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4 5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7 BOARDS OF TRUSTEES OF THE CASE NO. 2:21-cv-01040-JHC 8 SEATTLE AREA PLUMBING & PIPEFITTING INDUSTRY HEALTH & ORDER 9 WELFARE TRUST, et al., 10 Plaintiffs, 11 v. 12 J.P. FRANCIS & ASSOCIATES, INC., 13 Defendant. 14 I 15 INTRODUCTION 16 This matter comes before the Court on Plaintiffs Boards of Trustees of the Seattle Area 17 Plumbing & Pipefitting Industry Health & Welfare Trust, Seattle Area Plumbing & Pipefitting 18 Industry Journeymen and Apprentice Training Trust, Western Washington U.A. Supplemental 19 Pension Plan, Washington State Plumbing & Pipefitting Industry Pension Plan, International 20 Training Fund, and Plumbers & Pipefitters National Pension Fund’s (collectively, Trust Funds) 21 Motion for Default Judgment against Defendant J.P Francis & Associates, Inc. Dkt. # 28. The 22 motion is unopposed. See generally Dkt. The Court has considered the motion, the record, and 23 24 1 the applicable law. Being fully advised, the Court GRANTS in part and DENIES in part the 2 motion. 3 II BACKGROUND 4 The Trust Funds are jointly administered labor-management employee-benefit trust funds 5 created under Section 302(c) of the Labor Management Relations Act, 29 U.S.C. § 186(c), and 6 organized and operated under the Employee Retirement Income Security Act of 1974 (ERISA), 7 29 U.S.C. §1001, et seq. as amended. See Dkt. # 28 at 2. 8 Defendant, a Washington corporation, is a signatory to a collective bargaining agreement 9 (CBA) with the Mechanical Contractors Association and the Local 32 of the United Association 10 of Journeyman and Apprentices of the Plumbing and Pipefitting Industry of the United States 11 and Canada AFL-CIO. See Dkt. ## 1, 6, 14 at 3. As a CBA signatory, Defendant is bound by 12 each Trust Fund’s Trust Agreement, which are incorporated into the CBA by reference. See Dkt. 13 # 1 at 3; see also Dkt. # 6 at 2. 14 The CBA and Trust Agreements (collectively, the Agreements) require all signatory 15 employers to submit monthly remittance reports “listing the employees performing covered 16 work, the covered hours worked by those employees, and the contributions owed to the Trust 17 Funds for the hours worked.” Dkt. # 14 at 5. The Agreements also require employers to submit 18 monthly contributions to the Trust Funds for each employee for whom contributions are due. 19 See Dkt. # 1 at 3; see also Dkt. # 6 at 2. If an employer fails to submit its required contributions 20 by the fifteenth day of the following month, it must pay damages for its delinquent period. See 21 Dkt. # 14 at 5, 26. 22 Allegations. Plaintiffs allege as follows: Defendant failed to fulfill its obligations under 23 the Agreements between November 2020 and December 2021. See Dkt. # 28 at 7. Between 24 1 November 2020 and May 2021, Defendant completed and submitted its monthly remittance 2 reports to the Trust Funds, but it failed to pay the full extent of its required contributions. Id. at 3 5. Defendant therefore owes the Trust Funds $84,261.80 to cover unpaid fringe benefits,
4 liquidated damages, prejudgment interest, and attorney fees for the November 2020 to May 2021 5 delinquent period. Id. at 8–9. Defendant also owes the Trust Funds $100,151.45 to cover 6 unreported and unpaid contributions, as well as associated interest, liquidated damages, and audit 7 fees, throughout the course of the January 2020 through December 2021 audit period. Id. at 5. 8 On August 4, 2021, Plaintiffs filed their complaint. Dkt. # 1. Plaintiffs’ sole cause of 9 action for breach of the CBA seeks to recover from Defendant the delinquent contributions, 10 liquidated damages, interest, audit fees, and attorney fees and litigation costs. Id. at 2–4. 11 Defendant answered Plaintiffs’ complaint on September 13, 2021. Dkt. # 6. In January 2023, 12 Plaintiffs moved for summary judgment. Dkt. # 13. On January 31, 2023, Defendant’s counsel,
13 Mr. Garg, moved to withdraw as counsel of record. Dkt. # 18. On February 14, 2023, the Court 14 granted Mr. Garg’s motion, struck Plaintiffs’ motion, and granted Defendant 14 days to acquire 15 substitute counsel. Dkt. # 23. Substitute counsel never appeared. See generally Dkt. In March 16 2023, the Clerk entered an order of default against Defendant. Dkt. # 27. Plaintiffs later moved 17 for default judgment against Defendant, seeking Defendant’s unpaid contributions to the Trust 18 Funds, liquidated damages, interest on the unpaid contributions, audit fees, and attorney fees and 19 litigation costs as provided by the Trust Agreements and Section 502 of ERISA, 29 U.S.C. 20 § 1132(g)(2). See Dkt. # 28. 21 22
23 24 1 III DISCUSSION 2 A. Legal Standards 3 If a defendant fails to plead or otherwise defend, “the clerk must enter the party’s 4 default.” Fed. R. Civ. P. 55(a). Then, upon a plaintiff’s request or motion, the court may grant 5 default judgment for the plaintiff. Fed. R. Civ. P. 55(b)(2); see Aldabe v. Aldabe, 616 F.2d 1089, 6 1092 (9th Cir. 1980). On default judgment motions, “[t]he court must accept all well-pled 7 allegations of the complaint as established fact, except allegations related to the amount of 8 damages.” UN4 Prods., Inc. v. Primozich, 372 F. Supp. 3d 1129, 1133 (W.D. Wash. 2019) 9 (citing TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987)). Courts 10 typically consider these seven factors when evaluating a request for a default judgment: 11 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s 12 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) 13 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. 14 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). Because default judgments are 15 disfavored, “default judgment is appropriate only if the well-pleaded factual allegations of the 16 complaint suffice to establish a plaintiff’s entitlement to a judgment under the applicable law.” 17 Dentist Ins. Co. v. Luke St. Marie Valley Dental Grp., P.L.L.C., No. 2:21-cv-01229-JHC, 2022 18 WL 1984124 (W.D. Wash. Jun. 6, 2022) (citing DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 19 855 (9th Cir. 2007)). 20 B. Application of Eitel Factors 21 All seven Eitel factors support Plaintiffs’ motion. Default judgment is therefore an 22 appropriate remedy in this case. 23
24 1 1. Prejudice to Plaintiffs 2 “[P]rejudice exists where the plaintiff has no recourse for recovery other than default 3 judgment.” Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1200, 1211 (W.D. Wash. 2014)
4 (citation and internal quotation marks omitted). Federal courts have exclusive jurisdiction over 5 ERISA claims. 29 U.S.C. § 1132(e). As Defendant never obtained substitute counsel to defend 6 this action after Mr. Garg withdrew, default judgment is Plaintiffs’ only means for recovery. See 7 Eve Nevada, LLC v. Derbyshire, No. 21-0251-LK, 2022 WL 279030, at *3 (W.D. Wash. Jan. 31, 8 2022) (first Eitel factor favored entry of default judgment when the defendant “failed to respond 9 or otherwise put forth a defense”). Thus, this factor supports default judgment. 10 2. Merits of Plaintiffs’ claims and sufficiency of complaint 11 “Courts often consider the second and third Eitel factors together.” Developers Sur. and 12 Indem. Co. v. View Point Builders, Inc., No. C20-0221JLR, 2020 WL 3303046, at *5 (W.D.
13 Wash. Jun. 17, 2022). Plaintiffs say that Defendant failed to pay employee contributions to the 14 Trust Funds—as required by the CBA, the Trust Agreements, and ERISA—and is therefore 15 liable for unpaid contributions and associated late fees. See Dkt. # 28. 16 Under Section 515 of ERISA, employers must pay required contributions “under the 17 terms of the plan or under the terms of a collectively bargained agreement.” 29 U.S.C. § 1145. 18 To establish a Section 515 claim for unpaid contributions, Plaintiffs must show that “(1) the trust 19 fund is a multi-employer plan as defined by 29 U.S.C. § 1002(37); (2) the defendant is an 20 employer obligated to contribute under the plan’s terms; and (3) the defendant failed to 21 contribute in accordance with the plan.’” Bd. of Trustees of Sheet Metal Workers Health Care 22 Plan of N. California v. Gervasio Env’t Sys., No. C 03-04858 WHA, 2004 WL 1465719, at *1
23 (N.D. Cal. May 21, 2004). If a plaintiff brings an action under Section 515 and wins a favorable 24 1 judgment, the court must award the plaintiff damages in accordance with Section 502 of ERISA. 2 29 U.S.C. § 1132(g)(2). 3 As noted above, the Court accepts all well-pleaded allegations in the complaint as
4 established fact. See UN4 Prods, 372 F. Supp. 3d at 1133. Accepting such allegations, the 5 complaint suffices to state the cause of action directed against Defendant. The Trust Funds are 6 multi-employer plans under 29 U.S.C. § 1002(37), and Defendant is an employer obligated to 7 contribute to the Trust Funds under the CBA. See Dkt. ##1, 6, 14, 28. The record also contains 8 evidence showing that Defendant failed to contribute to the Trusts in accordance with the plan 9 during the relevant period. See, e.g., Dkt. # 14 at 6, 11, 132–134, 136–141. Plaintiffs have thus 10 established an ERISA claim for unpaid contributions and late fees. Consequently, the second 11 and third Eitel factors support default judgment. 12 3. Sum of money at stake
13 This factor “considers whether the amount of money requested is proportional to the 14 harm caused.” Sun Life Assurance Co. of Canada v. Estate of Wheeler, No. C19-0364JLR, 2020 15 WL 433352, at *4 (W.D. Wash. Jan. 28, 2020). Because Plaintiffs seek to recover Defendant’s 16 unpaid contributions, along with statutorily mandated interest, liquated damages, audit fees, and 17 reasonable attorney fees incurred while trying to enforce section 29 U.S.C. § 1145, there is direct 18 proportionality between the harm caused and the amount of money requested. Thus, the fourth 19 Eitel factor supports default judgment. 20 4. Possibility of dispute over material facts 21 There is no sign that the material facts are in dispute. And again, “[t]he general rule of 22 law is that upon default the factual allegations of the complaint, except those relating to
23 damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 24 1 1977). Defendant did not continue to defend this action, and the Clerk correctly entered default 2 against Defendant. See Dkt. # 27. 3 5. Excusable neglect
4 The sixth Eitel factor assesses whether a defendant’s default for failure to appear was 5 because of excusable neglect. Bds. of Trs. of Inland Empire Elec. Workers Welfare Tr. v. Excel 6 Elec. Servs., Inc., No. 2:21-CV-00200-MKD, 2022 WL 1243663, at *4 (E.D. Wash. Apr. 26, 7 2022). Generally, courts do not find excusable neglect when defendants were properly served 8 with the complaint. See, e.g., Maersk Line v. Golden Harvest Alaska Seafood LLC, No. C20- 9 1140-JLR-MLP, 2020 WL 6083464, at *4 (W.D. Wash. Sept. 30, 2020), report and 10 recommendation adopted, No. C20-1140 JLR, 2020 WL 6077419 (W.D. Wash. Oct. 15, 2020). 11 Defendant’s default was not because of excusable neglect. Plaintiffs properly served 12 Defendant. See Dkt. # 2. Additionally, Defendant was fully aware of the ongoing proceedings
13 against it, as shown by Defendant’s answer to the complaint, representation by counsel, and 14 appearances before the Court before February 2023. See generally Dkt. Further, when the Court 15 granted Mr. Garg’s motion to withdraw, the Court warned Defendant that default judgment may 16 be granted if substitute counsel did not make a timely appearance. See Dkt. # 23 at 4. In 17 February 2023, Defendant had the opportunity to obtain new counsel and avoid default; 18 evidently, Defendant declined to do so. This factor favors entry of default judgment. 19 6. Policy favoring decision on the merits 20 Because cases “should be decided upon their merits whenever reasonably possible,” this 21 factor often disfavors default judgment. Eitel, 782 F.2d at 1472. But Defendant’s failure to 22 appear “makes a decision on the merits impractical, if not impossible.” PepsiCo, Inc. v. Cal.
23 Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002); see also Empl. Painters’ Trust v. Dahl 24 Constr. Servs., Inc., No. C19-1541-RSM, 2020 WL 3639591 (W.D. Wash. July 6, 2020) 1 (explaining that when a defendant to appear, the policy favoring deciding cases upon their merits 2 does not preclude the entry of default judgment). In this case, the seventh Eitel factor also 3 supports default judgment.
4 In sum, all seven Eitel factors support default judgment. 5 C. Damages 6 “Because the Court does not accept the amount of claimed damages as true in a default 7 judgment motion, it must assess whether Plaintiff's claimed damages are appropriate to award.” 8 Caisse de Retraite du Pers. Navigant v. Renou, No. 2:22-cv-01002-JHC, 2022 WL 17667902, at 9 *3 (W.D. Wash. Dec. 14, 2022) (citing Geddes, 559 F.2d at 560). A plaintiff bears the burden of 10 proving that its requested damages are reasonable and supported by evidence. Bd. Of Trs. Of the 11 Boilermaker Vacation Tr. v. Skelly, Inc., F. Supp. 2d 1222, 1226 (N.D. Cal. 2005). 12 Under Section 502 of ERISA, if a fiduciary brings an action for or on behalf of a plan
13 under Section 515 and wins a favorable judgment, the court must award the plan: 14 (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) 15 liquidated damages provided for under the plan in an amount not in excess of 20 percent . . . , [and] (D) reasonable attorney’s fees and costs of the action, to be paid 16 by the defendant.
17 29 U.S.C. § 1132(g)(2). Plaintiffs seek recovery against Defendant under Section 502 and the 18 Trust Agreements for three categories: (1) reported but unpaid contributions and associated fees 19 for the delinquent period between November 2020 and May 2021, (2) unreported and unpaid 20 contributions and associated fees for the audit period of January 2020 through December 2021, 21 and (3) attorney fees and costs incurred by Plaintiffs in relation to this action. See Dkt. # 28. The 22 Court denies Plaintiffs’ request for the first category but grants Plaintiffs’ requests for the second 23 and third categories. 24 1 1. Reported but unpaid contributions and associated fees from November 2020 through May 2021 2 Plaintiffs request $84,261.80 in damages for Defendant’s delinquent period, comprised of 3 $55,963.03 in unpaid fringe benefit contributions, $15,496.70 in liquidated damages, $12,102.07 4 in prejudgment interest, and $700 in “referral attorney fees.” Id. at 2–3. For the reasons below, 5 the Court denies Plaintiffs’ request for damages under this category without prejudice. 6 The Bough declaration and the attachments thereto appear to support Plaintiffs’ request 7 for $55,963.03 in unpaid fringe benefits. See Dkt. #14. But Plaintiffs have not submitted copies 8 of the unfunded remittance reports submitted by Defendant. See generally Dkt. The Court is 9 thus unable to determine that the requested amount is warranted and distinct from the unpaid 10 contributions requested below for the January 2020 through December 2021 audit period. There 11 are also discrepancies in the total amount of money requested for this delinquent period. See, 12 e.g., Dkt. # 1 at 3 (Plaintiffs allege $57,899.65, not $55,963.03, in unpaid contributions); Dkt. # 13 28 at 5 (Plaintiffs state $84,039.98, not $84,261.80, is owed based on Defendant’s completed and 14 submitted unfunded remittance reports). Thus, the Court cannot award Plaintiffs unpaid fringe 15 benefits for now. 16 Plaintiffs have also failed to adequately explain the liquidated damages they seek. The 17 Trust Agreements provide that in the event of litigation, the delinquent employer must pay 18 liquidated damages to the Trust Funds, assessed at 10 percent of the contributions owed as a 19 result of the delinquency to the Plumbers and Pipefitters National Pension Fund and 20 percent 20 of the contributions owed as a result of the delinquency for all other Trust Funds. Dkt. # 14 at 21 86–87, 94–95, 100–101, 111, 119–120. Plaintiffs request $15,496.70 in liquidated damages, but 22 20 percent of the alleged unpaid contributions ($55,963.03) is $11,192.61. The calculations 23 sheet submitted by Plaintiffs also lists 10 percent as the “liquidated damage rate,” which 24 1 conflicts with the 20 percent liquidated damage rate employed elsewhere in Plaintiffs’ evidence. 2 Dkt. # 14 at 132. Plaintiffs have therefore not sufficiently justified a liquidated damages award 3 in the amount of $15,496.70.
4 Finally, the Court cannot determine whether Plaintiffs’ requests for unpaid interest and 5 “referral attorney fees” are proper based on Plaintiffs’ evidence. Each Trust Agreement provides 6 for the assessment of interest on delinquent funds. Dkt. # 14 at 7. But given the lack of clarity 7 with respect to the total amount of owed contributions and the variation in interest rates among 8 the Trust Agreements, the Court cannot confirm whether $12,102.07 reflects a proper interest 9 award Id. Further, although ERISA and the Trust Agreements provide for an award of 10 reasonable attorney fees, there is no information in the record explaining the basis for the 11 requested $700 in “referral attorney fees.” See generally Dkt. # 28; see also Bd. of Trs. of Auto. 12 Machinists Pension Tr. v. Ross Island Sand & Gravel Co., No. C18-0571JLR, 2018 WL
13 4051806, at *2 (W.D. Wash. Aug. 24, 2018) (denying default judgment and requiring plaintiff to 14 explain “referral attorney fees” in an amended motion). Thus, Plaintiffs have not proved that 15 their requested damages for the November 2020 to May 2021 period are reasonable and 16 supported by evidence. Thus, the Court denies Plaintiffs’ request for $84,261.80 in damages 17 without prejudice. 18 2. Unreported and unpaid contributions and associated fees from January 2020 through December 2021 19 Plaintiffs request $100,151.45 to cover $80,310.68 in unreported and unpaid 20 contributions, $14,503.30 in liquidated damages, $3,814.20 in interest, and $1,523.27 in audit 21 fees for the January 2020 to December 2021 audit period. Dkt. # 28 at 3. Per the Trust 22 Agreements, in the event of delinquency, the Trusts may collect unpaid contributions, liquidated 23 damages and interest, and audit fees at the expense of the employer. See Dkt. # 14 at 6–11. 24 1 On April 6, 2022, Anastasi Moore & Martin, PLLC conducted an audit of Defendant’s 2 payroll during January 2020 through December 2021. Id. at 136–137. Plaintiffs’ auditor 3 submitted a declaration describing her payroll audit. See Dkt. # 15. She first reviewed
4 Defendant’s payroll documentation, including its payroll register reports, tax filings, state 5 quarterly unemployment insurance reports, and Trust Fund remittance reports for the period of 6 January 2020 through December 2021. Id. at 2. After examining the payroll documentation, the 7 auditor explained her methodology for calculating the unpaid benefit contributions, liquidated 8 damages, and interest values according to the Trust Agreements. Id. at 3. Plaintiffs also 9 provided a copy of the audit report, along with attached tables further detailing the calculations. 10 See id. at 6–12. The auditor concluded that Defendant owed a sum of $100,151.45 to the Trust 11 Funds, comprised of $80,310.68 in unpaid employee benefit contributions, $14,503.30 in 12 liquidated damages, $3,814.20 in interest (calculated through April 26, 2022), and $1,523.27 in
13 audit fees. Dkt. # 15 at 2–3, 8. 14 From the auditor’s declaration and the audit report, the Court can ascertain how Plaintiffs 15 calculated damages for the January 2020 through December 2021 period. See Masonry Indus. 16 Tr. Admin., Inc. v. LeProwse Constr., Inc., No. 3:17-CV-1266-SI, 2019 WL 4237755, at *2–3 17 (D. Or. Sept. 6, 2019) (concluding even without an auditor declaration that the plaintiff 18 adequately proved damages based in part on a presumption that the auditor was knowledgeable 19 and “applied the correct rates in making the various calculations”). Plaintiffs have thus provided 20 sufficient evidence to support a damage award of $100,151.45 against Defendant. 21 3. Attorney fees and costs 22 Plaintiffs request $5,842.50 in attorney fees and $521 in litigation costs. Dkt. # 28 at 9.
23 Under Section 502 of ERISA and the Trust Agreements, Plaintiffs are entitled to recover 24 reasonable attorney fees and costs for suits brought against delinquent employers. See 29 U.S.C. 1 § 1132(g)(2); Dkt. # 14. In the Dwarzski declaration, Plaintiffs’ counsel states that she spent 2 20.5 hours working on this matter, at a rate of $285 per hour. Dkt. # 16 at 2. The Court finds 3 Plaintiffs’ request for $5,842.50 in attorney fees and $521 in litigation costs to be reasonable. Id.
4 at 10. Plaintiffs are thus entitled to recover $6,363.50 against Defendant for attorney fees and 5 costs. 6 IV CONCLUSION 7 For the foregoing reasons, the Court GRANTS in part and DENIES in part Plaintiffs’ 8 Motion for Default Judgment. Dkt. # 28. Specifically, the Court hereby ORDERS: 9 1. The Court GRANTS default judgment against Defendant J.P. Francis & 10 Associates, Inc. because all seven Eitel factors favor the entry of default judgment. 11 2. The Court GRANTS Plaintiffs’ request for $100,151.45 in unreported and unpaid 12 contributions, liquidated damages, interest, and audit fees for the January 2020 to December 13 2021 audit period. Plaintiffs may also collect interest on the unreported and unpaid contributions 14 and liquidated damages, totaling $94,813.98. Interest shall accrue on the outstanding 15 contributions at the rate set forth in the Trust Agreements, from April 6, 2022, until paid. 16 3. The Court GRANTS Plaintiffs’ request for attorney fees and litigation costs in the 17 amount of $6,363.50. 18 4. The Court DENIES without prejudice Plaintiffs’ request for $55,963.03 in unpaid 19 fringe benefit contributions, $15,496.70 in liquidated damages, $12,102.07 in interest, and $700 20 in “referral attorney fees” for the November 2020 through May 2021 delinquent period. 21 Plaintiffs may submit a supplemental brief, along with additional evidence, that offers a more 22 thorough explanation of their calculations and the damages they seek for the November 2020 23 through May 2021 delinquent period. To the extent Plaintiff intends to recover these damages, 24 l Plaintiffs must file a supplemental brief by no later than July 14, 2023. If Plaintiffs fail to timely 2 file a supplemental brief, the Court will enter final judgment consistent with this Order. 3 5. The Court DEFERS entry of final judgment. 4 6. The Court DIRECTS the Clerk to mail a copy of this order to J.P. Francis & 5 Associates, Inc. 6 Dated this 14th day of June, 2023. ’ Chur g John H. Chun United States District Judge 9 10 1] 12 13 14 15 16 17 18 19 20 21 22 23 24