The opinion of the court was delivered by: Hon. Napoleon A. Jones, Jr. United States District Judge
(1) GRANTING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT; (2) AWARDING DAMAGES IN THE AMOUNT OF $15,839.77 TO PLAINTIFFS; and (3) GRANTING PLAINTIFFS FIFTEEN (15) DAYS LEAVE TO FILE NECESSARY EVIDENCE TO SUPPORT CALCULATION OF INTEREST OWED TO PLAINTIFF NATIONAL ELECTRIC BENEFIT FUND
Before the Court is Plaintiffs Board of Trustees of the San Diego Electrical Pension Trust, et al.'s ("Plaintiffs") Motion for Default Judgment against Defendant Excellent Electric, Inc. ("Defendant"). [Doc. No. 18.] Defendant has not filed an opposition to Plaintiffs' Motion for Default Judgment. The Court reviewed the papers submitted and determined that the issues presented are appropriate for decision without oral argument pursuant to Civil Local Rule 7.1(d)(1). [Doc. No. 21]; see S.D. Cal. Civ. R. 7.1(d)(1) (2006).
For the reasons discussed below, the Court (1) GRANTS Plaintiffs' Motion for Default Judgment; (2) AWARDS Plaintiffs $8,003.23 in unpaid contributions; (3) AWARDS Plaintiffs $871.57 in interest on the unpaid contributions (4) GRANTS Plaintiffs fifteen (15) days leave to the necessary evidence to calculate the interest owed to the National Electrical Benefit Fund; AWARDS Plaintiffs $1,359.87 in liquidated damages; (6) AWARDS Plaintiffs $5,106.50 in attorneys' fees; and (7) AWARDS Plaintiffs $498.60 in court costs.
Defendant is a corporation with its principal place of business in El Cajon, County of San Diego, CA. (See Compl. ¶ 3.) Plaintiffs are a group of joint labor-management trust funds and various entities all administered and located within San Diego County, except for Plaintiff Board of Trustees of the National Electrical Benefit Fund, which is an entity with its principal place of business in the State of Maryland. (See Compl. ¶¶ 1-3.) Defendant and Plaintiff the International Brotherhood of Electrical Workers Local Union No. 569 are signatories to a Collective Bargaining Agreement. (See Compl. ¶ 7; Pls.' Reply to Order Re: Supplemental Briefing on Pls.' Mot. for Default J., Ex. C.) Because Defendant employed electricians covered by the Collective Bargaining Agreement, it was required to report the hours worked by these employees and pay monthly fringe contributions on their behalf to Plaintiffs. (See Compl. at 4.)
As a signatory to the Collective Bargaining Agreement, Defendant was also a signatory and governed by the terms of the Trust Agreements for the San Diego Electrical Pension Trust, the San Diego Electrical Health & Welfare Trust, the San Diego Electrical Training Trust, the San Diego Electrical Annuity Plan, and the National Electrical Benefit Fund. (See Mot. for Default J. at 2, Ex. B, C, D, E, and F.) These Trusts provide for the assessment of interest and liquidated damages in the event that Defendant is delinquent in its fringe benefit contributions to Plaintiffs. (See id. at 3.)
On June 2, 2005, Plaintiffs filed and served a Complaint against Defendant, alleging a demand for accounting, breach of contract, injunctive relief, and declaratory relief. [Doc. Nos. 1, 2.] On November 3, 2005, Defendant's attorney filed a motion to be relieved as counsel. [Doc. No. 11.] On February 23, 2006, this Court granted the motion and provided Defendant leave until March 27, 2006, to find replacement counsel and have said counsel appear on its behalf. [Doc. No. 17.] Because no replacement counsel appeared on Defendant's behalf by March 27, 2006, this Court entered default in Plaintiffs' favor, nunc pro tunc, on April 1, 2006.
On May 5, 2006, Plaintiffs filed the instant Motion for Default Judgment against Defendant. [Doc. No. 19.] Defendant filed no response. On September 11, 2006, this Court filed an Order for Supplemental Briefing on Plaintiffs' Motion for Default Judgment. [Doc. No. 22.] On September 21, 2006, Plaintiffs filed a Reply to the Order for Supplemental Briefing. [Doc. No. 23.]
A default judgment is appropriate where the defendant "has received actual or constructive notice of the filing of the action and failed to answer." Direct Mail Specialists, Inc. v. Eclat Computerized Techs., Inc., 840 F.2d 685, 690 (9th Cir. 1988). A plaintiff seeking judgment by default must apply to the Court if the plaintiff's claim is not "for a sum certain or for a sum which can by computation be made certain." Fed. R. Civ. P. 55(b)(1), 55(b)(2). Entry of default judgment is at the discretion of the Court. See Eitel v. McCool, 782 F.2d 1470, 1471 (9th Cir. 1986).
The Court considers the following factors when deciding a plaintiff's motion for entry of default judgment:
(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.
, 782 F.2d at 1471-72. When evaluating the Eitel factors and assessing liability, the well-pleaded " 'factual allegations of the complaint, except those relating to the amount of damages, [are] taken as true.' " TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). A default judgment can be entered without a hearing if the "amount claimed is a liquidated sum or capable of mathematical calculation." Davis v. Fendler, 650 F.2d 1154, 1161(9th Cir. 1981). In assessing damages, the court must review facts of record, requesting more information if necessary, to fix the amount to which plaintiff is lawfully entitled. See Pope v. United States, 323 U.S. 1, 12 (1944).
Rule 55(b)(2) of the Federal Rules of Civil Procedure Provides for Entry of Default Judgment against Defendant
Rule 55(b)(2) of the Federal Rules of Civil Procedure provides several procedural requirements before this Court can enter default judgment against Defendant. Default judgment cannot be entered against infants or incompetent persons unless they are represented by a "general guardian, committee, conservator, or other such representative." Fed. R. Civ. P. 55(b)(2). Additionally, the defendant must "be served with written notice of the application for judgment at least 3 days prior to the hearing" if the defendant has appeared in the action. Id.
Here, Plaintiffs have satisfied the requirements of Rule 55(b)(2). Defendant is a California corporation and thus the protections provided to infants and incompetent persons are inapplicable. (See Compl. ¶ 5.) On May 5, 2005, Plaintiffs served their Motion for Default Judgment, which included the hearing date of June 5, 2006, on Defendant. (See Mot. for Default J.) Therefore, Defendant received notice of Plaintiffs' Motion for Default Judgment more than three days prior to the hearing date on such Motion. Accordingly, and for the foregoing reasons, the Court FINDS that Plaintiffs have met the requirements of Rule 55(b)(2) of the Federal Rules of Civil Procedure.
The Eitel Factors Weigh in Favor of Granting Entry of Default Judgment
The Eitel factors weigh in favor of granting entry of default judgment, and the Court will address each in turn. See Eitel, 782 F.2d at 1471-72.
A. Plaintiffs Filed a Well-Pleaded Complaint and are Likely to Succeed on the Merits
1. Sufficiency of the Complaint
Plaintiffs filed a well-pleaded Complaintas required by the Federal Rules of Civil Procedure. Plaintiffs set forth the parties pursuant to Federal Rule of Civil Procedure 10(a). Compl. ¶¶ at 1-5.) See Fed. R. Civ. P. 10(a). They also included a short and plain statement of the claims entitling them to relief, and requested judgment for the amount found to be due on the delinquent contributions as well as interest and liquidated damages pursuant to Federal Rule of Civil Procedure 8(a). (See generally Compl.) See Fed. R. Civ. P. 8(a). Plaintiffs also properly served Defendant with the Complaint and a summons specifying the deadline for responding to the Complaint. [Doc. Nos. 1-2.]See Fed. R. Civ. P. 4-5. Accordingly, and for the foregoing reasons, the Court FINDS that Plaintiffs' Complaint is sufficient under the Federal Rules of Civil Procedure.
2. Merits of Plaintiffs' Substantive Claims
In order for this Court to enter a Default Judgment against Defendant, Plaintiffs' Complaint must state a claim upon which Plaintiffs may recover. See Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978). If the Court finds that Plaintiffs would have likely succeeded on the merits of their substantive claims had Defendant not defaulted, then default judgment is appropriate. See Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980).
A review of the Motion and related papers submitted to the Court indicates that Plaintiffs seek relief stemming from violation of 29 U.S.C. § 1145, which provides that, "every employer who is obligated to make contributions to a multiemployer plan under the terms of a collectively bargained agreement shall to the extent not inconsistent with the law, make such contributions in accordance with the terms and conditions of such plan or agreement." 29 U.S.C. § 1145 (1980).
In the instant case, Plaintiffs brought this ERISA action pursuant to 29 U.S.C. § 1132(g), which grants the fiduciaries of an employee-benefits fund a federal cause of action to enforce the employer's obligations imposed by 29 U.S.C. § 1145. In order to prevail on a claim for unpaid contributions under an ERISA plan, a plaintiff must provide that: (1) the trust funds are a qualified multi-employer plan as defined by 29 U.S.C. § 1002(37); (2) the defendant is an employer obligated to contribute under the plan's terms; and (3) the defendant failed to contribute in accordance to the plan. See Bd. of Tr. of the Sheet Metal Workers Health Care Plan of N. CA v. Gervasio Envtl. Sys., 2004 WL 1465719, at *2 (N.D. Cal. May 21, 2004; see also Nw. Adm'rs, Inc. v. Albertson's, Inc., 104 F.3d 253, 257 (9th Cir. 1996) (holding that a plaintiff is entitled to a mandatory award under § 1332(g)(2) if "(1) the employer [is] delinquent at the time the action is filed; (2) the district court [entered] a judgment against the employer; and (3) the plan [provided] for such an award.")
In their Complaint, Plaintiffs have alleged all the facts necessary to establish their ERISA claim in order to support an award of default judgment. Plaintiffs represent various joint labor-management trust funds, which qualify as a multi-employer plan within the meaning of 29 U.S.C. § 1002(37). On September 28, 2004, Plaintiffs entered into a Collective Bargaining Agreement with Defendant. (See Pls' Reply to Order Re: Supplemental Briefing on Pls.' Mot. for Default J., Ex. C.) Under the Collective Bargaining Agreement, Defendant was required to submit monthly reports indicating the identities of its electrician employees covered under the Agreement, and the hours they worked. (See Mot. for Default J., Ex. A at 9.) Defendant was also required to pay monthly fringe benefit contributions to Plaintiffs for the hours worked by these employees. (See Mot. for Default J., Ex. A.) Plaintiffs allege that Defendant failed to submit the reports and make contributions according to the Collective Bargaining Agreement for the months of January, February, March, and April 2005. (See Mot. for Default J. at 3-4.) Accepting all factual allegations as true, the Complaint establishes that Defendant is in clear violation of the terms of the Collective Bargaining Agreement. Therefore, Plaintiffs have adequately demonstrated a substantial likelihood of success on the merits of their claim.
B. Plaintiffs Will Suffer Prejudice Without Entry of Default Judgment
Plaintiffs "would suffer prejudice if . . . default judgment is not entered [if the] [p]laintiffs would be denied the right to judicial resolution of the claims presented and would be without other recourse for recovery." Elektra Entm't Group Inc. v. Crawford, 226 F.R.D. 388, 392 (C.D. Cal. 2005). Here, the parties entered into a Collective Bargaining Agreement, whereby Defendant was obligated to make timely contributions to Plaintiffs' Trust Funds. According to Plaintiffs, Defendant has breached this obligation under the Collective Bargaining Agreement by failing to make the payments. Because Defendant defaulted on their regular payment schedule, Plaintiffs have suffered damages not only in the delinquent amounts, but also any interest that would have accrued on the contributed funds. Without an entry of a judgment by default, Plaintiffs will be left with no alternative recourse against Defendant, and will be unable to collect the amounts owed to them. Thus, the Court FINDS thatdenial of the relief requested will be prejudicial to Plaintiffs, and this factor weighs in favor of granting a default judgment.
C. The Sum of Money at Stake is not Unreasonable
The third Eitel factor assesses the reasonableness of the potential award if a default judgment is entered against Defendant. Under this factor, the Court should take into account the amount of money at stake in relation to the seriousness of Defendant's conduct. See PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1176 (C.D. Cal. 2002). If the sum of money at issue is reasonably proportionate to the harm caused by Defendant's actions, then default judgment is warranted. See Bd. of Trs. of Cal. Metal Trades v. Pitchometer Propeller, 984 F. Supp. 978, 978 (N.D. Cal. 1997.) This Court may also take into consideration whether "the amount of money at stake is reasonable, properly documented and contractually justified." See Bd. of Trs. of N. Cal. Sheet Metal Workers v. Peters, 2000 U.S. Dist. LEXIS 19065, at *5 (N.D. Cal. December 29, 2000).
In the instant case, Plaintiffs only seek the amount owed under the terms of the Collective Bargaining Agreement and Trust Agreements. (See Mot. for Entry of Default J. at 3-5.) The amount requested by Plaintiffs is meant to place Plaintiffs in the position they would have been in had Defendant not breached the Collective Bargaining Agreement. This amount is not substantial enough to weigh in favor of denying a default judgment. Moreover, it reflects only four months of expected contributions to the Trusts, plus the costs of enforcing the Collective Bargaining Agreement. The amount of money demanded is not a large sum under these circumstances and an award in that amount is not exceedingly harsh. Thus, the Court FINDS that the sum of money at stake is not unreasonable.
D. There is No Dispute Concerning Material Facts
The " 'factual allegations of the complaint, except those relating to the amount of damages, [are] taken as true.' " TeleVideo,826 F.2d at 917-18. The Court has not been presented with any evidence that suggests there is a serious dispute concerning the material facts. Defendant filed a conclusory answer asserting several affirmative defenses without providing any specific facts or allegations which contradict the allegations of the Complaint. Additionally, it appears that Defendant is not likely to defend this suit. Other than filing an Answer, Defendant has completely failed to respond to discovery requests, and has not appeared ...