Board of Trustees of the Teamsters Local 631 Security Fund for Southern Nevada et al v. ABC Expo Services, LLC, No. 2:2019cv00164 - Document 8 (D. Nev. 2019)
Court Description: ORDER Granting Plaintiffs' 7 Motion for Default Judgment. The Clerk of Court is directed to enter final Judgment against ABC Expo Services, LLC for delinquent employee-benefit contributions of $14,771, liquidated damages of $6,2 98, interest of $6,298, audit fees of $2,660, and attorney's fees and costs of $9,624, minus a previous recovery of $9,342, for a total of $30,309 and close this case. Signed by Judge Jennifer A. Dorsey on 5/19/2019. (Copies have been distributed pursuant to the NEF - SLD)
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Board of Trustees of the Teamsters Local 631 Security Fund for Southern ...v. ABC Expo Services, LLC Doc. 8 Case 2:19-cv-00164-JAD-GWF Document 7-1 Filed 03/21/19 Page 89 of 94 1 2 3 4 5 6 7 8 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 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 (702) 382-2101 9 10 Attorneys for Plaintiffs UNITED STATES DISTRICT COURT 11 DISTRICT OF NEVADA 12 13 14 15 16 17 18 19 20 BOARD OF TRUSTEES OF THE Case No. 2:19-cv-00164-JAD-GWF TEAMSTERS LOCAL 631 SECURITY FUND FOR SOUTHERN NEVADA; BOARD OF TRUSTEES OF THE TEAMSTERS CONVENTION INDUSTRY TRAINING FUND, [PROPOSED] ORDER GRANTING Plaintiffs, MOTION FOR DEFAULT JUDGMENT (ECF NO. 7) vs. ABC EXPO SERVICES, LLC, a Nevada limited liability company 21 Defendant. 22 23 Before the Court is the Plaintiffs’, the Boards of Trustees of the Teamsters Local 631 24 Security Fund for Southern Nevada, and of the Teamsters Convention Industry Training Fund 25 (“Trust Funds”), Motion for Default Judgment against Defendant ABC Expo Services, LLC 26 (“ABC Expo”). (ECF No. 7.) Default having been entered against Defendant, the Court having 27 28 19026283 1 Dockets.Justia.com Case 2:19-cv-00164-JAD-GWF Document 7-1 Filed 03/21/19 Page 90 of 94 1 reviewed the Plaintiffs’ Motion, being fully advised, and good cause appearing, the Court now 2 makes the following findings of facts and conclusions of law. 3 I. 1. 4 5 Plaintiffs Boards of Trustees are fiduciaries for purposes of the Employee Retirement Income Security Act of 1974 (“ERISA”). 2. 6 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 (702) 382-2101 Finding of Facts. Defendant ABC Expo, acted as an employer within the State of Nevada employing 7 persons who perform work covered by a collective bargaining agreement (“CBA”) between ABC 8 Expo and the International Brotherhood of Teamsters Local 631 (“Union”).The Trust Funds are 9 ERISA employee benefit trust funds that provide benefits to Covered Employees. 3. 10 The CBA requires that in the event ABC Expo subcontracts work covered by the 11 CBA to a company not signatory to a CBA with the Union, the ABC Expo would ensure that the 12 subcontractor observes the applicable working conditions and wage rates, including the 13 remittance of employee benefit contributions to the Trust Funds. 14 4. 15 LLC (“T & L”). 16 5. T & L was not signatory to a CBA with the Union. 17 6. T & L failed to remit all required employee benefit contributions to the Trust 7. Demand has been made to ABC Expo to remit T & L’s delinquent contributions 18 ABC Expo subcontracted work covered under the CBA to Thunder and Lightning, Funds. 19 20 and other amounts due to the Trust Funds on behalf of T & L, but ABC Expo has failed and 21 refused to pay, and continues to refuse to pay these amounts. 8. 22 23 24 25 that ABC Expo owes $1,060, to the Trust Funds for employee benefit contributions. Additionally, the Audit also shows that ABC Expo owes $13,711, due to T & L’s failure to remit employee benefit contributions. 9. 26 27 28 A contract compliance review (“Audit”) was performed of ABC Expo, showing The Trust Funds’ Collection Policy requires an additional $5,000 in attorney’s fees and costs in any instance where the Trust Funds seek a delinquency judgment by default judgment. 19026283 2 Case 2:19-cv-00164-JAD-GWF Document 7-1 Filed 03/21/19 Page 91 of 94 1 II. 1. 2 “The general rule of law is that upon default the factual allegations of the 3 complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. 4 United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citing Pope v. U.S., 323 U.S. 1, 12 (1944)). 2. 5 The Trust Agreements and 29 U.S.C. § 1145 require each employer, including 6 ABC Expo, to submit monthly remittance reports and to make timely contributions to the Trust 7 Funds on behalf of each employee who performs work covered by the CBA. 3. 8 9 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 (702) 382-2101 Conclusions of Law. 10 If ABC Expo uses a subcontractor to perform work covered by the CBA, the CBA requires ABC Expo to “require the subcontractor to observe the applicable wage rates, hours and working conditions set forth in this Agreement.” 4. 11 Courts have routinely held that if a subcontractor does not pay employee benefit 12 contributions required by collective bargaining agreement, the signatory employer is liable for its 13 subcontractor’s delinquent contributions. See Seymour v. Hull & Moreland Engineering, 605 14 F.2d 1105, 1114-15 (9th Cir. 1979); In re Swanson-Dean Corp., 61 L.A. 682, 686-87 (1977), 15 enforced, 646 F.2d 376 (9th Cir. 1981) (“The (subcontracting) language accepted by the 16 employer is analogous to that used in guarantor agreements, or agreements of indemnification, 17 and it is our conclusion that the parties intended that the employer would pay if the subcontractor 18 did not”); Brogan v. Swanson Painting Co., 682 F.2d 807, 809 (9th Cir. 1982); Bd. of Trustees of 19 N. California Floor Covering Indus. v. Dalton Interiors, Inc., No. C 98 2211 EDL, 2000 WL 20 21 152131, at *2 (N.D. Cal. Feb. 8, 2000) (“Dalton is liable for unpaid non-union subcontractor contributions”). 5. 22 23 24 25 subcontractor’s default, the trustees “would have no remedy for defendant’s undisputed breach of contract.” Trustees of Teamsters Const. Workers Local No. 13, Health & Welfare Tr. Fund for Colorado v. Hawg N Action, Inc., 651 F.2d 1384, 1387 (10th Cir. 1981). 6. 26 27 28 If the court did not require the employer to make trust fund payments upon the Federal Rule of Civil Procedure 55(b)(2) permits a court to grant default judgment against a defendant who has failed to plead or defend an action. To determine whether a default judgment is appropriate, courts may consider the following factors: 19026283 3 Case 2:19-cv-00164-JAD-GWF Document 7-1 Filed 03/21/19 Page 92 of 94 1 (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. 2 3 4 Eitel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986). 5 6 7 8 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 (702) 382-2101 9 10 11 12 13 7. As to the first element of the Eitel test, the Trust Funds will suffer prejudice if default judgment is not entered because they “‘will likely be without other recourse for recovery’ if default judgment is not entered in their favor.” Tr. of the Bricklayers & Allied Craftworkers Local 13 Defined Contribution Pension Trust for S. Nev. v. Tile Concepts, Inc., No. 2:16-cv01067-GMN-GWF, 2016 WL 8077987 (D. Nev. Dec. 7, 2016) (quoting Liberty Ins. Underwriters, Inc. v. Scudier, 53 F. Supp. 3d 1308, 1318 (D. Nev. July 8, 2013)). ABC Expo has failed to meet its obligations under the collective bargaining agreement to ensure that its subcontractor, T & L, remitted contributions to the Trust Funds. ABC Expo has refused to pay these amounts and failed to participate in this litigation. Therefore, because the Trust Funds will 14 have no recourse against ABC Expo unless default judgment is granted, the first Eitel factor 15 favors the entry of default judgment. 16 8. The second and third Eitel factors address the merits and sufficiency of a 17 plaintiff’s claim. Eitel, 782 F.2d at 1471-72. The undisputed facts in this case demonstrate that 18 ABC Expo failed to monitor and require T & L, ABC Expo’s subcontractor, to make the same 19 contributions as required by the collective bargaining agreement. (Complaint at ¶ 8). As a result 20 of ABC Expo’s failure to require T & L to make the employee benefit contributions to the Trust 21 Funds, ABC Expo is liable to the Trust Funds for both its and T & L’s unpaid contributions, 22 interest, liquidated damages, audit fees and attorney’s fees. See 29 U.S.C. § 1132(g)(2). As a 23 result of having default entered against it, ABC Expo has admitted these facts, which should be 24 taken as true. The second and third Eitel factors favor the entry of default judgment. 25 9. The fourth Eitel factor concerns the damages at stake in the case. The damages in 26 this case are reasonable and well-documented, based on the Trust Funds’ governing documents 27 and 29 U.S.C. § 1132(g)(2). This factor also favors the entry of default judgment. 28 19026283 4 Case 2:19-cv-00164-JAD-GWF Document 7-1 Filed 03/21/19 Page 93 of 94 10. 1 2 material facts. Because ABC Expo has had a default entered against it, the allegations in the 3 complaint are deemed admitted and taken as true. Geddes v. United Fin. Group, 559 F.2d 557, 4 560 (9th Cir. 1977) (citing Pope v. U.S., 323 U.S. 1, 12 (1944)). Therefore, the fifth Eitel factor 5 also favors the entry of default judgment. 11. 6 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 (702) 382-2101 Regarding the fifth Eitel factor, there is no possibility of dispute concerning the The sixth Eitel factor demonstrates that excusable neglect is not a factor here. The 7 Complaint was filed on January 28, 2019. (ECF No. 1) A Summons was issued to ABC Expo on 8 the same day (ECF No. 3), and the registered agent accepted service of the Summons and 9 Complaint on January 31, 2019. (ECF No. 4.) ABC Expo failed to plead or otherwise defend the 10 suit, resulting in the entry of default on March 1, 2019. (ECF No. 6.) Moreover, ABC Expo has 11 relayed both through its counsel and principal that ABC does not intend to participate in this 12 proceeding. In short, there is no evidence that ABC Expo’s default was the result of excusable 13 neglect. The sixth Eitel factor favors the entry of a default judgment. 12. 14 The seventh and final Eitel factor also weighs in favor of entering default 15 judgment. Although “should be decided on the merits whenever reasonably possible,” Eitel, 782 16 F.2d at 1472, when defendants fail to answer the complaint, a decision on the merits is 17 “impractical, if not impossible.” Anzalone, 2018 WL 3004664 *7 (citing PepsiCo v. Cal. Sec. 18 Cans, 238 F.Supp.2d 1172, 1177 (C.D. Cal. Dec. 27, 2002)). “Thus, ‘the preference to decide a 19 case on the merits does not preclude a court from granting default judgment.” PepsiCo, 238 F. 20 21 22 Supp.2d at 1177 (quoting Kloepping v. Fireman’s Fund, No. C 94-2684 TEH, 1996 WL 75314 (N.D. Cal. Feb. 13, 1996)). Here, ABC Expo’s failure to appear has made a decision on the merits impractical, if not impossible. 13. 23 24 25 The damages set forth by the Trust Funds’ and their corresponding calculations are supported by the CBA, Trust Agreements, the Trust Funds’ Collection Policy, and 29 U.S.C. 1132(g)(2). 26 27 28 19026283 5 Case 2:19-cv-00164-JAD-GWF Document 7-1 Filed 03/21/19 Page 94 of 94 1 IT IS HEREBY ORDERED, ADJUDICATED AND DECREED that judgment is entered 2 against •Defendant ABC Expo Services, LLC, [ECF for delinquent employee benefit The motion for default judgment No. 7] is GRANTED; and contributions 3 • liquidated The Clerk of Court is directed ENTERaudit FINAL against fees ($14,711), damages ($6,298), interestto ($6,298), fees JUDGMENT ($2,660) and attorney’s Defendant ABC Expo Services, LLC for delinquent employee-benefit contributions of and costs ($9,624), minus a damages previous of recovery $9,342,offor a totalaudit of $30,309. $14,771, liquidated $6,298,ofinterest $6,298, fees of $2,660, and attorney's fees and costs of $9,624, minus a previous recovery of $9,342, for a total of $30,309 and CLOSE THIS CASE. DATED this ____ day of ________________, _____. _________________________________ _____ _ ______ ___ ____ ____ _______ U.S. District Ju Judge uddgge Jennif Jennifer fer e A. A D Dorsey __________________________________________ Dated: May 19 19, 2019 UNITED STATES DISTRICT COURT JUDGE 4 5 6 7 8 BROWNSTEIN HYATT FARBER SCHRECK, LLP 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 (702) 382-2101 9 10 Respectfully submitted by: 11 BROWNSTEIN HYATT FARBER SCHRECK, LLP 12 15 /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 16 Attorneys for Plaintiffs 13 14 17 18 19 20 21 22 23 24 25 26 27 28 19026283 6
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