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International Brotherhood of Electrical Workers District v. Metropolitan Netcomm

October 5, 2010

INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS DISTRICT
PENSION PLAN; NORTHERN CALIFORNIA- NORTHERN NEVADA SOUND & COMMUNICATION DISTRICT NO. 9 HEALTH & WELFARE TRUST FUND; NORTHERN CALIFORNIA-NORTHERN NEVADA SOUND & COMMUNICATION DISTRICT NO. 9 APPRENTICESHIP & TRAINING COMMITTEE; JOHN O'ROURKE, AS TRUSTEE OF THE ABOVE,
PLAINTIFFS,
v.
METROPOLITAN NETCOMM, INC., A CALIFORNIA CORPORATION,
DEFENDANT.



The opinion of the court was delivered by: Lucy H. Koh United States District Judge

ORDER GRANTING IN PART AND DENYIN IN PART AMENDED MOTION FOR DEFAULT JUDGMENT

United States District Court For the Northern District of California

Three employee benefit trusts (International Brotherhood of Electrical Workers District 9 Pension Plan; the Northern California-Northern Nevada Sound and Communications District No. 9 22 Health and Welfare Trust Fund; and the Northern California-Northern Nevada Sound and 23 Communications District No. 9 Joint Apprenticeship and Training Committee) are funded pursuant 24 to a collective bargaining agreement between an electricians' union (International Brotherhood of 25 Electrical Workers, "IBEW") and an employers' association (National Electrical Contractors 26 Association, "NECA"). The trusts and their trustee, John O'Rourke, (collectively, "Plaintiffs") 27 bring this action against Metropolitan Netcomm, Inc. ("Defendant"). Plaintiffs allege that 28 Defendant is delinquent in its payments into the trusts as required by the collective bargaining agreement, in violation of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 2 U.S.C. § 1145, and the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 145. 3 4 motion"), ECF No. 18. Having considered the motion and supporting evidence, Plaintiffs' 5 amended motion for default judgment is hereby GRANTED in part and DENIED in part. 6

10 the Northern California-Northern Nevada Sound and Communications District No. 9 Health and Communications District No. 9 Joint Apprenticeship and Training Committee ("Apprenticeship") §§ 1002(3), (37) and 29 U.S.C. § 1132(d)(1) and jointly trusteed employee benefit trusts pursuant 15 to the LMRA, 29 U.S.C. § 186(c)(5). Compl. ¶ 3. Dominic Nolan is a trustee and fiduciary of the "employer" "engaged in an industry or activity affecting commerce" (electrical wiring installation) 18 within the meaning of 29 U.S.C. § 152 and 29 U.S.C. §§ 1002-03. Compl. ¶ 8. 19

Addendum #2 ("S&C Agreement"), a written collective bargaining agreement between the IBEW 22 Local Union (a union) and the National Electrical Contractors Association (an employers 23 association). The S&C Agreement also requires Defendant to be bound by applicable Trust 24 agreements, which established the Trusts. The S&C Agreement requires a monthly payment to 25 each Fund. See Amended Stephenson Decl., Ex. A at 25-28, 30-31 (S&C Agreement arts. V, VIII, 26 IX). The rates of contributions reflected in the agreements are consistent with the calculations on 27 the benefits transmittal forms prepared by Defendant. Compare id., Ex. A at 37 (S&C Agreement 28

Presently before the Court is Plaintiffs' amended motion for default judgment ("amended

I.Background

A.Factual History

In a Complaint filed on December 2, 2010, Plaintiffs allege as follows:

The International Brotherhood of Electrical Workers District 9 Pension Plan ("Pension"), Welfare Trust Fund ("Health"), and the Northern California-Northern Nevada Sound and 12 (collectively, "Trusts") are multi-employer employee benefit plans pursuant to ERISA 29 U.S.C. 14 Funds under ERISA and the LMRA. Compl. ¶ 4. Defendant ACS Controls Corporation is an 17 At all relevant times, Defendant was a signatory to a Letter of Assent binding it to the 9th District Sound & Communications Agreement & Northern California & Northern Nevada 21 Wages and Fringes Schedule 2-C, requiring employer contributions of $7.35 per job hour for Health Insurance, $1.10 per job hour for Apprenticeship, and $1.70 per job hour for 9th District 2

Pension); with id. Exs. F, H (benefits transmittal forms prepared by Defendant for January 2010 3 and February 2010, calculating benefits at the Schedule 2-C rates).

F, H, pursuant to the Heath Trust Agreement's provision allowing such collateral benefits 7 purchases. See id., Ex. C at 29-30 (Health Trust Agreement art. VII § 5 "Non-Bargaining Unit 8

Defendant's benefit transmittal forms also calculate fringe benefit contributions paid to 10 non-parties. Defendants paid $0.11 per employee hour to the National and the Local NECA-IBEW Administrative Maintenance Fund (AMF); and 0.5% of monthly payroll the National Electrical H; see also id., Ex. A at 37 (S&C Agreement Wages and Fringes Schedule 2-C, setting forth LMCC, NEBF, and AMF payments); Ex. A at 26 (S&C Agreement art. VII, setting forth NECA 17 payments).

Defendant's benefit transmittal forms also show flat monthly payment of $1,000 to the

Health Trust, to purchase health insurance coverage for non-union employee Tori Angland, id. Ex. 6

Employees of Participating Employers"). 9

Labor Management Co-Operation Committees (LMCC). Defendants also paid 3% of monthly payroll to the National Electrical Benefit Fund (NEBF); 0.5% of monthly payroll to the 13

Industry Fund benefiting the National Electrical Contractors Association (NECA). See id. Ex. F, The Trust Agreements provide for prompt payment of all employer contributions to the Funds and in case of late payments, the Trust Agreements provide for liquidated damages, 20 prejudgment interest, and attorney's fees. See id., Ex. C (Health Trust Agreement art. III § 4, 21 requiring payment by the tenth of the month and setting forth 10% liquidated damages and 8% 22 annual interest as penalties for delinquency; art. III § 9, providing for payment of attorney's fees 23 for collection actions); Ex. D (Pension Trust Agreement art. VIII § 2, requiring payment by the 24 twentieth of the month and setting forth 10% liquidated damages and 8% annual interest as 25 penalties for delinquency; art. VIII § 5, providing for payment of attorney's fees for collection 26 actions); Ex. E (Apprenticeship Trust Agreement art. IV § 4, requiring payment by the tenth of the 27 month and setting forth 10% liquidated damages and 12% annual interest as penalties for 28 delinquency; art. IV § 7, providing for payment of attorney's fees for collection actions).

2 contributions for the four months of December 2009 through March 2010. See Compl. ¶ 20. 3

Plaintiffs allege two causes of action: (1) failure to make obligatory payments to a multiemployer 4 plan under the terms of a collective bargaining agreement in violation of ERISA, Compl. ¶ 11-13; 5 and (2) breach of Articles VI and VII of the S&C Agreement in violation of the LMRA. Compl. ¶ 6 14-15. 7

Plaintiffs allege that Defendant breached the Trust Agreements by failing to pay required

B.Procedural History

On December 12, 2010, Plaintiffs filed this suit. See ECF No. 1. On December 22, 2010, Plaintiffs served Defendant with the summons and complaint. See ECF No. 5. Pursuant to Federal 10 February 9, 2011, as a result of Defendant's failure to answer the complaint, Plaintiffs filed a motion for entry of default. See ECF No. 6. On March 1, 2011, the Clerk of Court entered default. 1

15. On June 25, 2011, the Court denied Plaintiffs' initial motion for default judgment on the 15 grounds that insufficient evidence was submitted to support Plaintiffs' damages and attorney's fees 16 calculations. See ECF No. 17. Presently before the Court is Plaintiffs' amended motion for default 17 judgment, filed with supporting amended declarations on July 25, 2011. See ECF No. 18. 18

20 answer a complaint, the plaintiff may move the Court for an entry of default judgment. The grant 21 of default judgment is within the discretion of the Court. Draper v. Coombs, 792 F.2d 915, 924 22

(9th Cir. 1986). In the Ninth Circuit, the district court must consider seven factors: (1) the 23 possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive claim; (3) the 24 sufficiency of the complaint; (4) the sum of money at stake in the action; (5) the possibility of a 25 dispute concerning material facts; (6) whether the default was due to excusable neglect; and (7) the 26 strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 27

Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). 28

Rule of Civil Procedure 12(a)(1), Defendant's answer was due on January 12, 2011. See id. On See ECF No. 11. Plaintiffs filed a motion for default ...


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