Board of Trustees of the Sheet Metal Workers Health Care Plan of Northern California et al v. Holiday Savings Plan et al

Filing 32

ORDER by Judge Samuel Conti granting 24 Motion for Default Judgment (sclc2, COURT STAFF) (Filed on 12/14/2009)

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1 2 3 4 5 6 7 8 9 10 For the Northern District of California UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 BOARD OF TRUSTEES OF THE SHEET METAL WORKERS HEALTH CARE PLAN OF NORTHERN CALIFORNIA; SHEET METAL WORKERS PENSION TRUST OF NORTHERN CALIFORNIA; SHEET METAL WORKERS LOCAL 104 VACATION, HOLIDAY SAVINGS PLAN; ANTHONY ASHER, TRUSTEE, Plaintiffs, v. T A M S, Inc., a California corporation, d/b/a THERMAL AIRE, Defendant. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) No. 08-3103 SC DEFAULT JUDGMENT I. INTRODUCTION Before the Court is the Motion for Default Judgment ("Motion") submitted by Plaintiffs Board of Trustees of the Sheet Metal Workers Health Care Plan of Northern California, et al., ("Plaintiffs"). Docket No. 24. Defendant TAMS, Inc., d/b/a Thermal Aire ("TAMS"), was duly notified of these proceedings. See Docket No. 4 ("Certificate of Service"). as to TAMS has been filed. Docket No. 10. An Entry of Default For the reasons stated herein, the Court GRANTS Plaintiffs' Motion. II. BACKGROUND Plaintiffs contend that TAMS is bound by the terms and 1 2 3 4 5 6 7 8 9 10 For the Northern District of California conditions of a collective bargaining agreement. 2, Ex. 1 ("Labor Agreement"). Canevari Decl.1 The collective bargaining agreement, and the Employee Retirement Income Security Act of 1974 ("ERISA"), authorize a collection action for unpaid employee benefit contributions. See Docket No. 1 ("Compl.") at 2-4. The Labor Agreement allows an assessment of ten percent (10%) of the delinquent contributions as liquidated damages. 3; Labor Agreement at 24-25. Maraia Decl.2 Amendment Number Three to the Trust Agreement provides for liquidated damages at a rate of 20%. Maraia Decl. 4, Ex. 3 ("Trust Agreement"). On or about March 26, 2008, Lindquist LLP, Certified Public Accountants, completed a compliance test of the books and records of TAMS for the period July 1, 2004 through June 30, 2007. Hallenbeck Decl.3 3, Ex. 2 ("Audit"). The amount of unpaid Audit at 4. United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 contributions uncovered by the audit was $6413.57. $4000 was paid on June 24, 2009, leaving a delinquent balance of $2413.57. Maraia Decl. Ex. 4 ("Liability Detail Sheet"). Id. The fee for the compliance test was $641.36. As a result of the delinquent contributions that remain due, and late payments of contributions by TAMS between May and September 2008, TAMS allegedly owes Plaintiffs liquidated damages in the amount of Dennis Canevari, business representative of Sheet Metal Workers Local Union No. 162, submitted a declaration in support of the Motion. Docket No. 25. Bonnie Maraia, fund manager of Plaintiffs' administrator, submitted a declaration in support of the Motion. Docket No. 27. Tim Hallenbeck, a manager with the firm Lindquist LLP, filed a declaration in support of the motion. Docket No. 26. 2 3 2 1 1 2 3 4 5 6 7 8 9 10 For the Northern District of California $30,020.80, and interest in the amount of $842.37. Id. III. LEGAL STANDARD After entry of default, the Court may enter a default judgment. Fed. R. Civ. P. 55(b)(2). The Court's decision whether Aldabe v. to enter a default judgment, while "discretionary," Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980), is guided by several factors. If the court determines service of process was sufficient, the court may consider: (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). "The United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 IV. general rule of law is that upon default the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true." Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977). DISCUSSION A. Eitel Factors Accepting the allegations in the Complaint, the Court finds that the Eitel factors favor default judgment. Section 502(a) of ERISA gives the participants and beneficiaries of an ERISA-governed pension plan a cause of action in federal court 3 1 2 3 4 5 6 7 8 9 10 For the Northern District of California where an employer violates the terms of the plan. 1132(a)(1)(B), (a)(3). 29 U.S.C. Plaintiffs have shown that, by failing to make timely contributions, TAMS has violated the terms of the Agreement. Mot. at 3. Plaintiffs are seeking damages of $33,918.10 for contributions still due, liquidated damages, interest, and a testing fee. See Liability Detail Sheet. Despite being notified of these proceedings, TAMS has not challenged these amounts. TAMS's default cannot be said to be the result of excusable neglect. TAMS was properly served. See Certificate of Service. United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 While it is preferable to decide cases on the merits whenever possible, this preference is not dispositive. Where a party fails to defend against a complaint, as TAMS has failed to do here, Rule 55 authorizes the Court to enter default judgment. Kloepping v. Fireman's Fund, No. 94-2684, 1996 U.S. Dist. LEXIS 1786, at *10 (N.D. Cal. Feb. 14, 1996). B. Remedy Plaintiffs seek to recover contributions still due, liquidated damages, interest, a testing fee, attorneys' fees, and court costs. Mot. at 1-2. The Trust Agreement sets liquidated damages at 20% of the amount of the delinquent payment, and they are assessed as of the delinquency date. Item III C, Amendment Number Three. amount to $30,020.80. See Trust Agreement, The liquidated damages See Liability Detail Sheet. Plaintiffs seek interest for the days during which payments were late between May and September 2008, Mot. at 3, and they are contractually entitled to such interest, see Trust Agreement Item 4 1 2 3 4 5 6 7 8 9 10 For the Northern District of California III C. The interest rate is set by the Board of Trustees, see id., and the current rate is 15%, see Carroll Decl. 7-8, Ex. 7 ("Ways & Means Committee Meeting Minutes"). from the contribution due date. Interest is computed Plaintiffs Maraia Decl. 9. seek $842.37 in interest payments. See Liability Detail Sheet. Plaintiffs request attorneys' fees under 29 U.S.C. 1132(g)(2)(D). Mot. at 5. Plaintiffs have submitted a description of their attorneys' fees and court costs totaling $1170. Carroll Decl. 2-5. Plaintiffs are entitled to the See Trust See Audit. testing fee under the terms of the Trust Agreement. Agreement, Item III E. United States District Court 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The testing fee is $641.36. The Court GRANTS Plaintiffs' request for damages consisting of contributions still due, liquidated damages, attorneys' fees, court costs, and a testing fee. V. CONCLUSION For the foregoing reasons, the Court GRANTS Plaintiffs default judgment. The Court hereby AWARDS Plaintiffs $2413.57 for contributions still due, liquidated damages of $30,020.80, interest of $842.37, plus $1170.00 in attorneys' fees and costs, and $641.36 for the testing fee, for a total judgment of $35,088.10. IT IS SO ORDERED. Dated: December 14, 2009 UNITED STATES DISTRICT JUDGE 5

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