The opinion of the court was delivered by: WILLIAM ALSUP, District Judge
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS'
APPLICATION FOR DEFAULT JUDGMENT
In this action alleging breach of a collective bargaining
agreement, plaintiffs Jose Moreno and Larry Totten, acting as
co-chairmen of the board of trustees for several laborers' trust
funds (collectively "Trust Funds"), apply for default judgment
against defendant Summit Electrical Construction, Inc. Summit has
never responded to this lawsuit in any way. Plaintiff's
application is therefore GRANTED IN PART. Summit is ORDERED
to pay a total of $42,915.54 to plaintiffs and to submit to an
audit, as detailed below. The Court reserves jurisdiction over
the case to enforce the injunction, and to entertain any motions
to increase the judgment if the audit reveals other liabilities or to award
additional attorney's fees. The Court DENIES the motions for a
judgment declaring that plaintiffs are entitled to attorney's
fees and costs to enforce this judgment, and for an order on
post-judgment interest. No part of this order is a judgment or
injunction enforceable against defendants Gary Brown or Erik
On March 17, 2005, plaintiffs filed this Employee Retirement
Income Security Act (ERISA) action. They alleged breach of a
collective bargaining agreement by Summit and Gary Brown. The
complaint was amended July 25, 2005, adding Erik Burdan as
another defendant. Plaintiffs sought unpaid contributions of
$24,406.69 to funds that provide workers with health, vacation,
holiday, pension and training benefits. They also wanted the
Court to order defendants to allow the Trust Funds to inspect
their records and thus determine how much more the defendants may
owe. Plaintiffs additionally asked for liquidated damages
($3,000), court costs ($857.92), attorney's fees ($12,847.50) and
Plaintiffs allege the following facts. The trust funds are
third-party beneficiaries to a collective bargaining agreement
between the Northern California District Council of Laborers and
an employer association that represents construction-industry
employers doing business in Northern California. Summit became a
signatory to the agreement about March 2, 2001. That agreement
never was terminated. It bound Summit to pay trust-fund
contributions each month, $150 in liquidated damages each time
they did not make a monthly contribution on time and certain
attorney's fees and costs in the event of a delinquency.
Defendant failed to pay $24,406.69 for the months of December
2004, and January and February 2005. Liquidated damages grew $150
for late payment between April 2003 and March 2005. Interest
accrued at a monthly rate of 1.5 percent of the
On June 15, 2005, the Clerk of the Court entered default as to
ANALYSIS In deciding whether to enter default judgment, courts deem true
all well-pleaded allegations in the complaint, except those
related to the amount of damages. Geddes v. United Fin. Group,
559 F.2d 557, 560 (9th Cir. 1977).
When a party does not defend against a claim for affirmative
relief, the clerk must enter the party's default. FRCP 55(a).
Upon such a failure to defend, the court then may enter, in its
discretion, a judgment by default. Yew v. Dulles, 236 F.2d 415,
416 (9th Cir. 1956). In making its decision, the court may
consider seven factors set forth in Eitel v. McCool:
(1) the possibility of prejudice to the plaintiff,
(2) the merits of the 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.
782 F.2d 1470
, 1471-72 (9th Cir. 1986).
The complaint is sufficient because it states the grounds upon
which the Court's jurisdiction depends, states a claim for breach
of a collective-bargaining agreement which would entitle
plaintiffs to relief, and demands a money judgment and an order
for injunctive relief (Amended Compl.). See also FRCP 8(a).
There is no reason to question the merits of plaintiffs'
substantive claims. According to the undisputed record, Summit
has failed to pay money it owes and has agreed to submit to an
audit in circumstances such as this.
Denying the Trust Funds' application would leave the plaintiffs
without a remedy.
In general, the fact that a large sum of money is at stake is a
factor disfavoring default judgment. Cf. Eitel,
782 F.2d at 1472 (stating that the fact that $3 million was at stake, when
considered in light of the parties' dispute as to material facts,
supported the court's decision not to enter judgment by default).
The Trust Funds have asked for a damages of $42,915.54. That
amount pales beside the $3 million at stake in Eitel.
Indications that there is a dispute of material fact weigh
against entry of default judgment. Eitel, 782 F.2d at 1471-72.
Summit has defaulted and the Court therefore must take as true all well-pleaded allegations in the ...