Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_14-cv-03132/USCOURTS-cand-3_14-cv-03132-1/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 28:1132 E.R.I.S.A.

---

United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1

 Codified at 29 U.S.C. § 1132, et seq. 

2

 Codified at 29 U.S.C. § 185, et seq. 

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

HOD CARRIERS LOCAL 166 PENSION

TRUST FUND, et al.,

Plaintiffs,

v.

JAMES ISLAND PLASTERING, INC., et al.,

Defendants.

___________________________________/

No. C-14-3132 EMC

ORDER GRANTING PLAINTIFFS’

MOTION FOR DEFAULT JUDGMENT

(Docket No. 17)

Plaintiffs are fiduciaries for the following trust funds: the HOD Carriers Local 166 Pension

Trust Fund; HOD Carriers Local 166 Pension Trust Fund; HOD Carriers Local 166 West Bay

Pension Trust Fund; HOD Carriers Local 166 Health, Welfare and Vacation Trust Fund; HOD

Carriers Local 166 Industry Promotion Fund; and HOD Carriers Local Union No. 166 (collectively,

the “Trust Funds”). Plaintiff Samuel Robinson is the Trustee of each of the above-listed Trust

Funds. The Trust Funds are all employee benefit plans pursuant to the Employee Retirement

Income Security Act (“ERISA”).1

 See Docket No. 1 (Complaint). The Trust Funds filed this lawsuit

against Defendants James Island Plastering, Inc. and Irving G. James (the President and CEO of

James Island) asserting claims pursuant to ERISA and the Labor Management Relations Act

(“LMRA”).2

 

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 1 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

 According to the Trust Funds, HOD Carriers Local 36 “merged into [Plaintiff] HOD

Carriers Local 166 in 2008.” Docket No. 17 at 4 n. 2. 

4

 The Plastering Contractors Association of San Francisco and San Mateo Counties has since

“merged into the Wall and Ceiling Alliance [(WACA)],” which is the “successor employer

association” to the Plastering Contractors Association. Docket No. 22-2 at 2 n.1. 

5

 Defendant also agreed to be bound by any future modifications, changes, amendments,

supplements, extensions, or renewals of the Master Agreement. Id. 

2

After Defendants failed to respond to the Trust Funds’ complaint, the clerk of this court

entered default against the Defendants on August 26, 2014. See Docket No. 13. Trust Funds

thereafter moved this Court for entry default judgment. See Docket No. 17. A hearing was held on

February 19, 2015. Docket No. 21. At the hearing, Plaintiffs were directed to file a supplemental

brief on the issue of whether Defendant Irving James should be held personally liable for James

Island Plastering’s outstanding contributions. Id. Trust Funds filed their supplemental brief on

February 26, 2015. Docket No. 22. Having considered the Plaintiffs’ briefs and accompanying

submissions, the Court hereby GRANTS the motion for default judgment against both Defendants. 

I. FACTUAL & PROCEDURAL BACKGROUND

On March 31, 2003, James Island signed a Letter of Assent with the HOD Carriers Union

Local No. 363

 and the Plastering Contractors Association of San Francisco and San Mateo

Counties.4

 Docket No. 17 (Martinez Decl., Ex. A) (Letter of Assent). Irving James signed the letter

on behalf of James Island as its President and CEO. Id. Under the Letter of Assent, Defendants

agreed to comply with “all of the provisions, terms and conditions” set forth in the HOD Carriers

Local Union No. 36 Collective Bargaining Agreement (CBA).5

 Id.; see also Docket No. 1 (Exhibit

A) (CBA). Defendants further agreed to be bound to the terms of “any subsequent [CBAs]

negotiated and executed by the Union and the Association.” Letter of Assent. 

As relevant here, the CBA provides that James Island must pay certain fringe benefit

contributions to the Trust Funds pursuant to the “HOD Carriers Local Union 166 Health, Welfare

and Vacation Trust Agreement.” CBA at 15-16; see also Docket No. 17 (Martinez Decl., Ex. B)

(Trust Agreement). The CBA also provides that “Any Employer who fails to pay contributions shall

be personally liable under the Agreement for benefits due his employees.” CBA at 16.

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 2 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

The Trust Agreements for the Trust Funds contains provisions that require Defendants to: (1)

make fringe benefits payments in a timely manner, see, e.g., Trust Agreement, Section 3; (2) pay

liquidated damages for any delinquent contributions, see, e.g., Trust Agreement, Section 6; (3) pay

interest on sums owing under the CBA, see e.g., Trust Agreement, Section 9; (4) pay the Trustee’s

reasonable attorneys’ fees and costs if a collection action is brought, see, e.g., Trust Agreement,

Section 8; and (4) submit to an audit so that the Trust Funds may determine whether the employer is

making full and prompt payment of all contributions owed. See, e.g., Trust Agreement, Section 7. 

James Island provided the Trust Funds with employee time records for the months of

October 2012, November 2012, January 2013, March 2013, and April 2013. Docket No. 17 at 7;

Martinez Decl., Ex. D (Time Records). These records apparently reveal that James Island failed to

remit $12,354.76 in unpaid fringe contributions. Docket No. 17 at 7. On July 10, 2014, Plaintiffs

filed this action after Defendants refused to pay delinquent amounts allegedly due and owed, as

requested by the Trust Funds. See Docket No. 1 at ¶¶ 16-17. The Trust Funds now request the

Court grant them the following relief: (1) $12,354.76 in unpaid fringe benefits contributions as

revealed by the Defendants’ time records; (2) $2,470.85 in liquidated damages; (3) $1,509.99 in

interest; (4) $6,747 in attorney’s fees and costs relating to the prosecution of this action; and (5) an

injunction ordering Defendants to permit auditors to come onto their premises and to submit to an

audit of their financial records for the period from January 1, 2012, to the present date. The Trust

Funds also ask the Court to hold James Island and Irving James jointly and severably liable for any

monetary judgment issued.

II. DISCUSSION

A. Adequacy of Service of Process

As a threshold matter in considering a motion for default judgment, the 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). Fed. R. Civ. P. 4(h)(1) authorizes service upon a

corporation “by delivering a copy of the summons and of the complaint to an officer, a managing or

general agent, or to any other agent authorized by appointment or by law to receive service of

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 3 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

process and – if the agent is one authorized by statute to receive service and the statute so requires –

by also mailing a copy of each to the defendant.” Fed. R. Civ. P. 4(h)(1). Rule 4(h)(1) also states

that a corporation may be served “in the manner prescribed by Rule 4(e)(1) for serving an

individual,” which, in turn, allows for service “following state law for serving a summons in an

action brought in courts of general jurisdiction in the state where the district court is located or

where service is made.” Fed. R. Civ. P. 4(e)(1).

Under California law, a summons and complaint may be served on a corporation by

delivering a copy of the documents to: (1) the person designated as agent for service under certain

provisions of the California Corporations Code: or (2) the “president or other head of the

corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a

general manager, or a person authorized by the corporation to receive service of process.” Cal. Code

Civ. P. § 416.10(a), (b). A corporation may also be served under California law via “substituted

service.” That is,

If a copy of the summons and complaint cannot with reasonable

diligence be personally delivered to the person to be served, . . . a

summons may be served by leaving a copy of the summons and

complaint at the person’s dwelling house, usual place of abode, usual

place of business, or usual mailing address other than a United States

Postal Service post office box, in the presence of a competent member

of the household or a person apparently in charge of his or her office,

place of business, or usual mailing address other than a United States

Postal Service post office box, at least 18 years of age, who shall be

informed of the contents thereof, and by thereafter mailing a copy of

the summons and of the complaint by first-class mail, postage prepaid

to the person to be served at the place where a copy of the summons

and complaint were left.

Cal. Code Civ. P. § 415.20(b). 

While substituted service is, as a general matter, an easier form of service compared to

personal delivery, it is not free of limitations. Before a party can resort to substituted service,

personal service must first be attempted with “reasonable diligence.” California courts have held

that “[o]rdinarily, . . . two or three attempts at personal service at a proper place should fully satisfy

the requirement of reasonable diligence and allow substituted service to be made.” Bein v.

Brechtel–Jochim Group, Inc., 6 Cal. App. 4th 1387, 1390 (1992). Also, “[s]ervice must be made

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 4 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

upon a person whose relationship to the person to be served makes it more likely than not that they

will deliver process to the named party.” Id. at 1393 (internal quotation marks omitted).

The proof of service for the summons and the complaint indicate that the documents were

served via substitute service at James Island’s principal place of business on July 21, 2014. See

Docket No. 10. Specifically, the documents were served on a Ms. Laura Doe, who the process

server described as the “Person in Charge of Office.” Id. An affidavit of reasonable diligence states

that the process server previously attempted to serve Mr. James both at James Island’s office, as well

as Mr. James’ home. Id. The process server avers that he made six separate efforts at personal

service between July 15 and July 18. Id. Substituted service was also completed by mail on July

22, 2014, and the summons and complaint were mailed to James Island’s business address. Id. The

efforts described above are sufficient under California law vis-a-vis substituted service, and

therefore the Court finds that service of process on Defendants was properly effectuated. 

B. Merits of Motion for Default Judgment

As noted above, the Clerk entered default against Defendants on August 26, 2014. See

Docket No. 13. After entry of default, a court may grant a default judgment on the merits of the

case. See Fed. R. Civ. P. 55. “The district court’s decision whether to enter a default judgment is a

discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir.1980). A court may consider

the following factors in exercising such discretion: 

(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). Because default has already been entered

in this case, the Court must construe as true all of “the factual allegations of the complaint, except

those relating to the amount of damages.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18

(9th Cir. 1987). 

The Court finds that the Eitel factors weigh in favor of granting default judgment. For

example, as to the first factor, if the motion for default judgment were to be denied, then the Trust

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 5 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6

Funds would likely be prejudiced as they would be left without a remedy. See Walters v.

Shaw/Guehnemann Corp., No. 03-cv-04058, 2004 U.S. Dist. LEXIS 11992, at *7 (N.D. Cal. Apr.

15, 2004) (“To deny plaintiff’s motion [for default judgment] would leave them without a remedy.

Prejudice is also likely in light of the merits of their claims.”); 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.”). 

As for the fourth Eitel factor, the sum of money at stake in this action is appropriate for

resolution on default judgment, particularly because the total amount sought ($23,672.60) is

narrowly tailored to Defendants’ specific misconduct. 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”); see also Church Bros., LLC v. Garden of Eden Produce, LLC, No. 11-cv04114, 2012 WL 1155656, at *3 (N.D. Cal. Apr. 5, 2012) ($212,259.21 deemed “modest” and “far

less than [the amount] contemplated by the court in Eitel”); Cf. Eitel, 782 F.2d at 1472 (dispute over

$2,900,000, when considered in light of disputed issues of material facts, supported the court’s

decision not to enter judgment by default). 

As to the fifth, sixth, and seventh Eitel factors, because Defendants have not filed an answer

to the complaint, there is nothing to suggest that there is a possibility of a dispute concerning

material facts. Nor is there any indication that Defendants’ default was due to excusable neglect, as

Plaintiffs adequately served the complaint and the motion for default judgment at Defendants’

business address. See Docket No. 10; Docket No. 17 at Proof of Service. And while public policy

favors decisions on the merits, Eitel, 782 F.2d at 1472, Defendants’ choice not to defend this action

renders a decision on the merits “impractical, if not impossible.” PepsiCo, 238 F. Supp. 2d at 1177.

The only remaining factors that warrant additional analysis are the second and third Eitel

factors – the merits of Trust Funds’ substantive claims and the sufficiency of those claims. Plaintiffs

have provided evidence that Mr. James signed a Letter of Assent binding James Island to the terms

of the CBA and Trust Agreement. Martinez Decl., Ex. A. Both the CBA and Trust Agreement

provide that Defendants “shall make contributions” to the Trust Funds for “each hour worked by

each of its employees on work covered by [the CBA].” CBA at 15; Trust Agreement at Section 1. 

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 6 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

Plaintiffs’ complaint alleges, and the Court must accept as true, see TeleVideo Sys., Inc., 826

F.2d at 917, that Defendants have refused to pay delinquent contributions to the Trust Funds and

failed to make contributions in a timely manner as required by the CBA and Trust Agreement. See

Complaint at ¶¶ 16-18. Thus, Plaintiffs have successfully stated a claim for relief under ERISA and

the LMRA. See 29 U.S.C. § 1145 (providing that “[e]very 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 law, make such contributions in

accordance with the terms and conditions of such plan or such agreement.”); 29 U.S.C. § 1132(a)(3)

(authorizing, inter alia, a fiduciary to bring a civil action to enforce an employer’s § 1145

obligation).

The complaint further requests an injunction ordering Defendants to submit to an audit to

determine additional amounts due or owed as required by the CBA and the Trust Agreement. 

Complaint at ¶ 28. “Where a Fund’s trust documents, to which an employer has bound itself,

specifically provide that Fund trustees can examine any of the employer’s records, an employer must

comply with such agreed upon obligations.” Eng’rs Joint Welfare, Pension, Supplemental

Unemployment Ben. & Training Funds v. BDR Inc., No. 05-cv-1385, 2006 U.S. Dist. LEXIS 70967,

at *9 (N.D.N.Y Sept. 29, 2006) (citing Central States, Southeast & Southwest Pension Fund v.

Central Transport, Inc., 472 U.S. 559 (1985)). The Trust Agreements herein provide that, “[u]pon

notice in writing, the Employer must permit an authorized Trust representative to enter upon the

premises of such Employer at a mutually agreeable time during regular business hours to examine

and copy such records as may be necessary to determine whether the Employer is making full and

prompt payment of all sums required to the Trust.” Trust Agreement at Section 7. Thus, Plaintiffs

have again successfully stated a claim for relief.

C. Irving James’ Personal Liability for Delinquent Contributions

Plaintiffs seek to hold Irving James personally liable for the contributions that James Island

failed to remit to the Trust Funds. Typically, “individuals are not liable for corporate debt.” 

Sullivan v. Cox, 78 F.3d 322, 325 (7th Cir. 1996) (explaining that the default rule in ERISA cases is

that corporate owners are not personally liable for delinquent contributions); see also Local 159,

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 7 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6 See also First Nat. City Bank v. Banco Para El Comercio Exterior de Cuba (Bancec), 462

U.S. 611, 625 (1983) (“Separate legal personality has been described as an almost indispensable

aspect of the public corporation.”). 

8

342, 343 & 444 v. Nor-Cal Plumbing, Inc., 189 F.3d 473 (9th Cir. 1999) (unpublished table

decision) (explaining that courts “have refused to impose personal liability on the sole shareholder

of a corporate employer that has breached its obligations under the LMRA, except when the veilpiercing test has been satisfied”).6

 An exception may be made, however, “where individuals

contractually accept responsibility for corporate liability, thus becoming employers obligated to

make contributions.” Sullivan, 78 F.3d at 325 (internal quotation marks omitted); see also Western

Washing Painters Defined Contribution Pension Trust v. Western Industrial, Inc., No. C09-826-

RSM, 2012 WL 3704993, at *18 (W.D. Wash. Aug. 27, 2012) (noting that courts “must enforce

explicit and unambiguous clauses . . . to hold corporate officers personally liable for [] delinquent

contributions and associated payments of the corporate employer”). 

Plaintiffs argue that Mr. James contractually agreed to be held personally liable for James

Island Plastering’s liabilities under the CBA. Specifically, Plaintiffs argue personal liability is

appropriate in this case because Mr. James signed a Letter of Assent binding himself to the CBA,

and the CBA provides that “Any Employer who fails to pay contributions shall be personally liable

under the Agreement for benefits due his employees.” CBA at 16 (emphasis added). 

The Court was initially skeptical that Mr. James could be held personally liable under the

above-provision of the CBA. Notably, the “Employer” referred to in the relevant provision of the

CBA is not Mr. James, but James Island Plastering, a corporation. Yet “personal” liability of a

corporation seems like a misnomer. Thus, the scope and applicability of the “personal liability”

clause of the CBA is ambiguous. Where a personal liability clause is ambiguous, courts will

typically construe such clauses consistently with the default rule of limited liability. See Bd. of

Trustees of Pipe Trades Dist. Council No. 36 Health and Welfare Trust Fund v. Clifton Enterprises,

Inc., No. 11-05447 JST (JSC), 2013 WL 2403573, at *5 (N.D. Cal. May 31, 2013) (acknowledging

the general rule that corporate owners are not personally liable for corporate debts, and refusing to

enforce personal liability provision in collective bargaining agreement that was “vague and

overbroad”). As Magistrate Judge Corley has explained, courts have only enforced personal liability

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 8 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7 See also F.B.T Productions, LLC v. Aftermath Records, 827 F. Supp. 2d 1092, 1106 (C.D.

Cal. 2011). 

8

 It appears the CBA – which applies solely to employers located in certain Northern

California counties – is governed by California law. See CBA at 1. 

9

provisions in ERISA cases where those provisions “explicitly and unambiguously impose individual

liability on corporate officers.” Id. 

Given the Court’s initial doubt that Mr. James could be held personally liable under the

ambiguous language of the CBA, the Court permitted Plaintiffs to file a supplemental brief with any

evidence or legal authorities that would support the Trust Funds’ position that Mr. James should be

held jointly and severably liable for James Island’s unpaid fringe benefit contributions. Plaintiffs’

filing has successfully erased the Court’s doubt. Specifically, Plaintiffs filed declarations from

bargaining representatives who represented both the Union and the employers’ association (WACA)

when the personal liability clause at issue in the CBA was discussed. Docket Nos. 22-1 (Robinson

Decl.) and 22-2 (Nunes Decl.). Both the employers’ representative and the Union representative

stated that it was the parties’ mutual intent at the time of contract formation that the CBA

“personally bind the owner of a business entity, should the employer fail to make required

contributions to the Trust Funds.” Nunes Decl. at ¶ 4. A court may turn to such extrinsic evidence

to shed light on ambiguous contractual terms, see Wolf v. Superior Ct., 114 Cal. App. 4th 1343,

1351 (2004),7

 and “great weight is given to the contemporaneous construction of the contract by the

parties themselves prior to the time controversy over its meaning arose.” Lix v. Edwards, 82 Cal.

App. 3d 573, 579 (1978).8

 Here, Plaintiffs have provided highly relevant extrinsic evidence from

both parties to the CBA regarding the meaning of the personal liability clause – namely that the

clause was intended to bind individuals like Mr. James. The Court is satisfied by this evidence, and

therefore finds that Mr. James contractually promised to be held “personally liable under the

Agreement for benefits due his employees.” CBA at 16. 

D. Damages and Other Relief

Because the Court concludes that default judgment is warranted, it must determine what

damages or other relief is appropriate. Plaintiffs have the burden of “proving up” their damages or

the need for other requested relief. See Board of Trustees of the Boilermaker Vacation Trust v.

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 9 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

Skelly, Inc., 389 F. Supp. 2d 1222, 1226 (N.D. Cal. 2005) (“Plaintiff has the burden of proving

damages through testimony or written affidavit.”). Under 29 U.S.C. § 1132(g)(2), 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 the greater of- (i) the interest on the unpaid

contributions, or (ii) 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 29 U.S.C. § 1132(g)(2). 

In their motion for default judgment, the Trust Funds seek to recover all outstanding

contributions due and owing, interest and liquidated damages, and attorney’s fees and costs. The

Trust Funds also request an injunction requiring Defendants to submit to an audit of their books and

records for the period from January 1, 2012, to present. 

1. Unpaid Contributions, Liquidated Damages, and Interest

The Trust Funds assert that for the months of October 2012, November 2012, January 2013,

March 2013, and April 2013, Defendants failed to make $12,354.76 in required contributions to the

Trust Funds. See Docket No. 17 at 7. In support of this assertion, the Trust Funds have filed time

sheets for these months that were provided to the Trust Funds by Defendants. Martinez Decl., Ex.

D. Based on these self-reported time sheets, the Trusts Funds determined that Defendants had not

submitted benefit contributions to the Trust Funds for 473 hours of covered work. See id. The time

sheets also provide for a contribution rate of $26.12 per hour. Id.; see also CBA at 15 (listing per

hour contribution rates per trust fund). Based on the evidence provided, the Court finds that the

Trust Funds have met their burden of proof regarding the amount of unpaid contributions for the

relevant time periods – namely $12,354.76 (i.e., 473 hours multiplied by the $26.12 hourly rate). 

The Trust Agreement also contains a provision allowing for the assessment of liquidated

damages of “twenty percent (20%) of the unpaid amount or twenty dollars ($20.00), whichever is

the greater.” See Trust Agreement at Section 6. Under Ninth Circuit law, an award of liquidated

damages under § 1132(g)(2) is “mandatory and not discretionary.” Operating Engineers Pension

Trust v. Beck Engineering & Surveying Co., 746 F.2d 557, 569 (9th Cir. 1984).

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 10 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

9

 The Trust Agreement provides that compound interest shall accrue on all unpaid

contributions at a “rate of two (2%) percent above the prime rate set by Bank of America.” Trust

Agreement at Section 9. Trust Funds provided evidence that the relevant prime rate set by Bank of

America was 3.25%, and thus the applicable interest rate to apply here is 5.25%. Martinez Decl.,

Ex. C (Bank of American rate structure). Although the Trust Funds appear to be entitled to

compound interest, they seek only simple interest here. Docket No. 17 at 8. 

10 This amount reflects the full amount of the unpaid contributions ($12,354.76) plus the full

amount of the requested liquidated damages ($2,470.85) and interest ($1,509.99). 

11

The Trust Funds seek $2,470.85 in liquidated damages. Ms. Martinez provided a chart in her

declaration explaining the figure sought, which is 20% of the principal amounts owed by Defendants

for the relevant periods. Martinez Decl. ¶ 9. The Trust Funds also seek $1,509.99 in interest.9

Again, Ms. Martinez provided a chart that shows how this figure was calculated – namely by

applying a 5.25% annual interest rate to the outstanding amount of contributions due and owing

during the relevant time period. Id. The Court finds that the Trust Funds have met their burden as

to these claims. Consequently, the Court awards total damages to the Trust Funds in the amount of

$16,335.60.10

2. Injunctive Relief

Plaintiffs also request an injunction directing Defendants to submit to an audit of its financial

records for the period January 1, 2012, through the present. Specifically, the Trust Funds require

that Defendants be required to “permit an authorized Trust representative to enter upon the premises

of such Employer at a mutually agreeable time during regular business hours to examine and copy

such records as may be necessary to determine whether the Employer is making full and prompt

payment of all sums required to the Trust.” Trust Agreement at Section 7. 

The Trust Funds’ requested injunctive relief is appropriate under ERISA to the extent the

audit is tailored to the purpose of verifying that required contributions have (or have not) been paid. 

See International Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., Inc.,

239 F. Supp. 2d 26, 31 (D.D.C. 2002) (“ERISA authorizes the court to provide for other legal or

equitable relief as the court deems appropriate [under 29 U.S.C. § 1132(g)(2)(E)]. This relief can

include an injunction requiring a defendant to permit, and cooperate with, an audit of its books and

records.”). Accordingly, the Court grants the Trust Funds’s claim for injunctive relief. Defendants

are ordered to: permit an auditor designated by the Trust Funds to enter upon its premises during

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 11 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

12

business hours, and at a reasonable time or times, to examine and copy books, records, papers or

reports of Defendants to determine whether they are making full and prompt payment of all sums

required to be paid to the Trust Funds at issue.

3. Attorneys’ Fees and Costs

The Trust Funds finally request that they be awarded their attorneys’ fees and costs incurred

in litigating this lawsuit. Specifically, the Trust Funds ask for $6,747 in attorneys’ fees and $589.80

in costs. See Docket No. 17-5 (Declaration of Wan Yan Ling) at ¶¶ 10-11. 

It is clear that costs and fees incurred by the Trust Funds are recoverable under ERISA. 

Section 502(g)(2) of ERISA, codified at 29 U.S.C. § 1132(g)(2), “makes the award of attorney’s fees

mandatory when the trustees prevail in actions to enforce and collect benefit fund contributions.” 

Kemmis v. McGoldrick, 706 F.2d 993, 997 (9th Cir. 1983). It is also “well-settled that the award of

attorneys’ fees is a matter within the discretion of the trial court, and that an award of attorneys’ fees

cannot be disturbed on appeal, absent a showing of abuse of discretion.” Seymour v. Hull &

Moreland Eng’g, 605 F.2d 1105, 1116 (9th Cir. 1979).

Having reviewed Plaintiffs’ attorneys’ billing records in detail, the Court finds that spending

34.6 hours on this case was both reasonable in light of the relative simplicity of this matter, as well

as necessary to its effective prosecution. See Ling Decl. at ¶ 9; see also The Bd. of Trustees v.

Charles B. Harding Construction, Inc., No. C-14-1140 EMC, 2014 WL 7206890, at *6 (N.D. Cal.

Dec. 18, 2014) (finding that 39 hours of billable time to prosecute ERISA default judgment action

was reasonable). Further, the Court finds that the hourly rate charged by the attorneys ($195 per

hour) is more than reasonable in this legal market for attorneys of similar skill and experience. See

Lind Decl. at ¶ 9; Charles B. Harding Construction, 2014 WL 7206890, at *6 (finding that rates

between $275 and $325 an hour are reasonable in this market for prosecution of ERISA collection

action). Therefore, the Court awards the requested amount ($6,747) of attorneys fees in full. 

Plaintiffs also seek an award of $589.80 in costs. Ling Decl at ¶ 11. Section 1132(g)(2)

specifies that both “reasonable attorney’s fees and costs of the action” are “to be paid by the

defendant.” Id. (emphasis added). The Court has reviewed Plaintiffs’ accounting of their costs in

this matter (e.g., filing fees and service-of-process fees), and finds that all costs claimed are those

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 12 of 13
United States District Court

For the Northern District of California

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

13

“customarily billed separately in [this legal] market” and are thus “recoverable as ‘reasonable

attorney’s fees’ under 29 U.S.C. § 1132(g)(2)(D).” Trustees of Const. Indus. & Laborers Health &

Welfare Trust v. Redland Ins. Co., 460 F.3d 1253, 1259 (9th Cir. 2006). Therefore, the Court

awards Plaintiffs $589.80 in costs, bringing the total fees and cost award in this matter to $7,336.80. 

III. CONCLUSION

The Court GRANTS the Trust Funds’ motion for default judgment in the amount of

$16,335.60, attorneys’ fees in the amount of $6,747.00, and costs in the amount of $589.80. The

Court finds that Mr. James is jointly and severably liable with James Island Plastering Inc., for this

judgment.

The Court also GRANTS the Trust Funds’ request for injunctive relief, and orders

Defendants to permit an auditor designated by the Trust Funds to enter upon their premises during

business hours, and at a reasonable time or times, to examine and copy books, records, papers or

reports of Defendants to determine whether they are making full and prompt payment of all sums

required to be paid to the Trust Funds at issue. 

Plaintiffs shall serve this Order on Defendants and shall file a proof of service with the Court

within seven (7) days from the date of this Order.

This order disposes of Docket No. 17. 

IT IS SO ORDERED.

Dated: March 6, 2015

_________________________

EDWARD M. CHEN

United States District Judge

Case 3:14-cv-03132-EMC Document 23 Filed 03/06/15 Page 13 of 13