Cascade Pension Trust et al v. Bob Fisher Electric Inc.

Filing 11

ORDER: Plaintiffs Motion for Entry of Default, Default Judgment, and Attorney fees and costs 6 , is GRANTED (See formal order). Signed on 4/20/2015 by Judge Michael J. McShane. (cp)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
CASCADE PENSION TRUST, et al.
Plaintiff,

Case No. 6:14-cv-01920-MC

v.

OPINION AND ORDER

BOB FISHER ELECTRIC, INC.,
Defendant.
_____________________________
MCSHANE, Judge:
Plaintiffs Cascade Pension Trust, Harrison Electrical Workers Trust Fund, National
Electrical Benefit Fund, I.B.E.W. District No. 9 Pension Plan, Central Inside Joint
Apprenticeship and Training Trust, and Southern Oregon IBEW-NECA Electrical Workers
Audit Committee, acting by and through its Collection Committee comprised of Plaintiffs Klaas
DeBoer, Jr. and Tim Frew (collectively, “Plaintiffs”) move this Court for an Entry of Default,
Default Judgment, and attorney fees and costs. See ECF No. 6. For the reasons that follow,
Plaintiffs’ motion, ECF No. 6, is GRANTED.
BACKGROUND
Plaintiffs brought this action on December 2, 2014, and Defendant Bob Fisher Electric,
Inc. (“Defendant”) received personal service on December 12, 2014. More than two months have
1 – OPINION AND ORDER

now passed, and Defendant has not filed any responsive pleadings. As a result, any allegations in
the Complaint that do not relate to the amount of damages are deemed admitted. See Fed. R. Civ.
P. 8(b)(6).
Defendant entered into a collective bargaining agreement (“CBA”) with Plaintiffs, under
which Defendant agreed to the terms and conditions of the collection procedures for delinquent
contributions. The CBA requires that Defendant submit reports to Plaintiffs each month
indicating the hours worked by Defendant’s employees who are covered under the CBA, and
Defendant must submit payments to Plaintiffs in order to provide benefits for those employees.
Defendant must maintain records for each employee to determine the amount of benefits due,
and Defendant must make those records available in the event Plaintiffs request an audit. If
Defendant does not keep adequate records and make the required payments, Defendant must pay
the expenses of an audit and pay employee benefits to Plaintiffs based on an imputed forty hours
per week for each employee.
Plaintiffs audited Defendant for the calendar years 2012 and 2013, during which
Defendant had two employees covered under the CBA, but Defendant did not submit adequate
records or contributions to Plaintiffs. Under the CBA and ERISA,1 Defendant must pay the
delinquent contributions, interest on the delinquent contributions, liquidated damages, the cost of
the payroll audit, and attorney fees. Plaintiffs also seek post-judgment interest at the Oregon
statutory rate of nine percent for their fees and costs. 2

1

Employee Retirement Income Security Act, 29 U.S.C. § 1145.
In the Complaint, Plaintiffs initially asked the Court to enjoin Defendant from failing to make further contributions
or submit written reports due to Plaintiff, but Plaintiffs have since waived their claim for equitable relief. See ECF
No. 6-1 at 5.

2

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STANDARDS
A defendant must file a responsive pleading within 21 days of being served, or within 60
days if the defendant has timely waived service. Fed. R. Civ. P. 12(a)(1). “When a party against
whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that
failure is shown by affidavit or otherwise, the clerk must enter the party’s default.” Fed. R. Civ.
P. 55(a).
After entering an order of default, the district court has discretion to issue a default
judgment. See Fed. R. Civ. P. 55(b); DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 852 (9th Cir.
2007), cert. denied, 555 U.S. 937 (2008). In exercising its discretion, the court may consider:
(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3)
the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of
a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7)
the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the
merits. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986) (citation omitted).
The court has "considerable leeway as to what it may require as a prerequisite to the entry
of a default judgment." Televideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987) (per
curiam) (footnote omitted). The court may take the complaint's well-pleaded factual allegations
as true, other than the amount of damages. Id. at 917-18 (citation omitted); DIRECTV, 503 F.3d
at 854 (citations omitted). On the other hand, a “‘defendant is not held to admit facts that are not
well-pleaded or to admit conclusions of law.’” DIRECTV, 503 F.3d at 854 (quoting Nishimatsu
Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)).

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DISCUSSION
I. Entry of Default
Defendant received personal service on December 12, 2014, and more than 60 days have
passed without Defendant filing any responsive pleadings. Defendant has not filed any notice to
appear or provided this court any reason why an entry of default is not appropriate in this case.
Defendant has failed to plead or otherwise defend the current action, so the clerk must enter
Defendant’s default.
II. Entry of Default Judgment
In considering an entry of default judgment, this Court examines the seven factors laid
out in Eitel. To satisfy the first three factors, Plaintiffs must state a valid claim in a well-pleaded
complaint, for which the refusal to grant a default judgment would be prejudicial to Plaintiffs.
ERISA 29 U.S.C. § 1145 requires the following:
Every employer who is obligated to make contributions to a multiemployer
plan under the terms of the plan or under the terms of a collectively bargained
agreement shall, to the extent not inconsistent with law, make such
contributions in accordance with the terms and conditions of such plan or such
agreement.
Plaintiffs have established that Defendant failed to make contributions in accordance with the
CBA, so Plaintiffs state a valid claim under ERISA. In terms of prejudice to Plaintiffs, if this
Court does not enter a default judgment in Plaintiffs’ favor, Plaintiffs have no other avenue to
collect the delinquent contributions.
With regard to the fourth and fifth Eitel factors, the sum of money at stake in this action
is appropriate to the amount of contributions the CBA required for Defendant’s employees, and
there is no material dispute concerning how many covered employees Defendant had or the
terms of the CBA. Finally, Defendant has not provided this Court any explanation that would
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constitute excusable neglect. Although the seventh factor favors decisions on the merits,
Defendant’s inaction in this matter has made a decision on the merits impossible. If the general
policy in favor of a decision on the merits, standing alone, outweighed the previous six Eitel
factors, then defendants could always refuse to defend an action and still avoid a default
judgment. Therefore, the Eitel factors in this case support an entry of default judgment.
III. Damages
Because the court accepts as true all allegations from the complaint except those relating
to the amount of damages, Plaintiffs must prove the amount of damages they seek in this action.
In an action to collect delinquent contributions under 29 U.S.C. § 1145, the ERISA statute
requires that the court award:
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of-(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in
excess of 20 percent . . . of the amount determined by the court under
subparagraph (A),
(D) reasonable attorney's fees and costs[.]
29 U.S.C. § 1145(g)(2). Such an award is mandatory if: (1) the employer is delinquent at the
time the action is filed; (2) the district court had entered a judgment against the employer; and
(3) the plan must provide for such an award. Nw. Adm'rs, Inc. v. Albertson's, Inc., 104 F.3d 253,
257 (9th Cir. 1996).

5 – OPINION AND ORDER

A. Unpaid Contributions
Plaintiffs submitted a detailed chart of the delinquent payments for each trust fund to
which Defendant owed contributions under the CBA. See ECF No. 7-4 at 3-4. A professional
outside auditing firm performed the payroll audit and used the imputed forty hours per week for
the unreported hours as specified in the CBA. Id. at 2. The payroll audit calculated $117,474.90
in unpaid contributions, which Plaintiffs are entitled to under 29 U.S.C. § 1145(g)(2)(A). The
total amount owed from the payroll audit excludes the contributions Defendant had already
made, so the remaining funds were still delinquent at the time Plaintiffs filed this action.
Plaintiffs’ counsel submitted a declaration that the payroll audit attributed the delinquent
contributions at the rate established in the CBA. See ECF No. 7 at 4-5 (Feb. 25, 2015 LeFever
Decl.).
B. Interest on Unpaid Contributions
Plaintiffs are entitled to interest on the unpaid contributions using the rate provided in the
CBA. See 29 U.S.C. § 1145(g)(2)(B). The CBA establishes a rate of 12 percent per year until
paid. ECF No. 7-2 at 1. Based on the monthly interest charges from January 2012 to December
2013, Plaintiffs are entitled to $24,643.08 as of December 1, 2014, and an additional $38.6219
each day thereafter until paid in full. See ECF No. 7-5 at 2.
C. Liquidated Damages
Liquidated damages only apply “when (1) the fiduciary obtains a judgment in favor of the
plan, (2) unpaid contributions exist at the time of suit, and (3) the plan provides for liquidated
damages.” Idaho Plumbers & Pipefitters Health and Welfare Fund v. United Mech. Contractors,
Inc., 875 F.2d 212, 215 (9th Cir.1989) (emphasis in original). In this case, all the disputed funds
remain unpaid, and the plan provides for liquidated damages. See ECF No. 7-2 at 1-2. Therefore,
6 – OPINION AND ORDER

ERISA provides that Plaintiffs are entitled to the greater of the interest on the unpaid
contributions or liquidated damages in an amount not greater than 20 percent of the unpaid
contributions. 29 U.S.C. § 1145(g)(2)(C). Although the liquidated damages provided in the CBA
are slightly higher, Plaintiffs request liquidated damages of $24,643.08 in the amount equal to
the interest on the unpaid contributions.
D. Attorney’s Fees and Costs
Plaintiffs are entitled to attorney’s fees and costs under the CBA and ERISA 29 U.S.C. §
1132(g)(2)(D). Plaintiffs submitted an itemized fee statement with an hourly breakdown of the
time spent on this case and the total costs and expenses. See ECF No. 7-14 (LeFever Decl.). I
find the 22 hours to be reasonable in light of the repeated communications Plaintiffs had to
engage in with Defendant, and the rate of $230 per hour is reasonable in the Oregon market for
attorneys of comparable skill and experience. The costs on the fee statement properly account for
the filing fee and postage, so Plaintiffs are entitled to $5,509.88 in attorney fees and court costs.
Under the CBA, Plaintiffs are also entitled to an award for the cost of the audit if
Defendant’s contributions during the audit period were “less than 95 percent of the amount
required to be contributed for such period.” ECF No. 7-3. Defendant’s contributions were far
below 95 percent of the required amount, so Plaintiffs are entitled to the audit cost of $1,329.32.
E. Post-Judgment Interest
Plaintiffs seek post-judgment interest at the Oregon statutory rate of nine percent. Federal
law, however, governs the post-judgment interest rate. Citicorp Real Estate, Inc. v. Smith, 155
F.3d 1097, 1107 (9th Cir. 1998). Under 28 U.S.C. § 1961, post-judgment interest “shall be
calculated . . . at a rate equal to the weekly average 1-year constant maturity Treasury yield, as
published by the Board of Governors of the Federal Reserve System, for the calendar week
7 – OPINION AND ORDER

preceding the date of the judgment.” The previous week’s auction price of 52-week treasury
bills, as posted by the Federal Reserve, was 0.24 percent. 3
CONCLUSION
For the above reasons, Plaintiffs’ motion for an Entry of Default, Default Judgment, and
attorney fees and costs, ECF No. 6 is GRANTED. Plaintiffs are entitled to:
a. $117,474.90 in unpaid contributions;
b. Interest on the unpaid contributions equal to $24,643.08 as of December 1, 2014,
plus an additional $38.6219 each day thereafter until paid in full;
c. $24,643.08 in liquidated damages;
d. $6839.20 in attorney’s fees, court costs, and audit costs; and
e. Interest on item d. from the date judgment is entered until paid in full at the rate of
0.24 percent per annum.

IT IS SO ORDERED.
DATED this 20th day of April, 2015.

_______/s/ Michael J. McShane ________
Michael McShane
United States District Judge

3

FRB: H.15 RELEASE—SELECTED INTEREST RATES —MARCH 30, 2015,
http://www.federalreserve.gov/releases/h15/current/ (last visited Apr. 7, 2015)

8 – OPINION AND ORDER