Trustees of the Operating Engineers Pension Trust v. California Testing and Inspections Inc.

District Court, C.D. California·Decided November 13, 2024·No. 2:24-cv-02588·Unknown

Opinion

O

United States District Court Central District of California

TRUSTEES OF THE OPERATING Case № 2:24-cv-02588-ODW (SSCx) ENGINEERS PENSION TRUST et al., Plaintiffs, ORDER GRANTING PLAINTIFFS’

v. MOTION FOR DEFAULT JUDGMENT [27]

INSPECTIONS, INC., Defendant. Plaintiffs bring this action against Defendant California Testing and Inspections, Inc. (“CTI”) for breach of written collective bargaining agreement (“CBA”) and violation of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”) § 515, 29 U.S.C. § 1145. (First Am. Compl. (“FAC”), ECF No. 9.) CTI failed to appear and defend, and Plaintiffs now move for entry of default judgment against CTI. (Notice Mot. Default J., ECF No. 27.) For the reasons that follow, the Court GRANTS Plaintiffs’ Motion.1

1 Having carefully considered the papers filed in connection with the Motion, the Court deemed the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15. Plaintiffs Trustees of the Operating Engineers Pension Trust, Trustees of the Operating Engineers Health and Welfare Fund, Trustees of the Operating Engineers Vacation-Holiday Savings Trust, Trustees of the Operating Engineers Training Trust, and Trustees of the Operating Engineers Local 12 Defined Contribution Trust (collectively, “Trustees”), are the trustees of five express trusts created pursuant to written declarations of trust (“Trust Agreements”) between the International Union of Operating Engineers, Local Union No. 12 (“Local 12”), and various construction multiemployer associations in Southern California and Southern Nevada. (FAC ¶ 5.) These labor-management multiemployer trusts are now, and were at all times material to this action, labor-management multiemployer trusts created and maintained pursuant to the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 186(c)(5). (Id.) Additionally, Plaintiffs Engineers Contract Compliance Committee Fund, Southern California Partnership for Jobs Fund, and Operating Engineers Workers’ Compensation Trust (“Funds”) are funds established by Local 12 and employers for the benefit of their employees. (Id.) Trustees and Funds are collectively “Plaintiffs.” On or about October 21, 2020, the Southern California Contractor’s Association (“SCCA”) notified Local 12 that CTI had assigned bargaining authority to the SCCA for the Master Inspection Field Soil and Material Testing Agreement (“Master Agreement”). (Id. ¶ 8.) As of that date, CTI was bound to the terms and provisions of the Master Agreement. (Id.) CTI was also bound to the terms of the incorporated Trust Agreements, of which CTI had previously signed written acknowledgments and acceptances. (Id. ¶¶ 8–9.) CTI is an “employer” as defined in the Master Agreement and Trust Agreements, and as defined in ERISA, 29 U.S.C. § 1002(5). (Id. ¶¶ 10–11.) As such an employer, CTI is obligated to submit true, complete, and accurate written monthly contribution reports to Plaintiffs (“Monthly Reports”), listing CTI’s covered employees, the work and number of hours its covered employees performed, and the amount CTI paid them. (Id. ¶¶ 13–15.A.) CTI is obligated to pay monthly fringe benefit contributions based on the Monthly Reports. (Id. ¶ 15.B.) CTI submitted Monthly Reports to Plaintiffs for work performed from November 2023 through March 2024, admitting that it owed Plaintiffs benefit contributions, but failed to timely pay the contributions due. (Id. ¶¶ 16, 18; Mem. ISO Mot. Default J. (“Motion” or “Mot”) 1, ECF No. 28.) In addition, in April 2024, Plaintiffs audited CTI’s payroll and related records covering the time period from September 2020 through July 2023 (“Audit Period”), and found that CTI also failed to pay fringe benefit contributions for the Audit Period. (FAC ¶ 17.) CTI is thus delinquent on these contributions. (Id. ¶ 19.) Plaintiffs sent written demands to CTI to recover the unpaid contributions. (Decl. Diana Nguyen ISO Mot. (“Nguyen Decl.”) ¶ 19, ECF No. 32.) When these efforts failed, on March 29, 2024, Plaintiffs initiated this ERISA action against CTI to collect unpaid contributions due. (Id. ¶¶ 7, 19; Compl., ECF No. 1.) On April 17, 2024, Plaintiffs served CTI. (Compl. Proof Service, ECF No. 8.) On May 6, 2024, Plaintiffs amended the complaint and served CTI again, this time by First Class Mail. (See FAC; FAC Proof Service, ECF No. 13; Nguyen Decl. ¶ 11.) On May 8, 2024, an individual attempted to file an answer in this litigation on CTI’s behalf; however, the Court struck the filing because the individual was not authorized to legally represent CTI in this action. (Min. Order Striking Answer, ECF No. 19.) Although the Court granted CTI an extension to June 21, 2024, to retain legal counsel and respond to Plaintiffs’ claims, CTI did not appear and defend. (TOE Ext., ECF No. 20.) Accordingly, upon Plaintiffs’ request, on June 27, 2024, the Clerk of Court entered CTI’s default. (CTI Default, ECF No. 25.) On July 29, 2024, Plaintiffs moved for default judgment against CTI to recover unpaid contributions. (Mot. 1.) Federal Rule of Civil Procedure (“Rule”) 55(b) authorizes a district court to grant a default judgment after the Clerk enters default under Rule 55(a). However, before a court can enter a default judgment against a defendant, the plaintiff must satisfy the procedural requirements in Rules 54(c) and 55, and Central District Civil Local Rules 55-1 and 55-2. Even if these procedural requirements are satisfied, “[a] defendant’s default does not automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc., v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1174 (C.D. Cal. 2002) (citing Draper v. Coombs, 792 F.2d 915, 924–25 (9th Cir. 1986)). Instead, “[t]he district court’s decision whether to enter a default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980) (collecting cases). Generally, after the Clerk enters a default, the defendant’s liability is conclusively established, and the well-pleaded factual allegations in the plaintiff’s complaint “will be taken as true” except those pertaining to the amount of damages. TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987) (per curiam) (quoting Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977)). The court need not make detailed findings of fact in the event of default, except as to damages. See Adriana Int’l Corp. v. Thoeren, 913 F.2d 1406, 1414 (9th Cir. 1990). Plaintiffs satisfy the procedural requirements for default judgment, establish that entry of default judgment against CTI is substantively appropriate, and demonstrate that the requested relief is warranted. Local Rule 55-1 requires that the movant establish: (1) when and against which party default was entered; (2) the pleading to which default was entered; (3) whether the defaulting party is a minor or incompetent person; (4) that the Servicemembers Civil Relief Act does not apply; and (5) that the defaulting party was prope

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