Board of Trustees of the California Ironworkers Field Pension Trust v. Streamline Integration

Opinion

Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 1 of 14 Page ID #:301 'O' 1 2 3 4 5 6 7 CV 21-08301-RSWL-KES x CALIFORNIA IRONWORKERS ORDER re: MOTION FOR SUMMARY JUDGMENT [20] AL., Plaintiffs, v. Defendant. Plaintiffs, trustees of the California Ironworkers Field Pension Trust (“Pension Trust”), California Ironworkers Field Welfare Plan (“Welfare Plan”), California Field Iron Workers Vacation Trust Fund (“Vacation Trust”), California Field Ironworkers Apprenticeship Training and Journeyman Retraining Fund (“Training Fund”), California Ironworkers Field Defined Contribution Pension Trust Fund (“DC Fund”), California Field Iron Workers Administrative Trust (“Admin. 1 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 2 of 14 Page ID #:302

1 Trust”), California Field Ironworkers Labor Management

2 Cooperative Trust Fund (“LMC Trust”), and the

3 Ironworkers Workers’ Compensation Trust (“Workers’ Comp. 4 Trust”), (collectively “the Trust Funds”), bring this 5 Action against Defendant Streamline Integration 6 (“Defendant”) for Breach of Written Collective 7 Bargaining Agreement and Related Trust Agreements, 8 Violation of Section 515 of the Employee Retirement 9 Income Security Act (“ERISA”), and for an injunction requiring Defendant submit to an audit of Defendant’s books and records. Currently before the Court is Plaintiffs’ Motion for Summary Judgment. Defendant failed to file an opposition or objection to Plaintiffs’ Motion. Having reviewed all papers submitted pertaining to this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: the Court GRANTS Plaintiffs’ Motion and ORDERS Defendant to submit to an audit of Defendant’s books and records relevant to its obligation to contribute to the Trust Funds. A. Factual & Procedural Background The Trust Funds are multi-employer trust funds created and maintained pursuant to ERISA and Section 302(c) of the Labor Management Relations Act of 1947, 29 U.S.C. § 186(c). Plfs.’ Statement of Uncontroverted Facts (“Plfs.’ SUF”) ¶¶ 2-3, ECF No. 20- 4. These Trust Funds are funded by contributions paid 2 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 3 of 14 Page ID #:303

1 by individual employers. Id. ¶ 4. The Ironworkers

2 Employees’ Benefit Corporation (the “IEBC”) is a non-

3 profit that administers the Trust Funds. Decl. of Mark 4 Ellis ¶ 2, ECF No. 20-2. 5 On or about June 7, 2020, Defendant executed the 6 Iron Workers Independent Agreement (“Independent 7 Agreement”) and the Contributing Employers Agreement 8 with the District Council of Iron Workers of the State 9 of California and Vicinity (the “Union”). Id. ¶¶ 6-7. These two agreements provide that Defendant shall comply with the provisions and rules set forth in the collective bargaining agreement governing employers obligated to contribute to the Trust Funds. Id. ¶¶ 8- 10. Therefore, under these agreements, Defendant agreed and is obligated to submit contributions to the Trust Funds. Id. ¶¶ 5-9. Specifically, Defendant must submit monthly reports and pay to the Trust Funds certain monetary contributions for each hour paid for or worked by employees performing work covered by the collective bargaining agreement. Id. ¶¶ 9-10. Contributions are due on the fifteenth day of each month following the month in which Defendant’s employees were paid and/or worked, and such contributions are considered delinquent if not received by the twenty-fifth day of the month. Id. ¶¶ 11-12. The agreements governing the Trust Funds make clear that the prompt payment of contributions is essential, and that liquidated damages resulting from 3 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 4 of 14 Page ID #:304

1 failure to timely pay contributions are presumed to be

2 ten percent of the delinquent contributions if paid

3 within ten days of becoming delinquent, or twenty 4 percent if paid after the ten days, but no less than 5 $50.00 under any circumstances.1 Id. ¶ 15. These 6 agreements provide that unpaid contributions shall bear 7 interest at the rate of ten percent per annum.2 Id. 8 ¶ 16. 9 The agreements also authorize the Trust Funds to examine and audit Defendant’s books and records to determine whether the employer is making full and prompt payment of the contributions to the Trust Funds. Id. ¶ 17. If an audit reveals that Defendant has failed to correctly report and pay contributions for reason other than clerical error or omission, Defendant shall be liable for an hourly charge for the audit, the unpaid contributions, liquidated damages, reasonable attorney’s fees, and any other costs of collection. Id. ¶ 18. Defendant failed to submit contributions to the Trust Funds from July 2020 through November 2020. Id. ¶ 19. As a result, Defendant currently owes the Trust Funds $36,149.06, broken down as follows: $25,327.77 in delinquent contributions, $5,688.50 in liquidated damages, $5,027.79 in interest, and $105.00 in audit

1 The Admin Trust deviates from this formula, instead assessing liquidated damages at ten percent what was due without increasing those damages to twenty percent at any time. Id. 2 Unpaid contributions to the Admin Trust bear interest at seven percent per annum. Id. 4 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 5 of 14 Page ID #:305

1 costs. Id. ¶¶ 21-24, 27.

2 Plaintiffs filed their Complaint [1] on October 20,

3 2021, and Defendant answered [11] on January 14, 2022. 4 Plaintiffs filed the instant Motion [20] on October 13, 5 2022. Defendant has not opposed or objected to the 6 instant Motion. 8 A. Legal Standard 9 Summary judgment is appropriate when the moving party “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A fact is “material” if it might affect the outcome of the suit, and the dispute is “genuine” if the evidence is such that a reasonable factfinder could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, 477 U.S 242, 248 (1986). The moving party bears the initial burden of proving the absence of a genuine dispute of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party bears the burden of proof at trial, the moving party need only show “an absence of evidence to support the nonmoving party’s case.” Id. at 325. If the moving party meets its burden, the burden then shifts to the nonmoving party to present “specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S at 250. The nonmoving party “must show more than the mere existence 5 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 6 of 14 Page ID #:306

1 of a scintilla of evidence . . . or some ‘metaphysical

2 doubt’ as to the material facts at issue.” In re Oracle

3 Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). 4 The evidence, and all reasonable inferences based 5 on underlying facts, must be construed in the light most 6 favorable to the nonmoving party. Scott v. Harris, 550 7 U.S. 372, 378 (2007). In reviewing the record, the 8 court’s function is not to weigh the evidence but only 9 to determine if a genuine issue of material fact exists. Anderson, 477 U.S. at 255. “A district court’s ruling on a motion for summary judgment may only be based on admissible evidence.” In re Oracle Corp. Sec. Litig., 627 F.3d at 385. “While the evidence presented at the summary judgment stage does not yet need to be in a form that would be admissible at trial, the proponent must set out facts that it will be able to prove through admissible evidence.” Norse v. City of Santa Cruz, 629 F.3d 966, 973 (9th Cir. 2010). B. Analysis Defendant does not oppose the present motion. In the absence of an opposition, the Court nevertheless decides a motion for summary judgment on its merits. See Cristobal v. Siegel, 26 F.3d 1488, 1494-95 (9th Cir. 1994) (holding that an unopposed motion for summary judgment may be granted only after the court determines there are no material issues of fact). Plaintiffs, therefore, must still meet their burden of showing the absence of a genuine issue of material fact. 6 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 7 of 14 Page ID #:307

1 Plaintiffs allege that Defendant breached contracts

2 obligating it to contribute to the Trust Funds, that

3 Defendant’s failure to contribute violated ERISA, and 4 the Defendant must submit to a further audit. See 5 generally Compl., ECF No. 1. The Court’s analysis 6 centers on Plaintiffs’ ERISA claim and request for an 7 injunction.3 8 1. ERISA 9 Plaintiffs contend that Defendant failed to timely submit contributions to the Trust Funds in violation of ERISA. See Plfs.’ Mem. of P. & A. in Supp. of Mot. for Summ. J. (“Mem.”), ECF No. 20-1. Section 515 of ERISA states that “[e]very 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 . . . make such contributions in accordance with the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. a. Defendant is Obligated to Make Contributions to the Trust Funds On June 7, 2020, Defendant entered into an Independent Agreement and a Contributing Employers

3 In 1980, Congress amended ERISA to provide trustees of multiemployer benefit plans with an effective federal remedy to collect delinquent contributions. Laborers Health & Welfare Tr. Fund For N. California v. Advanced Lightweight Concrete Co., 484 U.S. 539, 541 (1988). Therefore, section 514(a) of ERISA preempts state law claims that “relate to” employee benefits plans. 29 U.S.C. § 1144(a). Accordingly, “ERISA preempts common law theories of . . .breach of contract.” Ellenburg v. Brockway, Inc., 763 F.2d 1091, 1095 (9th Cir. 1985). 7 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 8 of 14 Page ID #:308

1 Agreement with the Union. See Decl. of Mark Ellis, Exs.

2 A-B (“Independent Agreement” and “Contributing Employers

3 Agreement,” respectively), ECF No. 20-2. By entering 4 the Independent Agreement, Defendant agreed to comply 5 with the conditions and provisions of the collective 6 bargaining agreement and to accept, assume, and be bound 7 by any trust agreements, plans, or rules pertaining to 8 the collective bargaining agreement. See Independent 9 Agreement. The Independent Agreement also established that Defendant “agree[d] to pay all monetary contributions for each hour paid for or worked by employees performing work covered by the [collective bargaining agreement] to . . .the Trust Funds specified in [the collective bargaining agreement] . . . .” Id. Therefore, Plaintiffs have adequately shown that the Trust Funds are a multiemployer plan that Defendant is obligated to contribute to under the Independent Agreement, Contributing Employer Agreement, and related agreements. See generally Mem.; Independent Agreement; Contributing Employer Agreement; Collective Bargaining Agreement. b. Defendant Failed to Make Contributions to the Trust Funds from June 2020 Through November 2020 Here, Plaintiffs have satisfied their burden of showing there is no genuine issue of material fact regarding whether Defendant failed to contribute to the Trust Funds in accordance with the agreements. The 8 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 9 of 14 Page ID #:309

1 agreements clearly required Defendant to submit monthly

2 reports and contributions to the Trust Funds, Defendant

3 did not do so, and Defendant has admitted as much. See 4 Independent Agreement; Collective Bargaining Agreement; 5 Decl. of Jason J. Kennedy ¶¶ 2-4, ECF No. 20-3; Decl. of 6 Jason J. Kennedy, Ex. A, ECF No. 20-3. 7 Mr. Mark Ellis, the Employer Accounts/Collection 8 Supervisor for the Trust Funds, oversees the collection 9 of contributions to the Trust Funds. Decl. of Mark Ellis ¶ 7. He also supervises the assessment of liquidated damages and interest owed to the Trust Funds by employers bound by the collective bargaining agreement and related agreements. Id. Mr. Ellis submitted a declaration stating that he has in his possession, custody, and control the books and records of the Trust Funds, including: (1) reports and contributions that the Trust Funds received from Defendant; (2) correspondence between Defendant and the Trust Funds; (3) records of contributions Defendant owes to the Trust Funds; and (4) calculations of amounts owed by Defendant to the Trust Funds. Id. ¶ 8. Mr. Ellis provided a copy of a spreadsheet “prepared by the IEBC staff reflecting the total contributions, interest, and liquidated damages owed by Defendant, less credit for payment received from a claim on a bond, for July 2020 through November 2020.” Id. ¶ 36. These amounts were “derived from the records of the Trust Funds and calculation of the IEBC staff” under 9 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 10 of 14 Page ID #:310

1 Mr. Ellis’s direction and supervision. Id. This

2 spreadsheet reveals that Defendant failed to pay

3 contributions owed to the Trust Funds from July 2020 4 through November 2020. See Decl. of Mark Ellis, Ex. M 5 (“Spreadsheet”), ECF No. 20-2. 6 Plaintiffs also supplied their First Set of 7 Requests for Admissions propounded upon Defendant. See 8 Decl. of Jason J. Kennedy, Ex. A. These Requests for 9 Admission ask Defendant to admit that (1) Defendant entered into the Independent Agreement and Contributing Employers Agreement; (2) Defendant had an obligation to submit monthly reports and pay contributions to the Trust Funds; (3) Defendant employed ironworker employees from June 2020 through November 2020; (4) Defendant had an obligation to pay benefit contributions from June 2020 through November 2020; (5) Defendant failed to timely submit full contribution payments; (6) On January 7, 2020, Defendant’s President/Chief Executive Officer executed a declaration stating the entire amount of the audit claimed in this Action was accurate; (7) On January 7, 2020, Defendant’s President/Chief Executive Officer executed a declaration stating that the entire amount of the audit claimed in this Action was owed by Defendant; and (8) Defendant has an obligation to pay the Trust Funds liquidated damages and interest for contributions not timely paid. See id. Defendant did not respond to Plaintiffs’ Requests for Admissions. Decl. of Jason J. Kennedy ¶ 3. Federal 10 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 11 of 14 Page ID #:311

1 Rule of Civil Procedure 36(a)(1) provides that “[a]

2 matter is admitted unless, within [thirty] days of being

3 served, the party to whom the request is directed serves 4 on the requesting party a written answer or objection 5 addressed to the matter and signed by the party or its 6 attorney.” Consequently, Defendant’s failure to respond 7 amounts to admissions of the information set forth in 8 Plaintiffs’ requests. Thus, Defendant has admitted to 9 failing to contribute to the Trust Funds from June 2020 through July 2020 in violation of the Independent Agreement, Contributing Employer Agreement, and related agreements. Therefore, Plaintiffs have satisfied their burden of showing that there is no genuine issue of material fact that Defendant has failed to comply with its obligations under the Independent Agreement, Contributing Employer Agreement, and related contracts. Having concluded that Defendant failed to pay contributions to the Trust Funds from June 2020 through November 2020, the Court finds that Defendant violated c. Damages Defendant Owes the Trust Funds Pursuant to 29 U.S.C. § 1132(g)(2), “[i]n any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 . . . in which a judgment in favor of the plan is awarded,” a court shall award: (A) the unpaid contributions, (B) interest on the unpaid contributions, (C) the greater of the 11 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 12 of 14 Page ID #:312

1 interest or liquidated damages provided for under the

2 plan in an amount not in excess of twenty percent,

3 (D) reasonable attorney’s fees and costs of the action, 4 to be paid by the defendant, and (E) such other legal or 5 equitable relief as the court deems appropriate. 6 The agreements provide that a delinquent employer 7 will be liable for unpaid contributions, interest, and 8 liquidated damages. SUF ¶¶ 15-16. An employer will 9 also be liable for audit costs, reasonable attorney’s fees, and any other costs of collection if an audit reveals the employer has failed to correctly report and pay contributions. Id. ¶ 18. Liquidated damages resulting from failure to timely pay contributions are presumed to be ten percent of the delinquent contributions if paid within ten days of becoming delinquent, or twenty percent if paid after the ten days.4 Id. ¶ 15. Unpaid contributions bear interest at the rate of ten percent per annum.5 Id. ¶ 16. Once the Court issues judgment in the Trust Funds’ favor, award of these damages is mandatory, so long as: (1) the employer is delinquent at the time of the action; (2) the Court enters judgment against the employer; and (3) the plan provides for the award. See, e.g., Nw. Adm’rs, Inc. v. Albertson’s, Inc., 104 F.3d 4 The Admin Trust assesses liquidated damages at ten percent what was due and does not increase liquidated damages to twenty percent. Id. 5 Unpaid contributions to the Admin Trust bear interest at seven percent per annum. Id. 12 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 13 of 14 Page ID #:313

1 253, 257 (9th Cir. 1996); Kemmis v. McGoldrick, 706 F.2d

2 993, 997 (9th Cir. 1983). These conditions have been

3 met here, so the Trust Funds are entitled to judgment in 4 the amounts discussed below. 5 The Court awards the Trust Funds: (1) $25,327.77 in 6 unpaid contributions; (2) $5,027.79 in interest; 7 (3) $5,688.50 in liquidated damages; and (4) $105.00 in 8 audit costs. See SUF ¶¶ 21-24, 27; Spreadsheet. 9 Plaintiffs’ fees for filing, service of process, and discovery are reasonable and recoverable, thus the Plaintiffs may file a Notice of Application to the Clerk to Tax Costs within thirty days of the Court entering judgment. C.D. Cal. L.R. 54-3.1, 54-3.2, 54-3.10. 2. Audit Plaintiffs request the Court issue an injunction requiring Defendant to submit to an audit of the months of “December 2020 to present to ascertain whether the correct amounts of contributions have been reported and paid and whether Defendant owes further contributions to Plaintiffs.” Plfs.’ Notice of Mot and Mot. for Summ. J. ¶ 4, ECF No. 20. The Supreme Court has held that where a collective bargaining agreement gives the trustees of an employee benefit plan the right to audit an employer’s books and records, it will be enforced. Cent. States, Se. & Sw. Areas Pension Fund v. Cent. Transp., Inc., 472 U.S. 559, 569 (1985). Here, Plaintiffs have identified the agreements which require a signatory employer to submit to an audit 13 Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 14 of 14 Page ID #:314

1 of its books and records. See Independent Agreement;

2 Collective Bargaining Agreement. Therefore, Plaintiffs

3 have presented sufficient evidence to show they are 4 entitled to injunctive relief in the form of a court 5 order compelling Defendant to submit to an audit of its 6 records. 7 Accordingly, the Court orders Defendant to submit 8 to a full audit for the period of December 2020 through 9 the present by auditors selected by the Trust Funds at the premises of Defendant during business hours, at a reasonable time or times, and to allow the auditors to examine such books and records of Defendant relevant to the enforcement of the Independent Agreement, Contributing Employer’s Agreement, collective bargaining agreement, and related agreements. Based on the foregoing, the Court GRANTS Plaintiffs’ Motion for Summary Judgment in the amount of $36,149.06. The Court ORDERS Defendant to submit to an audit of Defendant’s books and records relevant to its obligation to contribute to the Trust Funds. DATED: December 19, 2022 _ _ _ _ _ _ _/S_/ _R_O_N_A_L_D_ S_._W_. _LE_W_________ HONORABLE RONALD S.W. LEW Senior U.S. District Judge 14