Orange County Electrical Industry Health and Welfare Trust Fund; et al v. Moore Electrical Contracting, Inc

Filing 25

Order by Hon. Lucy H. Koh denying, without prejudice, 22 Motion for Default Judgment. (lhklc1, COURT STAFF) (Filed on 11/15/2011)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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United States District Court
For the Northern District of California

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ORANGE COUNTY ELECTRICAL
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INDUSTRY HEALTH AND WELFARE
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TRUST FUND; LOCAL UNION NO. 441 OF )
THE INTERNATIONAL BROTHERHOOD OF )
ELECTRICAL WORKERS; and DOUGLAS
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CHAPPELL, as Trustee of the above TRUST
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FUND,
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Plaintiffs,
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v.
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MOORE ELECTRICAL CONTRACTING,
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INC., a California corporation,
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Defendant.
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Case No.: 11-CV-00942-LHK
ORDER DENYING WITHOUT
PREJUDICE MOTION FOR DEFAULT
JUDGMENT

Now before the Court is Plaintiff Orange County Electrical Industry Health and Welfare

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Trust Fund’s (the “Trust Fund”), Local Union No. 441 of the International Brotherhood of

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Electrical Workers’, and Douglas Chappell’s, as trustee of the Trust Fund, (collectively

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“Plaintiffs”) unopposed motion for default judgment against Defendant Moore Electrical

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Contracting, Inc. (“Defendant”). ECF No. 22. The Court finds this matter suitable for decision

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without oral argument. See Civ. L.R. 7–1(b). Accordingly, the hearing on the motion, set for

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November 17, 2011, is hereby VACATED. For the reasons set forth below, the Court DENIES

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without prejudice Plaintiffs’ motion for default judgment. Plaintiffs may submit a revised motion

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for default judgment within 30 days of this Order.

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Plaintiffs filed this lawsuit on March 1, 2011. The Court granted Defendant’s former
counsel’s motion to withdraw as counsel on July 20, 2011, on the grounds that Defendant’s
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Case No.: 11-CV-0942-LHK
ORDER DENYING WITHOUT PREJUDICE MOTION FOR DEFAULT JUDGMENT

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ongoing liquidation frustrated the attorney client relationship. ECF No. 17, at 2. The Court also

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authorized Plaintiffs to move for entry of default within 14 days, pursuant to Civil Local Rule 3-

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9(b), if Defendant failed to obtain new counsel within 30 days. Id. at 4. Defendant failed to obtain

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counsel, and, accordingly, the Clerk entered Default on October 4, 2011. ECF No. 20. Plaintiffs

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filed the instant motion for default judgment on October 7, 2011.

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Plaintiffs seek a total judgment of $148,736.53, comprising $133,839.2 in total outstanding

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contributions, liquidated damages, and interest, and $14,897.33 in attorney’s fees and costs. Mot.

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4.
Plaintiffs allege that Defendant is an employer within the meaning of 29 U.S.C. §§ 1002(5),

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United States District Court
For the Northern District of California

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1145, and an employer in an industry affecting commerce within the meaning of section 301 of the

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LMRA, 29 U.S.C. § 185. Plaintiffs also allege that Defendant bound itself to the Inside Wireman’s

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Agreement between the Orange County Chapter of the National Electrical Contractors Association

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(“NECA”) and IBEW Local 441 when Defendant signed a Letter of Assent on November 16, 1982.

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See Decl. of Chloe Quail in Support of Mot. for Default J. Against Def. Moore Elec. Contracting,

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Inc. (“Quail Decl.”) Ex. A, at 1. Plaintiffs claim that the Inside Wireman’s Agreement obligated

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Defendant to make benefit contributions to the Trust Fund, Quail Decl. Ex. B, at 21-25, and that

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Defendant failed to make its required contributions from October 2010 through April 2011. Mot.

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4.

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Although Plaintiffs have attached the Inside Wireman’s Agreement that purportedly

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required Defendant to make contributions to the Trust Fund, the agreement is not signed. See

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Quail Decl. Ex. B. In the absence of a signed Inside Wireman’s Agreement, the Court will not

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presume that it is indeed binding on Defendant or that Defendant was obligated to pay the sums

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claimed in Plaintiffs’ motion. In a revised motion, Plaintiffs must attach a signed Inside

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Wireman’s Agreement.

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In addition to seeking unpaid contributions to the Trust Fund, Plaintiffs seek unpaid

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contributions to the following funds: National Electrical Benefit Fund; Orange County IBEW –

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NECA Electrical Workers Defined Contribution Plan; National Electrical Industry Fund, Vacation

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Fund; Orange County Electrical Joint Apprenticeship and Training Trust Fund; Orange County
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Case No.: 11-CV-0942-LHK
ORDER DENYING WITHOUT PREJUDICE MOTION FOR DEFAULT JUDGMENT

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IBEW – NECA Labor Management Cooperative Trust; National Labor Management Cooperation

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Fund; IBEW Local Union #441 Dues Deduction; IBEW Education Fund, Electrical Industry

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Administrative Maintenance Fund. These entities are not named plaintiffs in this action.

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Furthermore, the Court notes that Douglas Chappell is only named as Plaintiff on the grounds that

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he is a trustee of the Health and Welfare Trust Fund, and there is no evidence that Mr. Chappell has

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a relationship with the non-plaintiff recipients of fringe benefits contributions. The Court will not

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assume, in the absence of any cited authority, that Plaintiffs are entitled to recover damages for

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unpaid contributions that are owed to non-plaintiff trust funds. In a revised motion, Plaintiffs must

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cite binding authority supporting their position that they are entitled to collect contributions owed

United States District Court
For the Northern District of California

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to non-plaintiff trust funds. Failure to do so may result in only a partial award.

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The Court has reviewed the relevant transmittal forms, attached as Exhibit A to the

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Declaration of Sandy Stephenson in Support of Motion for Default Judgment (“Stephenson

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Decl.”), and Plaintiffs’ interest calculations, Stephenson Decl. ¶¶ 3-9, and finds that Plaintiffs’

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interest calculations are incomplete. Plaintiffs state that on or about August 1, 2011, Plaintiffs

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recovered $50,733.26 from Defendant, which amount was applied to Defendant’s delinquency.

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Stephenson Decl. ¶ 11. However, the interest calculations do not appear to consider that this

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payment would have paid off a portion of the principal owed, thereby curtailing the accrual of

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interest for at least a portion of the unpaid contributions. In a revised motion, Plaintiffs must take

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into account the August 1, 2011 payment in their interest calculations.

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Finally, the Court was unable to determine whether the liquidated damages became due on

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the same day that a monthly contribution became delinquent, as Plaintiffs appeared to suggest in

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their interest calculations. See Stephenson Decl. ¶¶ 3-9. The Stephenson Declaration states that

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“[t]he Trusts also require that contributions to the Trusts are delinquent if not paid by the 16th day

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of the calendar month following the payroll month. The Trusts also require that if contributions are

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more than thirty days late, liquidated damages of 15% of the amount which was not paid within the

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30 day deadline.” Stephenson Decl. ¶ 2. This statement suggests that liquidated damages for a

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given payroll month become due 30 days after the 16th day of the calendar month following the

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payroll month. Under this understanding, for example, the October 2010 contribution became
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Case No.: 11-CV-0942-LHK
ORDER DENYING WITHOUT PREJUDICE MOTION FOR DEFAULT JUDGMENT

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delinquent on November 16, 2010, and was subject to liquidated damages on December 15, 2010.

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Thus, the unpaid contribution and the liquidated damages for a given month would accrue interest

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for different periods of time. In a revised motion, Plaintiffs must clarify whether liquidated

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damages and unpaid contributions become due on the same day or whether they are staggered by

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30 days.

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For the reasons discussed above, Plaintiffs’ motion for default judgment is DENIED

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without prejudice. Plaintiffs may submit a revised motion addressing the issues raised above

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within 30 days of the date of this order. Failure to do so will result in dismissal of this action with

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prejudice.

United States District Court
For the Northern District of California

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IT IS SO ORDERED.

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Dated: November 15, 2011

_________________________________
LUCY H. KOH
United States District Judge

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Case No.: 11-CV-0942-LHK
ORDER DENYING WITHOUT PREJUDICE MOTION FOR DEFAULT JUDGMENT