time period. 

See id., Exs. F-G (wage rates); Supp. Bonida Decl., Ex. B (modification to wage rates). The Court

concludes that Plaintiffs’ estimates are reasonable. Cf. Brick Mason Pension Trust Fund v.

Industrial Fence & Supply, Inc., 839 F.2d 1333, 1338 (9th Cir. 1988) (indicating that, when an

employer fails to keep adequate records of hours, plaintiff satisfies its burden of proving damages if

it proves that work has been performed and provides sufficient evidence to show amount and extent

of work as a matter of just and reasonable inference).

In sum, the Court concludes that the total number of hours calculated by Plaintiffs is

appropriate.

2001 2002 2003

1/01 192.86

(estimate)

1/02 N/A 1/03 N/A

2/01 44.23

(estimate)

2/02 N/A 2/03 N/A

3/01 N/A 3/02 160 3/03 N/A

4/01 N/A 4/02 28.5 4/03 N/A

5/01 N/A 5/02 N/A 5/03 N/A

6/01 N/A 6/02 N/A 6/03 N/A

7/01 272 7/02 N/A 7/03 191.5

8/01 N/A 8/02 N/A 8/03 71

9/01 486.5 9/02 N/A 9/03 N/A

10/01 61.5 10/02 N/A 10/03 N/A

11/01 411.5 11/02 61 11/03 471.47

(estimate)

12/01 N/A 12/02 N/A 12/03 N/A

See also 2d Supp. Bonida Decl., Ex. E (summarizing number of hours worked with respect to the

Salinas High School District).

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d. Summary of Unpaid Contributions

Taking into account the contribution rates above and the number of hours worked above, the

Court concludes that the proper amount of unpaid contributions is $115,278.03. That figure has

been calculated as follows:

Month Rate Quality

Landscaping

Hours

Salinas High

School District

Hours

Total

1/99 $7.08 344.9 $2,441.89

2/99 $7.08 N/A

3/99 $7.08 300 $2124.00

4/99 $7.08 102 $722.16

5/99 $7.08 56.5 $400.02

6/99 $7.08 225.8 $1598.66

7/99 $7.44 59 $438.96

8/99 $7.44 384.5 $2860.68

9/99 $7.44 217.5 $1618.20

10/99 $7.44 35 $260.40

11/99 $7.44 415.5 $3091.32

12/99 $7.44 419 $3117.36

1999 Total $18,673.65

1/00 $7.44 45.5 $338.52

2/00 $7.44 1120.5 $8336.52

3/00 $7.44 57.5 $427.80

4/00 $7.44 291 $2165.04

5/00 $7.44 228.5 $1700.04

6/00 $7.44 361 $2685.84

7/00 $7.76 189.5 $1470.52

8/00 $7.76 219 $1699.44

9/00 $7.76 533 $4136.08

10/00 $7.76 545 $4229.20

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11/00 $7.76 491 $3810.16

12/00 $7.76 886 $6875.36

2000 Total $37,874.52

1/01 $7.76 115.5 192.86 (estimate) $2392.87

2/01 $7.76 218.5 44.23 (estimate) $2038.78

3/01 $7.76 394.5 N/A $3061.32

4/01 $7.76 356.5 N/A $2766.44

5/01 $7.76 657 N/A $5098.32

6/0 $7.76 1017.5 N/A $7895.80

7/01 $8.13 364.5 272 $5174.75

8/01 $8.13 411.5 N/A $3345.50

9/01 $8.13 156 486.5 $5223.53

10/01 $8.13 430 61.5 $3995.90

11/01 $8.13 141.5 411.5 $4495.89

12/01 $8.13 466.5 N/A $3792.65

2001 Total $49,281.75

1/02 $8.13 N/A

2/02 $8.13 N/A

3/02 $8.13 160 $1300.80

4/02 $8.13 28.5 $231.71

5/02 $8.13 N/A

6/02 $8.13 N/A

7/02 $9.08 N/A

8/02 $9.08 N/A

9/02 $9.08 N/A

10/02 $9.08 N/A

11/02 $9.08 61 $553.88

12/02 $9.08 N/A

2002 Total $2086.39

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Plaintiffs did not always use the correct number of hours and instead did further rounding.

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1/03 $9.08 N/A

2/03 $9.08 N/A

3/03 $9.08 N/A

4/03 $9.08 N/A

5/03 $9.08 N/A

6/03 $9.08 N/A

7/03 $10.03 191.5 $1920.75

8/03 $10.03 71 $712.13

9/03 $10.03 N/A

10/03 $10.03 N/A

11/03 $10.03 471.47 (estimate) $4728.84

12/03 $10.03 N/A

2003 Total $7361.72

1999-2003 Total $115,278.03

See also id., Ex. H (summarizing unpaid contributions).4

2. Interest on Unpaid Contributions After November 2002

In addition to unpaid contributions, Plaintiffs have asked that they be awarded interest for

those unpaid contributions after November 2002 (i.e., for the months July, August, and November

2003). Prior to November 2002, there was no provision in the Trust Agreements for interest on

unpaid contributions. See Leigh Decl. ¶ 21.

The Court agrees that Plaintiffs are entitled to these damages pursuant to the Master

Agreement for 2002-2006. See Donida Decl., Ex. C. Under this Master Agreement, delinquent

contributions bear simple interest at the rate of 1.5% per month until receipt of payment. See Donida

Decl., Ex. C. Interest is calculated from the twenty-fifth day after the month when the contributions

were earned. See id. ¶ 16; see also Leigh Decl., Ex. D (“Each Contribution to the Fund will be made

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promptly, and in any event on or before the 25th day of the calendar month in which it becomes

payable, on which date the Contribution, if not paid in full, will be delinquent . . . .”).

The unpaid contributions for July 2003 are $1,920.75; for August 2003, $712.13; and for

November 2003, $4728.84. Therefore, up to August 25, 2005, the total amount of interest owed is

$2466.23. This amount was determined as follows.

July 2003 August 2003 to August 2005

(25 months)

$1,920.75 x 1.5% x 25 months

= $720.28

August 2003 September 2003 to August

2005 (24 months)

$712.13 x 1.5% x 24 months = 

$256.37

November 2003 December 2003 to August

2005 (21 months)

$4728.84 x 1.5% x 21 months

= $1489.58

Total $2466.23

After August 25, 2005, interest will continue to accrue at the rate of $3.63 per day. This amount was

determined as follows:

July 2003 $1,920.75 x 18%5 = $345.74 per year

August 2003 $712.13 x 18% = $128.18 per year

November 2003 $4728.84 x 18% = $851.19

Total $1325.11 per year

$1325.11 ÷ 365 days per year = $3.63 per day

In sum, the Court recommends that Plaintiffs be awarded $2466.23 in interest, which

represents the interest up to August 25, 2005. Thereafter, Plaintiffs should be awarded $3.63 in

interest per day. 

3. Liquidated Damages After November 2002

Under the Master Agreement for 2002-2006, Plaintiffs are entitled to not only interest on the

unpaid contributions but also liquidated damages in the amount of $150 per month after November

2002. As stated above, there are only three months after November 2002 for which there were

unpaid contributions (that is, taking into account only the records from Quality Landscaping and the

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Salinas High School District): July 2003; August 2003; and November 2003. Accordingly, Plaintiffs

have asked for -- and the Court recommends as appropriate -- liquidated damages in the amount of

$450. See 2d Supp. Bonida Decl. ¶ 15. 

 4. Attorney’s Fees and Costs

Finally, Plaintiffs seek as damages their attorney’s fees and costs. See 29 U.S.C. §

1132(g)(2) (providing for reasonable attorney’s fees and costs).

a. Attorney’s Fees

Ninth Circuit case law indicates that, under § 1132(g)(2) of ERISA, reasonable attorney’s

fees are mandatory as opposed to discretionary. See Kemmis v. McGoldrick, 706 F.2d 993, 997 (9th

Cir. 1983) (noting that § 1132(g)(2) “now makes the award of attorney’s fees mandatory when the

trustees prevail in actions to enforce and collect benefit fund contributions”). Factors considered in

determining the reasonableness of a fee award under § 1132(g)(2) include (1) the degree of the

opposing party’s culpability or bad faith, (2) the ability of the opposing party to satisfy an award of

fees, (3) whether an award of fees would deter others from acting under similar circumstances, (4)

whether the party requesting fees sought to benefit all participants and beneficiaries of an ERISA

plan or to resolve a significant legal question regarding ERISA, and (5) the relative merits of the

parties’ positions. See Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 452 (9th Cir. 1980) (noting

factors to be considered in determining whether fees should be awarded as a discretionary matter

under § 1132(g)(1)); Kemmis, 706 F.2d at 997-87 (stating that § 1132(g)(1) factors can still inform

the reasonableness of an award under § 1132(g)(2)). Reasonableness is also informed by the typical

Hensley lodestar/multiplier approach. See id. at 998 (citing Johnson factors discussed in Hensley);

see also Van Gerwen v. Guarantee Mut. Ins. Co., 214 F.3d 1041, 1045 (9th Cir. 2000) (applying the

Hensley lodestar/multiplier approach to determine reasonable attorney’s fees under § 1132(g)(1)

instead of § 1132(g)(2)).

The Court has reviewed the hours and rates provided by counsel for Plaintiffs. See Leigh

Decl. ¶ 29 & Ex. G (120.9 hours at rate of $225 per hour). While the Court concludes that the rate of

$225 per hour is reasonable, it does not make the same conclusion with respect to the number of

hours. More specifically, the Court disagrees with Plaintiffs that they are entitled to all of the 120.9

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hours when part of that time was attributable to Plaintiffs’ having sued the wrong defendant (i.e., Mr.

Haworth’s son instead of Mr. Haworth). On the other hand, some of those hours should be charged

to Mr. Haworth because, as indicated by the deposition of his son, Mr. Haworth has had knowledge

of the lawsuit but tried to evade responsibility. See generally Leigh Decl., Ex. A (deposition of Mr.

Haworth’s son). 

The Court recommends that Plaintiffs not be compensated for the following hours incurred

because Plaintiffs sued the wrong defendant. In general, these constitute hours spent by Plaintiffs

serving and seeking a default judgment against Mr. Haworth’s son in spite of evidence suggesting

that Mr. Haworth’s son was not the correct defendant. 

7/28/03 2.20 hours Draft and revise Default

Motion papers; telephone conf

with Court Clerk

10/1/03 1.70 hours Work on response to Order re

Service [filed on 9/26/03]

10/1/03 0.80 hours Received and reviewed Court

Order; reviewed file

documents

10/28/03 0.80 hours Received and reviewed Order

notes for follow-up [filed on

10/28/03]

11/7/03 0.30 hours Reviewed Order; letter to

Haworth

11/18/03 0.30 hours Telephone call from Judge

Chen’s clerk re submission

pursuant to order; meeting

with JPW re same

11/18/03 4.40 hours Telephone call to Balben

Donida re source of records for

defendant company; legal

research re successor liability;

prepare response to Court’s

10/28/03 order; prepare

declaration of Donida; prepare

email to Donida

11/24/03 0.40 hours Received and reviewed

correspondence re Default;

meeting with Mazzola re same

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11/24/03 0.80 hours Receive notification from

court of filing by defendant;

review defendant’s 11/13/03

letter; prepare response letter

to defendant; review

defendant’s submissions for

his contact information;

meeting with JPW re 11/13/03

letter; telephone call to Mark

Haworth Jr.

11/25/03 0.20 hours Continue preparing letter to

Haworth

Total 11.90 hours

The Court recommends that Plaintiffs be compensated for the remaining hours sought by Plaintiffs

because the remaining hours are reasonable. For example, it was reasonable for Plaintiffs to take the

deposition of Mr. Haworth’s son (as expressly permitted by the Court) in order to determine who the

correct defendant in the case should be, especially when the deposition revealed Mr. Haworth’s

attempt to evade responsibility. Further, it was reasonable for Plaintiffs to work with process servers

to try to serve Mr. Haworth and the other entity defendants and then seek leave from Judge Wilken

to serve Defendants by publication because they could not, with reasonable diligence, be located. In

addition, it was reasonable for Plaintiffs to obtain and review documents from Quality Landscaping

and the Salinas High School District because Defendants did not submit to an audit and such

documents established the number of hours worked by Defendants’ employees.

Accordingly, the Court recommends that Plaintiffs be awarded an hourly rate of $225 for 109

attorney hours (instead of 120.9), for a total of $24,525. 

b. Costs

Section 1132(g)(2) of ERISA specifies that not only are attorney’s fees recoverable but also

costs. In Agredano v. Mutual of Omaha Cos., 75 F.3d 541 (9th Cir. 1996), the Ninth Circuit held

that the allowance for costs under § 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.” Id. at 544. Given this was the

Ninth Circuit’s approach for § 1132(g)(1), it is reasonable to apply the same approach to §

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See Crawford Fitting Co. v. J. T. Gibbons, Inc., 482 U.S. 437, 441-42 (1987) (“We think the

better view is that § 1920 defines the term ‘costs’ as used in Rule 54(d). Section 1920 enumerates

expenses that a federal court may tax as a cost under the discretionary authority found in Rule 54(d).”).

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1132(g)(2), which uses the same statutory language as § 1132(g)(1) (i.e., “reasonable attorney’s fees

and costs”). 

 Plaintiffs therefore should be able to get as costs their filing fee, fees for service of process

and deposition transcript fees. See 28 U.S.C. § 1920; see also Civ. L.R. 54-3(a)(1) (“The Clerk’s

filing fee is allowable if paid by the claimant.”); Civ. L.R. 54-3(a)(2) (“Fees for service of process by

someone other than the marshal acting pursuant to FRCivP 4(c), are allowable to the extent

reasonably required and actually incurred.”), Civ. L.R. 54-3(c)(1) (“The cost of an original and one

copy of any deposition . . . taken for any purpose in connection with the case is allowable.”).6

However, other items identified by Plaintiffs do not fall under costs as defined by § 1920 (e.g.,

unidentified photocopies, deliveries, e-filing fees). See Leigh Decl., Ex. F. See, e.g., Civ. L.R. 54-

3(d) (“The cost of reproducing copies of motions, pleadings, notices, and other routine case papers is

not allowable.”). While the Trust Agreements provide that not only are costs recoverable but also

reasonable expenses, § 1132(g)(2) provides only for the former, not the latter. See 4AC ¶ 26

(seeking costs pursuant to § 1132(g)(2); see also Aetna, 223 F.3d at 1034 (9th Cir. 2000) (noting that

ERISA preempts state law claims that “relate to” employee benefit plans, such as breach of contract;

citing 29 U.S.C. § 1144(a)). 

Accordingly, the Court recommends that Plaintiffs be awarded costs in the amount of

$2,563.22. This amount excludes the expenses incurred for unidentified photocopies, deliveries, and

e-filing fees.

E. Injunctive Relief

In their complaint, Plaintiffs seek as relief not only damages but also injunctive relief -- more

specifically, an injunction compelling Defendants to submit to an audit of their books and records. 

Plaintiffs have alleged in their complaint that an audit of Defendants’ books and records is permitted

under the Trust Agreements so that Plaintiffs may determine the amount of trust fund contributions

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due and owing. See 4AC ¶¶ 29-30. In support of their motion for default judgment, Plaintiffs have

provided a copy of a Trust Agreement, which provides as follows:

Upon request in writing from the Board, any Individual Employer will

permit a Trust Fund Auditor to enter upon the premises of such

Individual Employer during business hours, at a reasonable time or

times, not less than two (2) working days after such request, and to

examine and copy such books, records, papers, or reports of such

Individual Employer as may be necessary to determine whether the

Individual Employer is making full and prompt payment of all sums

required to be paid by him or it to the Fund.

Leigh Decl., Ex. E.

Accordingly, the Court recommends that an injunction be issued compelling Defendants to

submit to an audit of its books and records as provided for by the relevant Trust Agreements. See 29

U.S.C. § 1132(g)(2) (providing for damages such as unpaid contributions, interest, liquidated

damages, and attorney’s fees and costs as well as “other appropriate legal or equitable relief”).

F. Post-Judgment Interest and Attorney’s Fees and Costs Incurred in Enforcing Judgment

Finally, the Court addresses Plaintiffs’ request for post-judgment interest and attorney’s fees

and costs incurred in enforcing the judgment.

1. Post-Judgment Interest

Title 28 U.S.C. § 1961 is the statute providing for post-judgment interest. It states that

“[i]nterest shall be allowed on any money judgment in a civil case recovered in a district court.” 28

U.S.C. § 1961. Plaintiffs, therefore, should be awarded post-judgment interest. The proper interest

rate is that provided for in § 1961, with one exception, namely, for that part of the judgment

consisting of the unpaid contributions after November 2002. Parties are allowed to contract to a

post-judgment interest rate different from that specified in § 1961. See Society of Lloyd’s v.

Reinhart, 402 F.3d 982, 1004 (10th Cir. 2005) (“[W]e acknowledge that parties may contract to, and

agree upon, a post-judgment interest at a rate other than that specified in § 1961.”); Fidelity. Fed.

Bank, FSB v. Durga Ma Corp., 387 F.3d 1021, 1023 (9th Cir. 2004) (“An exception to § 1961 exists

when the parties contractually agree to waive its application. In Citicorp, the promissory notes at

issue included an express, mutually-agreed upon interest rate in the case of default. The parties also

stipulated to a certain arbitration award provided that interest would accrue at the rate specified in

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the promissory note after the judgment until collection.”). In this case, the parties agreed to an

interest rate for the unpaid contributions after November 2002 of 1.5% per month. As Plaintiffs

point out, this rate was to apply until the obligation was paid, and not merely until judgment. See

Donida Decl., Ex. C (“Any Individual Employer who is found to be delinquent as a result of an audit

will pay and satisfy such delinquency with accrued interest and in addition pay liquidated damages. 

All delinquent contributions shall bear simple interest at the rate of one and one-half percent (1.5%)

per month until receipt of payment.”) (emphasis added).

Thus, the Court recommends that all of the judgment be subject to the interest rate specified

in § 1961 except for that part of the judgment consisting of the unpaid contributions after November

2002 -- totaling $7361.72 (i.e., total unpaid contributions for July, August, and November 2003) --

which shall accrue interest at the rate of 1.5% per month or 18% per year.

2. Attorney’s Fees and Costs Incurred in Enforcing Judgment

As for Plaintiffs’ request for the attorney’s fees and costs incurred in enforcing a judgment,

the Court considers the request premature in light of the fact that no judgment has issued as of yet

and thus no enforcement efforts or proceedings have begun. Plaintiffs may raise this issue when

such fees and/or costs have actually been incurred.

III. CONCLUSION

For the foregoing reasons, the Court recommends that Plaintiffs’ motion for default judgment

be granted and that Plaintiffs be awarded damages consisting of (1) the unpaid contributions

($115,278.03); (2) interest on the unpaid contributions after November 2002 ($2466.23, as of August

25, 2005, plus $3.63 per day thereafter); (3) liquidated damages after November 2002 ($450); and

(4) reasonable attorney’s fees ($24,525) and costs ($2,563.22). Furthermore, the Court recommends

that post-judgment interest be awarded to Plaintiffs at the rate provided for in § 1961 for all of the

judgment except for the unpaid contributions after November 2002 ($7361.72), for which the proper

interest rate should be 1.5% per month or 18% per year. 

In addition, the Court recommends that an injunction be issued consistent with the audit

provision contained in the Trust Agreements. 

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Finally, the Court recommends that Judge Wilken retain jurisdiction over the case so that she

may entertain a motion for a further money judgment against Defendants for additional damages that

may be discovered by the audit. As noted above, Plaintiffs’ request for damages in their motion for

default judgment is based on the records of only Quality Landscaping and the Salinas High School

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

11992, at *11-2 (N.D. Cal. Apr. 15, 2004) (awarding, inter alia, unpaid contributions and ordering

defendant to submit to audit under conditions expressed in trust agreements; adding that “[p]laintiffs

shall not have the power to amend this Court’s judgment following the audit” but that the “Court

retains jurisdiction over this case with regard to contributions and damages determined owed to

plaintiffs during the audit”) (emphasis added); see also International Union of Operating Eng’rsEmployers Constr. Indus. Pension, Welfare & Training Trust Funds v. Karr, 994 F.2d 1426, 1431-32

(9th Cir. 1993) (holding that “an action to recover accurate contributions arises from the same

transactional nucleus of facts as a prior action to recover delinquent payments and is barred under the

doctrine of res judicata”) (emphasis added).

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.

Dated: August 24, 2005

_________________________

 EDWARD M. CHEN

United States Magistrate Judge

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