Boards of Trustees of the Puget Sound Electrical Workers Healthcare Trust v. CEC Electrical Contracting LLC

• Court: District Court, W.D. Washington
• Decided: March 26, 2020
• Docket: 2:18-cv-01166
• Status: Unknown

Opinion

HONORABLE RICHARD A. JONES 1

6 UNITED STATES DISTRICT COURT 7 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 BOARDS OF TRUSTEES OF THE PUGET 9 SOUND ELECTRICAL WORKERS HEALTHCARE TRUST, et al., 10 Plaintiffs, CASE NO. 18-cv-1166-RAJ 11 v. ORDER GRANTING 12 PLAINTIFFS’ MOTION FOR CEC ELECTRICAL CONTRACTING DEFAULT JUDGMENT 13 LLC, et al., AGAINST JOHN CHASE

14 Defendants. 15 This matter comes before the Court on Plaintiffs’ motion for default judgment 16 against Defendant John Chase. Dkt. # 25. For the reasons that follow, the Court 17 GRANTS Plaintiffs’ motion. 18 At the default judgment stage, the court presumes all well-pleaded factual 19 allegations are true, except those related to damages. TeleVideo Sys., Inc. v. Heidenthal, 20 826 F.2d 915, 917–18 (9th Cir. 1987); see also Fair House. of Marin v. Combs, 285 F.3d 21 899, 906 (9th Cir. 2002). Where those facts establish a defendant’s liability, the Court 22 has discretion, not an obligation, to enter a default judgment. Aldabe v. Aldabe, 616 F.2d 23 1089, 1092 (9th Cir. 1980); Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 24 1392 (9th Cir. 1988). The plaintiff must submit evidence supporting a claim for a 25 particular sum of damages. TeleVideo Sys., 826 F.2d at 917-18; see also Fed. R. Civ. P. 26 55(b)(2)(B). If the plaintiff cannot prove that the sum it seeks is “a liquidated sum or 27 1 capable of mathematical calculation,” the Court must hold a hearing or otherwise ensure 2 that the damage award is appropriate. Davis v. Fendler, 650 F.2d 1154, 1161 (9th Cir. 3 1981). 4 Plaintiffs are employee-benefit Trust Funds, organized and operating under 5 Section 302(c) of the Labor Management Relations Act of 1947 to provide healthcare and 6 related benefits to eligible participants. Dkt. # 1 at 2. Defendant John W. Chase (“Mr. 7 Chase”) was the President and Registered Agent of Defendant CEC Electrical. CEC 8 Electrical is bound to the Stockman Labor Agreement, 9th District Sound & 9 Communications Labor Agreement, Residential Labor Agreement, and Inside 10 Construction Labor Agreement, (collectively the “Labor Agreements”) with the Puget 11 Sound Chapter, NECA and the IBEW Local 46 Union (collectively the “Locals”). Under 12 the terms of the Labor Agreements, CEC Electrical was required to promptly and fully 13 report for and pay fringe benefits to Plaintiffs for each hour of covered work performed 14 by CEC Electricals’ employees. 15 The Court previously determined that CEC Electrical was liable for failure to pay 16 contributions owed to Plaintiffs for the period February 2018 through August 2018 and 17 granted default judgment against CEC Electrical. Dkt. # 29. Specifically, the Court 18 determined that the evidence showed that CEC Electrical failed to pay contributions in 19 the amount of $645,271.27 and interest in the amount of $23,354.86. Id. The Court also 20 held that the Trust Agreements, to which CEC Electrical consented, entitled Plaintiffs to 21 liquidated damages in the amount of $67,631.58, and audit costs of $10,732.50. Id. 22 Plaintiffs now move for default judgment against Defendant John Chase. 23 Section 409 of ERISA provides for personal liability where there is a breach of 24 fiduciary duty: 25 Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this 26 subchapter shall be personally liable to make good to such any losses to the 27 plan resulting from each such breach, and to restore to such any profits of 1 such fiduciary which have been made through use of assets of the by the 2 fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. 3 ERISA defines a fiduciary as any person who “exercises any discretionary authority or 4 discretionary control respecting management of such plan or exercises any authority or 5 control respecting management or disposition of its assets.” See 29 U.S.C. 6 §1002(21)(A)(i). Plan assets includes amounts that a participant or beneficiary pays to an 7 employer, or contributions that a participant has withheld from his wages by an employer 8 for contribution to the plan. See 29 CFR §2510.3-102(a)(1). 9 The evidence shows that Mr. Chase is a fiduciary under ERISA. Mr. Chase, as 10 President and owner of CEC Electrical, exercised control over CEC Electrical and the 11 amount of vacation contributions withheld from CEC Electrical employees’ paychecks. 12 Dkt. # 1-1 at 1; Dkt. # 26 at ¶¶ 7-9. As a result, Mr. Chase is personally liable for 13 damages arising from the breach of his fiduciary duty. See 29 U.S.C. §1109(a); Kayes v. 14 Pacific Lumber Co., 51 F.3d 1449, 1459 (9th Cir. 1995). The evidence shows Mr. Chase 15 is liable for $95,454.17 in vacation contributions that were withheld from CEC Electrical 16 employees’ paychecks for the period February 2018 through August 2018 and never 17 remitted to the Trust Funds. See Dkt. # 26 at ¶ 7; Dkt. # 27 at ¶ 8. Under ERISA and the 18 Trust Agreements, Mr. Chase is also liable for liquidated damages in the amount of 19 $9,545.43 and $14,122.79 in interest. See 29 U.S.C. § 1132(g)(2); see also Northwest 20 Adm’rs, Inc. v. Albertson’s, Inc., 104 F.3d 253, 258 (9th Cir. 1996); Dkt. # 27 at ¶ 9. 21 Plaintiffs are also entitled to attorney fees and costs under ERISA § 502 which 22 provides for the award of reasonable attorney fees and costs in any unpaid contributions 23 action in which a judgment in favor of the plan is awarded. See 29 U.S.C.A. § 24 1132(g)(2)(D). Attorney fees are also provided for under the terms of the Trust 25 Agreements. See Dkt. # 18, Exs. 4-8. Here, Plaintiffs are requesting attorney fees in the 26 27 1 amount of $8,363.50 and costs of $554.42. Dkt. # 28 at 2-3. The Court finds that 2 Plaintiffs’ evidence supports an award of attorney fees and costs of $8,917.92. 3 For the foregoing reasons, Plaintiffs’ Motion for Default Judgment Against 4 Defendant John W. Chase is GRANTED. Dkt. # 25. The Clerk is directed to enter 5 default judgment in accordance with this order. 6

7 Dated this 26th of March, 2020.

8 A 9

10 The Honorable Richard A. Jones 11 United States District Judge 12

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