The Board of Trustees for the Laborers Health and Welfare Trust Fund for Northern California et al -v- TKDemo and Concrete Cutting, Inc., et al

Filing 33

ORDER GRANTING PLAINTIFFS' MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT. Signed by Judge William H. Orrick on 11/12/2015. (jmdS, COURT STAFF) (Filed on 11/12/2015)

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BARRY E. HINKLE, Bar No. 071223
TRACY L. MAINGUY, Bar No. 176928
CONCEPCIÓN E. LOZANO-BATISTA, Bar No. 227227
WEINBERG, ROGER & ROSENFELD
A Professional Corporation
1001 Marina Village Parkway, Suite 200
Alameda, California 94501
Telephone [phone]
Fax [phone]
E-Mail: [e-mail]
[e-mail]
[e-mail]

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Attorneys for Plaintiffs
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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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THE BOARD OF TRUSTEES, in their
capacities as Trustees of the LABORERS
HEALTH AND WELFARE TRUST FUND
FOR NORTHERN CALIFORNIA;
LABORERS VACATION-HOLIDAY TRUST
FUND FOR NORTHERN CALIFORNIA;
LABORERS PENSION TRUST FUND FOR
NORTHERN CALIFORNIA; and LABORERS
TRAINING AND RETRAINING TRUST
FUND FOR NORTHERN CALIFORNIA,

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No. C 15-01366 WHO
ORDER GRANTING PLAINTIFFS’
MOTION FOR ENTRY OF DEFAULT
JUDGMENT BY COURT
Date:
Time:
Dept.:
Judge:

November 18, 2015
2:00 p.m.
Courtroom 2, 17th Floor
Hon. William H. Orrick

Plaintiffs,

v.
TKDEMO AND CONCRETE CUTTING,
INC., a California Corporation; TKDEMO
AND CONCRETE CUTTING, INC., a
California Corporation doing business as T K
ENGINEERING; TKDEMO AND
CONCRETE CUTTING, INC., a California
Corporation doing business as T K DEMO
AND CONCRETE CUTTING, INC. doing
business as T K ENGINEERING; and
TIMOTHY BRIAN KRUSE, individually,
Defendants.

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WEINBERG, ROGER &
ROSENFELD
A Professional Corporation
1001 Marina Village Parkway, Suite 200
Alameda, California 94501
[phone]

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ORDER GRANTING PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT
Case No. C 15-01366 WHO

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This matter was set for hearing for entry of Judgment by Default against Defendants

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TKDEMO AND CONCRETE CUTTING, INC.; TKDEMO AND CONCRETE CUTTING, INC.

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doing business as T K ENGINEERING; TKDEMO AND CONCRETE CUTTING, INC. doing

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business as T K DEMO AND CONCRETE CUTTING, INC. doing business as T K

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ENGINEERING (collectively referred to as “TKDEMO AND CONCRETE CUTTING, INC.”)

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and Defendant TIMOTHY BRIAN KRUSE on November 18, 2015 at 2:00 p.m. in Courtroom 2,

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17th Floor, 450 Golden Gate Avenue, San Francisco, California. Plaintiffs are The Board of

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Trustees, in their capacities as Trustees of LABORERS HEALTH AND WELFARE TRUST

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FUND FOR NORTHERN CALIFORNIA; LABORERS VACATION-HOLIDAY TRUST

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FUND FOR NORTHERN CALIFORNIA; LABORERS PENSION TRUST FUND FOR

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NORTHERN CALIFORNIA; AND LABORERS TRAINING AND RETRAINING TRUST

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FUND FOR NORTHERN CALIFORNIA (hereinafter “Trust Funds” or “Plaintiffs”). Having

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considered the pleadings and arguments in this matter, the hearing set for November 18, 2015 is

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VACATED, and good cause appearing, this Court FINDS AS FOLLOWS:

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1.

The Complaint was filed with this Court on March 24, 2015:

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2.

The Complaint was served on Defendants, and each of them, on April 1, 2015, for

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which proofs of service were filed before this Court with the Summons on April 13, 2015;
3.

No answer or other responsive pleadings having been filed within the time

permitted by law and default was entered against the Defendants on April 29, 2015;
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On June 21, 1990, TIMOTHY BRIAN KRUSE executed a Memorandum of

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Memorandum Agreement and assumed its terms adhering to its terms, including making

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contributions to the Trust for work performed by employees of TIM KRUSE CONSTRUCTION,

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INC. The Master Agreement by its terms incorporates the various Trust Agreements establishing

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each of the Trust Funds. Hereinafter, the Master Agreement, Memorandum Agreement, and

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A Professional Corporation

BRIAN KRUSE incorporated TIM KRUSE CONSTRUCTION, INC. after executing the

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1001 Marina Village Parkway, Suite 200
Alameda, California 94501
[phone]

Union, which incorporated by reference the AGC/ Laborers Master Agreement. TIMOTHY

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WEINBERG, ROGER &
ROSENFELD

Agreement on behalf of Kruse Construction (hereinafter “Memorandum Agreement”) with the

Trust Agreements are referred to collectively as the “Agreements.” Pursuant to the Agreements,

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ORDER GRANTING PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT
Case No. C 15-01366 WHO

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TIM KRUSE CONSTRUCTION, INC. is required to contribute and pay to Plaintiffs the hourly

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amounts required by said Agreements for each hour paid for or worked by any of its employees

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who performed any work covered by said Agreements, and that it would be subject to and bound

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by all of the terms, provisions and conditions of the Trust Agreements as incorporated by the

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terms of the Master Agreement.

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5.

TIM KRUSE CONSTRUCTION, INC. failed to pay contributions in the amount

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of $39,279.80 that were revealed as owed to the Trust Funds for work performed by its

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employees during the time period of February 2009 through June 2012, and related liquidated

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damages and interest. TIM KRUSE CONSTRUCTION, INC. also timely failed to pay

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contributions owed based upon work performed by its employees between August 2010 and

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December 2011for which it owes the Trust Funds entitled to $4,132.61 in liquidated damages and

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interest. Furthermore, TIM KRUSE CONSTRUCTION, INC. failed to pay the Trust Funds

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unpaid contributions of $126,547.76 and interest and liquidated damages of $14,000.55 for the

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period of January 2012 through April 2013. The Trust Funds filed a Complaint in this Court in

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Case Number CV-12-05322 JSW seeking collection of such sum and its attorneys’ fees and costs.

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This Court entered a judgment in favor of the Trust Funds and against TIM KRUSE

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CONSTRUCTION, INC. in the amount of $212,183.47 on October 2, 2013 (hereinafter

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“Judgment”). TIM KRUSE CONSTRUCTION, INC. also failed to pay contributions in the

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amount of $6,913.62 for the month of May of 2013 which were reported to the Trust Funds as

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owed, but not paid. This amount was not included in the Judgment.

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6.

TIM KRUSE CONSTRUCTION, INC. did not satisfy the Judgment. On

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November 26, 2013, TIMOTHY BRIAN KRUSE incorporated TKDEMO AND CONCRETE

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CUTTING, INC. in order to evade the obligations under the collective bargaining agreement.

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The Trust Funds levied against TIM KRUSE CONSTRUCTION, INC.’s bank account and

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obtained a payment toward the judgment in the amount of $25,239.30. The Trust Funds also

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levied a writ of execution on Tricorp, a contractor for whom TIM KRUSE CONSTRUCTION,

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INC. performed work as a subcontractor and thus owed moneys to TIM KRUSE

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WEINBERG, ROGER &
ROSENFELD
A Professional Corporation

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1001 Marina Village Parkway, Suite 200
Alameda, California 94501
[phone]

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ORDER GRANTING PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT
Case No. C 15-01366 WHO

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CONSTRUCTION, INC. The Trust Funds obtained payments from such levy toward the

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judgment in the total amount of $36,030.00.

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TKDEMO AND CONCRETE CUTTING and TIM KRUSE CONSTRUCTION,

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INC., operate the same type of business, i.e., a contracting business at the same location and both

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use the same mailing address. TIM KRUSE CONSTRUCTION, INC. and TKDEMO AND

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CONCRETE CUTTING, INC. perform the same services and labor for the same clients in the

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same geographic area, and work orders not completed by TIM KRUSE CONSTRUCTION, INC.

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prior to its termination were completed by TKDEMO AND CONCRETE CUTTING, INC.

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TIMOTHY BRIAN KRUSE was the RMO/CEO/ Owner of TIM KRUSE CONSTRUCTION,

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INC. and he is the RMO/CEO/ Owner of TKDEMO AND CONCRETE CUTTING, INC.

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Substantially all of TKDEMO AND CONCRETE CUTTING, INC.’s equipment and machinery

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is the same equipment and machinery used by TIM KRUSE CONSTRUCTION, INC., and

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TKDEMO AND CONCRETE CUTTING, INC. did not pay TIM KRUSE CONSTRUCTION,

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INC. fair market value for the acquisition and use of this equipment and machinery. The sole

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person with control over Defendants’ bank accounts, TIMOTHY BRIAN KRUSE, is the same

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person who controlled TIM KRUSE CONSTRUCTION, INC.’S bank accounts. TKDEMO AND

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CONCRETE CUTTING, INC. was incorporated immediately after judgment was entered against

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TIM KRUSE CONSTRUCTION, INC. TKDEMO AND CONCRETE CUTTING, INC. took

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over the operations of TIM KRUSE CONSTRUCTION, INC. after TIM KRUSE

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CONSTRUCTION, INC.’s California Contractor’s license was suspended for failure to pay the

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Judgment. Accordingly, The Trust Funds have shown that two firms have the same common

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ownership, management, operations, and labor relations. Additionally, Plaintiffs have also

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established that TKDEMO AND CONCRETE, INC. is used in a sham effort to avoid collective

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bargaining obligations.

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8.

After TIMOTHY BRIAN KRUSE filed a Chapter 13 Bankruptcy petition, he

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began conducting business under the name TKDEMO AND CONCRETE CUTTING using TIM

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KRUSE CONSTRUCTION, INC.’ equipment to finish contracts bid by TIM KRUSE

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CONSTRUCTION, INC. without satisfying the judgment debt owed to the Trust Funds and

WEINBERG, ROGER &
ROSENFELD
A Professional Corporation

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1001 Marina Village Parkway, Suite 200
Alameda, California 94501
[phone]

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ORDER GRANTING PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT
Case No. C 15-01366 WHO

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without regard to the Trust Funds’ lien rights in both his personal and real property. He operates

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his new business out of the real property owned by TIM KRUSE CONSTRUCTION, INC.

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paying the mortgage personally or from the income of the TKDEMO AND CONCRETE

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CUTTING, INC. since he concedes that TIM KRUSE CONSTRUCTION, INC. is out of

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business. His actions within the bankruptcy Court, including scheduling TIM KRUSE

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CONSTRUCTION, INC.’s assets as his own free of the Trust Funds’ secured claim and not

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revealing his interest in TKDEMO AND CONCRETE CUTTING, INC. in his initial bankruptcy

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schedules, evidence his fraudulent intention to retain the property of TIM KRUSE

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CONSTRUCTION, INC. for his own benefit and depletion at the expense of the Trust Funds.

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Moreover, TIM BRIAN KRUSE admits that he incorporated TKDEMO AND CONCRETE

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CUTTING, INC. because his license was suspended for nonpayment of the Judgment obtained by

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the Trust Funds and he wanted to continue to conduct the same business but could not do so

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under the name of TIM KRUSE CONSTRUCTION, INC. Accordingly, the Trust Funds have

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shown that the TIMOTHY BRIAN KRUSE as shareholder misused the corporate form of TIM

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KRUSE CONSTRUCTION, INC. to perpetrate the fraud of continuing to operate as a contractor

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as TKDEMO AND CONCRETE CUTTING, INC. using and depleting the corporate assets of

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TIM KRUSE CONSTRUCTION, INC. as if they were his own without paying the debts of the

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TIM KRUSE CONSTRUCTION, INC. TIMOTHY BRIAN KRUSE’s Chapter 13 Bankruptcy

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was dismissed on March 19, 2015 for failure to make plan payments and unreasonable delay that

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is prejudicial to creditors.

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9.

Defendants, and each of them, have been an employers within the meaning of

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section 3(5) and section 515 of ERISA (29 U.S.C. §§ 1002(5), 1145) and an employer in an

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industry affecting commerce within the meaning of section 301 of the LMRA (29 U.S.C. § 185).

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10.

That Defendants, and each of them, failed to pay delinquent contributions in the

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amount of $98,537.59 based upon work performed by TIM KRUSE CONSTRUCTION, INC.’s

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employees and owes Plaintiffs liquidated damages and interest in the total amount of $89,767.13

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related to such unpaid contributions and contributions paid by TIM KRUSE CONSTRUCTION,

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INC., but paid late.

WEINBERG, ROGER &
ROSENFELD
A Professional Corporation

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1001 Marina Village Parkway, Suite 200
Alameda, California 94501
[phone]

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ORDER GRANTING PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT
Case No. C 15-01366 WHO

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11.

That Defendants, and each of them, owe Plaintiffs’ attorneys’ fees in the total

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amount of $114,058.50 and costs in the amount of $12,634.86, relating to the collection of the

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contributions owed to the Trust Funds in this lawsuit, United States District Court for the

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Northern District Case No. C-12-05322 JSW and Eastern District of California Bankruptcy Case

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No. 14-22472-B-13J.

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IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT judgment be

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entered in favor of Plaintiffs and against Defendants, and each of them. A separate judgment will

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issue.

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DATED: November 12, 2015

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HONORABLE WILLIAM H. ORRICK
UNITED STATES DISTRICT COURT
MAGISTRATE JUDGE

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137210/830607

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WEINBERG, ROGER &
ROSENFELD
A Professional Corporation

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1001 Marina Village Parkway, Suite 200
Alameda, California 94501
[phone]

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ORDER GRANTING PLAINTIFFS’ MOTION FOR ENTRY OF DEFAULT JUDGMENT BY COURT
Case No. C 15-01366 WHO