Pension Trust Fund For Operating Engineers et al v. Dalecon, Inc. et al
Filing
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ORDER GRANTING 127 PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT AGAINST DALECON, INC. Signed by Judge Laurel Beeler on 3/12/2014. (lblc2, COURT STAFF) (Filed on 3/12/2014)
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UNITED STATES DISTRICT COURT
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Northern District of California
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San Francisco Division
PENSION TRUST FUND FOR OPERATING
ENGINEERS, et al.,
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For the Northern District of California
UNITED STATES DISTRICT COURT
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No. C 11-02851 LB
ORDER GRANTING PLAINTIFFS’
MOTION FOR SUMMARY
JUDGMENT AGAINST DALECON,
INC.
Plaintiffs,
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v.
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DALECON, INC., et al.,
[Re: ECF No. 127]
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Defendants.
_____________________________________/
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INTRODUCTION
In this action, plaintiffs Pension Trust Fund for Operating Engineer (the “Trust”), F.G.
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Crosthwaite, and Russell E. Burns (collectively, “Plaintiffs”) sued Dalecon, Inc. (“Dalecon”), Aleut
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Sons Construction, Inc. (“Aleut Sons Construction”), Dale Stickney Construction, Inc. (“Dale
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Stickney Construction”), Dale Homes, Inc. (“Dale Homes”), Dale Properties, Inc. (“Dale
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Properties”), Point West Properties, LLC (“Point West”), RHS Norcal Investments, LLC (“RHS”),
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Plus Housing & Development, Inc. (“Plus Housing”), DSCI Group, Inc. (“DSCI”), and individuals
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Ronald Stickney (“Mr. Stickney”) and James Underwood (“Mr. Underwood”) (collectively,
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“Defendants”), for Dalecon’s failure to pay withdrawal liability in violation of the parties’ collective
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bargaining agreements, the trust agreement, and federal law. See Complaint, ECF No. 1.1 Mr.
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Citations are to the Electronic Case File (“ECF”) with pin cites to the electronicallygenerated page number at the top of the document.
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ORDER
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Stickney, Mr. Underwood, and Dale Stickney Construction were dismissed from this action.
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Voluntary Dismissal, ECF No. 108; Stipulation of Dismissal, ECF No. 121. The Clerk of the Court
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entered default against Aleut Sons Construction, Dale Homes, Dale Properties, Point West, RHS,
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Plus Housing, and DSCI (the “Defaulting Defendants”). Entry of Default, ECF No. 14. Plaintiffs
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now move for summary judgment against Dalecon.2 The court held a hearing on the motion on
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February 20, 2014. 2/20/2014 Minute Order, ECF No. 140. Upon consideration of the papers
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submitted, the arguments of counsel at the hearing, and the applicable authority, the court GRANTS
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Plaintiff’s motion and finds that Plaintiffs should be awarded $423,389.77, which includes $242,614
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in assessed withdrawal liability, $77,171.67 in interest, $48,522.80 in liquidated damages,
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$53,367.50 in attorney’s fees, and $1,713.80 in costs.3
STATEMENT
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For the Northern District of California
UNITED STATES DISTRICT COURT
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I. FACTS
This action arises under Employment Retirement Income Security Act of 1974 (“ERISA”), as
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amended by the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29 U.S.C. §§
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1001-1461 (1982).
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The Trust is: (a) an employee benefit plan as defined in the ERISA § 3(3) (29 U.S.C. § 1002(3));
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(b) an “employee benefit pension plan” as defined in ERISA § 3(2) (29 U.S.C. § 1002(2)); and (c) a
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“multiemployer plan” as defined in ERISA §§ 3(37) and 4001(a)(3) (29 U.S.C. §§ 1002(37) and
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1301(a)(3)). Complaint, ECF No. 1 ¶ 6; Joint Statement, ECF No. 128 ¶ 2; Trento Declaration, ECF
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No. 113 ¶ 2. The Trust primarily covers employers in the building and construction industry.
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Trento Declaration, ECF No. 113 ¶ 2. The Trust is maintained pursuant to the Labor Management
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Plaintiffs also move for default judgment against the Defaulting Defendants. Motion for
Default Judgment, ECF No. 117. Because the Defaulting Defendants have neither consented to nor
declined the undersigned’s jurisdiction, the court will separately issue a report and recommendation
recommending that a district judge grant that motion and enter judgment in this case.
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Pursuant to 28 U.S.C. § 636(c), Plaintiffs and Dalecon previously consented to the
undersigned’s jurisdiction, see Consent (Plaintiffs), ECF No. 10; Consent (Dalecon), ECF No. 97,
and at the February 20, 2014 hearing, in light of the Defaulting Defendants’ failure to appear in this
action, they specifically consented again to the undersigned deciding Plaintiffs’ motion for summary
judgment, see 2/20/2014 Minute Order, ECF No. 140.
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Relations Act § 302(c) (29 U.S.C. §186(c)) and is jointly administered. Complaint, ECF No. 1 ¶ 6;
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Trento
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Declaration, ECF No. 113 ¶ 2. At all relevant time periods, Associated Third Party Administrators
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(“ATPA”) was the third party administrator for the Trust. Joint Statement, ECF No. 128 ¶ 3; Trento
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Declaration, ECF No. 113 ¶ 1.
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Plaintiffs F.G. Crosthwaite and Russell E. Burns are members of the Board of Trustees of the
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Trust (“Trustees”). Complaint, ECF No. 1 ¶ 7; Trento Declaration, ECF No. 113 ¶ 3. The Trustees
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are “fiduciaries” with respect to the Trust as defined in ERISA § 3(21)(A) (29 U.S.C. §
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1002(21)(A)) and are collectively the “plan sponsor” of the Board of Trustees within the meaning of
Complaint, ECF No. 1 ¶ 7. As Trustees of the Trust, they are empowered to bring this action on
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For the Northern District of California
ERISA §§ 3(16)(B)(iii) and 4001(a)(10)(A) (29 U.S.C. §§ 1002(16)(B)(iii) and 1301(a)(10)(A)).
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UNITED STATES DISTRICT COURT
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behalf of the Trust pursuant to ERISA §§ 4301(a)(1) & (b) and 502(a)(3) (29 U.S.C. §§ 1132(a)(3)
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and 1451(a)(1) & (b)). Complaint, ECF No. 1 ¶ 7.
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Defendant Dalecon is a dissolved California corporation with its principal place of business
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located at 2727 Churn Creek Road, Suite A, Redding, California at all relevant time periods.
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Complaint, ECF No. 1 ¶ 8; Joint Statement, ECF No. 128 ¶ 4; Richardson Declaration, ECF No. 112
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¶ 4 & Ex. A. Dalecon was an employer within the meaning of ERISA § 3(5) (29 U.S.C. § 1002(5))
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and the National Labor Relations Act (“NLRA”) § 2(2) (29 U.S.C. §152(2)) and was engaged in an
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industry affecting commerce within the meaning of ERISA § 3(11) and (12) (29 U.S.C. § 1002(11)
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and (12)). Complaint, ECF No. 1 ¶¶ 8, 15; Joint Statement, ECF No. 128 ¶ 5. Dalecon was a
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participating employer in the Trust pursuant to collective bargaining agreements (“CBAs”) with the
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Operating Engineers Local Union No. 3 (“Union”) which required it to make fringe benefit
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contributions for all covered work performed by its employees. Complaint, ECF No. 1 ¶ 15; Joint
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Statement, ECF No. 128 ¶¶ 6 (listing six collective bargaining agreements), 7; Trento Declaration,
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ECF No. 113 ¶ 5 & Ex. A (attaching those agreements). Dalecon was owned, operated, and
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controlled by Defendants James Underwood and Ronald Stickney. Complaint, ECF No. 1 ¶ 9.
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Plaintiffs allege that Mr. Underwood and Mr. Stickney also controlled the Defaulting Defendants,
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making Dalecon and the Defaulting Defendants (collectively, the “Entity Defendants”) part of the
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same controlled group. Complaint, ECF No. 1 ¶ 9; Joint Statement, ECF No. 128 ¶ 26. This means
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that the Entity Defendants are treated as a single employer pursuant to ERISA § 4001(b)(1) (29
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U.S.C. §1301(b)) and therefore are jointly and severally liable for the withdrawal liability at issue
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here. Complaint, ECF No. 1 ¶ 9.
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On or about May 2007, Dalecon became delinquent under the CBAs. Complaint, ECF No. 1 ¶
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16. An audit revealed further delinquent amounts for the period from June 2004 through June 2007.
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Id. Thus, on October 10, 2007, Plaintiffs filed the action entitled Gil Crosthwaite, et al. v. Dalecon,
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Inc., et al., Case No. C07-5192 WHA (the “Delinquency Action”), seeking those delinquent
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contributions pursuant to 29 U.S.C. § 1945.4 Id.; see Delinquency Action, ECF No. 1 (Oct. 10,
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Plaintiffs voluntarily dismissed the Delinquency Action on October 17, 2008, after the parties
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For the Northern District of California
UNITED STATES DISTRICT COURT
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2007).
entered into a stipulated settlement agreement on October 10, 2008. Joint Statement, ECF No. 128
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¶¶ 9, 24-29 & Ex. 1 (the “Stipulation”5). Pursuant to the Stipulation, Dalecon and Mr. Stickney
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agreed to pay Plaintiff’s $136,000 in settlement of their claims for delinquent contributions. Id.,
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ECF No. 128, Ex. A, ¶ 2(a). The Stipulation included the following relevant terms:
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1. Under the terms of their Collective Bargaining Agreement and Trust Agreements,
Plaintiffs contend that Defendant[s have] become indebted to the Plaintiffs for
contributions, liquidated damages, interest, [and] attorneys fees and costs, including
those amounts found due on an audit of Defendants’ records. Plaintiffs filed this
action to seek to collect the amounts they claim are due from Defendant[s]. The
parties acknowledge and agree that by this Agreement and Stipulation they are
compromising disputed claims[.]
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29 U.S.C. § 1145 provides, “every employer who is obligated to make contributions to a
multiemployer plan under the terms of the plan or 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.” Section 1145 thus creates a claim against employers
who do not make timely contributions as required under a collective bargaining agreement. See
Trustees of the Screen Actors Guild-Producers Pension & Health Plans v. NYCA Inc., 572 F.3d 771,
774-76 (9th Cir. 2009); Board of Trustees v. RBS Washington Blvd. LLC, No. C 09-06660 WHA,
2010 WL 145097, at *2 (N.D. Cal. Jan. 8, 2010).
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To avoid confusion, the court refers to the parties’ agreement, which is titled “Settlement
Agreement and Stipulation for Entry of Judgment,” as the “Stipulation” rather than the “Settlement
Agreement” or “Stipulated Settlement” because the parties to refer to it as the “Stipulation” in their
joint statement of undisputed facts and briefs.
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2. The parties to this action have agreed to resolve this matter as follows:
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(a) Defendant shall pay the amount of $136,000 (the “Settlement Amount”) as
follows:
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Within thirty (30) days of Defendant’s execution of this Stipulation, defendant
will make an initial payment in the amount of $20,000.00. Within thirty (30) days
after the date of the initial payment, defendant will make a second payment in the
amount of $20,000.00.
Thereafter, defendant will continue with monthly payments of $10,000.00 to be
received by plaintiffs on or before the 15th of each month beginning with December
15, 2008, and continuing through August 15, 2009, and one final monthly payment of
$6,000.00, plus all accrued interest, by September 15, 2009. Defendant shall have the
right to increase said monthly payments at any time and shall incur no prepayment
penalties.
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(b) Interest will continue to accrue on the unpaid balance at the rate of 1% per month
(12% per annum) as provided for in the Bargaining Agreement and Trust
Agreements.
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For the Northern District of California
UNITED STATES DISTRICT COURT
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(c) Each payment shall be applied first to unpaid interest and then to the reduction of
the principal balance.
(d) All payments made pursuant to this Stipulation shall be made payable to the
“Operating Engineers Trust Funds,” and timely delivered to Michele R. Stafford,
Saltzman & Johnson Law Corporation, 44 Montgomery Street, Suite 2110, San
Francisco, CA 94104, or to such other address as may be specified by Plaintiffs.
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(e) Upon execution of this Stipulation, Plaintiffs will file a Dismissal without
Prejudice of the instant action. This Stipulation is in complete satisfaction of all
claims made by Plaintiffs in this action. Accordingly, the parties release each other
and their respective agents, employees, officers, shareholders, directors, successors,
assigns, and attorneys from all injuries, damages, claims[,] and causes of action
whatsoever, of whatever kind of nature, whether known or unknown, suspected or
unsuspected, including any claims which the parties made or could have made.
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The parties acknowledge and agree that there is a risk that after execution of this
Stipulation they will incur or discover losses, damages, or injuries which are in some
way caused by the events which were the subject of this release, but which are
unknown and unanticipated at the time this Stipulation is signed. The parties hereby
assume the above-mentioned risks and understand that this Stipulation shall apply to
all unknown or unanticipated results of the events which were the subject of this
release, as well as those known and anticipated, and upon advice of counsel, waive
and all rights under California Civil Code section 1542[,] which section has been
explained and reads as follows:
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A general release does not extend to claims which the creditor does
not known or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
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The mutual releases stated above do not affect the parties’ obligations set forth in
this Stipulation.
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A dismissal with Prejudice shall be filed by Plaintiffs once payment has been
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made in full, and Plaintiffs confirm that the final payment(s) have cleared the bank.
Id. ¶¶ 1-2.6
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Dalecon ceased contributing to the Trust for work performed after August 1, 2007, and thereby
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made a complete withdrawal from the Trust under ERISA § 4203 (29 U.S.C. § 1383). Complaint,
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ECF No. 17; Joint Statement, ECF No. 128 ¶ 8; Trento Declaration, ECF No. 113 ¶ 8.
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Subsequent to the withdrawal, on three to four occasions, Plaintiffs were notified that “Dalecon
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trucks and equipment” were seen on worksites on which the workers were performing work of the
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type for which contributions were previously required to be made by Dalecon under the CBAs. See
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Complaint, ECF No. 1 ¶ 18; Richardson Declaration, ECF No. 112 ¶ 5.7 As Plaintiffs had
Dalecon ceased to contribute to the Trust, withdrawal liability was assessed on the basis that
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For the Northern District of California
information indicating that Defendants had continued covered work within 5 years from the time
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UNITED STATES DISTRICT COURT
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Dalecon did not qualify for the building and construction exception to withdrawal liability under
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ERISA § 4203(b) (29 U.S.C. §1383(b)). Complaint, ECF No. 1 ¶ 18.
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By letter dated September 2, 2010, Plaintiffs notified Dalecon and its controlled group members
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of the withdrawal liability assessed against it in the sum of $242,614.00, payable in a lump sum or in
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quarterly installments of $59,210.85, pursuant to ERISA §§ 4201- 4203 (29 U.S.C. § 1381 et seq.).
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Complaint, ECF No. 1 ¶¶ 19-20; Joint Statement, ECF No. 128 ¶¶ 10-11; Trento Declaration, ECF
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In the Delinquency Action, Plaintiffs voluntarily dismissed the case, and after a period of
default, the defendants cured the default and made all payments pursuant to the Stipulation. See
Delinquency Action, ECF Nos. 22-36.
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Paragraph 5 of the Richardson Declaration states as follows: “Subsequent to the
withdrawal[,] the Union’s District Representative observed Dalecon trucks and equipment on
worksites, where the workers were performing work of the type for which contributions were
previously required to be made by Defendant Dalecon under its Bargaining Agreement. This
triggered the Fund to assess withdrawal liability.” Richardson Declaration, ECF No. 112 ¶ 5.
Dalecon objects to this paragraph as lacking foundation as required by Federal Rule of Evidence 602
and as containing hearsay that should be excluded under Federal Rule of Evidence 801(c).
Objection, ECF No. 134. But as Plaintiffs explain, this statement is offered to show the basis for the
Trust’s decision to assess withdrawal liability, not to show the truth of the statement. Reply, ECF
No. 135 at 2 n.3. Moreover, to challenge Plaintiffs’ statement that the workers were performing
work of the type for which contributions were previously required to be made by Defendant Dalecon
under the CBAs, Defendants must have timely demanded arbitration under ERISA Section § 4221(a)
(29 U.S.C. § 1401(a)), which they did not do.
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No. 113 ¶ 9 & Ex. D (September 2, 2010 Letter). Plaintiffs calculated the withdrawal liability as of
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December 31, 2006, pursuant to ERISA § 4211(b)(2)(A) (29 U.S.C. § 1391(b)(2)(A)). Complaint,
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ECF No. 1 ¶ 20(a); Joint Statement, ECF No. 128 ¶ 11(a); Trento Declaration, ECF No. 113, Ex. D.
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Plaintiffs also advised Dalecon that it had the option of challenging the withdrawal liability
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calculation by requesting review within ninety days of receiving the assessment as provided by
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ERISA § 4219(b)(2) (29 U.S.C. § 1399(b)(2)) and thereafter, timely demanding arbitration under
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ERISA Section § 4221(a) (29 U.S.C. § 1401(a)). Complaint, ECF No. 1 ¶ 20; Joint Statement, ECF
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No. 128 ¶ 11; Trento Declaration, ECF No. 113, Ex. D. Dalecon did not request review or initiate
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arbitration. Complaint, ECF No. 1 ¶ 21; Joint Statement, ECF No. 128 ¶ 14.
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Dalecon also failed to make any quarterly withdrawal liability installment payments. Complaint,
ECF No. 1 ¶ 21; Joint Statement, ECF No. 128 ¶ 13; Trento Declaration, ECF No. 113 ¶ 10. On
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For the Northern District of California
UNITED STATES DISTRICT COURT
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December 6, 2010, the Trust’s legal counsel sent a notice to cure to Dalecon (by way of Mr.
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Stickney) stating that the first quarterly withdrawal liability payment, which was due on October 1,
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2010, had not been received by the Trust. Complaint, ECF No. 1 ¶ 22; Joint Statement, ECF No.
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128 ¶ 12; Richardson Declaration, ECF No. 112 ¶ 7 & Ex. B (December 6, 2010 Letter). The
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Trust’s counsel directed Dalecon to cure the delinquency and advised that if payment was not
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received within 60 days Dalecon would be in default under ERISA § 4219(c)(5) (29 U.S.C.
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§1399(c)(5). Complaint, ECF No. 1 ¶ 22; Joint Statement, ECF No. 128 ¶ 12; Richardson
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Declaration, ECF No. 112, Ex. B. Dalecon failed to cure the delinquent installment payments within
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60 days. Complaint, ECF No. 1 ¶¶ 22-23; Joint Statement, ECF No. 128 ¶ 13; Richardson
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Declaration, ECF No. 112 ¶ 7. As a result, pursuant to ERISA § 4219(c)(5) (29 U.S.C. §
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1399(c)(5)), Plaintiffs accelerated the entire withdrawal liability which became immediately due and
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payable with interest and liquidated damages on February 7, 2011 (i.e., 60 days after Plaintiffs’
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notice to cure). Complaint, ECF No. 1 ¶ 23; Richardson Declaration, ECF No. 112 ¶ 7.
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II. PROCEDURAL HISTORY
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Plaintiffs filed their complaint in this action on June 10, 2011. Complaint, ECF No. 1. They
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served each Defendant with the complaint and summons on July 28, 2011. Proofs of Service, ECF
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Nos. 7, 8, 11. Mr. Underwood and Mr. Stickney answered the complaint, but the Entity Defendants
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failed to appear in this action, and upon Plaintiffs’ request, the Clerk of the Court entered their
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default. Answer, ECF No. 6; Request, ECF No. 14; Entry of Default, ECF No. 15. Dalecon
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subsequently appeared and answered, and its default was set aside. Entry of Default, ECF No. 15;
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Stipulation to Set Aside Default, ECF No. 90; Dalecon Answer, ECF No. 91. In its answer, Dalecon
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asserted the affirmative defenses of “accord and satisfaction” and “release,” arguing that Plaintiffs,
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by agreeing to the Stipulated Judgment in the Delinquency Action, released the withdrawal liability
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claim that they now bring. See Dalecon Answer, ECF No. 91.
for bankruptcy and therefore Plaintiffs’ claims against them were or are still subject to an automatic
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stay under 11 U.S.C. § 362. Notices of Automatic Stay, ECF No. 13, 28, 57. Plaintiffs subsequently
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dismissed Mr. Underwood, Mr. Stickney, and Dale Stickney Construction from this action.
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For the Northern District of California
While this action was pending, Dale Stickney Construction and both Individual Defendants filed
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UNITED STATES DISTRICT COURT
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Voluntary Dismissal (Underwood and Dale Stickney Construction), ECF No. 108; Stipulation of
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Dismissal (Stickney), ECF No. 121. This leaves only the Dalecon and the Defaulting Defendants as
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defendants to this action.
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On December 12, 2013, Plaintiffs filed motions for default judgment against the Defaulting
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Defendants and for summary judgment against Dalecon. Motion for Default Judgment, ECF No.
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115; Motion for Summary Judgment, ECF No. 127. In both motions, Plaintiffs ask for an award of
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$242,614 in assessed withdrawal liability, $77,171.67 in interest, $48,522.80 in liquidated damages,
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$54,867.50 in attorney’s fees, and $1,713.80 in costs, for a total award of $424,889.77. Motion for
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Default Judgment, ECF No. 115 at 8-10; Motion for Summary Judgment, ECF No. 127 at 17-18.
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On January 16, 2014, Dalecon filed an untimely opposition to Plaintiff’s motion for summary
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judgment. Dalecon’s Opposition, ECF No. 133. The court held a hearing on both motions on
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February 20, 2014, and Plaintiffs and Dalecon appeared at it. 2/20/2014 Minute Order, ECF No.
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140.
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ANALYSIS
I. THE COURT GRANTS SUMMARY JUDGMENT AGAINST DALECON
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A. The Summary Judgment Legal Standard
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A court should grant a motion for summary judgment if there is no genuine issue of material fact
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and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a); Anderson v.
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Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986). Material facts are those that may affect the
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outcome of the case. Anderson, 477 U.S. at 248. A dispute about a material fact is genuine if there
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is sufficient evidence for a reasonable jury to return a verdict for the non-moving party. Id. at 248-
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49.
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The party moving for summary judgment has the initial burden of informing the court of the
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basis for the motion and identifying those portions of the pleadings depositions, answers to
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interrogatories, admissions, or affidavits that demonstrate the absence of a triable issue of material
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fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). To meet its burden, “the moving party
defense or show that the nonmoving party does not have enough evidence of an essential element to
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For the Northern District of California
must either produce evidence negating an essential element of the nonmoving party’s claim or
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UNITED STATES DISTRICT COURT
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carry its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd. v. Fritz
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Companies, Inc., 210 F.3d 1099, 1102 (9th Cir. 2000); see Devereaux v. Abbey, 263 F.3d 1070, 1076
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(9th Cir. 2001) (“When the nonmoving party has the burden of proof at trial, the moving party need
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only point out ‘that there is an absence of evidence to support the nonmoving party’s case.’”)
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(quoting Celotex Corp., 477 U.S. at 325).
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If the moving party meets its initial burden, the burden shifts to the non-moving party, which
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must go beyond the pleadings and submit admissible evidence supporting its claims or defenses and
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showing a genuine issue for trial. See Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324; Nissan Fire,
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210 F.3d at 1103; Devereaux, 263 F.3d at 1076. If the non-moving party does not produce evidence
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to show a genuine issue of material fact, the moving party is entitled to summary judgment. See
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Celotex, 477 U.S. at 323.
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In ruling on a motion for summary judgment, inferences drawn from the underlying facts are
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viewed in the light most favorable to the non-moving party. Matsushita Elec. Indus. Co. v. Zenith
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Radio Corp., 475 U.S. 574, 587 (1986).
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B. The Statutory Withdrawal Liability Scheme
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Pension plans, including those like the Trust here, are federally regulated pursuant to ERISA, 29
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U.S.C. § 1001 et seq. The MPPAA, 29 U.S.C. §§ 1381–1453, amended ERISA “to allow plans to
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of multiemployer plans.”8 Carpenters Pension Trust Fund v. Underground Constr. Co., Inc., 31
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F.3d 776, 778 (9th Cir. 1994). “Prior to the enactment of the MPPAA, employers could withdraw
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from pension plans without paying their share of the plans’ unfunded vested benefit liability.”
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Woodward Sand Co., Inc. v. W. Conf. Teamsters Pension Trust Fund, 789 F.2d 691, 694 (9th Cir.
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1986) (citing Bd. of Trs. of the W. Conf. of Teamsters Pension Trust Fund v. Thompson Building
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Materials, Inc., 749 F.2d 1396, 1401-02 (9th Cir. 1984), cert. denied, 471 U.S. 1054 (1985)). “The
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employers could simply cease making pension contributions (e.g., by ceasing covered business) and
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avoid any responsibility for the actual, but unfunded, liabilities of the plans.” Id. “The other
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employers remaining in the plan were forced either to assume these additional liabilities or to
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withdraw, resulting in unfairness to the remaining employers or insolvency of the plan.” Id. (citing
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impose proportional liability on withdrawing employers for the unfunded vested benefit obligations
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Pension Benefit Guaranty Corp. v. R.A. Gray & Co., 467 U.S. 717, 722, n.2 (1984)).
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“To alleviate these problems, Congress established a system for computing and assessing the
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liability of employers who withdraw from pension plans.” Id. (citing 29 U.S.C. § 1361 et seq.).
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“This system is designed to make employers pay their share of the real cost of pensions, by paying a
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share of the difference between the assets already contributed and the vested benefit liability.” Id.
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(citing R.A. Gray & Co., 467 U.S. at 723). “When an employer withdraws from a multiemployer
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pension plan, such as the one administered by the Fund, ERISA requires a withdrawing employer to
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compensate a pension plan for benefits that have already vested with the employees at the time of
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the employer's withdrawal.” Id. (citing R.A. Gray & Co., 467 U.S. at 724). “This ‘withdrawal
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liability’ is assessed against the employer to ‘ensure that employees and their beneficiaries [are not]
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deprived of anticipated retirement benefits by the termination of pension plans before sufficient
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funds have been accumulated in the plans.’” Id. (citing R.A. Gray & Co., 467 U.S. at 720). Given
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the remedial purposes of ERISA and the MPPAA, their provisions should be liberally construed to
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protect plan participants. See Bd. of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc.,
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296 F.3d 164, 175 (3d Cir. 2002) (citation omitted); Teamsters Pension Trust Fund–Bd. of Trs. of W.
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For a summary of the legislative history, see Pension Benefit Guarantee Corp. v. R.A. Gray
& Co., 467 U.S. 717, 720-25 (1984).
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1
2
Conference v. Allyn Transp. Co., 832 F.2d 505, 507 (9th Cir. 1987) (citation omitted).
29 U.S.C. § 1399 sets forth the procedure regarding the calculation and notification of a
withdrawing employer’s withdrawal liability. As soon as practicable after an employer’s complete
4
or partial withdrawal, the plan sponsor must notify the employer of the amount owed and provides a
5
schedule of payments. 29 U.S.C. § 1399(b)(1). The employer is entitled, within ninety days of such
6
notice, to ask the sponsor to review any specific matter relating to the determination of the
7
employer's withdrawal liability and schedule of payments, to identify any inaccuracies, or to provide
8
additional relevant information. 29 U.S.C. § 1399(b)(2)(A). After a reasonable review of matters
9
raised, the plan sponsor then must notify the employer of its decision. 29 U.S.C. § 1399(b)(2)(B).
10
29 U.S.C. § 1401 provides a procedure in the event of a dispute. Section 1401(a)(1)(A) states:
11
(1) Any dispute between an employer and the plan sponsor of a multiemployer plan
concerning a determination made under sections 4201 through 4219 [29 U.S.C. §
1381–99] shall be resolved through arbitration. Either party may initiate the
arbitration proceeding within a 60–day period after the earlier of (A) the date of
notification to the employer under section 4219(b)(2)(B) [29 U.S.C. § 1399(b)(2)(B)],
or (B) 120 days after the date of the employer’s request under section 4219(b)(2)(A)
[29 U.S.C. § 1399(b)(2)(A)].
12
For the Northern District of California
UNITED STATES DISTRICT COURT
3
13
14
15
16
Section 1401(b)(1) goes on to state:
18
If no arbitration proceeding has been initiated pursuant to subsection (a), the amounts
demanded by the plan sponsor under section 4219(b)(1) [29 U.S.C. § 1399(b)(1)]
shall be due and owing on the schedule set forth by the plan sponsor. The plan
sponsor may bring an action in a State or Federal court of competent jurisdiction for
collection.
19
An employer that fails to initiate arbitration in a timely manner waives defenses and objections that
20
must have been raised in arbitration. See Bd. of Trs Sheet Metal Workers’ Nat’l Pension Fund v.
21
BES Servs., Inc., 469 F.3d 369, 376 (4th Cir. 2006); Bd. of Trs of Trucking Employees of N. Jersey
22
Welfare Fund, Inc. v. Kero Leasing Corp., 377 F.3d 288, 294 n.5 (3d Cir. 2004); Cent. States, Se.
23
and Sw. Areas Pension Fund v. Midwest Motor Exp., Inc., 181 F.3d 799, 805 (7th Cir. 1999); Mason
24
and Dixon Tank Lines, Inc. v. Cent. States, Se. and Sw. Areas Pension Fund, 852 F.2d 156, 166 &
25
n.11 (6th Cir. 1988); Allyn Transp. Co., 832 F.2d at 505-06 (9th Cir. 1987).
17
26
C. Summary Judgment Should Be Entered against Dalecon
27
Plaintiff argue that they are entitled to summary judgment against Dalecon because they
28
complied with the procedures for assessing withdrawal liability and Dalecon did not initiate
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ORDER
11
1
arbitration and thus waived its “accord and satisfaction” and “release” affirmative defenses.
2
Because these defenses essentially are the same—both assert that Plaintiffs released its withdrawal
3
liability claim through the Stipulation—the court hereinafter refers to them as a single “release”
4
defense. Dalecon argues that it did not need to raise this defense in arbitration. For the reasons
5
explained below, the court finds that while Dalecon did not waive its release defense, the defense is
6
unsupported, and summary judgment should be entered against it.
7
1. Plaintiffs Have Made a Prima Facie Showing that They Are Entitled to Withdrawal
8
Liability
9
Plaintiffs have made a prima facie showing that they are entitled to withdrawal liability. They
2007, and thereby made a complete withdrawal from the Trust. They also provided evidence
12
For the Northern District of California
provided evidence that Dalecon ceased contributing to the Trust for work performed after August 1,
11
UNITED STATES DISTRICT COURT
10
showing that they complied with the MPPAA’s procedures for assessing withdrawal liability: they
13
notified Dalecon and its controlled group members of the withdrawal liability assessed against it in
14
the sum of $242,614.00, payable in a lump sum or in quarterly installments of $59,210.85; they
15
advised Dalecon that it had the option of challenging the withdrawal liability calculation by
16
requesting review within ninety days of receiving the assessment and thereafter by timely
17
demanding arbitration. Dalecon did not request review or initiate arbitration also failed to make any
18
quarterly withdrawal liability installment payments. The Trust’s legal counsel then sent a notice to
19
cure to Dalecon (by way of Mr. Stickney) stating that the first quarterly withdrawal liability payment
20
had not been received, directing Dalecon to cure the delinquency, and advising that if payment was
21
not received within 60 days Dalecon would be in default. Dalecon failed to cure the delinquent
22
installment payments within 60 days. As a result, Plaintiffs accelerated the entire withdrawal
23
liability, which then became immediately due and payable with interest and liquidated damages on
24
February 7, 2011. In short, unless Dalecon can show that it has a defense to Plaintiffs’ claim or that
25
there is a genuine issue of material fact, Plaintiffs’ motion should be granted.
26
2. Dalecon Did Not Waive Its Release Defense by Not Initiating Arbitration
27
Despite finding that Plaintiffs have made a prima facie showing that they are entitled to
28
withdrawal liability, in considering Dalecon’s arguments and to rule on Plaintiffs’ motion, the court
C 11-02851 LB
ORDER
12
1
must determine a threshold issue: whether Dalecon waived its release defense by not presenting it in
2
arbitration.
3
In their motion, Plaintiffs cite 29 U.S.C. § 1401(a)(1)(A), which, as stated above, provides that
4
“[a]ny dispute between an employer and the plan sponsor of a multiemployer plan concerning a
5
determination made under sections 4201 through 4219 [29 U.S.C. §§ 1381–99] shall be resolved
6
through arbitration.” Motion, ECF No. 127 at 9; see also Bd. of Trs. of the W. Conference
7
Teamsters Pension Trust Fund v. Arizona-Pacific Tank Lines, No. C 83 0317 AJZ, 1983 U.S. Dist.
8
LEXIS 12709, at *2 (N.D. Cal. Oct. 14, 1983) (citing 29 U.S.C. § 1401(a)(1)(A) and highlighting its
9
breadth). But these authorities not tell us whether Dalecon must have arbitrated its release defense;
withdrawal liability,” Shelter Framing Corp. v. Pension Benefit Guar. Corp., 705 F.2d 1502, 1509
12
For the Northern District of California
after all, 29 U.S.C. §§ 1381–99 “refer to the establishment, computation and collection of
11
UNITED STATES DISTRICT COURT
10
(9th Cir. 1983), rev’d on other grounds, 467 U.S. 717 (1984), and not all defenses fall into those
13
categories, see, e.g., id. (“[T]he arbitration requirement does not apply where the constitutionality of
14
the statute, not the establishment or amount of withdrawal liability, is at issue. The district court
15
correctly found no mandatory arbitration requirement for determination of constitutional issues.”).
16
Aside from these authorities, which address the arbitration requirement in general terms,
17
Plaintiffs cite two out-of-circuit opinions—ILGWU Nat’l Ret. Fund v. Levy Bros. Frocks, Inc., 846
18
F.2d 879 (2d Cir. 1988), and ILGWU Nat’l Ret. Fund v. West Helena-Helana Sportswear, No. 96
19
Civ 1007 (HB)(DFE), 1996 U.S. Dist. LEXIS 20635 (S.D.N.Y. July 25, 1996)— that bear upon the
20
issue presented here.9 Motion, ECF No. 127 at 10-11. In Levy Bros. Frocks, a trust fund assessed
21
withdrawal liability against a company in accordance with the MPPAA’s procedures, and the
22
company did not challenge the assessment through arbitration. 846 F.2d at 883. When the trust
23
fund later sued the company, the company asserted, among other things, that it was not bound on
24
25
26
27
28
9
Plaintiffs also cite Chicago Truck Drivers, Helpers, and Warehouse Workers Union
(Indep.) Pension Fund v. R. Sumner Trucking Co., Inc., No. 91 C 3967, 1992 WL 39004, at *1-2
(N.D. Ill. Feb. 24, 1992), but that opinion is unhelpful as the court, in a near-summary ruling,
emphasized that it precluded defendant from raising its non-arbitrated defense to withdrawal liability
in large part because the defendant provided no legal authority in support of its argument that it
should be able to. Id. at 2.
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13
1
and after the effective date of the MPPAA by a contract to contribute to the trust fund. Id. The
2
question before the Second Circuit was whether the company had waived this defense by not
3
arbitrating it. Id. at 880. It held that it had. Id. at 884-87. In so holding, it reasoned that the
4
company’s obligation to arbitrate was statutory, rather than contractual, in origin, and that the statute
5
(29 U.S.C. § 1401) required the parties to arbitrate their dispute about whether the company was
6
obligated to contribute to the trust fund during the relevant period. Id. The Second Circuit believed
7
its ruling to be in accord with Congress’ intention that disputes over withdrawal liability be resolved
8
quickly, even if the failure to arbitrate certain defenses could result in waiving them. Id. at 88–87.
9
The district court in West Helena made a similar ruling, but it made in the context of a prior
that required it to make payments to a retirement fund. West Helena, 1996 U.S. Dist. LEXIS 20635,
12
For the Northern District of California
settlement agreement. In that case, an employer was a party to a collective bargaining agreement
11
UNITED STATES DISTRICT COURT
10
at *4. The employer fell behind in making these payments, so the retirement fund sued the employer
13
to recover them. Id. at *5. None of the pleadings in the action made any allegations about
14
withdrawal liability; the allegations were about delinquent contributions only. Id. at *6. During the
15
pendency of the action, the employer ceased all of its operations. Id. at *5. Thereafter, the parties to
16
this action entered into a settlement agreement whereby the employer agreed to pay money to the
17
retirement fund and, in exchange, the retirement fund agreed to release the employer “of and from
18
any and all actions, causes of action, [etc.] . . . for delinquent contributions” owed to the retirement
19
fund up to December 23, 1994, “arising from the [collective bargaining agreement] and related to
20
the matters or allegations which are the subject matter of the current litigation between the parties . .
21
. .” Id. at *6-7 (emphasis in original).
22
After this, the retirement fund assessed withdrawal liability against the employer. Id. at *7-8.
23
The employer argued that the settlement agreement covered any liability to the retirement fund, but
24
the employer never initiated arbitration arguing this. Id. at *8-9. When the retirement fund later
25
sued the employer to recover the withdrawal liability, the employer tried to assert its defense that the
26
retirement fund released its claim to withdrawal liability. Id. at *10-12. The court rejected the
27
employer’s attempt and barred the employer from asserting it. Id. at *12-21. In so ruling, the court
28
relied in part on the Second Circuit’s holding in Levy Bros. Frocks that the company had waived its
C 11-02851 LB
ORDER
14
1
defense by not arbitrating it and its reasoning that Congress intended disputes over withdrawal
2
liability be resolved quickly. Id. at *13-15. The court noted that the employer had not cited any
3
decision that disagreed with the Second Circuit’s holding or reasoning. Id. at *15. Even though the
4
court deemed the defense waived, it still went on to explain that the defense failed because the
5
language in the release clearly related to delinquent contributions only and did not include
6
withdrawal liability; it was “totally unreasonable” to claim that it did. Id. at *24-28.
7
In its opposition, Dalecon cites an opinion by Judge Conti of this District to argue that defenses
8
relating to whether a prior settlement agreement released withdrawal liability claims do not need to
9
be arbitrated. Opposition, ECF No. 133 at 6-7 (citing Operating Eng’rs Pension Trust Fund v.
purchased a welding business that was subject to a shop agreement with operating engineers. Id. at
12
For the Northern District of California
Clark’s Welding and Mach., 688 F.2d 902 (N.D. Cal. 2010)). In Clark’s Welding, two individuals
11
UNITED STATES DISTRICT COURT
10
905. The owners closed the business in 2003 and sold the assets to a former employee. Id. Shortly
13
thereafter, the operating engineers’ pension fund sued the welding business and its owners for failing
14
to pay contributions required by the shop agreement. Id. In 2004, the parties entered into a
15
settlement agreement and dismissed the action. Id. Pursuant to the settlement agreement, the
16
business agreed to pay its delinquent contributions, and the pension fund agreed to waive liquidated
17
damages and interest. Id. The settlement agreement also contained a mutual release, which stated as
18
follows:
19
20
21
22
23
24
25
This Agreement embodies the entire Agreement between the parties hereto. All prior
understandings and agreements by and between the parties hereto are merged into and
superseded by this Agreement and no party released herein shall be bound by or
liable for any statement, representation, promise, inducement or understanding of any
kind or nature not set forth herein. This Agreement is the product of negotiation and
preparation by and amount [sic] the parties hereto and their attorneys, if any.
Therefore, the parties acknowledge and agree that this Agreement shall not be
deemed to have been prepared or drafted by one party or another, and that it shall be
construed accordingly.
Id. at 906.
Over four years later, the pension fund assessed withdrawal liability against the business, and the
26
business did not seek review of the withdrawal liability assessment or initiate arbitration. Id. In the
27
subsequent suit by the pension fund against the business to recover the assessed withdrawal liability,
28
the business asserted in defense that the pension fund released its claim for withdrawal liability in
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15
1
the 2004 settlement agreement. Id. at 909. The pension fund argued that the business waived this
2
defense by not initiating arbitration. Id. Although Dalecon cites Judge Conti’s February 10, 2010
3
summary judgment order for his ruling on this issue, see Opposition, ECF No. 133 at 7 (citing
4
Clark’s Welding, 688 F.2d at 909), Judge Conti first ruled on the issue (and provided significant
5
detail) in his May 8, 2009 order denying the business’s motion to dismiss, see Operating Eng’rs
6
Pension Trust Fund v. Clark’s Welding and Mach., No. 09-0044 SC, 2009 WL 1324049, 2009 U.S.
7
Dist. LEXIS 43379 (N.D. Cal. May 8, 2009).
8
In the May 8, 2009 order, Judge Conti ruled that the business had not waived its release defense
9
by not arbitrating it. Id. at *3. He first stated that “[d]isputes that have to be arbitrated concern ‘the
705 F.2d at 1509), and that “[d]isputes concerning the establishment of withdrawal liability turn on
12
For the Northern District of California
establishment, computation and collection of withdrawal liability,’” id. (quoting Shelter Framing,
11
UNITED STATES DISTRICT COURT
10
whether the employer’s conduct constitutes a complete or partial withdrawal from a pension plan,”
13
id. (citing 29 U.S.C. § 1381; Allyn Transp., 832 F.2d at 505-06). He also noted that the Third
14
Circuit has “determined that the issue of whether there had been a breach of a settlement agreement
15
d[oes] not fall into any of the categories that the MPPAA deems arbitrable,” id. (citing Bd. of Trs. of
16
Trucking Employees of N. Jersey Welfare Fund, Inc. v. Centra, 983 F.2d 495, 506-07 (3d Cir.
17
1992)), and that the Tenth Circuit, when holding that “the defense of laches [is] not barred by a
18
failure to arbitrate,” has stated that “‘[g]enerally . . . the only defenses which are waived by a failure
19
to timely initiate arbitration are those which go to the merits of the liability assessment itself,’” id.
20
(quoting In re Centric Corp., 901 F.2d 1514, 1518-19 (10th Cir. 1990)). Indeed, in Centra, the
21
Third Circuit expressed concern that requiring every issue that bears upon the determination of the
22
amount of withdrawal liability to be arbitrated would moot the specifically enumerated list of
23
arbitrable issues set forth in 29 U.S.C. §§ 1381-1399. Centra, 983 F.2d at 507. Judge Conti also
24
distinguished West Helena, noting that the court there specifically found no unfairness in enforcing
25
the arbitration requirement because it was “totally unreasonable” to argue that the settlement
26
agreement at issue there applied to withdrawal liability; in Clark’s Welding, Judge Conti found the
27
release language to be broad enough that the business could “reasonably contend” that it covered
28
withdrawal liability in addition to delinquent contributions. Id. at *4. Judge Conti also noted that
C 11-02851 LB
ORDER
16
1
the West Helena court did not consider the Third Circuit’s decision in Centra “that questions
2
concerning the validity and effect of a prior settlement agreement do not have to be submitted to an
3
arbitrator.” Id. (citing Centra, 983 F.2d at 506-07). He also made clear that, to the extent that
4
Congress intended that withdrawal liability be decided quickly through arbitration, that rationale did
5
not carry much weight where the pension fund waited over four years from the signing of the
6
settlement agreement to assess withdrawal liability. Id.
7
Plaintiffs did not respond to Dalecon’s argument in their reply, see generally Reply, ECF No.
about any liability are best suited to an arbitrator’s expertise in the first instance. The court’s own
10
research yielded no appellate or district court opinions specifically addressing whether an employer
11
must arbitrate a release-in-a-prior-settlement-agreement defense to withdrawal liability. But see Trs.
12
For the Northern District of California
135, but at oral argument they conceded that the withdrawal liability and the parties’ agreement
9
UNITED STATES DISTRICT COURT
8
of Utah Carpenters’ and Cement Masons’ Pension Trust v. Indus. Power Contractors Plan Maint.
13
Servs., Nos. 2:09CV929DAK, 2:10CV334DAK, 2011 WL 6130932, at *6 (D. Utah Dec. 8, 2011)
14
(stating in dicta that “[e]ven where there are questions as to whether the pension plan had any basis
15
to assess withdrawal liability, the failure to arbitrate is fatal.”) (citing Trs. of Utah Carpenters’ and
16
Cement Masons’ Pension Trust v. New Star/Culp L.C., No. 2:07-CV-699 (TC), 2009 WL 321573, at
17
*3 n.2 (D. Utah Feb. 9, 2009) (describing the “unique situation” where a trust fund “might have
18
previously concluded that [the employer] had not incurred withdrawal liability” but might later have
19
changed its mind later and suggesting that the employer would have had to arbitrate a defense based
20
on this situation)). So, with little to go on, and out of an abundance of caution, the court concludes
21
on this record and argument that Dalecon did not waive its release defense by not arbitrating it. The
22
court finds Judge Conti’s opinion appropriately cautious, as he relied upon the Ninth Circuit’s
23
statement that the arbitrable issues under the MPPAA “concern ‘the establishment, computation and
24
collection of withdrawal liability,’” and emphasized that it is not clear that a defense based on a
25
release found within a prior settlement agreement always concerns these matters. Clark’s Welding,
26
2009 WL 1324049, at *3 (quoting Shelter Framing, 705 F.2d at 1509). The court also takes
27
seriously the Third Circuit’s concern that pushing the boundaries of the MPPAA’s enumerated list
28
of arbitrable issues eventually could defeat the purpose of having a list at all. See Centra, 983 F.2d
C 11-02851 LB
ORDER
17
1
at 507. And while West Helena is thorough and well-reasoned, the court finds Judge Conti’s
2
approach to be better suited to the circumstances presented here.
3
4
5
2. Even So, Dalecon’s Release Defense Fails
Now that the court has found that Dalecon did not waive its release defense, the court proceeds
to determine whether Dalecon has met its burden to show that it has merit.10
6
“[F]ederal law always governs the validity of releases of federal causes of action.” Mardan
7
Corp. v. CGC Music, Ltd., 804 F.2d 1454, 1455 (9th Cir. 1986) (citing Dice v. Akron, Canton &
8
Youngstown R.R. Co., 342 U.S. 359, 361 (1952); Salmeron v. United States, 724 F.2d 1357, 1361
9
(9th Cir. 1983); Jones v. Taber, 648 F.2d 1201, 1203 (9th Cir. 1981)). “Frequently,” however, “state
Id. at 1458 (citations omitted); see Lumpkin v. Envirodyne Industries, Inc., 933 F.2d 449, 458-59
12
For the Northern District of California
rules of decision will furnish an appropriate and convenient measure of the governing federal law.”
11
UNITED STATES DISTRICT COURT
10
(7th Cir. 1991) (relying on state law to determine scope of release of ERISA claims); Clark’s
13
Welding, 688 F.2d at 910-11 (relying on state law to interpret language of settlement agreement in
14
ERISA withdrawal liability action); Cent. States, Se. and Sw. Areas Pension Fund v. Art Pape
15
Transfer, Inc., 881 F. Supp. 1168, 1172-73 (N.D. Ill. 1995) (same). And Plaintiffs and Dalecon both
16
agree that California law applies to the interpretation of the Stipulation. See Motion, ECF No. 127
17
at 11-16 (relying on California law); Opposition, ECF No. 133 at 9-10 (same).
18
“According to the California Supreme Court, a release is the ‘abandonment, relinquishment or
19
giving up of a right or claim to the person against whom it might have been demanded or enforced . .
20
. and its effect is to extinguish the cause of action.’” Marder, 450 F.3d at 449 (quoting Pellett v.
21
Sonotone Corp., 26 Cal. 2d 705, 711 (1945)); see also Cal. Civ. Code § 1541 (“An obligation is
22
extinguished by a release therefrom given to the debtor by the creditor, upon a new consideration, or
23
in writing, with or without new consideration.”). “‘In general, a written release extinguishes any
24
obligation covered by the release’s terms, provided it has not been obtained by fraud, deception,
25
26
27
28
10
Dalecon has the burden to show that its release defense precludes liability for Plaintiffs’
withdrawal liability claim. See Miles v. Am. Seafoods Co., 197 F.3d 1032, 1034 (9th Cir. 1999) (“At
oral argument, counsel for defendant properly conceded that because it had pled the release as an
affirmative defense, the burden of proving that it precluded liability for the 1997 injury rested on
defendant.”) (citing Fed. R. Civ. P. 8(c)).
C 11-02851 LB
ORDER
18
1
misrepresentation, duress, or undue influence.’” Marder, 450 F.3d at 449 (quoting Skrbina v.
2
Fleming Cos., 45 Cal. App. 4th 1353 (3d Dist. 1996)).
3
“The interpretation of a release is governed by the same principles applicable to any other
4
contractual agreement.” Id. (citing Benedek v. PLC Santa Monica, LLC, 104 Cal. App. 4th 1351,
5
1357 (2d Dist. 2002)). “The court must interpret the [r]elease so as to give effect to the parties’
6
mutual intent as it existed when they contracted.” Id. (citing Cal. Civ. Code § 1636; Bank of the W.
7
v. Superior Court, 2 Cal. 4th 1254, 1264-65 (1992)). “The parties’ intent should be inferred from
8
the language of the [r]elease, so long as that language is not ambiguous or uncertain.” Id. (citing
9
Cal. Civ. Code §§ 1638, 1639). “‘Where contract language is clear and explicit and does not lead to
Regents of Univ. of Cal., 58 Cal. App. 4th 44, 53 (3d Dist. 1997) (quoting Ticor Title Ins. Co. v.
12
For the Northern District of California
absurd results, [the court] ascertains intent from the written terms and go[es] no further.’” Shaw v.
11
UNITED STATES DISTRICT COURT
10
Employers Ins. of Wausau, 40 Cal. App. 4th 1699, 1707 (1st Dist. 1995)).
13
Dalecon first argues that the Stipulation should be read to release it from withdrawal liability as
14
well as liability for delinquent contributions because the release language is broad. See Opposition,
15
ECF No. 133 at 8, 10. In support of this argument, Dalecon quotes the following portion of the
16
release:
17
18
19
20
. . . the parties release each other and their respective agents, employees, officers,
shareholders, directors, successors, assigns, and attorneys from all injuries, damages,
claims[,] and causes of action whatsoever, of whatever kind of nature, whether
known or unknown, suspected or unsuspected, including any claims which the parties
made or could have made.
24
The parties acknowledge and agree that there is a risk that after execution of this
Stipulation they will incur or discovery losses, damages, or injuries which are in
some way caused by the events which were the subject of this release, but which are
unknown and unanticipated at the time this Stipulation is signed. The parties hereby
assume the above-mentioned risks and understand that this Stipulation shall apply to
all unknown or unanticipated results of the events which were the subject of this
release, as well as those known and anticipated, and upon advice of counsel, waive
and all rights under California Civil Code section 1542[,] which section has been
explained and reads as follows: . . . .
25
Stipulation, ECF No. 128, Ex. 1 ¶ 2(e). This portion of the release, on its own, does suggest that the
26
release is broad enough to account for withdrawal liability. This quotation is selective, however.
27
The court fully quoted Paragraphs 1 and 2 of the Stipulation in the Statement section of this order.
28
Paragraph 1 defines the nature of the dispute: Defendant’s indebtedness to Plaintiffs for
21
22
23
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ORDER
19
1
“contributions, liquidated damages, interest, attorneys fees and costs, including those amounts found
2
due on an audit of Defendants’ records”; Plaintiffs’ lawsuit “to collect the amounts they claim are
3
due from Defendant”; and the parties’ acknowledgment that by their settlement agreement “they are
4
compromising disputed claims.” Id. ¶ 1. Paragraph 2 provides the details. It first sets forth the
5
settlement amount of $136,000 for the delinquent contributions, then describes the payment plan,
6
and concludes with the parties’ mutual release. Id. ¶ 2(a)-(e). Subparagraph (e) is the release that
7
Defendants quoted selectively. In full, it reads as follows:
8
9
10
12
For the Northern District of California
UNITED STATES DISTRICT COURT
11
13
14
15
16
(e) Upon execution of this Stipulation, Plaintiffs will file a Dismissal without
Prejudice of the instant action. This Stipulation is in complete satisfaction of all
claims made by Plaintiffs in this action. Accordingly, the parties release each other
and their respective agents, employees, officers, shareholders, directors, successors,
assigns, and attorneys from all injuries, damages, claims[,] and causes of action
whatsoever, of whatever kind of nature, whether known or unknown, suspected or
unsuspected, including any claims which the parties made or could have made.
The parties acknowledge and agree that there is a risk that after execution of this
Stipulation they will incur or discover losses, damages, or injuries which are in some
way caused by the events which were the subject of this release, but which are
unknown and unanticipated at the time this Stipulation is signed. The parties hereby
assume the above-mentioned risks and understand that this Stipulation shall apply to
all unknown or unanticipated results of the events which were the subject of this
release, as well as those known and anticipated, and upon advice of counsel, waive
and all rights under California Civil Code section 1542[,] which section has been
explained and reads as follows:
17
A general release does not extend to claims which the creditor does
not known or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have
materially affected his or her settlement with the debtor.
18
19
20
The mutual releases stated above do not affect the parties’ obligations set forth in
this Stipulation.
21
A dismissal with Prejudice shall be filed by Plaintiffs once payment has been
made in full, and Plaintiffs confirm that the final payment(s) have cleared the bank.
22
23
Id. ¶ 2(e). In the preamble to the release that Dalecon omitted from its quotation, the parties
24
reiterated that the settlement was “in compete satisfaction of all claims made by Plaintiffs in this
25
action,” meaning, as made clear by Paragraph 1, Plaintiffs’ delinquent contribution claims. Id. ¶
26
2(e). This ties the release to Plaintiffs’ claims in the Delinquency Action. The next sentence is the
27
parties’ release. It begins with the word “Accordingly” (again tying the release to the satisfaction of
28
Plaintiffs’ claims for delinquent contributions) and continues, “the parties release each other” from
C 11-02851 LB
ORDER
20
unknown, suspected or unsuspected, including any claims which the parties made or could have
3
made.” Id. That “known or unknown” language is tied again, in the next two sentences, to the
4
delinquent contribution claims that are the subject of the lawsuit: the parties define the risk of
5
unknown claims as their discovery of “losses, damages, or injuries which are in some way caused by
6
the events which were the subject of this release, but which are unknown and unanticipated at the
7
time this Stipulation is signed” and state that the release applies to “all unknown or unanticipated
8
results of the events which were the subject of this release, as well as those known and anticipated.”
9
Id. The release then waives all rights under California Civil Code § 1542, which defines a general
10
release as extending only to known claims. This release is a standard Section 1542 waiver tied to
11
known and unknown claims relating to the subject of the Delinquency Action. Withdrawal liability
12
For the Northern District of California
all injuries, damages and claims “whatsoever, of whatever kind or nature, whether known or
2
UNITED STATES DISTRICT COURT
1
was not the subject of the Delinquency Action.11
13
In support of their argument that the release does not cover withdrawal liability, Plaintiffs cite
14
Judge Conti’s February 10, 2010 order granting summary judgment in Clark’s Welding. See
15
Motion, ECF No. 127 at 11-12, 16. In that case, after deciding that the business had not waived its
16
release defense by not arbitrating it, Judge Conti went on to reject the merits of the business’s
17
release defense. Clark’s Welding, 688 F.2d at 910-12. The business in that case made a similar
18
argument that Dalecon makes here: that the mutual release language found in the settlement
19
agreement covered withdrawal liability, even though the action settled was for delinquent
20
contributions. Id. at 905, 910-11. The release language in Clark’s Welding stated is relevant part:
21
22
23
24
25
26
27
28
11
Also, withdrawal liability here was assessed because after the purported withdrawal on
August 1, 2007, union representatives saw Dalecon trucks or equipment on site. See Complaint,
ECF No. 1 ¶ 18; Richardson Declaration, ECF No. 112 ¶ 5; see also supra n.7. Because this
covered work happened within five years from when Dalecon ceased to contribute to the Trust,
Plaintiffs assessed withdrawal liability in September 2010 (calculated as of December 31, 2006), on
the basis that Dalecon did not qualify for the building and construction exemption to withdrawal
liability. See Complaint, ECF No. 1 ¶ 18. Thus, withdrawal liability in any event was not an
“unknown” claim at the time of the lawsuit. Covered work that happens later means that withdrawal
is not effective, and withdrawal liability is assessed back to the purported date of withdrawal
(because the “withdrawal” is essentially ineffective). And as discussed infra, if there were fact
issues that attend withdrawal liability, Dalecon waived them by not invoking arbitration.
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21
1
2
3
This Agreement embodies the entire Agreement between the parties hereto. All prior
understandings and agreements by and between the parties hereto are merged into and
superseded by this Agreement and no party released herein shall be bound by or
liable for any statement, representation, promise, inducement or understanding of any
kind or nature not set forth herein.
4
Id. at 906. In rejecting the business’s argument, Judge Conti noted that this paragraph was the only
5
place that the word “release” occurred in the settlement agreement and was mentioned only in the
6
context of an integration clause clarifying that any other agreements or understandings of the parties
7
are superseded by the settlement agreement. Id. at 910. He found that the only reasonable
8
interpretation of the phrase “no party released herein” was as a reference to the fact that, earlier in
9
the settlement agreement, the pension fund waived its right to seek liquidated damages and interest.
also noted that the words “withdrawal liability” did not appear anywhere in the settlement agreement
12
For the Northern District of California
Id. (Liquidated damages and interest are often sought in relation to delinquent contributions.) He
11
UNITED STATES DISTRICT COURT
10
and that is was clear that the settlement agreement focused on delinquent contributions, not
13
withdrawal liability. Id. at 911.
14
The release language in the Stipulation here is fuller than the language quoted in Clark’s
15
Welding. Still, like the language in Clark’s Welding, the Stipulation does not include the words
16
“withdrawal liability” anywhere. And, as the court pointed out above, the full language of the
17
Stipulation—which Dalecon failed to quote in its opposition—indicates that the Stipulation focused
18
specifically and exclusively on the claims for delinquent contributions that Plaintiffs brought in the
19
Delinquency Action. This is an important distinction because liability for delinquent contributions
20
and withdrawal liability are completely different: one is based upon the parties’ contractual
21
obligations, while the other is a creature of statute; they are “wholly distinct obligations, with
22
different factual and legal predicates.” West Helena, 1996 U.S. Dist. LEXIS 20635, at *30
23
(distinguishing between the two claims and rejecting the employer’s argument that the retirement
24
fund’s withdrawal liability action was barred by res judicata because of the retirement fund’s prior
25
delinquent contributions action). In its opposition, Dalecon tries to distinguish Clark’s Welding
26
because, in that case, there was no related entity like Dale Stickney Construction here, see
27
Opposition, ECF No. 133 at 7-8, but the court finds that distinction to be irrelevant. What makes
28
Clark’s Welding helpful is Judge Conti’s consideration of the settlement agreement’s language, not
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22
1
the presence (or lack thereof) of a related entity. Applying the same approach here yields the result
2
that the Stipulation was about withdrawal liability.
3
Dalecon also argues that the Stipulation should be read to release it from withdrawal liability as
4
well as liability for delinquent contributions because Plaintiffs were aware when they signed the
5
Stipulation (Dalecon says) that Dalecon had already stopped operating and made a complete
6
withdrawal and that a related entity, Dale Stickney Construction, which is a nonunion construction
7
company related owned by Mr. Stickney and which was not a party to the CBAs, was going to
8
acquire Dalecon’s trucks and equipment and start using them. See Opposition, ECF No. 133 at 8-10.
9
To the extent that Dalecon’s argument is that it is exempt from withdrawal liability pursuant to
1383(b), this argument fails. Under this provision, “complete withdrawal” by an employer in the
12
For the Northern District of California
the MPPAA’s so-called “building and construction industry” exemption that is found at 29 U.S.C. §
11
UNITED STATES DISTRICT COURT
10
building and construction industry occurs (and thus withdrawal liability arises) only when the
13
employer ceases to have an obligation to contribute under a multiemployer plan and the employer
14
either continues to perform work in the jurisdiction of the collective bargaining agreement of the
15
type for which contributions were previously required or resumes such work within 5 years after the
16
date on which the obligation to contribute under the plan ceases, and does not renew the obligation
17
at the time of the resumption. See 29 U.S.C. § 1383(b)(2). But this provision falls within the range
18
of provisions that are required, pursuant to 29 U.S.C. § 1401, to be resolved by arbitration. See 29
19
U.S.C. § 1401(a)(1)(A) (providing that “[a]ny dispute between an employer and the plan sponsor of
20
a multiemployer plan concerning a determination made under sections 4201 through 4219 [29
21
U.S.C. §§ 1381–99] shall be resolved through arbitration”). Thus, courts uniformly hold such a
22
defense to have been waived when it was not first arbitrated, and here Dalecon did not initiate
23
arbitration. See Trs. of Laborers Dist. Council and Contractors Pension Fund of Ohio v. Excel
24
Contracting, Inc., No. 2:12-CV-462, 2012 WL 4322572, at *3-5 (S.D. Ohio Sept. 20, 2012); Bd. of
25
Trs. Sheet Metal Workers’ Nat’l Pension Fund v. Palladium Equity Partners, LLC, 722 F. Supp. 2d
26
854, 873-75 (E.D. Mich. 2010); Trucking Employees of N. Jersey Welfare Fund, Inc. v. Parsippany
27
Constr. Co., Inc., No. 08–2763 (JLL), 2009 WL 1076201, at *1, 3 (D.N.J. Apr. 21, 2009); New
28
Star/Culp L.C., 2009 WL 321573, at *3-5; Trs. of the Laborers’ Local 310 Pension Fund v. Able
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23
1
2
Contracting Group, Inc., No. 1:06cv1925, 2007 WL 2238361, at *6-7 (N.D. Ohio Aug. 1, 2007).
Nonetheless, to the extent that Dalecon’s argument is that Plaintiffs’ knowledge at the time the
under California’s parol evidence rule, “[t]erms set forth in a writing intended by the parties as a
5
final expression of their agreement with respect to such terms as are included therein may not be
6
contradicted by evidence of any prior agreement or of a contemporaneous oral agreement,” Cal.
7
Code Civ. Proc. § 1856(a), but here, and unlike the settlement agreement at issue in Clark’s
8
Welding, the Stipulation here does not contain an integration clause. See generally Stipulation, ECF
9
No. 128, Ex. 1. In this situation, under California law, even when a contract appears to the court to
10
be unambiguous (as the Stipulation does here), extrinsic evidence can be used “to prove a meaning
11
to which the language of the instrument is reasonably susceptible.” Pac. Gas & Elec. Co. v. G.W.
12
For the Northern District of California
Stipulation is signed simply sheds light on the parties’ intention, the court will address it. Normally,
4
UNITED STATES DISTRICT COURT
3
Thomas Drayage & Rigging Co., 69 Cal. 2d 33, 37 (1968); see also Clark’s Welding, 688 F. Supp.
13
2d at 911. A court “provisionally receives (without actually admitting) all credible evidence
14
concerning the parties’ intentions to determine ‘ambiguity,’ i.e., whether the language is ‘reasonably
15
susceptible’ to the interpretation urged . . . .” Wolf v. Superior Court, 114 Cal. App. 4th 1343, 1351
16
(2d Dist. 2004) (quoting Winet v. Price, 4 Cal. App. 4th 1159, 1165 (4th Dist. 1992)). A court’s
17
determination of whether an ambiguity exists is a question of law. Clark’s Welding, 688 F. Supp. 2d
18
at 911.
19
Upon consideration of Dalecon’s argument, the court still is not persuaded that the Stipulation
20
releases Dalecon from withdrawal liability. As Plaintiffs point out in their reply, Dalecon presents
21
no evidence to suggest that Plaintiffs actually were aware at the time the Stipulation was signed that
22
Dalecon already had completely withdrawn or that Dale Stickney Construction was going to acquire
23
Dalecon’s trucks and equipment and start using them. See Reply, ECF No. 135 at 2. Dalecon’s
24
argument about Plaintiffs’ knowledge, then, is unsupported. Cf. Clark’s Welding, 688 F. Supp. 2d at
25
911-12 (the parties submitted evidence showing when the drafters of the settlement agreement first
26
learned about the potential withdrawal liability claim).
27
28
Without any evidence to support its argument, and in light of the Stipulation making clear that
Plaintiffs brought the Delinquency Action to recover delinquent contributions directly tying the
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24
1
compromises Plaintiffs made in the stipulation to Plaintiffs’ claims to recover those contributions,
2
the court finds that the Stipulation’s release language is not ambiguous and that it did not release
3
Dalecon from withdrawal liability. Any argument about withdrawal liability should have been
4
raised in arbitration, and it was not. Accordingly, the court GRANTS Plaintiffs’ motion for
5
summary judgment against Dalecon.
6
II. THE COURT FINDS THAT DALECON IS LIABLE FOR $423,389.77
7
Plaintiffs request from Dalecon $242,614 in assessed withdrawal liability, $77,171.67 in interest,
award of $424,889.77. Motion for Summary Judgment, ECF No. 127 at 17-18. Plaintiffs are
10
entitled to all of these types of damages under ERISA § 4301 (b) (29 U.S.C. § 1451(b)), which
11
provides that, “[i]n any action under this section to compel an employer to pay withdrawal liability,
12
For the Northern District of California
$48,522.80 in liquidated damages, $54,867.50 in attorney’s fees, and $1,713.80 in costs, for a total
9
UNITED STATES DISTRICT COURT
8
any failure of the employer to make any withdrawal liability payment within the time prescribed
13
shall be treated in the same manner as a delinquent contribution (within the meaning of section 515
14
[29 U.S.C. § 1145] ).” The following damages are available where an employer fails to pay required
15
contributions: (1) unpaid contributions; (2) interest on the unpaid contributions; (3) liquidated
16
damages as provided by the plan (not to exceed 20% of the unpaid contributions); and (4) reasonable
17
attorney’s fees and costs. 29 U.S .C. § 1132(g)(2). Therefore, Plaintiffs may recover these types of
18
damages on their claim for unpaid withdrawal liability. The appropriate amount of each type of
19
damages is discussed below.
20
A. Withdrawal Liability
21
As explained above, under 29 U.S.C. § 1399, the amount of a withdrawing employer’s
22
withdrawal liability is first computed by the pension plan’s sponsor. The employer is then notified
23
of the amount owed and is entitled, within ninety days of such notice, to ask the sponsor to review
24
any specific matter relating to the determination of the employer’s withdrawal liability. 29 U.S.C. §
25
1399(c). “Any dispute” between an employer and the plan sponsor relating to the employer’s
26
withdrawal liability “shall be resolved through arbitration.” 29 U .S.C. § 1401(a)(1). Arbitration
27
may be initiated “within a 60–day period” after the employer is notified of the sponsor’s final
28
determination concerning withdrawal liability (or 120 days after the employer requested the sponsor
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25
1
to review the matter, whichever date is earlier). 29 U.S.C. § 1401(a)(1). If arbitration proceedings
2
are not initiated within the time periods prescribed by the statute, “the amounts demanded by the
3
plan sponsor . . . shall be due and owing on the schedule set forth by the plan sponsor.” 29 U.S.C.
4
§ 1401(b)(1). If the employer fails to make payment when due, and fails to cure the delinquency
5
within sixty days of notice of the delinquency, the plan sponsor is entitled to obtain immediate
6
payment of the entire amount of the employer's outstanding withdrawal liability. 29 U.S.C. §
7
1399(c)(5).
8
9
Here, Plaintiffs assessed Dalecon’s withdrawal liability to be $242,614.00. Plaintiffs followed
the procedures required by the MPPAA for computing the amount and notifying Dalecon and its
group members disputed the amount or made any payment. Thus, Plaintiffs’ assessed withdrawal
12
For the Northern District of California
controlled group members of the withdrawal liability assessed. Neither Dalecon nor its controlled
11
UNITED STATES DISTRICT COURT
10
liability of $127,795.00 is binding on Dalecon under ERISA § 4221(b)(1) (29 U.S.C. § 1401(b)(1)).
13
B. Interest
14
Interest on unpaid contributions must be calculated “by using the rate provided under the plan,
15
or, if none, the rate prescribed under Section 6621 of Title 26.” Under the Delinquency Collection
16
Procedures adopted by the Trustees, Plaintiffs are entitled to 10% simple interest on unpaid
17
contributions due after January 1, 2010. Joint Statement, ECF No. 128 ¶ 15; Trento Declaration,
18
ECF No. 113 ¶¶ 6-7 & Exs. B-C. Under ERISA § 4219(c)(5) (29 U.S.C. 1399(c)(5)), interest on the
19
accelerated withdrawal liability accrues from the due date of the first delinquent installment
20
payment. Accordingly, 10% interest on the unpaid withdrawal liability of $242,614.00 has been
21
accruing since October 1, 2010, the date of Dalecon’s first missed installment payment. Interest in
22
the sum of $77,171.67 has accrued from October 1, 2010 through December 5, 2013, the date on
23
which Plaintiffs noticed its motions for hearing. Trento Declaration, ECF No. 113 ¶ 11. Thus,
24
Plaintiffs are entitled to this amount of interest, which will continue to accrue at a rate of $66.47 per
25
day from December 5, 2013 through the date of judgment.
26
C. Liquidated Damages
27
Under ERISA § 502(g)(2) (29 U.S.C. § 1132(g)(2)), liquidated damages may be awarded when:
28
(1) the employer is delinquent at the time the action is filed, (2) the court enters a judgment against
C 11-02851 LB
ORDER
26
1
the employer, and (3) the plan provides for an award of liquidated damages. See Nw. Adm’rs, Inc. v.
2
Albertson’s, Inc., 104 F.3d 253, 258 (9th Cir. 1996). Here, Dalecon is currently in default on the
3
entire unpaid withdrawal liability as no payments have been made (at least as of December 12,
4
2013). The Delinquency Collection Procedures adopted by the Trustees provide for liquidated
5
damages at the rate of 20% of the delinquent amount upon commencement of litigation. Complaint,
6
ECF No. Joint Statement, ECF No. 128 ¶ 15; Trento Declaration, ECF No. 113 ¶¶ 6-7 & Exs. B-C.
7
Thus, Plaintiffs are entitled to recover liquidated damages of $48,522.80 ($242.614.00 x 0.2 =
8
$48,522.80) because they were required to file this suit in an attempt to recover the withdrawal
9
liability owed.
D. Attorney’s Fees and Costs
11
Plaintiffs also ask for attorney’s fees of $54,867.50 and costs of $1,713.80. Richardson
12
For the Northern District of California
UNITED STATES DISTRICT COURT
10
13
14
Declaration, ECF No. 112 ¶¶ 9-19; Motion for Summary Judgment, ECF No. 127 at 17.
1. Attorney’s Fees
As for the requested attorneys’ fees, an award of fees is mandatory because withdrawal liability
15
is unpaid, and the Plan provides for reasonable fees and costs. See Nw. Adm’rs, 104 F.3d at 257.
16
Fees also are allowed and appropriate under the terms of the CBAs.
17
To determine a reasonable fee award in a case like this, federal courts use the lodestar method.
18
Grove v. Wells Fargo Financial Cal., Inc., 606 F.3d 577, 582 (9th Cir. 2010). The court calculates a
19
“lodestar amount” by multiplying the number of hours counsel reasonably spend on the litigation by
20
a reasonable hourly rate. Id.
21
i. Reasonable Hourly Rate
22
A reasonable hourly rate is that prevailing in the community for similar work performed by
23
attorneys of comparable skill, experience, and reputation. Moreno v. City of Sacramento, 534 F.3d
24
1106, 1111 (9th Cir. 2008); Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008).
25
The relevant community is “the forum in which the district court sits,” which here is the Northern
26
District of California. Camacho, 523 F.3d at 979. The party requesting fees must produce
27
satisfactory evidence—in addition to the attorney’s own affidavits or declarations—that the rates are
28
in line with community rates. See Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984); Jordan v.
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27
1
Multomah County, 815 F.2d 1258, 1263 (9th Cir. 1987). Plaintiffs described the qualifications and
2
rates of attorneys Julie A. Richardson (initially $195.00 per hour, and later $205.00 per hour),
3
Richard C. Johnson ($275.00 per hour), Shaamini A. Babu (initially $195.00 per hour, and later
4
$205.00 per hour), and of the paralegals Jonathan Sha (initially $115.00 per hour, and later $120.00
5
per hour) and Barbara Savino (initially $115.00 per hour, and later $120.00 per hour). Richardson
6
Declaration, ECF No. 112 ¶¶ 12-17. Plaintiffs also submit copies of six orders in which courts in
7
this district have awarded their counsel’s rates in similar cases. Id. ¶ 11 & Ex. C. The court’s own
8
review also establishes that courts in this district have approved roughly similar hourly rates for
9
counsel. See, e.g., Pension Trust Fund for Operating Engineers v. Kickin Enters., No. C-11-03685
Fund v. Clark’s Welding and Mach., No. 09–0044 SC, 2010 WL 1729475, at *5 (N.D. Cal. Apr. 27,
12
For the Northern District of California
JCS, 2012 WL 6711557, at *8-9 (N.D. Cal. Dec. 20, 2012); Operating Engineers’ Pension Trust
11
UNITED STATES DISTRICT COURT
10
2010) (finding paralegal rates of $110 per hour, associate rates of $180–185 per hour, and
13
shareholder rates of $255 per hour to be reasonable). This court, too, finds that Plaintiffs’ counsels’
14
hourly rates are reasonable.
15
ii. Reasonable Hours Expended
16
Reasonable hours expended on a case are hours that are not “‘excessive, redundant, or
17
otherwise unnecessary.’” McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (quoting
18
Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). The party requesting fees must provide detailed
19
time records documenting the tasks completed and the time spent. See Hensley, 461 U.S. at 434;
20
McCown, 565 F.3d at 1102; Welch v. Metropolitan Life Ins. Co., 480 F.3d 942, 945-46 (9th Cir.
21
2007).
22
Plaintiffs seek attorney’s fees for 152.3 hours of attorney time and 190.7 hours of paralegal time.
23
Richardson Declaration, ECF No. 112 ¶¶ 13-17 & Ex. D (billing records). Plaintiffs’ counsel
24
summarizes the billing records and the time spent as follows:
25
26
27
28
The attorneys’ fees and costs specified herein were incurred by the Trust in
connection with the review of files; tracking of statutory deadlines applicable to
withdrawal liability; preparation of the Complaint; electronic filings and service of
documents; service of Defendants; correspondence with Trustees, ATPA, and the
Union district representatives; legal research; analysis of controlled group members
and assets; preparation of initial disclosures; tracking of bankruptcy procedures;
preparation of discovery; review of investigative documents; communication by
letter, e-mail and telephone with counsel for Defendants regarding this action;
C 11-02851 LB
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28
1
2
3
preparation of mediation statement; preparation and attendance of mediation;
preparation of case management conference statement and attendance of case
management conference; and preparation of the Motion for Default Judgment,
supporting declarations and Proposed Judgment., discussions with opposing counsel
and withdrawal of the default; dismissal of the bankrupt defendants; preparation of
this motion for summary judgment and renewed motion for default judgment.
4
5
Id. ¶ 10. Based on the court’s review of Plaintiffs’ billing records in support of this summary, the
6
court finds that the fees for attorney and paralegal work are reasonable. Accordingly, Plaintiffs are
7
entitled to attorneys’ fees in the amount of $53,367.50.
8
9
Plaintiffs also request reimbursement for their fees in connection with the preparation for and
attendance at the hearing of on their motions. Richardson Declaration, ECF No. 112 ¶ 18; Motion
Richardson Declaration, ECF No. 112 ¶ 18. The court declines to recommend awarding this amount
12
For the Northern District of California
for Summary Judgment, ECF No. 127 at 17. They estimate that such fees will amount to $1,500.00.
11
UNITED STATES DISTRICT COURT
10
because Plaintiffs have not documented how they arrived at this amount or their entitlement to
13
estimated fees.
14
15
2. Costs
As for the requested costs of $1,713.80, they are comprised of $125 in investigative fees, a $350
16
filing fee, $445.62 in messenger and overnight mail fees, $538.18 in research, and a $255 process
17
service fee. Id. These costs are reasonable.
18
CONCLUSION
19
Based on the foregoing, the court GRANTS Plaintiffs’ motion for summary judgment against
20
Dalecon and finds that Plaintiffs should be awarded $423,389.77, which includes $242,614 in
21
assessed withdrawal liability, $77,171.67 in interest, $48,522.80 in liquidated damages, $53,367.50
22
in attorney’s fees, and $1,713.80 in costs.
23
As discussed in the related Report and Recommendation (ECF No. 142) regarding Plaintiffs’
24
motion for default judgment against the Defaulting Defendants, the separate judgment under Rule
25
58(a) should reflect that liability for Dalecon and the Defaulting Defendants is joint and several.
26
27
IT IS SO ORDERED.
Dated: March 12, 2014
_______________________________
LAUREL BEELER
United States Magistrate Judge
28
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29
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