Puget Sound Electrical Workers Healthcare Trust v. Chau Electric LLC

District Court, W.D. Washington·Decided June 30, 2023·No. 2:23-cv-00541·Unknown

Opinion

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4 5 UNITED STATES DISTRICT COURT AT SEATTLE 7 PUGET SOUND ELECTRICAL WORKERS CASE NO. 2:23-cv-00541-JHC 8 HEALTHCARE TRUST ET AL., ORDER GRANTING MOTION FOR 9 Plaintiffs, DEFAULT JUDGMENT 10 v. 11 CHAU ELECTRIC LLC,

12 Defendant. 13

14 I 15 INTRODUCTION 16 This matter comes before the Court on Plaintiffs Puget Sound Electrical Workers 17 Healthcare Trust, Puget Sound Electrical Workers Pension Trust, Puget Sound Electrical 18 Workers 401(k) Savings Plan Trust, and Puget Sound Electrical Joint Apprenticeship and 19 Training Trust’s (collectively, “Trust Funds”) Motion for Default Judgment against Defendant 20 Chau Electric LLC. Dkt. # 12. The Court has considered the motion, the record, and the 21 applicable law. Being fully advised, the Court GRANTS the Motion. 22

23 24 1 II 3 The Trust Funds are jointly administered labor-management employee-benefit trust

4 funds. See Dkt. # 12 at 1. They provide health and welfare, retirement, and training benefits 5 under the Employee Retirement Income Security Act of 1974 (“ERISA”). Id. 6 Defendant Chau Electric is a Washington limited liability company with its principal 7 place of business in King County, Washington. Dkt. # 1 at 2. Chau Electric executed a Letter of 8 Assent with the City of Seattle for the Ship Canal Water Quality Project Tunnel Storage PW 9 #2018–018 Project. See Dkt. # 13 at 9–13. The Letter of Assent provides that any signatory to 10 the Letter agrees to be bound by the terms of the Community Workforce Agreement. See Dkt. 11 # 1 at 3, 13. The Community Workforce Agreement binds Chau Electric to the Trust Funds’ 12 trust agreements, which are incorporated into the Community Workforce Agreement by

13 reference. See Dkt. # 13 at 13, 22; see also Dkt. # 1 ¶¶ 3.1–3.5. 14 The Community Workforce Agreement and the trust agreements (collectively, “the 15 Agreements”) require Chau Electric to submit monthly fringe benefit contribution payments 16 (along with remittance reports) to the Trust Funds’ administration office no later than the 17 fifteenth of each month following the month in which the hours were worked. See Dkt. # 1 ¶ 3.6; 18 see also Dkt. # 13 at 76, 116, 150, 177. If Chau Electric fails to submit the contributions by the 19 deadline, the Agreements allow the Trust Funds to collect liquidated damages, interest, attorney 20 fees, and other costs of collection (like court fees). See Dkt. # 1 ¶¶ 3.7–3.10. 21 According to the complaint, Chau Electric did not fulfill its obligations under the 22 Agreements. See Dkt. # 13 at 4–5. First, Chau Electric submitted its November 2022

23 contributions and remittance reports nearly three months late on March 9, 2023. Therefore, for 24 November 2022, Chau Electric owes $4,374.37 in liquidated damages and $1,117.47 in interest. 1 Id. Second, Chau Electric submitted its December 2022 contributions and remittance reports two 2 months late on March 15, 2023. Id. at 5. Therefore, for December 2022, Chau Electric owes 3 $3,490.38 in liquidated damages and $626.48 in interest. Id. Third, Chau Electric submitted its

4 March 2023 remittance reports nearly two weeks late on April 28, 2023, and no contribution 5 payments were made with the report. Id. Therefore, for March 2023, Chau Electric owes 6 $39,198.52 in contributions, $3,905.58 in liquidated damages, and $740.66 in accrued interest as 7 of June 16, 2023. Id. at 191. 8 On April 7, 2023, the Trust Funds filed this lawsuit,1 asserting one cause of action for 9 breach of the Agreements and one cause of action under Section 515 of ERISA. Dkt. # 1. On 10 April 16, 2023, Chau Electric was served by personal service on the company’s registered agent, 11 Natalie Dinh. See Dkt. # 8. After being properly served, Chau Electric failed to appear, and the 12 Trust Funds moved for and obtained an order of default. See Dkt. # 11. Plaintiffs now move for

13 default judgment. See Dkt. # 12. They seek to recover Chau Electric’s unpaid contributions to 14 the Trust Funds, liquidated damages, interest on the unpaid contributions, attorney fees, and 15 collection costs as provided by the Agreements and 29 U.S.C. § 1132(g)(2). Id. 16 III 18 A. Legal Standards 19 If a defendant fails to plead or otherwise defend, “the clerk must enter the party’s 20 default.” Fed. R. Civ. P. 55(a). Then, upon a plaintiff’s request or motion, the court may grant 21 default judgment for the plaintiff. Fed. R. Civ. P. 55(b)(2); see also Aldabe v. Aldabe, 616 F.2d 22

1 This is not the first dispute between these parties. A nearly identical default-judgment motion 23 for unpaid contributions and fees was recently resolved by another judge of this Court. See Puget Sound Elec. Workers Healthcare Tr. v. Chau Elec. LLC, No. 2:22-CV-01190-TL, 2023 WL 2873814 (W.D. 24 Wash. Mar. 22, 2023). 1 1089, 1092 (9th Cir. 1980). On default judgment motions, “[t]he court must accept all well-pled 2 allegations of the complaint as established fact, except allegations related to the amount of 3 damages.” UN4 Prods., Inc. v. Primozich, 372 F. Supp. 3d 1129, 1133 (W.D. Wash. 2019)

4 (citing TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). Courts 5 typically consider these seven factors (often called the “Eitel factors”) when evaluating a request 6 for a default judgment: 7 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at 8 stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy 9 underlying the Federal Rules of Civil Procedure favoring decisions on the merits.

10 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). Because default judgments are 11 disfavored, “[d]efault judgment is appropriate only if the well-pleaded factual allegations of the 12 complaint suffice to establish a plaintiff’s entitlement to a judgment under the applicable law.” 13 Dentist Ins. Co. v. Luke St. Marie Valley Dental Grp., P.L.L.C., No. 2:21-cv-01229-JHC, 2022 14 WL 1984124, at *2 (W.D. Wash. June 6, 2022) (citing DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 15 847, 855 (9th Cir. 2007)). 16 B. Application of Eitel Factors 17 All seven Eitel factors support the Trust Funds’ motion. Default judgment is therefore an 18 appropriate remedy in this case. 19 1. Prejudice to Plaintiffs 20 “[P]rejudice exists where the plaintiff has no recourse for recovery other than default 21 judgment.” Curtis v. Illumination Arts, Inc., 33 F. Supp. 3d 1211, 1211 (W.D. Wash. 2014) 22 (citation and internal quotation marks omitted). Chau Electric has failed to respond to this 23 action, so default judgment is the Trust Funds’ only means for recovery. See Eve Nevada, LLC 24 v. Derbyshire, Case No. 21-0251-LK, 2022 WL 279030, at *3 (W.D. Wash. Jan. 31, 2022); Bd. 1 of Trs. of U.A. Loc. No. 159 Health and Welfare Tr. Fund v. RT/DT, Inc., No. C 12-05111 JSW, 2 2013 WL 2237871, at *4 (N.D. Cal. May 21, 2013) (“Because ERISA provides that federal 3 courts have exclusive jurisdiction for claims of this nature, denial of Plaintiffs’ Motion would

4 leave them without a remedy.”). Thus, this factor supports default judgment. 5 2.

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