Opinion
3:22-cv-01989
09-01-2023
TRUSTEES OF THE PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND, TRUSTEES OF THE U.A. UNION LOCAL NO. 290 PLUMBER, STEAMFITTER, AND SHIPFITTER INDUSTRY PENSION TRUST; TRUSTEES OF THE U.A. UNION LOCAL NO. 290 PLUMBER, STEAMFITTER, AND SHIPFITTER INDUSTRY HEALTH AND WELFARE TRUST; TRUSTEES OF THE U.A. UNION LOCAL NO. 290 PLUMBER, STEAMFITTER, AND SHIPFITTER INDUSTRY RETIREE HEALTH TRUST; TRUSTEES OF THE UNITED ASSOCIATION LOCAL NO. 290 APPRENTICESHIP AND JOURNEYMEN TRAINING TRUST FUND; TRUSTEES OF THE INTERNATIONAL TRAINING FUND; TRUSTEES OF THE U.A. UNION LOCAL NO. 290 PLUMBER, STEAMFITTER AND SHIPFITTER INDUSTRY VACATION, SCHOLARSHIP, AND EDUCATIONAL REIMBURSEMENT TRUST; TRUSTEES OF THE PLUMBING AND PIPING MANAGEMENT TRUST FUND; TRUSTEES OF THE U.A. UNION LOCAL NO. 290 PLUMBER, STEAMFITTER, AND SHIPFITTER INDUSTRY LABOR MANAGEMENT COOPERATION TRUST; and PLUMBERS, STEAMFITTERS AND MARINE FITTERS LOCAL NO. 290, Plaintiffs v. REDSIDE PLUMBING LLC, Defendant.
FINDINGS AND RECOMMENDATION
JEFF ARMISTEAD UNITED STATES MAGISTRATE JUDGE
The above-named plaintiffs (collectively, Trustees) bring this action against defendant Redside Plumbing, LLC (Redside). They sue under the Employee Retirement Income Security Act of 1974 (ERISA) and the applicable collective bargaining agreement (CBA) for the collection of unpaid contributions, liquidated damages, attorney fees, and costs. Before the court is Trustees' Motion for Default Judgment under Federal Rule of Civil Procedure (Rule) 55(b). For the following reasons, the court recommends granting the motion.
BACKGROUND
Plaintiffs are the Trustees of the Plumbers and Pipefitters National Pension Fund (National Pension Fund), the U.A. Union Local No. 290 Plumber, Steamfitter and Shipfitter Industry Pension Trust (Local Pension Fund), the U.A. Union Local No. 290 Plumber, Steamfitter and Shipfitter Industry Health and Welfare Trust (Health Fund), the U.A. Union Local No. 290 Plumber, Steamfitter and Shipfitter Industry Retiree Health Trust (Retiree Health Fund), the United Association Local 290 Apprenticeship and Journeymen Training Trust Fund (“Local Training Fund”), the International Training Fund (ITF), the U.A. Union Local No. 290 Plumber, Steamfitter and Shipfitter Industry Vacation, Scholarship and Educational Reimbursement Trust (VSE Fund), the Plumbing and Piping Management Trust Fund (Management Fund), the U.A. Union Local No. 290 Plumber, Steamfitter and Shipfitter Industry Labor Management Cooperation Trust (Cooperation Trust) (collectively, Trust Funds) and Plumbers, Steamfitters and Marine Fitters Local No. 290 (Union). (Decl. of Cadonau Ex. 1; ECF No. 12.)
Defendant Redside is a signatory to the Union's CBA and agreed to be bound by the terms and conditions of the trust agreements that created the Trust Funds. (Id. ¶ 4, Ex. 1.) Those agreements require Redside to pay fringe benefit contributions and union dues for employees covered by the CBA, and to make such payments each month. (Id.) The trust agreements provide that, if Redside does not make timely contributions, it is liable for: (1) the late fringe benefit contributions; (2) 12 percent interest annually from the due date of the contribution until paid; and (3) liquidated damages of 10 percent of the delinquent fringe benefit contributions or $10 per month, whichever is greater. (Id. ¶ 5.) The CBA provides that, if union dues are not timely remitted, Redside must pay: (1) delinquent union dues; (2) nine percent interest annually from the due date of the union dues until paid; and (3) liquidated damages of 10 percent of the delinquent union dues. (Id. ¶¶ 5-6.)
Trustees filed their complaint for breach of the CBA and ERISA violations on December 28, 2022. (Compl. ¶¶ 12-22; ECF No. 1.) In their first claim, Trustees contend that Redside failed to submit remittance report forms, pay fringe benefit contributions and union dues, and pay interest and liquidated damages for the months of March, April, June, July, August, October, and November 2022. (Id. ¶ 15.) Trustees seek to recover $32,009.90 in fringe contributions and union dues, $3,252.79 in liquidated damages, and $3,259.40 in interest calculated through June 30, 2023, with interest continuing to accrue on the amount of the unpaid fringe benefit contributions ($30,507.10) at the rate of 12 percent annually from July 1, 2023, through the entry of judgment, and interest continuing to accrue on the dues owed to the Union ($1,502.80) at the rate of nine percent annually from July 1, 2023, through the entry of judgment; plus $1,147.02 in interest and liquidated damages due to late-paid fringe benefit contributions and union dues for February and March 2023. (Mot. for Default J. ¶ 1; ECF No. 11.) In their second claim, Trustees contend that Redside owes interest and liquidated damages from its failure to timely pay fringe benefit contributions and union dues for work performed in May and September 2022. (Compl. ¶ 19.) Trustees seek $1,035.06 in interest and liquidated damages for the late-paid months of May and September 2022, as well as $2,767.50 in attorney fees and $857.52 in court costs. (Mot. for Default J. ¶¶ 2, 4.) Trustees also seek to dismiss the National Pension Fund and ITF as plaintiffs.
Plaintiffs served process on Redside on December 30, 2022. (ECF No. 6.) Redside did not file any responsive pleadings. On February 2, 2023, Trustees moved for an entry of default, which the court granted on February 3. (ECF Nos. 4, 7.) On July 3, 2023, Trustees filed this motion for default judgment. (ECF No. 11.)
LEGAL STANDARD
Under Rule 55(a), the clerk of court must enter an order of default if a party against whom affirmative relief is sought has failed to timely plead or otherwise defend an action. See FED. R. CIV. P. 55(A) (“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.”). Upon default, the court accepts as true “the well-pleaded factual allegations” of the complaint. DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (quotation omitted); see also TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (providing the general rule that “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true”). Where the plaintiff's claim is not for a sum certain or a sum that can be made certain by computation, the court may conduct hearings to effectuate a judgment as needed to conduct an accounting, ascertain damages, establish the truth of any allegation by evidence, or investigate any other matter. Fed.R.Civ.P. 55(b)(2)(A-D). A sum is certain when “no doubt remains as to the amount to which a plaintiff is entitled as a result of the defendant's default.” Franchise Holding II, LLC v. Huntington Rests. Grp., Inc., 375 F.3d 922, 929 (9th Cir. 2004).
“Rule 55 provides that ‘after the clerk's entry of default against a defendant, a court may enter default judgment against that defendant.'” Glacier Films (USA), Inc., v. Tenorio, Case No. 3:15-cv-01729-SB, 2016 WL 3766465, at *1 (D. Or. June 22, 2016) (quoting FirstBank P.R. v. Jaymo Properties, LLC, 379 Fed.Appx. 166, 170 (3d Cir. 2010)). “The district court's decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising this discretion, courts in this circuit consider the factors articulated in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986). Glacier Films, 2016 WL 3766465, at *1. The Eitel factors are: (1) the possibility of prejudice to plaintiffs; (2) the merits of plaintiffs' substantive claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the litigation; (5) the possibility of dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the strong policy favoring decisions on the merits. Eitel, 782 F.2d at 1471-72. The court's analysis begins with “the general rule that default judgments are ordinarily disfavored.” Id. at 1472 (citation omitted).
DISCUSSION
A. The Eitel Factors
The court finds that all the Eitel factors favor entering a default judgment. Trustees will be prejudiced if the court does not enter default judgment because Redside's failure to respond to the complaint leaves Trustees with no alternative avenues of redress. See Boards of Trustees of AGC-Operating Engineer Health & Welfare Fund, Case No. 3:19-cv-0621-SI, 2019 WL 4567578, at *2 (D. Or. Sept. 20, 2019) (finding failure to enter default judgment would prejudice plaintiffs because they would be without avenue of resolution). The facts alleged in the complaint, which the court accepts as true, support Trustees' claims. The CBA requires Redside to pay fringe benefit contributions to the Trust Funds and to pay union dues, and they have failed to do so in a timely manner. Trustees request total damages of $40,704.17, plus attorney fees and court costs of $3,625.02. Trustees have provided sufficient documentation describing how they arrived at this damages figure. Additionally, the amount is not unreasonable given the seriousness of Redside's conduct. There is no room for a “dispute concerning material facts.” Eitel, 782 F.2d at 1471-72. The court must accept Trustees' factual allegations because default has already been entered. Trustees also provided evidence on the amount of damages. It is unlikely that the default was due to excusable neglect-Redside was served with process and the parties (unsuccessfully) attempted to settle. Finally, although policy disfavors default judgments, judgment on the merits is impossible where Redside has not answered or made a responsive pleading. Thus, the Eitel factors favor entry of a default judgment in this case.
B. Damages
The court does not accept as true allegations relating to damages. TeleVideo Sys., 826 F.2d at 917-18. Trustees must prove the amount of damages. To support their damages figure, Trustees submitted the declaration of Cary Cadonau (Decl. of Cadonau), the plaintiffs' attorney; the transcript of Matthew Wasch's deposition, Redside's owner and sole member; and several exhibits. Wasch provides that Redside was delinquent in paying union dues and fringe benefits for the months of March, April, June, July, August, October, and November 2022. (Decl. of Cabonau, Ex. 2 at 3.) Cadonau submits a three-page spreadsheet that details the total sum of $38,522.09 owed in unpaid contributions and dues, liquidated damages, and interest (through June 30, 2023) for the months of March, April, June, July, August, October, and November 2022. (Id. Ex. 3.) Cadonau also submits a portion of the delinquency report that he had received from Trustees' third-party administrator, which shows that Redside owes $1,147.02 in liquidated damages for late payment in February and March 2023. (Id. Ex. 4.) The delinquency report also shows $1,035.06 owed in interest and liquidated damages for the late-paid months of May and September 2022. (Id. Ex. 4.) The combination of the amounts due and the procedure for calculating damages is adequate proof of damages for contributions, liquidated damages, and interest. Thus, there is no doubt as to the amount to which Trustees are entitled because of Redside's default. Because the contributions and dues are a “sum certain,” default judgment should be entered.
C. Attorney Fees
Attorney fees are not a “sum certain” calculation; however, where a contract or statute calls for “reasonable attorney fees” the court must determine what is reasonable. See Trustees of Glaziers, Architectual Metal and Glass Workers Joint Apprenticeship & Journeyman Training Fund v. Highland Glass, LLC, Case No. 3:17-cv-01446-YY, 2018 WL 1710440, at *2 (D. Or. Apr. 6, 2018). Here, § 1132(g)(2)(D) of ERISA provides for payment of attorney fees and costs by Redside. (Decl. of Cadonau ¶ 13.) Courts determine what is reasonable by utilizing the lodestar calculation, which multiplies the number of hours reasonably expended by a reasonable hourly rate. See McElwaine v. U.S. W., Inc., 176 F.3d 1167, 1173 (9th Cir. 1999); Gates v. Deukmejian, 987 F.2d 1392, 1401 (9th Cir. 1993). The party seeking an award of fees “has the burden of submitting billing records to establish that the number of hours it has requested [is] reasonable.” Gonzalez v. City of Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). Similarly, the fee applicant has the burden of proving that the requested hourly rate is reasonable. See Camacho v. Bridgeport Fin. Inc., 523 F.3d 973, 980 (9th Cir. 2008).
Here, Trustees' attorney expended 13.5 hours on this case and at an hourly rate of $205, for a total of $2,767.50. (Decl. of Cardonau ¶ 16.) The court finds the hourly rate reasonable considering counsel's extensive experience in this area. Additionally, the court has reviewed the billing summary submitted by counsel and finds the hours expended reasonable and that no reductions are warranted. Finally, the court finds the costs of $857.52 submitted by counsel (filing fee of $402.00; service expenses of $196.27 (summons and complaint) and $239.25 (deposition subpoena); and prevailing party fee of $20) are also reasonable and necessary. Therefore, the attorney fees and costs are reasonable and should be awarded.
D. Dismissal of Plaintiffs
Trustees seek to dismiss the Trustees of the Plumbers and Pipefitters National Pension Fund and the Trustees of the International Training fund from this case. (Mot. for Default J. ¶ 3.) Because Trustees have properly requested dismissal and the terms thereof are appropriate, the above-named plaintiffs should be dismissed. Fed.R.Civ.P. 41(a)(2).
CONCLUSION
For the above reasons, the motion (ECF No. 11) should be GRANTED and award the following in damages:
1. Against Redside on Claim One: $32,009.90 in fringe benefit contributions and union dues, $3,252.79 in liquidated damages, and $3,259.40 in interest calculated through June 30, 2023, with interest continuing to accrue on the amount of unpaid fringe benefit contributions ($30,507.10) at the rate of 12 percent annually from July 1, 2023, through the entry of judgment, and interest continuing to accrue on the dues owed to the Union ($1,502.80) at the rate of nine percent annually from July 1, 2023, through entry of judgment; plus $1,147.02 in interest and liquidated damages due to late-paid fringe benefit contributions and union dues for February and March 2023;
2. Against Redside on Claim Two: $2,767.50 in attorney fees and $877.52 in court costs to plaintiffs.
3. The right to conduct future payroll examination of Redside's books and records to ensure compliance with fringe benefit and union due payment compliance, and to institute legal proceedings to recover any delinquent contributions and union dues, plus attorney fees and costs.
SCHEDULING ORDER
The Findings and Recommendation will be referred to a district judge. Objections, if any, are due within fourteen days. If no objections are filed, the Findings and Recommendation will go under advisement on that date. If objections are filed, a response is due within fourteen days. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will go under advisement.