The Boards of Directors of the Motion Picture Industry Pension Plan et al v. BZ Com Marketing, Inc.

Filing 22

ORDER GRANTING DEFAULT JUDGMENT for Plainiffs Motion Picture Industry Health Plan, The Boards of Directors of the Motion Picture Industry Pension Plan, The Motion Picture Industry Individual Account Plan against defendant BZ Com Marketing, Inc: BZ Co m is to pay to the Plans: $ 3,680.00 for reasonable attorneys fees incurred in prosecuting this action; $ 510.01 for costs of suit; and All costs incurred by Plaintiffs in conducting the audit for the period of January 23, 2005 to date.Judge Dean D. Pregerson. (Made JS-6. Case Terminated.) (lc)

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 v. BZ COM MARKETING, INC., a California corporation, Defendant. ___________________________ THE BOARDS OF DIRECTORS OF THE MOTION PICTURE INDUSTRY PENSION PLAN, THE MOTION PICTURE INDUSTRY INDIVIDUAL ACCOUNT PLAN, and THE MOTION PICTURE INDUSTRY HEALTH PLAN, Plaintiffs, ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 08-02956 DDP (JWJx) ORDER GRANTING DEFAULT JUDGMENT AGAINST BZ COM MARKETING, INC. [Motion filed on August 28, 2008] UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

This matter comes before the Court on Plaintiffs' Motion for Default Judgment against Defendant BZ Com Marketing, Inc. ("BZ Com"). After reviewing the materials submitted by the plaintiffs and considering the arguments therein, the Court grants Plaintiffs' motion and adopts the following order. I. Background The plaintiffs in this action are the Boards of Directors of the Motion Picture Industry Pension Plan, the Motion Picture Industry Individual Account Plan, and the Motion Picture Industry

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Health Plan ("Plans").

The Plans are employee welfare benefit and

pension plans under ERISA, 29 U.S.C. § 1002(1) & 2(A), and multiemployer plans within the meaning of ERISA, 29 U.S.C. § 1002(37)(A). In March 2005, Defendant BZ Com entered into an Agreement of Consent in which it agreed to be bound by the Producer-IATSE Basic Agreement. It also executed an IATSE Trust Acceptance acknowledging that it entered into the Basic Agreement with IATSE and agreeing to become a party to the Health Plan, Pension Plan, and Individual Account Plan. Also in March 2005, BZ Com entered into International Cinematographers Guild (Publicists) Local 600 Competitive Agency Agreement for the period August 1, 2004 through July 31, 2006. BZ Com entered into a successive Publicist Agreement for August 1, 2006 through July 31, 2009. The Basic Agreement provides that an employer's weekly contributions to the Plans are calculated by separately determining total hours worked by or guaranteed to employees and multiplying all such hours by the rates set forth in the Basic Agreement and Trust Agreements. Pursuant to these agreements, BZ

Com is obligated to forward a single combined weekly remittance report, together with contributions owed to the Plans by the last day of the week following the week in which work was performed. Contributions are delinquent if not received within five days from the date they become due. The Trust Agreements provide that the

Plan Directors may audit the records of any employer in connection with the contributions and reports. Gordon Decl. ¶ 10, Exs. 5-7 (Article III). If a party fails to make records available for an audit or inspection, the Trust Agreements allow the Plans to take "any action," including bringing a lawsuit, to enforce the audit 2

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provisions.

E.g., Gordon Decl. Ex. 5, § 6.

The Plans also

provide that, in such a circumstance, the party refusing the audit will be liable for enforcement expenses. Id. at § 6(b). The Plans determined that a number of BZ Com's records must be made available for inspection, and are necessary for the Plans to determine whether contributions have been properly reported and paid to the plans in accordance with the Basic Agreement and the Trust Agreements. For that purpose, in November 2007 the Plans

requested that BZ Com submit its records for an audit from the period of January 23, 2005 to date. has failed and refused to comply. On May 6, 2008, the Plans filed this action to enforce the audit provisions of the Trust Agreement pursuant to § 502(g)(2)(E) of ERISA, 29 U.S.C. § 1132(g)(2)(E), and § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185(a). The Plans allege that BZ Com has breached the Basic and Trust Agreements by refusing to submit to the audit. The Plans seek a judgment ordering BZ Com to submit to the requested audit and to recover the attorneys' fees and costs incurred in bringing this enforcement action, attorneys' fees in the sum of $ 3,080 and costs in the sum of $ 510.01. The Plans served the Summons and Complaint on BZ Com by substituted service on June 13, 2008. At the request of the The Plans allege that BZ Com

Plans, the clerk entered Default against BZ Com on July 30, 2008 pursuant to Federal Rule of Civil Procedure 55(a). The Plans now move for Default Judgment pursuant to Rule 55(b). /// /// 3

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II.

Legal Standard for Default Judgment A party applies to the Court for an entry of default judgment

pursuant to Federal Rule of Civil Procedure 55(b)(2). A judgment by default "shall not be different in kind from or exceed in amount that prayed for in the demand for judgment." Fed. R. Civ. P. 54(c). In the Central District of California, applications for default judgment must be accompanied by a declaration that identifies "(a) [w]hen and against what party the default was entered; (b) [t]he identification of the pleading to which

default was entered; (c) [w]hether the defaulting party is an infant or incompetent party ... ; (d) [t]hat the Servicemembers Civil Relief Act (50 App. U.S.C. § 521) does not apply; and (e) [t]hat notice has been served on the defaulting party[.]" Central District of California Local Rule 55-1. The Plans have complied with these requirements. See Jordan Decl. ¶¶ 2-7. A court grants default judgment in the exercise of its discretion. See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986); DirecTV, Inc. v. Hoa Huynh, 503 F.3d 847, 852 (9th Cir. 2007). In considering whether to grant a default judgment, a

district court may consider the following factors, among others: (1) the possibility of prejudice to the plaintiff, (2) the merits of a 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. 4

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Eitel, 782 F.2d at 1471-72. III. A. Application Default Judgment is Warranted

In this case, the Court finds that the factors weigh in favor of the entry of default judgment. The first Eitel factor calls on

the Court to consider whether the Plans will suffer prejudice if default judgment is not entered. Without some form of judgment from the Court, the Plans will be unable to enforce the audit provisions of the pension plans or determine whether BZ Com has been properly contributing to them. The second two Eitel factors, substantive merits and sufficiency of the complaint, call upon the Plans to state a claim upon which that would allow recovery. Pepsico, Inc. v. Cal. Sec. The Plans

Cas, 238 F. Supp. 2d 1172, 1175 (C.D. Cal. 2002).

appear to state claims with potential substantive merit, see Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980), and the Complaint clearly indicates the particular Agreements and Dates at issue. The Plans are appropriate parties to enforce violations of

the various Agreements. Beneficiaries and fiduciaries are authorized to bring civil actions under ERISA to enforce compliance with the terms of bargaining agreements. See 29 U.S.C. §§ 1132, 1145. Additionally, § 301 of the LMRA "require[s] only

that the object of the suit be the enforcement of rights guaranteed by an agreement between an employer and a labor organization, and not strictly that the suit itself be between a labor union and an employer." Audit Services, Inc. v. Rolfson, 641 F.2d 757, 760 (9th Cir. 1981). The Plans allege a violation of

the terms of the Agreements, which do include audit provisions, 5

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see Gordon Decl. Exs. 5-7; Compl. ¶ 17, and seek remedies authorized both by ERISA and by the Agreements, see Compl. pp. 7-8 (prayer for relief); 29 U.S.C. § 1132(g); Gordon Decl. Ex. 5 §§ 5c, 6. Additionally, the relief sought in this action favors default judgment. The Plans primarily seek an order from the Court directing BZ Com to comply with the audit provisions of the Basic Agreement and Trust Agreements. They also seek attorneys' fees in the amount of $3,680, and costs for bringing this enforcement action in the amount of $510.01. See Jordan Decl. Ex. 12. As noted above, both the Trust Agreements and ERISA support this relief. Moreover, because the facts at the heart of the claim surround the alleged failure to allow an audit upon a request authorized by the Agreements, the claim is unlikely to involve a dispute of material fact. There is no indication of excusable neglect. The final Eitel factor stems from the policy of the Federal Rules of Civil Procedure favoring decisions on the merits. Although the Court favors decisions on the merits, at times this is not practicable. Here, BZ Com's failure to answer the

complaint makes a decision on the merits impractical, if not impossible. The preference for rulings on the merits is not a

requirement; under Rule 55(a), a termination of a case before a hearing on the merits is allowed whenever a BZ Com fails to defend an action. Thus, "the preference to decide cases on the merits

does not preclude a court from granting default judgment." Pepsico, 238 F. Supp. 2d at 1177. Accordingly, the Court finds that Default Judgment is 6

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warranted in this case.

The form of such judgment will be

discussed in further detail below. B. Relief Sought

The Court also finds the requested relief warranted in this case. 1. Allow the Plans to Perform Audit

As noted above, the Plans seek an order from the Court directing BZ Com to submit to an audit, including (1) making available the appropriate books and records, (2) affording the Plans ample time and opportunity to examine those books and records, and (3) supplement missing records. The Court finds this relief warranted. See 29 U.S.C. § 1132(g). 2. Attorneys Fees and Costs

The Plans also request (1) attorneys' fees and costs incurred in bringing this enforcement action and (2) in conducting the audit. The Court finds this request appropriate. The Plans have filed a Motion pursuant to Local Rule 55-3 requesting the attorneys' fees. Having reviewed the provisions of the Agreement providing for a reimbursement of costs incurred, see, e.g., Gordon Decl. Ex. 5, § 6(b), and the documented attorneys' fees and costs, see Jordan Decl. Exs. 10 & 12, the Court finds the requested relief appropriate. IV. Conclusion For the foregoing reasons, the Court enters default judgment against Defendant for the relief and amounts in Plaintiffs' motion. 1. Defendant BZ Com is hereby ordered to: A. Make available to the Plans all of the books and records 7

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concerning the classification of the employees of BZ Com, their names, social security numbers, the amount of wages paid to each, and the hours worked, including, but not limited to, Individual Time Cards and/or start slips; Individual payroll ledger; Quarterly returns filed with each state in which work was performed or filed with any other state agency; Accounts Payable/Cash Disbursement Journals (or canceled checks in lieu thereof); Quarterly returns filed with the Federal Government (Form 941); Cash Disbursement Journal; Cancelled checks and the check stub register; Invoices and backup for Cash Disbursement Journal, cancelled checks and the check stub register; Forms W-2 and W-3; Forms 1096's and 1099's; Workers' compensation carrier reports; General Ledger; Accounts Receivables and such other records as may be necessary in the opinion of the Plans' auditor, and any other records or information that the Plans require to examine for the period of January 23, 2005 to date. B. Afford to the Plans both ample time and opportunity to

examine all of BZ Com's materials specified above, without harassment, at such time and at such place as shall be convenient to the authorized representative of the Plans. 2. In the event BZ Com cannot produce all of the records which

the Plans are required to examine, BZ Com is ordered to participate in record reconstruction, where BZ Com shall have 14 days to: A. Apply to the Federal and State agencies with which BZ

Com previously filed periodic reports pertaining to employees for copies of BZ Com's reports to them for the periods for which BZ Com cannot produce records; and 8

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B.

Subsequently make available to the Plans all such copies

of BZ Com's periodic reports to the Federal and State agencies under the Conditions set forth in 1(B), above. 3. BZ Com is further ordered to pay to the Plans: A. $ 3,680.00 for reasonable attorneys' fees incurred in

prosecuting this action; B. C. $ 510.01 for costs of suit; and All costs incurred by Plaintiffs in conducting the audit

for the period of January 23, 2005 to date. IT IS SO ORDERED.

Dated: October 3, 2008

DEAN D. PREGERSON United States District Judge

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