Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_13-cv-03800/USCOURTS-cand-4_13-cv-03800-2/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1145 E.R.I.S.A.

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UNITED 

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DISTRICT 

COURT

For the Northern District of California

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 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are

to the ECF-generated page numbers at the tops of the documents.

REPORT AND RECOMMENDATIONS

C 13-03800 JSW (LB)

UNITED 

STATES 

DISTRICT 

COURT

For the Northern District of California

UNITED STATES DISTRICT COURT

Northern District of California

San Francisco Division

CENTRAL CALIFORNIA IBEW/NECA

PENSION TRUST, et al.,

Plaintiffs,

v.

OZZIMO ELECTRIC, INC.,

Defendant.

_____________________________________/

No. C 13-03800 JSW (LB)

REPORT AND RECOMMENDATION

REGARDING DAMAGES

INTRODUCTION

Plaintiffs ― the collective-bargaining representative and trustees of employee-benefits plans for

employees working as electrical workers ― sued Defendant Ozzimo Electric for failing to pay

employee fringe benefits in violation of the parties’ collective-bargaining agreements (“CBAs”).

(Compl. S ECF No. 1.)1

 The court previously recommended that the district judge grant Plaintiffs’

motion for default judgment, and the district judge then granted it, which resulted in: (1) an award of

fees of $6,273.50 and costs of $520.07; and (2) an order for a payroll audit covering January 2010 to

the present and any monthly transmittals from March 2012 to the present to establish the unpaid

contributions. (ECF Nos. 20, 22.) Plaintiffs have now submitted their audit. The undersigned

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UNITED 

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COURT

For the Northern District of California

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REPORT AND RECOMMENDATIONS

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recommends that the district judge enter judgment for $237,475.92.

STATEMENT

This statement incorporates by reference the facts in the initial report and recommendation

establishing the filing of the complaint, the allegations in it, its service on Ozzimo, and the service of

both the entry of default and the default-judgment motion on Ozzimo. (See ECF No. 20.) The record

reflects that Plaintiffs also served the undersigned’s report and recommendation on Ozzimo. (ECF

No. 21.) As set forth in the January 23, 2014 report and recommendation, the terms of the CBA

required Ozzimo to make timely monthly contributions for the benefit of its employees. (1/24/14

Report and Recommendation S ECF No. 20 at 3.) The complaint sought an audit to determine what

Ozzimo had failed to pay in required contributions “during the period of the statute of limitations,”

the amounts that that audit ultimately discovered Ozzimo owed, as well as missing monthly

transmittals from March 2012 to the present. (Compl. S ECF No. 1 at 5, 8.) Plaintiffs also asked for

an order compelling Ozzimo to produce documents from January 2010 forward to facilitate the

audit; the undersigned recommended that the district judge grant, and the district judge later did

grant, that request. (See ECF Nos. 20, 22.) 

In its order granting default judgment and ordering the audit, the district court retained

jurisdiction “for the limited purpose of permitting Plaintiffs to file a second submission detailing any

unpaid contributions that are revealed by the audit.” (ECF No. 22 at 1.) On February 27, 2015,

Plaintiffs filed the necessary submission and attached the audit, which had been conducted by Miller

Kaplan Arase LLP, a certified public accounting firm. (See ECF Nos. 29 at 2, 29-1 at 7.) The audit

shows $139,352.85 in unpaid or underpaid contributions. (ECF No. 29 at 5.) Plaintiffs additionally

seek interest of $69,496.79, liquidated damages of $13,935.28, attorney’s fees of $10,506.00, and

the costs of the audit of $4,185.00, which brings the total amount sought to $237,475.92. (Id.)

Defendants were served with the results of the audit on February 27, 2015. (ECF No. 29 at 7.)

RELIEF SOUGHT

Under ERISA and the CBAs, when contributions are unpaid, Plaintiffs may recover: (1) the

unpaid contributions; (2) interest on the unpaid contributions; (3) an amount equal to the greater of

the interest on the unpaid contributions or liquidated damages as specified in the plan (generally not

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COURT

For the Northern District of California

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to exceed 20% of the unpaid contributions); (4) reasonable attorney's fees and costs; and (5) such

other legal and equitable relief as the court deems appropriate. See 29 U.S.C. § 1132(g)(2); (CBA S

ECF No. 11-4 at 27, § 6.08).

For the damages claim under 29 U.S.C. § 1132(g)(2), Plaintiffs must prove their entitlement to

relief through written declarations and fulfill the following three requirements: (1) the defendant

must be delinquent in its contributions at the time the action is filed; (2) the district court must enter

judgment against the defendant; and (3) the plan must provide for the damages sought. Nw.

Admin’rs, Inc. v. Albertsons, Inc., 104 F.3d 253, 257-58 (9th Cir. 1996); Idaho Plumbers &

Pipefitters Health & Welfare Fund v. United Mech. Contractors, Inc., 875 F.2d 212, 215 (9th Cir.

1989). If these requirements are met, then an award of contributions, liquidated damages, and

reasonable attorney’s fees and costs is mandatory. Northwest Administrators, 104 F.3d at 257-58;

Bd. of Trs. v. RBS Washington Blvd. LLC, No. C 09-06660 WHA, 2010 WL 145097, at *3 (N.D.

Cal. Jan. 8, 2010).

For the liquidated-damages demand, the court applies federal contract law to determine whether

those damages are reasonable. See Idaho Plumbers, 875 F.2d at 214-18. Liquidated damages must

meet two requirements: (1) the harm caused by the breach of contract must be difficult or impossible

to estimate; and (2) the amount of liquidated damages must be a reasonable forecast of

compensation for the harm caused. Id.; United Order of Am. Bricklayers & Stone Masons Union No.

21 v. Thorleif Larsen & Son, Inc., 519 F. 2d 331, 337 (9th Cir. 1975) (upholding liquidated-damages

provision in collective-bargaining agreement of 10% of unpaid contributions).

The earlier report and recommendation could not fully evaluate the default-judgment test set

forth in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), because the “sum of money at stake in the

litigation” ― which is Eitel’s last factor ― was unknown before the audit. (See ECF No. 20 at 7-8.)

As discussed below, the undersigned now finds that the damages and fees sought are warranted and

reasonable, and that the “money at stake” does not impede this last element of the requested default

judgment.

Two further principles guide the court’s damages inquiry. First, in assessing the Eitel factors, all

factual allegations in the complaint are taken as true, except those with regard to damages. See

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Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). “To recover damages after

securing a default judgment, a plaintiff must prove the relief it seeks through testimony or written

affidavit.” Bd. of Trustees of the Laborers Health & Welfare Trust Fund for N. Cal. v. A & B Bldg.

Maint. Co. Inc., C 13-00731 WHA, 2013 WL 5693728, at *4 (N.D. Cal. Oct. 17, 2013); see also Bd.

of Trustees of Bay Area Roofers Health & Welfare Trust Fund v. Westech Roofing, 12-CV-05655-

JCS, 2014 WL 2085339, at *8 n.13 (N.D. Cal. May 19, 2014) (“It is Plaintiffs’ burden on default

judgment to establish the amount of their damages.”). 

Second, under Federal Rule of Civil Procedure 54(c), “[a] default judgment must not differ in

kind from, or exceed in amount, what is demanded in the pleadings.” Fed. R. Civ. P. 54(c). The

purpose of this rule is to ensure that a defendant is put on notice of the damages being sought against

him so that he may make a calculated decision as to whether or not it is in his best interest to answer. 

In re Ferrell, 539 F.3d 1186, 1192-93 (9th Cir. 2008); Board of Trs. of the Sheet Metal Workers

Local 104 Health Care Plan v. Total Air Balance Co., No. 08-2038 SC, 2009 WL 1704677, at *3-5

(N.D. Cal. June 17, 2009).

The court now turns to Plaintiffs’ requested relief. 

A. Unpaid and Underpaid Contributions, Interest, and Liquidated Damages

As Plaintiffs describe matters in their brief, and as the documents submitted demonstrate,

Ozzimo failed to pay or underpaid contributions on behalf of its covered employees from January

2009 through September 2011. (See Ling Decl. S ECF No. 29-1 at 2, ¶¶ 2-3.) The unpaid principal

contributions total $139,352.85. (Id. ¶ 3.)

Furthermore, under the CBAs’ terms, Ozzimo is liable for interest of 10% per annum calculated

from the day contributions are considered delinquent, as well as for liquidated damages, calculated

at 10% on the assessed funds. (ECF No. 11, Exhibit D at 9-10.) Calculated at 10% per month from

the month in which each delinquent contribution for each Trust Fund was recorded and accumulated,

Ozzimo owes $69,496.79 in total interest. (ECF No. 29 at 4-5.) Calculated at 10% of the principal

owed, Plaintiffs are entitled to an additional $13,935.28 in liquidated damages.

In sum, for unpaid and underpaid contributions, liquidated damages, and interest, Plaintiffs are

entitled to an award under 29 U.S.C. §§ 1132(g)(2)(A), (B) and (C) as follows:

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DISTRICT 

COURT

For the Northern District of California

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Unpaid/Underpaid Contributions: $139,352.85

Interest: $69,496.79

Liquidated Damages: $13,935.28

Subtotal: $222,784.92

(ECF No. 29 at 4-5.)

This amount is within the relief sought by the Complaint. Plaintiffs there asked for the “unpaid

principal” that the audit “discovered,” interest on that principal, liquidated damages, and attorney’s

fees. (ECF No. 1 at 8.) The unpaid principal consisted of unpaid and underpaid contributions

“during the period of the statute of limitations.” (Id. at 5, ¶ 11.) The missed contributions from

January 2009 that the audit discovered, and which Plaintiffs now request, fall within this requested

range. In ERISA actions, including those that involve collective-bargaining agreements, “federal

courts apply the state statute of limitations for breach of a written contract.” Trs. of Operating

Eng’rs Pension Trust v. Smith-Emery Co., 906 F. Supp. 2d 1043, 1058 (C.D. Cal. 2012) (citing N.

Cal. Retail Clerks Unions Pension Trust v. Jumbo Markets, 906 F.2d 1371, 1372 (9th Cir. 1990)).

California’s applicable statute of limitation is four years. Smith-Emery, 906 F. Supp. 2d at 1058.

“Because the cause of action is federal, however, federal law determines the time at which the cause

of action accrues.” Jumbo Markets, 906 F.2d at 1372. A cause of action like the present one accrues

when the plaintiff knows or has reason to know that the employer has not paid, or has underpaid, a

required contribution to the trust. See id.; Price v. Provident Life & Acc. Ins. C o., 2 F.3d 986, 988

(9th Cir. 1993); Jumbo Markets, 906 F.2d at 1372.

From the Complaint, it appears that Plaintiffs discovered that Ozzimo had missed or underpaid

required contributions by November 2012. (See ECF No. 1 at 5, ¶ 14.) It was then that they asked

Ozzimo for “documents . . . necessary for the completion of an audit.” (Id.) This would have

triggered the limitations period. Smith-Emery, 906 F. Supp. 2d at 1059 (“[P]laintiffs had reason to

know of missing contributions once they decided that an audit was necessary . . . .”). Plaintiffs filed

this case on August 15, 2013, within the four-year limitations period. All their claims for unpaid and

underpaid contributions are thus timely. Id. at 1060 (reasoning that if plaintiffs filed within the

statutory period after “they first formally requested an audit,” then “none of their claims,” including

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those going back six years, “would be time-barred by [California’s] four-year statute of

limitations”).

The principal amounts that Plaintiffs request, encompassing missed or underpaid contributions

from January 2009, are thus within the request of the Complaint; the relief they seek (damages,

interest, and fees) does “not differ in kind from, or exceed in amount, what is demanded in the

pleadings,” Fed. R. Civ. P. 54(c), and so may be properly awarded on default judgment.

B. Attorney’s Fees

Plaintiffs also seek attorney’s fees for the work that their lawyers have done since the court’s last

report and recommendation. That earlier report and recommendation awarded the Plaintiffs’ lawyers

fees and costs for work done and amounts spent before they filed their motion for default judgment.

(See ECF No. 20 at 8-10; Quail Decl. S ECF No. 11 at 4-5, ¶ 15-19; Invoices S ECF No. 11-7.) Their

supplemental brief now seeks fees for new work done on, and after, the default-judgment motion of

November 26, 2013. (See Ling Decl. S ECF No. 29-1 at 3-4, ¶ 9 and n. 1; Invoices S ECF No. 29-1

at 25-48.)

Plaintiffs request the following fees: $8,166.00 (30.6 hours at $235 per hour, totaling $7,191.00;

and 2 hours at $195 per hour, totaling $975.00). (Ling Decl. S ECF No. 29-1 at 3-4, ¶¶ 8-9.)

Plaintiffs also request $2,340.00 for 12 hours (at $195 per hour) for February 2015 hours that their

attorneys’ billing system invoiced for February 2015. (Id.) The invoiced fees of $8,166.00 combined

with the February invoices of $2,340.00 amounts to a total requested attorney’s fee of $10,506.00.

An award for reasonable fees and costs is mandatory because there are unpaid contributions and

the plan provides for reasonable fees and costs. See Northwest Administrators, 104 F.3d at 257-58.

Specifically, the CBAs provide for reimbursement of attorneys’ fees and costs, audit fees, and all

other expenses incurred in collecting the delinquent contributions. (See ECF No. 11-5 at 12.)

To determine a reasonable attorney’s fee award in cases such as this, courts use the lodestar

method. Grove v. Wells Fargo Fin. Cal., Inc., 606 F.3d 577, 582 (9th Cir. 2010). The court

calculates a lodestar amount by multiplying the number of hours counsel reasonably spent on the

litigation by a reasonable hourly rate. Id.

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1. Reasonable Hourly Rate

The attorney billing rates charged here were $195-$235 per hour. (ECF No. 29-1 at 3.) In the

earlier report and recommendation, taking into account rates that courts in this district have

approved in other ERISA cases, the undersigned found that the $235 rate was reasonable. (ECF No.

20 at 9-10.) The $195 rate is likewise reasonable. This district has found higher rates to be

acceptable in ERISA cases. E.g., Day v. SBC Disability Income Plan, No. 06-1740, 2008 WL

2783482 at *2 (N.D. Cal. July 17, 2008) (attorney rate of $450 per hour was reasonable); Trs. on

Behalf of Teamsters Benefit Trust v. Casey’s Office Moving Servs., No. 05-4157, 2007 WL 1031320

at *5 (N.D. Cal. Apr. 3, 2007) (determining that for a relatively simple trust collection $250 per hour

was reasonable); Bd. of Trs. of Boilermaker Vacation Trusts v. Skelly, Inc., 389 F. Supp. 2d 1222,

1227-28 (N.D. Cal. 2005) (associate’s rate of $225 per hour and partner’s rate of $385 per hour were

reasonable); May v. Metro. Life Ins. Co., No. 03-5056, 2005 WL 839291 at *4 (N.D. Cal. April 7,

2005) (approving reasonable rates for plaintiffs’ attorneys of $350 and $395 per hour).

2. Reasonable Hours Expended

Reasonable hours expended on a case are hours that are not “‘excessive, redundant, or otherwise

unnecessary.’” McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (quoting Hensley v.

Eckerhart, 461 U.S. 424, 434 (1983)). The party requesting fees must provide detailed time records

documenting the task completed and the time spent. See Hensley, 461 U.S. at 434; McCown, 565

F.3d at 1102; Welch, 480 F.3d at 945-46. 

Here, the total of 47.6 hours, spent from November 26, 2013 through December 2014, includes

drafting the Motion for Default Judgment, Plaintiff’s Response to an Order to Show Cause, and

Motion for Extension of Time to File Supplemental Brief. (See Invoices S ECF No. 29-1 at 25-48.) 

In addition, Plaintiffs’ counsel conducted conferences and communicated with Plaintiffs, the Trust

Funds (and their administrator), and general contractors. (Id.) The court finds these billings to be

reasonable, in line with the timeline of this action, and necessary for its prosecution.

Plaintiffs also request $2,340.00 for work conducted in 2015, including procuring documents for

the audit, communicating with Ozzimo regarding the audit, and preparing Plaintiff’s supplemental

brief. The court finds these billings too to be reasonable, in line with the timeline of this action,

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For the Northern District of California

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necessary for its prosecution.

(Again, the fees and costs that the undersigned previously recommended, and that the district

judge granted, were for work done and expenses incurred before the motion for default judgment.

The current fee request is for subsequent work. (See Ling Decl. S ECF No. 29-1 at 3-4, ¶ 9 and n. 1;

Invoices S ECF No. 29-1 at 25-48.))

Applying the hourly rates to the recommended hours, the court ultimately recommends that

Plaintiffs be awarded $10,506.00 in attorney’s fees. 

C. Audit Costs

Plaintiffs additionally seek the cost of conducting the audit, as provided for under the CBAs. 

(ECF No. 29-1 at 4; ECF No. 11, Exhibit D at 12.) Plaintiffs have filed invoices from the auditing

firm in the total amount of $4185. (ECF No. 29-1 at 50-61.) That is the amount they request as audit

costs, and it is the amount that the undersigned recommends they be awarded.

CONCLUSION

The court has reviewed the audit documents and notes that Defendant has not disputed them. The

court has reviewed the audit, finds nothing in it to suggest that it is unreliable, and finds a total

award of $237,475.92 appropriate. See Bd. of Trustees, in their capacities as Trustees of the Cement

Masons Health & Welfare Trust Fund for N. California v. SLR Concrete Const., Inc., 2010 WL

5422562 (N.D. Cal. Dec. 28, 2010); Dist. Council 16 N. Cal. Health & Welfare Fund v. Mortensen's

Carpets, Inc., 2010 WL 1956725 (N.D. Cal. May 13, 2010).

Based on the foregoing, the undersigned RECOMMENDS that the district judge ORDER 

Ozzimo to pay Plaintiffs a total of $237,475.92 for unpaid or underpaid contributions, attorney’s

fees, and audit costs. Any party may file objections to this Report and Recommendation with the

district judge within 14 days after being served with a copy. See 28 U.S.C. § 636(b)(1); Fed. R. Civ.

P. 72(b); N.D. Cal. Civ. L.R. 72. Failure to file an objection may waive the right to review of the

issue in the district court.

The court ORDERS Plaintiffs to serve a copy of this report and recommendation on Ozzimo.

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For the Northern District of California

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IT IS SO ORDERED.

Dated: April 2, 2015

__________________________

LAUREL BEELER

United States Magistrate Judge

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