Board of Trustees of the Laborers Health and Welfare Trust Fund for Northern California et al v. Breneman, Inc. et al
Filing
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ORDER by Judge Yvonne Gonzalez Rogers granting 65 Motion of Plaintiffs Cement Masons Trust Funds for Summary Judgment. (fs, COURT STAFF) (Filed on 10/10/2017)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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BOARD OF TRUSTEES OF THE
LABORERS HEALTH AND WELFARE
TRUST FUND FOR NORTHERN
CALIFORNIA, et al.,
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Plaintiffs,
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United States District Court
Northern District of California
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v.
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BRENEMAN, INC., a California
corporation; and JAMES G. BRENEMAN,
an individual,
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Defendant.
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BOARD OF TRUSTEES OF THE
CEMENT MASONS HEALTH AND
WELFARE TRUST FUND FOR
NOTHERN CALIFORNIA, et al.,
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Plaintiffs,
v.
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BRENEMAN, INC., a California
corporation; and JAMES G. BRENEMAN,
an individual,
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Defendant.
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Case No. 16-cv-01640-YGR
ORDER GRANTING MOTION OF PLAINTIFFS
CEMENT MASONS TRUST FUNDS FOR
SUMMARY JUDGMENT
Re: Dkt. No. 65
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In this enforcement action brought under the Employee Retirement Income Security Act
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(“ERISA”), 29 U.S.C. §§ 1002(3) and 1002(37), plaintiffs Board of Trustees of the Cement
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Masons Health and Welfare Trust Fund for Northern California, Board of Trustees of the Cement
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Masons Vacation-holiday Trust Fund for Northern California, Board of Trustees of the Cement
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Masons Pension Trust Fund For Northern California and Board of Trustees of the Cement Masons
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Training Trust Fund for Northern California (collectively, “Cement Masons Trust Funds”), move
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for summary judgment against defendant Breneman, Inc., and defendant James G. Breneman.
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(Dkt. No. 65.)
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The complaint alleges the following causes of action: (i) breach of the collective
bargaining agreement against Breneman, Inc., (ii) recovery of unpaid trust fund contributions
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United States District Court
Northern District of California
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under ERISA §§ 502(g)(2), 515 against Breneman, Inc.; (iii) breach of contract (Payment Plan)
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against Breneman Inc. and James G. Breneman, and (iv) for a mandatory injunction under ERISA
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§ 502(g)(2)(E) against Breneman, Inc. (Case 4:16-cv-1641, Dkt. No. 1, “Complaint.”)1 Cement
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Masons Trust Funds seek an audit, liquidated damages, interest, outstanding trust fund
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contributions, and attorneys’ fees and costs. The Cement Masons Trust Funds now move for
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summary judgment against Breneman Inc. on the first, second, and fourth causes of action, and
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against James G. Breneman individually for breach of a personal guarantee to pay outstanding
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trust fund contributions due and owing by Breneman, Inc. under the third cause of action.
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The motion for summary judgment and documents in support thereof were filed July 28,
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2017, and originally set for hearing on August 29, 2017. (Dkt. No. 65.) The Court issued an order
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vacating the hearing on this motion on August 1, 2017. (Dkt. No. 70.) No opposition was filed by
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the defendants and the Court issued a further order permitting one final opportunity for defendants
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to respond the summary judgment motion. (Dkt. No. 71.) As of the date of this Order, no
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Case 4:16-cv-1641 was administratively closed and consolidated with 16-cv-1640 on
January 30, 2017. (Dkt. No. 47.)
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opposition to the motion has been filed by defendants.2
Based upon the Court’s review of the duly noticed motion, the evidence submitted in
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support thereof, and the lack of opposition thereto, and for the reasons stated herein, the Cement
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Masons Trust Funds’ motion for summary judgment is GRANTED against defendants Breneman,
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Inc. and James G. Breneman.
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I.
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BACKGROUND
Cement Masons Trust Funds are trustees and fiduciaries of employee benefit plans created
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by written trust agreements pursuant to section 302 of the Labor Management Relations Act, 29
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U.S.C. § 186, and a multiemployer employee benefit plan within the meaning of sections 3, 4, and
502 of ERISA, 29 U.S.C. §§ 1002, 1003, and 1132. (See Declaration of Karen Hubbard in
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United States District Court
Northern District of California
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Support of Motion for Summary Judgment (“Hubbard Decl.”), Dkt. No. 66, at ¶ 10.) The Cement
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Masons Trust Funds consist of all employee fringe benefit contributions made by employers
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pursuant to covered collective bargaining agreements. (Id. at ¶ 10, Exh. A at 1-4 [Amended and
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Restated Trust Agreement Establishing the Cement Masons Pension Trust Fund For Northern
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California]; Exh. B. at Art. II, § 1.) The Trust Agreements for all the Cement Masons Trust Funds
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contain the same terms and conditions as the Trust Agreement for the Cement Masons Pension
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Trust Fund for Northern California. (Id. at ¶ 11.)
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The duties of the Board of Trustees to the Cement Masons Trust Funds include ensuring
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that employers who are signatories to the collective bargaining agreements comply with the terms
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and conditions of the collective bargaining agreements, namely, payments and contributions to the
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Trust Funds on behalf of the covered employees. The Trust Agreement permits the Boards of
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Trustees to seek judicial relief to recover prompt payment of contributions due, including the
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recovery of delinquent contributions, and further, to seek all attorneys’ fees and costs incurred in a
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The Court notes that defendants James G. Breneman and Breneman, Inc. were defaulted
in this action on June 24, 2016, and on August 3, 2016, respectively. (Case 4:16-cv-1641, Dkt.
Nos. 16 and 23.) Those defaults were set aside by stipulation of the parties, and defendants
appeared by counsel thereafter, filing their answer to the complaint on November 29, 2016. (Case
4:16-cv-1641, Dkt. Nos. 34, 35, 36.)
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lawsuit to recover the delinquent contributions. (Hubbard Decl. at ¶ 12, Exh. C at Art. IV, § 3.)
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The Trust Agreement further provides that an employer must submit to an audit by the Board of
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Trustees, and in so doing, produce its books and financial records to the Board of Trustees. (Id. at
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¶ 12, Exh. C at Art. IV § 7.)
On March 8, 2011, Breneman, Inc. executed a Memorandum Agreement with the District
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Council of Plasters’ and Cement Masons’ of Northern California (“Cement Masons Union”) to be
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bound by the written collective bargaining agreement with the Cement Masons Union entitled the
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Cement Masons Master Agreement For Northern California (“Master Agreement”). (Hubbard
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Decl. at ¶ 6, Exh. D.) Section 8 of the Cement Masons Master Agreement requires that employers
make contributions to the Cement Masons Trust Funds based on the hours that their respective
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United States District Court
Northern District of California
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employees worked as cement masons. (Id. at ¶ 13, Exh. E.) Employers must pay employee fringe
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benefit contributions by the 25th day of the month immediately succeeding the month in which the
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employee’s work was performed. In the event that the employer fails to make the monthly
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installments timely, employers are subject to interest at the rate of 1.5% per month as well as $150
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for each delinquent contribution as liquidated damages. Liquidated damages are set at $150 for
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each month that the contribution is delinquent. (Id. at ¶ 13 and Exh. F.) The agreements also
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require employers to report to the Cement Masons Trust Funds the number of hours worked by, or
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paid to, each employee performing covered work. (Id. at ¶ 7.)
In addition, on July 28, 2015, Breneman Inc. entered into a payment plan, and James G.
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Breneman entered into a Personal Guarantee and Undertaking, due to Breneman, Inc.’s failure to
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make timely contributions for a period from June 2012 to May 2015. (Id. at Exh. H, p. 1.) By that
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Personal Guarantee and Undertaking, James G. Breneman agreed that if Breneman Inc. defaulted
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on the payment plan, he became personally liable for the outstanding balance of unbalance
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contributions, liquidated damages and interest. (Id.)
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II.
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APPLICABLE LEGAL STANDARD
Summary judgment is appropriate when there is no genuine dispute as to any 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). Any party
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seeking summary judgment bears the initial burden of identifying those portions of the pleadings
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and discovery responses that demonstrate the absence of a genuine issue of material fact. Celotex
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Corp. v. Catrett, 477 U.S. 317, 323 (1986). Material facts are those that might affect the outcome
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of the case. Anderson v. Liberty Lobby. Inc., 477 U.S. 242, 248 (1986). A dispute as to a material
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fact is “genuine” if there is sufficient evidence for the finder of fact to return a verdict for the
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nonmoving party. Id.
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If the moving party meets its initial burden, the opposing party must then set out specific
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facts showing a genuine issue for trial in order to defeat the motion. Anderson, 477 U.S. at 250;
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Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007); see also Fed.R.Civ.P.
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56(c), (e). A court may only consider admissible evidence in ruling on a motion for summary
judgment. See Fed.R.Civ.P. 56(c)(2); Beyene v. Coleman Sec. Servs., Inc., 854 F.2d 1179, 1181
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United States District Court
Northern District of California
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(9th Cir.1988) (“It is well settled that only admissible evidence may be considered by the trial
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court in ruling on a motion for summary judgment.”). However, when deciding a summary
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judgment motion, “the court does not make credibility determinations or weigh conflicting
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evidence.” Soremekun, 509 F.3d at 984. Instead, the court must view the evidence in the light
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most favorable to the nonmoving party and draw all justifiable inferences in its favor. Anderson,
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477 U.S. at 255; Hunt v. City of Los Angeles, 638 F.3d 703, 709 (9th Cir.2011).
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III.
DISCUSSION
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Cement Masons Trust Funds seek summary judgment against Breneman Inc. on: (1) their
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first claim for breach of the collective bargaining agreement based upon its failure to pay certain
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contributions timely and for unpaid contributions; (2) their second claim for recovery of unpaid
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trust fund contributions under ERISA sections 502(g)(2) and 515 (29 U.S.C. §§ 1132(g)(2), 1145),
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which provide additional remedies for enforcement of an employer’s obligation to make
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contributions required as provided in a collective bargaining agreement; and (3) their fourth cause
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of action for a mandatory injunction for an audit. Cement Masons Trust Funds seeks summary
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judgment against James G. Breneman on the third cause of action for breach of the Personal
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Guarantee and Undertaking requiring James G. Breneman to pay in the event that Breneman Inc.
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defaulted in its 2015 payment plan with Cement Masons Trust Funds for catching up on certain
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unpaid contributions.
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A.
Unpaid Contributions, Damages, and Interest against Breneman Inc.
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Under the collective bargaining agreement and the ERISA enforcement provision, Cement
Masons Trust Funds are entitled to the principal amount of the unpaid contributions plus interest at
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1.5% per month and an additional sum that is the greater of liquidated damages or interest.
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Pursuant to the collective bargaining agreement’s Liquidated Damage Program – Board Policy,
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employers like Breneman, Inc. are subject to interest at the rate of 1.5% per month, as well as
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liquidated damages, set at $150 for each month that a contribution is delinquent. Interest was
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calculated at 1.5% per month from the month in which each delinquent contribution for each Trust
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Fund was recorded and accumulated. (Hubbard Decl. ¶ 14, Exh. F.) Because this is an ERISA
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enforcement action, Cement Masons Trust Funds are entitled not only to interest on the unpaid
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United States District Court
Northern District of California
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contributions, but also to an additional award in “an amount equal to the greater of [the] interest on
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the unpaid contributions or liquidated damages” as provided in the benefits plan agreement. 29
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U.S.C. §§ 1132(g)(B) and (C).
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Based upon the evidence submitted, for contributions reported but not paid, Cement
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Masons Trust Funds are entitled to the principal amount of $34,223.52, plus interest and liquidated
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damages for the period of November 2015 to October 2016. (Hubbard Decl. at ¶¶ 18–20.)3
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Breneman, Inc. submitted its Combined Employer Reports of Contributions for these months
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detailing, as required, hours of covered work under the collective bargaining agreement and
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contributions due on behalf of the covered workers. The Combined Employer Reports of
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Contribution submitted by Breneman, Inc. identify the employees by name and social security
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number, along with their hours worked for the reported month. The Employer Reports of
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Contribution are marked “Hours Only,” meaning that the report came in with hours reported and a
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detail of the contributions due, but no money was paid. (Id. at ¶ 20.) Breneman, Inc. reported
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contributions due and owing for the time period, but failed to pay all the contributions due and
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owing for these months. (Id.)
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The Court notes that this time period extends beyond that alleged in the Complaint, and
that defendants have not contested or disputed these amounts as being owed.
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The Court finds that Cement Masons Trust Funds are entitled to the principal amount of
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unpaid contributions, pursuant to 29 U.S.C. section 1132(g)(2)(A), plus interest at 1.5% per
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month, liquidated damages at a flat rate of $150 per month, and an additional statutory award in an
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amount equal to the greater of those two, pursuant to 29 U.S.C. section 1132(g)(2)(B), (C).
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(Hubbard Decl. at ¶¶ 21–31.)
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In addition to these unpaid hours reported by Breneman, Inc., Cement Masons Trust Funds
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also seek amounts they determined to be unpaid as a result of an audit of the period from January
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2013 to June 2015. The audit revealed unpaid amounts for the period from June 2013 to August
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2013, and the months of January, May and June 2014, in the principal amount of $4,305.54, plus
interest and liquidated damages. (Hubbard Decl. at ¶¶ 32–35.) The Court finds that Cement
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United States District Court
Northern District of California
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Masons Trust Funds have sufficiently demonstrated that they are entitled to these additional
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amounts they seek as result of the audit. (See id. at ¶¶ 32–35, and Exhs. T, U, and V.) Pursuant to
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29 U.S.C. §§ 1132(g)(C), Cement Masons Trust Funds are also entitled to an additional award in
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an amount equal to the greater of the interest on the unpaid contributions or liquidated damages at
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the contract rate. Here, the interest exceeds the liquidated damages, and the Court finds that
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Cement Masons Trust Funds are entitled to an additional award of interest.
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B.
Contributions Paid Late
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For several months during the period from March 2012 to February 2015, Breneman, Inc.
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failed to pay employee fringe benefit contributions on time, breaching the terms of the Trust and
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Master Agreements. (Hubbard Decl. at ¶ 17 (late payments for months of March, May and August
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2012; September – December 2013; January – September 2014; and January – February 2015).)
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The terms of the Trust Agreement provide that employers must pay employee fringe benefit
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contributions by the 25th day of the month immediately succeeding the month in which the
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employee’s work was performed, and failure to pay timely makes the employer subject to interest
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at the rate of 1.5% per month and $150 for each delinquent contribution, for each month that the
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contribution is delinquent, as liquidated damages. (Id. at ¶ 17 and Exh. I.) Further, the ERISA
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enforcement provisions support an action to recover interest and liquidated damages as provided
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in the agreement with respect to late payments. Idaho Plumbers & Pipefitters Health and Welfare
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Fund v. United Mechanical Contractors, Inc., 875 F.2d 212, 217 (9th Cir. 1989) (section
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1132(g)(2)(E) interest and liquidated damages could be awarded for contributions that were paid,
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but paid late); Board of Trustees v. JRD, 99 F.Supp.2d 1115, 1118, 1120 (C.D. Cal. 1995)
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(awarding liquidated damages on contributions paid late).
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Cement Masons Trust Funds have offered sufficient evidence to demonstrate that they are
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entitled to interest and liquidated damages based upon late payment of the contributions for the
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specified months, pursuant to the terms of the Master and Trust Agreements. (Hubbard Decl. at ¶
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17, Exh. I.)
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C.
Order Compelling Audit of Breneman Inc.
Cement Masons Trust Funds also seek an order compelling Breneman, Inc. to submit to an
United States District Court
Northern District of California
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audit for the period July 1, 2015, to the present to determine the full amount of employer
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contributions owed to the Cement Masons Trust Funds. Pursuant to Article IV, Section 7 of the
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Trust Agreement, Breneman, Inc. is required to allow Cement Masons Trust Funds access to its
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books and records to determine the amount of trust fund contributions due and owing. (Id., Exh.
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C.) Furthermore, an audit is “well within the authority of the trustees as outlined in the trust
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documents” and is part of “proper plan administration.” Central States, Southeast & Southwest
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Areas Pension Fund v. Central Transport Inc., 472 U.S. 559, 571 n. 12 (1985). The Court finds
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that the evidence supports entry of a mandatory injunction compelling Breneman, Inc. to comply
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with its contractual obligations to allow an audit of its records for the period of July 1, 2015
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through the present, consistent with the terms of the relevant agreements.
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D.
Breach of Guarantee by James G. Breneman
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Cement Masons Trust Funds also seek to enforce the Personal Guarantee, a contract
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Breneman signed, wherein he agreed to become personally liable for the debt in the Payment Plan
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should there be a default of the Payment Plan. (Hubbard Decl. at ¶ 38.) On July 20, 2015, Cement
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Masons Trust Funds provided to Breneman Inc. a payment plan for delinquent contributions for
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the months of June 2014, September to November 2014, and March to May 2015. (Id. at ¶ 15,
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Exh G.) James G. Brenemen entered into a Personal Guarantee and Undertaking on that payment
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plan, wherein he agreed to become personally liable, should there be a default in payments by
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Breneman Inc., for the amount of $194,417.99, less any payments made, plus interest at a rate of
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10% per annum. (Id. at ¶¶ 16, 38, Exh. H.) The agreement was signed by James G. Breneman as
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of July 28, 2015. (Id.) Breneman, Inc. made a series of partial payments, leaving a balance due of
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$84,896.72, on the underlying contributions. (Id. at ¶ 40.)
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The Court finds that Cement Masons Trust Funds are entitled to recover against James G.
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Breneman, for breach of the Personal Guarantee and Undertaking, the principal sum of $84,896.72
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in unpaid plan contributions, plus $750 in liquidated damages, and interest. (Id. at ¶ 40.)
E.
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ERISA also provides for recovery of reasonable attorneys’ fees and costs within the
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discretion of the Court. 29 U.S.C. § 1132(g)(2)(D). Where a party is entitled to reasonable
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United States District Court
Northern District of California
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Attorneys’ Fees and Costs
attorneys’ fees by either contract or statute, the court will determine the amount to be awarded
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based on reasonable billing rates and time spent. See Jordan v. Multnomah Cnty., 815 F.2d 1258,
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1262 (9th Cir. 1987) (referring to this quantum of reasonableness as the “lodestar”).
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Here, the contracts at issue provide for payment of attorneys’ fees. Pursuant to the
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Agreements between Breneman, Inc. and Cement Masons Trust Funds, Breneman Inc. agreed to
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pay reasonable attorneys’ fees and costs incurred in a suit to enforce payment of outstanding
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contributions. (Hubbard Decl. at ¶ 12.) Pursuant to the Personal Guarantee and Undertaking,
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James G. Breneman also agreed to pay reasonable attorneys’ fees and costs incurred in a civil
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action to recover on that agreement. (Id. at ¶ 36.)
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Cement Masons Trust Funds’ Motion for Summary Judgment requests $19,058.15 in
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attorneys’ fees and costs. To substantiate their fees and costs, counsel for Cement Masons Trust
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Funds included a declaration and detailed ledger. (Declaration of Ronald L. Richman (“Richman
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Decl.”), Dkt. No. 67, at ¶¶ 4–6.) Based on the claims against Breneman, Inc. and the claim against
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James Breneman, Cement Masons Trust Funds have apportioned attorneys’ fees and costs evenly,
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seeking to recover $9,529.07 each from Breneman, Inc. and James G. Breneman. (Hubbard Decl.
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at ¶¶ 36, 41.)
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The Court has reviewed counsel’s declaration and attached billing records and finds that
the time incurred of 56.90 hours and billing rates of $325 per hour for partners, $275 per hour for
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associates and $150 per hour for paralegals are reasonable. (Richman Decl. at ¶¶ 4–6.) Given the
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complexity of the accounting involved in this case, the Court finds that Cement Masons Trust
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Funds are entitled to $19,058.15 in attorneys’ fees and costs. Accordingly, the Court finds
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Cement Masons Trust Funds’ attorneys’ fees and costs against Breneman, Inc. in the amount of
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$9,529.07, and attorneys’ fees and costs against Breneman in the same amount.
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IV.
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CONCLUSION
In sum, under the terms of the Agreements as well as ERISA, Breneman Inc. is obligated
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to report and pay regular contributions and may be liable for liquidated damages and interest on
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any and all delinquencies. Breneman Inc.’s failure to report or pay the contributions is a breach of
the Agreements and a violation of ERISA section 515. 29 U.S.C. § 1145. The Court finds that
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United States District Court
Northern District of California
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Cement Masons Trust Funds are therefore entitled to judgment for the unpaid contributions, plus
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all requested liquidated damages and interest, in the amounts stated in the proposed judgment
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submitted September 25, 2017, as follows:
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Breneman, Inc.
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Liquidated Damages and Interest on
Contributions Paid, but Paid Late:
$ 22,622.04
Contributions Reported, Not Paid:
§ 1132(g)(2)(A) unpaid contributions:
§ 1132(g)(2)(B) interest:
§ 1132(g)(2)(C) interest:
Sub Total:
$34,223.52
$6,705.58
$6,705.58
$47,634.68
Contributions Not Reported, Not Paid:
§ 1132(g)(2)(A) unpaid contributions:
§ 1132(g)(2)(B) interest:
§ 1132(g)(2)(C) interest:
Sub Total:
$4,305.54
$2,685.07
$2,685.07
$9,675.68
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Attorneys’ Fees and Costs:
TOTAL:
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Moreover, Cement Masons Trust Funds are entitled to an audit of Breneman, Inc.’s books
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$9,529.07
$89,461.47
and records for the period July 1, 2015 to the present. The Court will retain jurisdiction to enforce
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the order for an audit and amend the judgment to reflect any contributions and interest owed by
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Defendants after Plaintiffs submit an additional declaration setting forth the results of the audit
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and proving up their request for damages.
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James G. Breneman.
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Unpaid Payment Plan Contributions:
$84,896.72
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Liquidated Damages and Interest:
$38,599.42
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Attorneys’ Fees and Costs:
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TOTAL:
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This Order terminates Docket Number 65.
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United States District Court
Northern District of California
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$9,529.07
$133,025.21
IT IS SO ORDERED.
Dated: October 10, 2017
______________________________________
YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE
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