United States District Court, N.D. California
ORDER GRANTING PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT
EDWARD M. CHEN, District Judge.
Plaintiffs are fiduciaries for the following trust funds: the HOD Carriers Local 166 Pension Trust Fund; HOD Carriers Local 166 Pension Trust Fund; HOD Carriers Local 166 West Bay Pension Trust Fund; HOD Carriers Local 166 Health, Welfare and Vacation Trust Fund; HOD Carriers Local 166 Industry Promotion Fund; and HOD Carriers Local Union No. 166 (collectively, the "Trust Funds"). Plaintiff Samuel Robinson is the Trustee of each of the above-listed Trust Funds. The Trust Funds are all employee benefit plans pursuant to the Employee Retirement Income Security Act ("ERISA"). See Docket No. 1 (Complaint). The Trust Funds filed this lawsuit against Defendants James Island Plastering, Inc. and Irving G. James (the President and CEO of James Island) asserting claims pursuant to ERISA and the Labor Management Relations Act ("LMRA").
After Defendants failed to respond to the Trust Funds' complaint, the clerk of this court entered default against the Defendants on August 26, 2014. See Docket No. 13. Trust Funds thereafter moved this Court for entry default judgment. See Docket No. 17. A hearing was held on February 19, 2015. Docket No. 21. At the hearing, Plaintiffs were directed to file a supplemental brief on the issue of whether Defendant Irving James should be held personally liable for James Island Plastering's outstanding contributions. Id. Trust Funds filed their supplemental brief on February 26, 2015. Docket No. 22. Having considered the Plaintiffs' briefs and accompanying submissions, the Court hereby GRANTS the motion for default judgment against both Defendants.
I. FACTUAL & PROCEDURAL BACKGROUND
On March 31, 2003, James Island signed a Letter of Assent with the HOD Carriers Union Local No. 36 and the Plastering Contractors Association of San Francisco and San Mateo Counties. Docket No. 17 (Martinez Decl., Ex. A) (Letter of Assent). Irving James signed the letter on behalf of James Island as its President and CEO. Id. Under the Letter of Assent, Defendants agreed to comply with "all of the provisions, terms and conditions" set forth in the HOD Carriers Local Union No. 36 Collective Bargaining Agreement (CBA). Id .; see also Docket No. 1 (Exhibit A) (CBA). Defendants further agreed to be bound to the terms of "any subsequent [CBAs] negotiated and executed by the Union and the Association." Letter of Assent.
As relevant here, the CBA provides that James Island must pay certain fringe benefit contributions to the Trust Funds pursuant to the "HOD Carriers Local Union 166 Health, Welfare and Vacation Trust Agreement." CBA at 15-16; see also Docket No. 17 (Martinez Decl., Ex. B) (Trust Agreement). The CBA also provides that "Any Employer who fails to pay contributions shall be personally liable under the Agreement for benefits due his employees." CBA at 16.
The Trust Agreements for the Trust Funds contains provisions that require Defendants to: (1) make fringe benefits payments in a timely manner, see, e.g., Trust Agreement, Section 3; (2) pay liquidated damages for any delinquent contributions, see, e.g., Trust Agreement, Section 6; (3) pay interest on sums owing under the CBA, see e.g., Trust Agreement, Section 9; (4) pay the Trustee's reasonable attorneys' fees and costs if a collection action is brought, see, e.g., Trust Agreement, Section 8; and (4) submit to an audit so that the Trust Funds may determine whether the employer is making full and prompt payment of all contributions owed. See, e.g., Trust Agreement, Section 7.
James Island provided the Trust Funds with employee time records for the months of October 2012, November 2012, January 2013, March 2013, and April 2013. Docket No. 17 at 7; Martinez Decl., Ex. D (Time Records). These records apparently reveal that James Island failed to remit $12, 354.76 in unpaid fringe contributions. Docket No. 17 at 7. On July 10, 2014, Plaintiffs filed this action after Defendants refused to pay delinquent amounts allegedly due and owed, as requested by the Trust Funds. See Docket No. 1 at ¶¶ 16-17. The Trust Funds now request the Court grant them the following relief: (1) $12, 354.76 in unpaid fringe benefits contributions as revealed by the Defendants' time records; (2) $2, 470.85 in liquidated damages; (3) $1, 509.99 in interest; (4) $6, 747 in attorney's fees and costs relating to the prosecution of this action; and (5) an injunction ordering Defendants to permit auditors to come onto their premises and to submit to an audit of their financial records for the period from January 1, 2012, to the present date. The Trust Funds also ask the Court to hold James Island and Irving James jointly and severably liable for any monetary judgment issued.
A. Adequacy of Service of Process
As a threshold matter in considering a motion for default judgment, the Court must first "assess the adequacy of the service of process on the party against whom default is requested." Board of Trustees of the N. Cal. Sheet Metal Workers v. Peters, No. C-00-0395 VRW, 2000 U.S. Dist. LEXIS 19065, at *2 (N.D. Cal. Jan. 2, 2001). Fed.R.Civ.P. 4(h)(1) authorizes service upon a corporation "by delivering a copy of the summons and of the complaint to an officer, a managing or general agent, or to any other agent authorized by appointment or by law to receive service of process and - if the agent is one authorized by statute to receive service and the statute so requires - by also mailing a copy of each to the defendant." Fed.R.Civ.P. 4(h)(1). Rule 4(h)(1) also states that a corporation may be served "in the manner prescribed by Rule 4(e)(1) for serving an individual, " which, in turn, allows for service "following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made." Fed.R.Civ.P. 4(e)(1).
Under California law, a summons and complaint may be served on a corporation by delivering a copy of the documents to: (1) the person designated as agent for service under certain provisions of the California Corporations Code: or (2) the "president or other head of the corporation, a vice president, a secretary or assistant secretary, a treasurer or assistant treasurer, a general manager, or a person authorized by the corporation to receive service of process." Cal. Code Civ. P. § 416.10(a), (b). A corporation may also be served under California law via "substituted service." That is,
If a copy of the summons and complaint cannot with reasonable diligence be personally delivered to the person to be served, ... a summons may be served by leaving a copy of the summons and complaint at the person's dwelling house, usual place of abode, usual place of business, or usual mailing address other than a United States Postal Service post office box, in the presence of a competent member of the household or a person apparently in charge of his or her office, place of business, or usual mailing address other than a United States Postal Service post office box, at least 18 years of age, who shall be informed of the contents thereof, and by thereafter mailing a copy of the summons and of the complaint by first-class mail, postage prepaid to the person to be served at the place where a copy of the summons and complaint were left.
Cal. Code Civ. P. § 415.20(b).
While substituted service is, as a general matter, an easier form of service compared to personal delivery, it is not free of limitations. Before a party can resort to substituted service, personal service must first be attempted with "reasonable diligence." California courts have held that "[o]rdinarily, ... two or three attempts at personal service at a proper place should fully satisfy the requirement of reasonable diligence and allow substituted service to be made." Bein v. Brechtel-Jochim Group, Inc., 6 Cal.App.4th 1387, 1390 (1992). Also, "[s]ervice must be made upon a person whose relationship to ...