Laborers Health & Welfare Trust Fund for Northern California v. Four M's Construction & Backhoe, Inc.

CourtDistrict Court, N.D. California
DecidedFebruary 23, 2024
Docket4:22-cv-00872
StatusUnknown

This text of Laborers Health & Welfare Trust Fund for Northern California v. Four M's Construction & Backhoe, Inc. (Laborers Health & Welfare Trust Fund for Northern California v. Four M's Construction & Backhoe, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laborers Health & Welfare Trust Fund for Northern California v. Four M's Construction & Backhoe, Inc., (N.D. Cal. 2024).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 LABORERS HEALTH & WELFARE Case No. 22-cv-00872-DMR TRUST FUND FOR NORTHERN 8 CALIFORNIA, et al., ORDER GRANTING MOTION FOR 9 Plaintiffs, DEFAULT JUDGMENT 10 v. Re: Dkt. No. 59

11 FOUR M'S CONSTRUCTION & BACKHOE, INC., 12 Defendant. 13 14 Plaintiffs Board of Trustees of the Laborers Health and Welfare Trust Fund for Northern 15 California, et al., move the court pursuant to Federal Rule of Civil Procedure 55(b)(2) for default 16 judgment against Defendant Four M’s Construction & Backhoe Inc. [Docket Nos. 59 (Mot.), 62 17 (Supp. Br.).] Plaintiffs seek unpaid employee fringe benefit contributions, liquidated damages and 18 interest for delinquent contributions, attorneys’ fees and costs, and an injunction requiring an audit 19 of Defendant’s books and records. For the following reasons, the motion is granted.1 20 I. BACKGROUND 21 A. Factual Allegations 22 Plaintiffs are the Board of Trustees of the Laborers Health and Welfare Trust Fund for 23 Northern California, Laborers Pension Trust Fund for Northern California, Laborers Vacation- 24 Holiday Trust Fund for Northern California, and Laborers Training and Retraining Trust Fund for 25 Northern California (the “Trust Funds”). Compl. ¶ II. Each of the Trust Funds, created by written 26 Trust Agreements, is an employee benefit plan subject to the Labor Management Relations Act of 27 1 1947 (“LMRA”), 29 U.S.C. § 186, and a multi-employer employee benefit plan within the 2 meaning of the Employment Retirement Income Security Act of 1974 (“ERISA”), sections 3, 4, 3 and 502 of ERISA, 29 U.S.C §§ 1002, 1003, 1132. Id. [See Docket No. 59-1 (Sorensen Decl. 4 Dec. 29, 2023) ¶¶ 3, 4, Ex. A (Trust Agreement for Trust Funds).] The Trust Funds are 5 administered by a Board of Trustees, which is authorized to sue on behalf of the Trust Funds. 6 Sorensen Decl. ¶ 4. 7 Plaintiffs allege that Defendant Four M’s Construction & Backhoe Inc. (“Four M’s”) is an 8 employer as defined in ERISA, 29 U.S.C. §§ 1002(5), 1145, and that it is an employer in an 9 “industry affecting commerce” within the meaning of the LMRA, 29 U.S.C. § 185. Compl. ¶ III. 10 Plaintiffs allege that Four M’s became subject to the terms and conditions of the Northern 11 California AGC/Laborers’ Master Agreement (“Master Agreement”) by signing a Letter of 12 Understanding (“LOU”) with the Northern California District Council of Laborers (the “Union”) 13 on June 22, 2009 and a Memorandum Agreement (“MA”) on June 17, 2009. Id. ¶ IV; Sorensen 14 Decl. ¶ 8 Exs. C (Master Agreement 2014-2019), D (Master Agreement 2018-2023), E (signed 15 LOU), F (signed MA). The Master Agreement incorporates the Trust Agreements establishing 16 each of the Trust Funds (the “Agreements”). Pursuant to the Agreements, Four M’s promised that 17 it would contribute and pay to Plaintiffs the hourly amounts required by the Agreements for each 18 hour paid for or worked by any of its employees who performed any work covered by the 19 Agreements. Compl. ¶ IV; Sorensen Decl. ¶¶ 9 10, Ex. C at ECF pp. 160-61 (§ 28A), Ex. D at 20 ECF pp. 217-18 (§ 28A). 21 The Trust Agreements authorize the Trust Funds to audit employer records to ensure 22 compliance with the Agreements. Compl. ¶ V; Sorensen Decl. ¶ 12, Ex. A at ECF p. 23 (Art. IV, 23 § 7). Under the terms of the relevant agreements, an employer that fails to provide contributions, 24 or provides them late, is subject to liquidated damages at the rate of $150.00 per month for each 25 month that contributions are delinquent, and a 1.5% monthly interest rate is applied to all unpaid 26 contributions until receipt of payment. Compl. ¶ V; Sorensen Decl. ¶ 10, Ex. C at ECF pp. 160-61 27 (§ 28A), Ex. D at ECF pp. 217-18 (§ 28A). The Trust Funds may also recover attorneys’ fees and 1 ¶ 13, Ex. A at ECF P. 21 (Art. IV, § 3). 2 Plaintiffs performed an audit of Four M’s’ books and records for the period October 2015 3 to September 2022. Plaintiffs calculated delinquent contributions totaling $338,809.48 for the 4 audit period. Compl. ¶ VII; Sorensen Decl. ¶ 14, Ex. G. Plaintiffs seek the amount of the unpaid 5 contributions plus interest and liquidated damages on both the unpaid contributions, as well as 6 attorneys’ fees and costs. Compl. ¶ VIII. 7 B. Procedural History 8 Plaintiffs filed the complaint in February 2022 and served Four M’s with the summons and 9 complaint in August 2022. [Docket No. 19 (Waiver of Service).] Four M’s filed an answer to the 10 complaint in October 2022. [Docket No. 26.] The parties participated in a court-ordered 11 settlement conference before the Honorable Alex G. Tse in September 2023 but did not reach a 12 settlement. [Docket No. 50.] Counsel for Four M’s moved to withdraw and the court granted the 13 motion on September 14, 2023, at a hearing at which Four M’s’ principal, David Mayhugh, 14 appeared by telephone. [Docket No. 51.] The court ordered new counsel to appear on Four M’s’ 15 behalf by October 13, 2023. Id. No new counsel appeared for Four M’s and on November 1, 16 2023, the court struck its answer. [Docket No. 52.] 17 The Clerk entered Four M’s’ default on November 16, 2023 (Docket No. 56) and this 18 motion followed. The court ordered Plaintiffs to file a supplemental brief clarifying their request 19 for injunctive relief. Plaintiffs timely filed a brief. Supp. Br. The court held a hearing on 20 February 21, 2024 at which Four M’s did not appear. 21 II. LEGAL STANDARDS 22 Federal Rule of Civil Procedure 55(b)(2) permits a court to enter a final judgment in a case 23 following a defendant’s default. Shanghai Automation Instrument Co. v. Kuei, 194 F. Supp. 2d 24 995, 999 (N.D. Cal. 2001). Whether to enter a judgment lies within the court’s discretion. 25 Pepsico, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (“A defendant’s 26 default does not automatically entitle the plaintiff to a court-ordered judgment.” (citing Draper v. 27 Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986))). 1 service on the defendant, as well as confirm that it has subject matter jurisdiction over the case and 2 personal jurisdiction over the parties. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). If the 3 court finds these elements satisfied, it turns to the following factors (“the Eitel factors”) to 4 determine whether it should grant a default judgment:

5 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) 6 the sum of money at stake in the action[,] (5) the possibility of a dispute concerning material facts[,] (6) whether the default was due 7 to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decision on the merits. 8 9 Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986) (citation omitted).

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Laborers Health & Welfare Trust Fund for Northern California v. Four M's Construction & Backhoe, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/laborers-health-welfare-trust-fund-for-northern-california-v-four-ms-cand-2024.