Trustees of the Plumbers and Pipefitters Union Local 525 Health and Welfare Trust and Plan et al v. Now Services of Nevada, LLC, No. 2:2017cv01734 - Document 32 (D. Nev. 2019)
Court Description: ORDER Granting Plaintiffs' 29 Motion for Default Judgment. The Clerk of Court is directed to enter final Judgment against Defendant Now Services of Nevada, LLC in favor of the Trust Funds for the Sotelo Air Judgment amount ($249,560) plus the Trust Funds' attorney's fees ($21,792) for a total of $271,352 and close this case. Signed by Judge Jennifer A. Dorsey on 5/19/2019. (Copies have been distributed pursuant to the NEF - SLD)
Download PDF
<![CDATA[
Trustees of the Plumbers and Pipefitters Union Local 525 Health and .... Now Services of Nevada, LLC Doc. 32 Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 1 of 7 1 2 3 4 5 6 7 Adam P. Segal, Esq. Nevada Bar No. 6120 Bryce C. Loveland, Esq. Nevada Bar No. 10132 Christopher M. Humes, Esq. Nevada Bar No. 12782 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 Telephone: (702) 382-2101 Facsimile: (702) 382-8135 Email: asegal@bhfs.com Email: bcloveland@bhfs.com Email: chumes@bhfs.com 8 Attorneys for Plaintiffs UNITED STATES DISTRICT COURT 10 DISTRICT OF NEVADA 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP 9 11 12 13 14 15 16 TRUSTEES OF THE PLUMBERS AND PIPEFITTERS UNION LOCAL 525 HEALTH AND WELFARE TRUST AND PLAN; TRUSTEES OF THE PLUMBERS AND PIPEFITTERS UNION LOCAL 525 PENSION PLAN; AND THE TRUSTEES OF THE PLUMBERS AND PIPEFITTERS LOCAL UNION 525 APPRENTICE AND JOURNEYMAN TRAINING TRUST FOR SOUTHERN NEVADA, Case No.: 2:17-cv-01734-JAD-CWH [PROPOSED] ORDER GRANTING MOTION FOR DEFAULT JUDGMENT (ECF NO. 29) Plaintiffs, 17 vs. 18 19 NOW SERVICES OF NEVADA, LLC dba Cool Air Now dba Plumbing Repair Now, a Nevada limited liability company, 20 Defendant. 21 22 Before the Court is the Plaintiffs’, Trustees of the Plumbers and Pipefitters Union Local 23 525 Health and Welfare Trust and Plan, Trustees of the Plumbers and Pipefitters Union Local 525 24 Pension Plan, and the Trustees of the Plumbers and Pipefitters Local Union 525 Apprentice and 25 Journeyman Training Trust for Southern Nevada (“Trust Funds”), Motion for Default Judgment 26 (the “Motion”) against Defendant Now Services of Nevada, LLC (“Now Services”). Default 27 having been entered against Defendant, the Court having reviewed the Plaintiffs’ Motion, being 28 fully advised, and good cause appearing, the Court now provides a brief procedural history and 1 18718595 Dockets.Justia.com 1 makes the following findings of facts and conclusions of law. 2 I. Procedural History. 3 On June 13, 2018, Now Services’s counsel filed a Joint Motion to Withdraw. (ECF No. 4 16.) This Court granted counsels’ Motion to Withdraw and ordered Now Services to notify the 5 Court in writing of the identity of new counsel by July 30, 2018. (Minute Order (ECF No. 18, 6 filed July 5, 2018).) Now Services never complied with the Court’s Order. 7 On August 7, 2018, this Court again ordered Now Services to retain an attorney and for 8 Now Services’s attorney to file a notice of appearance by September 7, 2018. (ECF No. 20.) Now 9 Services again failed to comply with the Court’s order, and continues to do so as of the filing of 10 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 2 of 7 this Order. 11 The Trust Funds then moved for sanctions against Now Services in the form of an entry of 12 Default Judgment. (ECF No. 21, filed Sep. 21, 2018.) On February 8, 2019, the Court held a 13 Hearing and denied the Motion without prejudice, instructing the Trust Funds to first seek entry 14 of default against Now Services. (ECF No. 24, filed Feb. 12, 2019.) The Trust Funds followed the 15 Court’s direction and filed a motion for clerk’s entry of default. (ECF No. 26, filed Feb. 14, 16 2019.) The Court granted the motion for default on February 19, 2019. (ECF No. 27.) The Trust Funds now seek a default judgment. 17 18 II. 1. 19 20 Finding of Facts. Plaintiffs Boards of Trustees are fiduciaries for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”). 2. 21 Juan Carrilio Sotelo dba Sotelo Air and/or Sotelo Air, Inc., dba Cool Air Now 22 (“Sotelo Air”) acted as an employer within the State of Nevada employing persons who perform 23 work covered by a collective bargaining agreement (“CBA”) between Sotelo Air and the United 24 Association of Journeymen and Apprentices of Plumbing and Pipe Fitters Local 525 (“Covered 25 Employees”). 3. 26 27 Juan Carrilio Sotelo owns Sotelo Air, as well as another entity, Now Services of Nevada, LLC dba Cool Air now dba Plumbing Repair Now. 28 2 18718595 Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 3 of 7 4. 1 2 Covered Employees. 5. 3 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP 4 The Trust Funds are ERISA employee benefit trust funds that provide benefits to The CBA incorporates by reference the trust agreements establishing the Trust Funds and any amendments thereto (“Trust Agreements”). 5 6. Pursuant to the CBA, Sotelo Air agreed to abide by the Trust Agreements. 6 7. Sotelo Air failed to remit employee benefit contributions to the Trust Funds. 7 8. In response to Sotelo Air’s failure to remit the amounts owed, the Trust Funds 8 initiated litigation against Sotelo Air. See Board of Trustees of the Plumbers and Pipefitters 9 Union Local 525 Health and Welfare Trust, et al. v. Juan Carrilio Sotelo dba Sotelo Air, et al., 10 No. 2:13-cv-00657-RFB-NJK (D. Nev. Aug. 2, 2013). After trial, the Sotelo Air court awarded 11 the following damages to the Trust Funds: $95,013.77 in unpaid contributions; $69,835.13 in 12 accrued interest up to that date; $69,835.13 in liquidated damages; and $14,875.96 in audit fees 13 (the “Sotelo Air Judgment”), totaling $249,560 (rounded to the nearest dollar). 9. 14 15 business operations to Now Services. 10. 16 17 Shortly after the initiation of the Sotelo Air litigation, Sotelo Air transferred its Now Services performs the same air conditioning installation and repair services as Sotelo Air. 18 11. Sotelo Air assigned its office space lease to Now Services. 19 12. Now Services employs the same accountant and consultants as Sotelo Air. 20 13. Sotelo Air transferred its equipment and customer list to Now Services. 14. Sotelo Air transferred its vehicles to Now Services, changed the signs on the 21 22 vehicles and Now Services began using the vehicles in its business operations. 23 24 25 26 Multiple employees transferred from Sotelo Air to Now Services. 16. Now Services uses the same phone number as Sotelo Air. 17. Now Services shares commonalties in ownership and management, business purposes, operations, customers, supervision and employees with Sotelo Air. 18. 27 28 15. Now Services has been and is being used to avoid collectively-bargained obligations. 3 18718595 Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 4 of 7 19. 1 2 and costs in any instance where the Trust Funds seek a delinquency judgment by default 3 judgment. 4 III. “A corporation, partnership, or association may not appear in court except through 6 licensed counsel.” See Bd. of Trustees of the Plumbers & Pipefitters Union Local 525 Health & 7 Welfare Trust & Plan v. Sec. Plumbing & Air Conditioning, No. 2:14-cv-01027-APG-PAL, 2016 8 WL 7031911, at *2 (D. Nev. Oct. 24, 2016). 2. 9 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 Conclusions of Law. 1. 5 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP The Trust Funds’ Collection Policy requires an additional $5,000 in attorney’s fees Accordingly, “[t]he court may appropriately enter a default judgment against a 10 defendant entity when it has failed to retain counsel to represent it as directed by the court.” Id. 11 (citing United States v. High County Broad Co., Inc., 3 F.3d 1244, 1245 (9th Cir. 1993); see also 12 Emp. Painters’ Trust v. Ethan Enters., Inc., 480 F.3d 993, 998 (9th Cir. 2007) 3. 13 The court may also award sanctions against an unrepresented corporate defendant 14 for violating an order of the court: “[t]he court has the authority under Rule 37(b) to impose 15 litigation-ending sanctions.” Id. 16 4. 17 following factors: (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 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 underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 18 19 20 21 To determine whether a default judgment is appropriate, courts may consider the Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986). 22 5. As to the first element of the Eitel test, the Trust Funds will suffer prejudice if 23 default judgment is not entered because they “‘will likely be without other recourse for recovery’ 24 if default judgment is not entered in their favor.” Tr. of the Bricklayers & Allied Craftworkers 25 Local 13 Defined Contribution Pension Trust for S. Nev. v. Tile Concepts, Inc., No. 2:16-cv- 26 01067-GMN-GWF, 2016 WL 8077987 (D. Nevada Dec. 7, 2016) (quoting Liberty Ins. 27 Underwriters, Inc. v. Scudier, 53 F.Supp.3d 1308, 1318 (D. Nevada July 8, 2013)) 28 4 18718595 Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 5 of 7 6. 1 2 opportunities to retain counsel. As a result of its contravention of Court Orders, Now Services 3 has received sanctions in the form of an entry of default against it. The first Eitel factor favors 4 the entry of default judgment because Now Services has clearly stopped participating in this 5 action, and the Trust Funds will have no recourse against Now Services unless default judgment 6 is granted. 7. 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 7 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP Now Services has failed to participate in this action, despite being given multiple The second and third Eitel factors address the merits and sufficiency of a 8 plaintiff’s claim. Eitel, 782 F.2d at 1471-72. The undisputed facts in this case demonstrate that 9 Now Services has numerous similarities with Sotelo Air, Inc., its alter ego, and was formed to 10 avoid Sotelo Air’s collectively bargained obligations. (Complaint at ¶¶ 12-18, 24). A judgment 11 has been entered against Sotelo Air, demonstrating Now Services’s alter ego’s liabilities to the 12 Trust Funds have been conclusively established. As a result of having default entered against it, 13 Now Services has admitted these facts. The second and third Eitel factors favor the entry of 14 default judgment. 15 8. The fourth Eitel factor concerns the damages at stake in the case. The damages in 16 this case are reasonable and well-documented, based on the Sotelo Air Judgment, the Trust 17 Funds’ governing documents and calculations performed in the Trust Funds’ Motion. Moreover, 18 the damages in this case are dictated by statute. While the amount is not inconsequential, the 19 well documented nature of the amounts coupled with the issuance of Sotelo Air judgment causes 20 this factor to also favor the entry of default judgment. 9. 21 22 23 24 25 Regarding the fifth Eitel factor, there is no possibility of dispute concerning the material facts. Because Now Services has had a default entered against it, the allegations in the complaint are deemed admitted and taken as true. Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citing Pope v. U.S., 323 U.S. 1, 12 (1944)). Therefore, the fifth Eitel factor also favors the entry of default judgment. 26 27 28 5 18718595 Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 6 of 7 10. 1 2 Now Services’s failure to participate was not based on excusable neglect. The Court afforded 3 Now Services multiple chances to retain counsel and participate in this action. Moreover, many 4 months have passed between Now Services violating the Court’s Orders and the filing of this 5 Motion. Now Services elected not to continue, and therefore voluntarily subjected itself to the 6 sanction of default. The sixth Eitel factor favors the entry of a default judgment. 11. 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 7 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP The sixth Eitel factor demonstrates that excusable neglect is not a factor here. The seventh and final Eitel factor also weighs in favor of entering default 8 judgment. Although “should be decided on the merits whenever reasonably possible,” Eitel, 782 9 F.2d at 1472, when defendants fail to answer the complaint, a decision on the merits is 10 “impractical, if not impossible.” Anzalone, 2018 WL 3004664 *7 (citing PepsiCo v. Cal. Sec. 11 Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. Dec. 27, 2002)). “Thus, ‘the preference to decide a 12 case on the merits does not preclude a court from granting default judgment.” PepsiCo, 238 F. 13 Supp.2d at 1177 (quoting Kloepping v. Fireman’s Fund, No. C 94-2684 TEH, 1996 WL 75314 14 (N.D. Cal. Feb. 13, 1996)). Here, Now Services’s election to not continue in this action and 15 resulting default has made a decision on the merits impractical, if not impossible. 12. 16 “The general rule of law is that upon default the factual allegations of the 17 complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. 18 United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citing Pope v. U.S., 323 U.S. 1, 12 19 (1944)). 13. 20 The alter ego doctrine in labor law is designed to prevent employers from escaping 21 their collective bargaining obligations by shifting work to nonunion firms they also own. UA 22 Local 343 United Ass’n of Journeymen & Apprentices of the Plumbing and Pipefitting Industry of 23 the United States and Canada, AFL-CIO v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1475 (9th Cir. 24 1995). 14. 25 A successful application of the alter ego doctrine binds a nonunion employer to the 26 signatory employer’s continuing collective bargaining agreement and obliges the nonunion 27 employer to pay the signatory employer’s debt. Resilient Flooring Covering Pension Fund v. 28 M&M Installation, Inc., 630 F.3d 848, 854 (9th Cir. 2010). 6 18718595 Case 2:17-cv-01734-JAD-CWH Document 31 Filed 04/09/19 Page 7 of 7 15. 1 2 an unrepresented entity, the Court finds that default judgment is appropriate in this instance. 16. 3 ego of Sotelo Air due to their various commonalities and that Now Services is being used to avoid 5 Sotelo Air’s collectively bargained obligations. 7 17. 9 10 Now Services is therefore liable for the Sotelo Air Judgment, jointly and severally with Sotelo Air, for the amount of $249,560. 18. 8 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 702.382.2101 I conclude that based on the facts admitted upon default, Now Services is the alter 4 6 B ROWNSTEIN H YATT F ARBER S CHRECK , LLP Given Now Services’s failure to comply with this Court’s orders and its status as Pursuant to 29 U.S.C. § 1132(g)(2) and the Trust Funds’ governing documents, Now Services is also liable for the Trust Funds’ reasonable attorney’s fees, totaling $21,792, for a total judgment of $271,352, against Now Services and in favor of the Trust Funds. 11 the Clerkisofentered Court IT IS HEREBY ORDERED, ADJUDICATED AND DECREED that judgment 12 is directed to ENTER FINAL JUDGMENT against Services of Nevada, LLC against Services of Nevada, LLC, andDefendant in favor the Trust Funds, for the Sotelo •Defendant TheNow motion for default judgment [ECF No. 29] isofNow GRANTED; and 13 in Funds forCourt the Sotelo AirTrust Judgment amount ($249,560) plus theagainst Trust •of the Trust The Clerk of is directed toFunds’ ENTER FINAL JUDGMENT Airfavor Judgment amount ($249,560) and the attorney’s fees ($21,792) for a Funds' total of Defendant Now Services of Nevada, LLC in favor of the Trust Funds for the attorney's a total of $271,352 and CLOSE THIS CASE. $271,352.fees ($21,792) Sotelo Airfor Judgment amount ($249,560) plus the Trust Funds' attorney's fees ($21,792) for a total of $271,352 and CLOSE THIS CASE. 14 15 16 DATED this ____ day of ________________, _____. _________________________________ ____ _ _________ ____ _____ _ _ U.S. District Judg Judge dge Je dg JJennifer nnifer er A er A.. D Dorsey Dated: May 19, 2019 __________________________________________ UNITED STATES DISTRICT COURT JUDGE 17 18 19 Respectfully submitted by: 20 21 22 23 24 25 26 BROWNSTEIN HYATT FARBER SCHRECK, LLP /s/ Christopher M. Humes Adam P. Segal, Esq., Nevada Bar No. 6120 Bryce C. Loveland, Esq., Nevada Bar No. 10132 Christopher M. Humes, Esq., Nevada Bar No. 12782 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 Attorneys for Plaintiffs 27 28 7 18718595
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
