Bay Area Counties Roofing Industry Promotion Fund et al v. Bartek International, Inc., No. 5:2021cv06025 - Document 21 (N.D. Cal. 2022)
Court Description: ORDER GRANTING 19 MOTION FOR DEFAULT JUDGMENT by Judge Beth Labson Freeman. (blflc2, COURT STAFF) (Filed on 4/8/2022)
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 8 BAY AREA COUNTIES ROOFING INDUSTRY PROMOTION FUND, et al., Plaintiffs, 9 v. 10 11 Case No. 21-cv-06025-BLF ORDER GRANTING MOTION FOR DEFAULT JUDGMENT [Re: ECF No. 19] BARTEK INTERNATIONAL, INC., United States District Court Northern District of California Defendant. 12 13 This ERISA collection case is brought by Plaintiffs—six employee benefit plans and their 14 trustee—against Defendant Bartek International, Inc., a roofing company. The Clerk of Court has 15 entered default against Bartek, which has not appeared in this action. See ECF No. 17. Now 16 before the Court is Plaintiffs’ motion for default judgment against Bartek. ECF No. 19 (“Mot.”). 17 The Court previously found this motion suitable for disposition without oral argument and vacated 18 the March 3, 2022 hearing. ECF No. 20. For the following reasons, the Court GRANTS the 19 motion for default judgment. 20 21 I. BACKGROUND Plaintiffs are six employee benefit plans as defined under the Employee Retirement 22 Income Security Act of 1974 (“ERISA”) and their trustee Doug Ziegler. ECF No. 1 (“Compl.”) 23 ¶¶ 8–9. Defendant Bartek International Inc. entered into agreements with Local 81 of the United 24 Union of Roofers, Waterproofers and Allied Workers, AFL-CIO (“Roofers Local 81”) and Local 25 95 of United Union of Roofers, Waterproofers and Allied Workers, AFL-CIO (“Roofers Local 26 95”) to make contributions to the plans. Id. ¶¶ 8, 10; see also id. Exs. A (collective bargaining 27 agreements), B–D (letters of assent), and E (collection policy). Under the terms of the 28 agreements, failure to make timely contributions to the plans makes the employer liable to the 1 plans for all unpaid contributions, liquidated damages, interest on the unpaid contributions, and 2 attorneys’ fees and court costs. Id. ¶¶ 18–19. 3 Bartek has allegedly failed to make payments to the plans in the amount of at least 4 $78,718.45 from October 2019 to February 2020. Compl. ¶ 20. $15,743.75 in liquidated damages 5 have accrued, as have $19,115.65 in interest. Id. ¶¶ 20–23. Plaintiffs’ Complaint asserts a claim for delinquent contributions under ERISA, 29 U.S.C. 6 7 § 1145, Compl. ¶¶ 30–36; and a claim for breach of the collective bargaining agreements under 8 the Labor Management Relations Act (“LMRA”), 29 U.S.C. § 185, Compl. ¶¶ 37–41. Bartek has 9 not appeared in this action despite being served. 10 II. Default may be entered against a party who fails to plead or otherwise defend an action, 11 United States District Court Northern District of California LEGAL STANDARD 12 who is neither a minor nor an incompetent person, and against whom a judgment for affirmative 13 relief is sought. Fed. R. Civ. P. 55(a). After an entry of default, a court may, in its discretion, 14 enter default judgment. Id. R. 55(b)(2); Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). 15 In deciding whether to enter default judgment, a court may consider the following factors: (1) the 16 possibility of prejudice to the plaintiff; (2) the merits of the plaintiff’s substantive claims; (3) the 17 sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a 18 dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) 19 the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 20 Eitel v. McCool, 782 F.2d 1470, 1471–72 (9th Cir. 1986). In considering these factors, all factual 21 allegations in the plaintiff’s complaint are taken as true, except those related to damages. 22 TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917–18 (9th Cir. 1987). When the damages 23 claimed are not readily ascertainable from the pleadings and the record, the court may either 24 conduct an evidentiary hearing or proceed on documentary evidence submitted by the plaintiff. 25 See Johnson v. Garlic Farm Truck Ctr. LLC, 2021 WL 2457154, at *2 (N.D. Cal. Jun. 16, 2021). 26 III. DISCUSSION 27 “When entry of judgment is sought against a party who has failed to plead or otherwise 28 defend, a district court has an affirmative duty to look into its jurisdiction over both the subject 2 United States District Court Northern District of California 1 matter and parties.” In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999). The Court discusses in turn 2 jurisdiction, service of process, the Eitel factors, and Plaintiffs’ requested relief. 3 A. 4 The Court has subject matter jurisdiction over this lawsuit. Federal question jurisdiction 5 exists based on Plaintiffs’ federal ERISA and LMRA claims. 28 U.S.C. § 1331. The Court also 6 has personal jurisdiction over Bartek. Plaintiffs have alleged that Bartek engages in roofing, 7 waterproofing, and/or contracting business in Santa Clara County and is a California corporation. 8 Compl. ¶ 10. It thus appears that Defendant is subject to this Court’s general jurisdiction. See 9 Daimler AG v. Baumann, 571 U.S. 117, 134 (2014). Jurisdiction 10 B. 11 When a plaintiff requests default judgment, the court must assess whether the defendant Service of Process 12 was properly served with notice of the action. See, e.g., Solis v. Cardiografix, No. 12-cv-01485, 13 2012 WL 3638548, at *2 (N.D. Cal. Aug. 22, 2012). A sworn proof of service constitutes “prima 14 facie evidence of valid service which can be overcome only by strong and convincing evidence.” 15 G&G Closed Cir. Events, LLC v. Macias, 2021 WL 2037955, at *2 (N.D. Cal. May 21, 2021) 16 (quoting Securities & Exchg. Comm’n v. Internet Solns. for Business, Inc., 509 F.3d 1161, 1166 17 (9th Cir. 2007)). Plaintiffs have filed a sworn proof of service indicating that the summons and 18 complaint were served on a representative of Bartek via personal service and mail. See ECF No. 19 13. Accordingly, the Court finds that Bartek was properly served with process. 20 C. 21 The Court finds that the Eitel factors support entering a default judgment. On the first Eitel Factors 22 Eitel factor, the Court finds that Plaintiffs would be prejudiced without a default judgment against 23 Bartek. Unless default judgment is entered, Plaintiffs will have no other means of recourse against 24 Bartek. See Ridola v. Chao, 2018 WL 2287668, at *5 (N.D. Cal. May 18, 2018) (plaintiff 25 prejudiced without default judgment because she “would have no other means of recourse against 26 [d]efendants for the damages caused by their conduct”). 27 Under Eitel factors 2 and 3, the Court finds that the Complaint alleges meritorious 28 substantive claims for relief under ERISA and the LMRA, taking the allegations of the Complaint 3 1 as true. The terms of the collective bargaining agreements and Bartek’s letters of assent to the 2 same require Bartek to make payments to the plans for the benefit of the members of Roofers 3 Local 81 and 95. Bartek’s failure to make payments pursuant to those agreements constitute 4 violations of both its contractual and statutory duties under ERISA and the LMRA. See 29 U.S.C. 5 § 1145; see also id. § 1132(g)(2) (entitling Plaintiffs to unpaid contributions, liquidated damages, 6 interest, and attorneys’ fees and costs); id. § 185 (LMRA). 7 The fourth Eitel factor requires the Court to consider the sum of money at stake in relation 8 to the seriousness of Bartek’s conduct. Love v. Griffin, 2018 WL 4471073, at *5 (N.D. Cal. Aug. 9 20, 2018). While the sum requested is not insignificant, the Court finds it proportional to the 10 United States District Court Northern District of California 11 violations of ERISA and the LMRA that are alleged. Under the fifth and sixth Eitel factors, the Court considers whether there is a possibility of 12 a dispute over any material fact and whether Bartek’s failure to respond was the result of 13 excusable neglect. See Love, 2018 WL 4471073, at *5; Ridola, 2018 WL 2287668, at *13. 14 Because Plaintiffs plead plausible claims for violations of ERISA and the LMRA, and as all 15 liability-related allegations are deemed true, there is nothing before the Court that indicates a 16 possibility of a dispute as to material facts. Moreover, there is no indication that Bartek’s default 17 was due to excusable neglect. Bartek has not appeared or responded in this action, suggesting that 18 it has chosen not to present a defense in this matter. Accordingly, these factors weigh in favor of 19 default judgment. 20 On the seventh and final Eitel factor, while the Court prefers to decide matters on the 21 merits, Bartek’s failure to participate in this litigation makes that impossible. See Ridola, 2018 22 WL 2287668, at *13 (“Although federal policy favors decision on the merits, Rule 55(b)(2) 23 permits entry of default judgment in situations, such as this, where a defendant refuses to 24 litigate.”). Default judgment, therefore, is Plaintiffs’ only recourse. See United States v. Roof 25 Guard Roofing Co. Inc., 2017 WL 6994215, at *3 (N.D. Cal. Dec. 14, 2017) (“When a properly 26 adversarial search for the truth is rendered futile, default judgment is the appropriate outcome.”). 27 The Eitel factors thus support entering a default judgment. 28 4 1 D. 2 Plaintiffs request damages for unpaid contributions, liquidated damages, interest, and 3 attorneys’ fees and costs under the statutes and pursuant to the terms of their agreements. Mot. at 4 8–13. Plaintiffs also request an order requiring Bartek to make payments and submit monthly 5 contribution reports as required by their agreements. Id. at 13. The Court finds that Plaintiffs are 6 entitled to each category of relief and analyzes each in turn. 7 United States District Court Northern District of California Requested Relief i. Unpaid Contributions 8 ERISA permits Plaintiffs to recover unpaid contributions to the plans. See 29 U.S.C. 9 § 1132(g)(A). Plaintiffs have provided a declaration attaching the trust funds’ accounting showing 10 the outstanding amounts in unpaid contributions under both the Roofers Local 95 collective 11 bargaining agreement ($62,480.14) and the Roofers 81 Local collective bargaining agreement 12 ($16,238.61) from October 2019 to February 2020. See ECF No. 19-10 (“Stephenson Decl.”), 13 Exs. E (Roofers Local 95 accounting) & F (Roofers Local 81 accounting). The Court finds that 14 the evidence attached to the declaration adequately substantiates Plaintiffs’ request for unpaid 15 contributions. The Court will accordingly award Plaintiffs $78,718.75 in unpaid contributions. 16 17 ii. Liquidated Damages ERISA permits Plaintiffs to recover up to 20% liquidated damages on unpaid 18 contributions. See 29 U.S.C. § 1132(g)(C)(ii). The agreements to which Bartek assented set the 19 liquidated damages rate at 20% per year or $100, whichever is greater. See Stephenson Decl. E at 20 Art. E. Based on the $78,718.45 in unpaid contributions from October 2019 to February 2020, 21 Plaintiffs are entitled to $15,743.75 in liquidated damages. See Mot. at 9–10 (calculations for 22 liquidated damages for both Roofers Local 95 and Roofers Local 81 CBAs). 23 24 iii. Interest ERISA permits, and the agreements allows, Plaintiffs to recover interest on the unpaid 25 contributions and liquidated damages. See 29 U.S.C. § 1132(g)(2)(B). The interest rate is 10% 26 per year under the parties’ agreements. See Stephenson Decl. Ex. D at art. F. A total of 27 $15,929.75 in interest is due on the unpaid contributions and $3,185.90 in interest is due on the 28 liquidated damages. See Mot. at 10–11 (performing calculations for both unions). This amounts 5 1 2 3 iv. Attorneys’ Fees and Costs ERISA entitles Plaintiffs to reasonable attorneys’ fees incurred in an action to enforce the 4 agreements. See 29 U.S.C. § 1132(g)(2)(D). The Court will now analyze Plaintiffs’ request to see 5 if it comports with the legal standards applicable in this circuit. 6 7 United States District Court Northern District of California to a total of $19,115.65 in interest. a. Legal Standard When calculating the appropriate amount of attorneys’ fees, courts in this circuit follow 8 “the ‘lodestar’ method, and the amount of that fee must be determined on the facts of each case.” 9 Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 978 (9th Cir. 2008) (quoting Ferland v. Conrad 10 Credit Corp., 244 F.3d 1145, 1149 n.4 (9th Cir. 2001)). Under the lodestar method, the most 11 useful starting point “is the number of hours reasonably expended on the litigation multiplied by a 12 reasonable hourly rate.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The party seeking an 13 award of fees should submit evidence supporting the hours worked and rates claimed. Id. 14 “In determining a reasonable hourly rate, the district court should be guided by the rate 15 prevailing in the community for similar work performed by attorneys of comparable skill, 16 experience, and reputation.” Chalmers v. City of Los Angeles, 796 F.2d 1205, 1210–11 (9th Cir. 17 1986). “Generally, the relevant community is the forum in which the district court sits.” Barjon v. 18 Dalton, 132 F.3d 496, 500 (9th. Cir. 1997). The fee applicant bears the burden of producing 19 evidence, other than declarations of interested counsel, that the requested rates are in line with 20 those prevailing in the community for similar services by lawyers of reasonably comparable skill, 21 experience, and reputation. See Blum, 465 U.S. at 896 n.11. Further, the district court should 22 exclude hours that were not reasonably expended. See Hensley, 461 U.S. at 434. 23 24 b. Rates The Court finds that the rates Plaintiffs seek are in line with the rates that have been 25 granted in this community for ERISA work performed by attorneys of comparable skill, 26 experience, and reputation. The relevant community for this action is the Northern District of 27 California. Plaintiffs seek an hourly rate of $260.00 per hour for a first-year associate (Cassie M. 28 Peabody) and $325.00 per hour for a shareholder (Lois H. Chang). Courts in this district have 6 1 awarded in ERISA cases rates that exceed the rates Plaintiffs seek. See Bd. of Tr. of Laborers 2 Health & Welfare Trust Fund for N. Cal. v. JS Taylor Contr., Inc., 2020 WL 3441052, at *7 (N.D. 3 Cal. May 26, 2020) ($290 per hour for junior associate and $345 per hour for shareholder); Bd. of 4 Tr. of the Laborers Health & Welfare Trust Fund for N. Cal. v. Lopez, 2018 WL 2117336, at *, *4 5 (N.D. Cal. May 8, 2018) ($275–$290 per hour for junior associates; $325–$345 per hour for 6 partners). Accordingly, the Court finds the rates in line with those appropriate for this work in this 7 community. United States District Court Northern District of California 8 c. Hours 9 Plaintiffs seek an award for 27.7 hours of attorney time in this case since June 2021. 10 Plaintiffs attach a detailed spreadsheet recounting the fees incurred from the inception of the case. 11 See ECF No. 19-1 (“Peabody Decl.”) Ex. F. Plaintiffs spent 10.5 hours drafting and preparing the 12 Complaint, 2.5 hours compiling and filing the Complaint, 0.4 hours performing legal research, 4.6 13 hours performing service of process, 1.7 hours preparing exhibits to the Complaint, and 14 approximately 8 hours filing and drafting the request for entry of default and this motion for 15 default judgment. Peabody Decl. ¶ 12 & Ex. F. 7.7 of these hours were performed by the 16 shareholder and 20 hours were performed by the associate. Peabody Decl. ¶ 13. This amounts to 17 $7,702.50 in attorneys’ fees. Id. The Court finds that these hours are appropriate and will award 18 them to Plaintiffs. Accordingly, the Court awards Plaintiffs $7,702.50 in attorneys’ fees. 19 20 d. Costs Plaintiffs also seek $608.43 in costs for filing the Complaint, performing service of 21 process, postage, and copying. Peabody Decl. ¶ 14 & Exs. F–H. The Court finds these costs are 22 substantiated and will award $608.43 in costs. 23 e. Summary 24 The Court’s award of fees and costs is summarized below. 25 /// 26 /// 27 /// 28 /// 7 1 Name Rate Awarded Hours Awarded Fees/Costs Awarded 2 Lois H. Chang $325 7.7 $2,502.50 3 Cassie M. Peabody $260 20 $5,200 4 Total Fees 5 Costs 6 TOTAL Fees & Costs $7,702.50 $608.43 $8,310.93 7 8 IV. For the foregoing reasons, IT IS HEREBY ORDERED that: 9 United States District Court Northern District of California ORDER 10 • Plaintiffs’ motion for default judgment is GRANTED; 11 • Plaintiffs are AWARDED $78,718.75 in unpaid contributions; 12 • Plaintiffs are AWARDED $15,743.75 in liquidated damages; 13 • Plaintiffs are AWARDED $19,115.65 in interest; 14 • Plaintiffs are AWARDED $8,310.93 in attorneys’ fees and costs;1 15 • Bartek SHALL timely submit all delinquent and currently due monthly 16 contribution reports and payments as required by the agreements between the 17 parties; • 18 Plaintiffs SHALL promptly serve Defendant with this Order and Judgment and file proof of service with the Court; and 19 • 20 The Court will retain jurisdiction of this action pending compliance with this Order and Judgment. 21 22 23 Dated: April 8, 2022 ______________________________________ BETH LABSON FREEMAN United States District Judge 24 25 26 27 28 Plaintiffs’ total requested judgment—$113,578.15—inadvertently omits their request for attorneys’ fees and costs. The Court has corrected this scrivener’s error and added attorneys’ fees and costs to the total judgment. 8 1
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