District Council 16 Northern California Health and Welfare Trust Fund v. Sinnock

District Court, N.D. California·Decided May 6, 2021·No. 3:19-cv-08262·Unknown

Opinion

San Francisco Division DISTRICT COUNCIL 16 NORTHERN Case No. 19-cv-08262-LB CALIFORNIA HEALTH AND WELFARE TRUST FUND, et al., ORDER GRANTING THE PLAINTIFFS’ MOTION FOR Plaintiffs, DEFAULT JUDGMENT v. Re: ECF No. 48

individually and doing business as Defendant.

The plaintiffs — benefits plans and trustees — sued the defendant for failing to make contributions to the plans required by the parties’ collective bargaining agreements, the trust agreements, the Labor Management Relations Act (LMRA), and the Employee Retirement Income Security Act of 1974 (ERISA). The defendant did not appear in the case (although all parties consented to the court’s jurisdiction). The Clerk of Court entered the defendant’s default, and the plaintiffs moved for default judgment. The court grants the motion and enters default judgment for the plaintiffs of $53,223.08 for unpaid contributions, liquidated damages, interest through March 17, 2021 (and daily simple interest at five percent thereafter), attorney’s fees, and costs. 1. The Parties The plaintiffs are “employee benefit plans” as defined in ERISA § 3(3), 29 U.S.C. § 1002(3), “multiemployer plans” as defined in ERISA §§ 3(37) and 4001(a)(3), 29 U.S.C. §§ 1002(37) & 1301(a)(3)), and trustees authorized to bring this action on behalf of the plans under ERISA § 502(a)(3), 29 U.S.C. § 1132(a)(3).1 Mr. Sinnock, individually and doing business as Neighborhood Glass Network, is an employer as defined in ERISA § 3(5), 29 U.S.C. § 1002(5), and NLRA § 2(2), 29 U.S.C. § 152(2).2 2. The Agreements The defendant signed and is a party to the two bargaining agreements (one for July 1, 2011 to June 30, 2014 and the second for July 1, 2015 to June 30, 2018). The bargaining agreements incorporate the trust agreements, thus binding the defendant to the terms and conditions of the trust agreements.3 The Funds are third-party beneficiaries of the bargaining agreements.4 Employers must make contributions to the Funds based on the hours that their employees work. The contributions are due by the 15th day of the month for the employees’ work the previous month. 5 Contributions are delinquent if the Funds do not receive them by the end of the month.6 1 Compl. – ECF No. 1 at 2 (¶¶ 1, 4). Citations refer to material in the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents. 2 Id. (¶ 3). 3 Christophersen Decl. – ECF No. 49 at 2 (¶¶ 2–5); Id. at 3 (¶ 7); Bargaining Agreement 2011–2014 (BA1), Ex. A to id. – ECF No. 49-1 at 3 (art. 28); Signatures, Ex. B to id. – ECF No. 49-2 at 1; Bargaining Agreement 2015–2018 (BA2), Ex. C to id. – ECF No. 49-3 at 3 (art. 28); Signatures, Ex. D to id. – ECF No. 49-4 at 1. 4 Christophersen Decl. – ECF No. 49 at 3 (¶ 6); BA1, Ex. A to id. – ECF No. 49-1 at 3 (art. 28); BA2, Ex. C to id. – ECF No. 49-3 at 3 (art. 28). 5 Christophersen Decl. – ECF No. 49 at 3 (¶ 8); BA1, Ex. A to id. – ECF No. 49-1 at 4 (art. 28, § D(2)); BA2, Ex. C to id. – ECF No. 49-3 at 4 (art. 28, § D(2)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 7–8 (¶ III, §§ A–B). 6 Christophersen Decl. – ECF No. 49 at 3 (¶ 8); BA1, Ex. A to id. – ECF No. 49-1 at 4 (art. 28, § D(2)); BA2, Ex. C to id. – ECF No. 49-3 at 4 (art. 28, § D(2)); H&W Trust Agreement, Ex. E to id. – The bargaining and trust agreements require employers like the defendant to pay liquidated damages and interest on delinquent contributions.7 Liquidated damages before a lawsuit is filed are the greater of 10 percent of the delinquent contributions or $150 (with a cap of $750 per month).8 Otherwise, liquidated damages are 20 percent of the delinquent contributions.9 Interest on delinquent contributions is five percent, calculated from the first day of the month after the month when payment was due.10 Employers must pay reasonable attorney’s fees and other expenses incurred in connection with delinquent payments.11 The agreements require employers to keep weekly time records for employees and to submit records to the Fund trustees (or their authorized representatives) for examination.12 If an examination reveals that an employer is not making full and prompt payments of all sums owing, the employer must pay the Funds the costs (including audit fees) reasonably incurred in the examination.13 7 Christophersen Decl. – ECF No. 49 at 3 (¶ 8); BA1, Ex. A to id. – ECF No. 49-1 at 4 (art. 28, § D(2)); BA2, Ex. C to id. – ECF No. 49-3 at 4 (art. 28, § D(2)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 8–9 (¶ III, § C(1)–(3)). 8 Christophersen Decl. – ECF No. 49 at 3–4 (¶ 9); BA1, Ex. A to id. – ECF No. 49-1 at 5 (art. 28, § D(3)); BA2, Ex. C to id. – ECF No. 49-3 at 5 (art. 28, § D(3)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 8 (¶ III, § C(2)). 9 Christophersen Decl. – ECF No. 49 at 3–4 (¶ 9); BA1, Ex. A to id. – ECF No. 49-1 at 5 (art. 28, § D(3)); BA2, Ex. C to id. – ECF No. 49-3 at 5 (art. 28, § D(3)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 8 (¶ III, § C(2)). 10 Christophersen Decl. – ECF No. 49 at 4 (¶ 10); BA1, Ex. A to id. – ECF No. 49-1 at 5 (art. 28, § D(3)); BA2, Ex. C to id. – ECF No. 49-3 at 5 (art. 28, § D(3)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 8–9 (¶ III, § C(3)). 11 Christophersen Decl. – ECF No. 49 at 4 (¶ 11); BA1, Ex. A to id. – ECF No. 49-1 at 5 (art. 28, § D(3)); BA2, Ex. C to id. – ECF No. 49-3 at 5 (art. 28, § D(3)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 8 (¶ III, § C(2)). 12 Christophersen Decl. – ECF No. 49 at 4 (¶ 12); BA1, Ex. A to id. – ECF No. 49-1 at 7–8 (art. 28, § E); BA2, Ex. C to id. – ECF No. 49-3 at 7–8 (art. 28, § E)); H&W Trust Agreement, Ex. E to id. – ECF No. 49-5 at 9 (¶ III, § D). 13 Christophersen Decl. – ECF No. 49 at 4 (¶ 12); BA1, Ex. A to id. – ECF No. 49-1 at 8 (art. 28, § E(13)); BA2, Ex. C to id. – ECF No. 49-3 at 8 (art. 28, § E(13)); H&W Trust Agreement, Ex. E to id. – 3. Unpaid Contributions A third-party auditor examined the defendant’s records for the period from October 1, 2013 through December 31, 2018 and determined initially that the defendant owed $29,533.25 in unpaid contributions plus liquidated damages and interest.14 On November 29, 2017, the auditor sent a notification letter to the defendant asking for documents for the audit.15 The defendant did not respond to the letter or to the auditor’s follow-up calls.16 On February 22, 2018, the auditor referred the matter to the plaintiffs’ legal counsel.17 Counsel sent the defendant a demand letter, he produced documents, and the auditor completed the audit in July 2019.18 The auditor ultimately determined that the defendant owed $21,577.10 in unpaid contributions for October 1, 2013 through December 31, 2018.19 On July 9, 2019, the auditor sent the defendant a draft audit report and gave him two weeks to dispute the findings in writing.20 The defendant did not dispute the audit.21 On October 8, 2019, the plaintiffs’ counsel sent a pre-lawsuit letter to the defendant demanding payment for the $21,557.10 in unpaid contributions, liquidated damages (then calculated at $750), accrued interest at five percent, and the audit fees.22 The defendant did not respond. The plaintiffs’ counsel sent the defendant a second demand letter on October 24, 2019.23 The table below shows the liquidated damages at 20 percent and interest at 5 percent. (Because the July 2018 payment was late,

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District Council 16 Northern California Health and Welfare Trust Fund v. Sinnock, (N.D. Cal. 2021).

District Council 16 Northern California Health and Welfare Trust Fund v. Sinnock (District Council 16 Northern California Health and Welfare Trust Fund v. Sinnock) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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