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Board of Trustees of Laborers Health and Welfare Trust Fund For Northern California v. CEM Builders, Inc.

United States District Court, N.D. California, San Jose Division

February 27, 2018

BOARD OF TRUSTEES OF THE LABORERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA,, Plaintiffs,
v.
CEM BUILDERS, INC., Defendant.

          ORDER GRANTING PLAINTIFFS' SECOND MOTION FOR RIGHT TO ATTACH ORDER AND WRIT OF ATTACHMENT RE: DKT. NO. 14

          EDWARD J. DAVILA, UNITED STATES DISTRICT JUDGE

         On January 31, 2018, Plaintiffs filed a complaint against Defendant, seeking damages for breach of a collective bargaining agreement, recovery of unpaid trust fund contributions, and injunctive relief. Dkt. No. 1 (“Compl.”). Plaintiffs now move for a right to attach order and writ of attachment of two of Defendant's bank accounts, as well as “any of Defendant's accounts receivable, other later identified checking accounts held in its names, and any proceeds from the sale of its business assets.” Dkt. No. 14 (“Mot”), at 14. Defendant has been served with a copy of the Complaint and a previous version of Plaintiffs' motion, Dkt. No. 12, but has not yet appeared or filed a response. For the reasons discussed below, Plaintiffs' motion is GRANTED.

         I. BACKGROUND

         A. Factual Background

         Plaintiffs are the boards of trustees of several trust funds, which serve to provide employee benefit plans created by written trust agreements subject and pursuant to §§ 3(3) and 3(37) of ERISA, 29 U.S.C. §§ 1002(3) and (37). Compl. ¶ 3; Declaration of Michele Lauziere (“Lauziere Decl.”), Dkt. No. 16, at ¶ 4. The trust funds were established through collective bargaining agreements between the Northern California District Council of Laborers (“Laborers Union”) and employer associations representing construction industry employers. Id.

         On or about June 8, 2006, Defendant entered into a Memorandum Agreement in which it agreed to be bound to the terms of one of these collective bargaining agreements, the Laborers' Master Agreement for Northern California (“Master Agreement”). Lauziere Decl. ¶ 6; Compl. ¶ 9. The Master Agreement provided that “each individual Employer shall pay hourly contributions for each hour paid for and/or worked [by a covered employee], including overtime pay, shift pay, show-up time pay and similar payments.” Lauziere Decl., Ex. G (“Master Agreement”), at § 28A. According to Plaintiffs,

[i]t is the usual practice of the Fund Office to send each employer a monthly Combined Employer Report of Contributions form showing the contribution rate per hour of covered work. The employer is to fill out the form, showing the total number of hours of covered work performed in the reporting month, and calculating the amount due for the employer's contribution. . . . The employer is to return the completed Employer Report of Contributions form, along with its payment for the contributions due, by the 25th day of the month following the month in which the hours were worked.

         Lauziere Decl. ¶ 7.

         The Master Agreement also provided for certain penalties that would be incurred if a participating employer became delinquent in its contributions:

Any Individual Employer who is found to be delinquency as a result of an audit will pay and satisfy such delinquency with accrued interest and in addition pay liquidated damages. All delinquent contributions shall bear simple interest at the rate of one and one-half percent (1.5%) per month until receipt of payment. Subject to accounting verification, liquidated damages shall be assessed on delinquent contributions at a flat rate of one hundred and fifty dollars ($ 150.00) per month to reflect the internal administrative costs incurred by the trust administrators in monitoring and tracking such late contributions.

         Master Agreement § 28A. This was also reflected in the Liquidated Damages Program-Board Policy, which stated in relevant part that:

Liquidated damages and interest will be assessed under the following conditions:
Employer's original report is postmarked after the 25th day of the month following employment. If contributions are paid within thirty (30) days of the due date, the employer will only be assessed the flat fee of $ 150.00. If contributions are paid more than thirty (30) days after they become due, the employer will be assessed interest at the rate of one and one-half percent (1.5%) per month until contributions are paid in full.

         Lauziere Decl., Ex. H.

         Plaintiffs report that, beginning in June 2015, Defendant failed to timely pay certain contributions which it reported as due and owing. Specifically, during the periods June-December 2015, January-September 2016, December 2016, and January-March 2017, Defendant paid its contributions but not on time. Lauziere Decl. ¶ 17. During the periods May-August 2017, November 2017, and December 2017, Defendant did not pay its contributions at all. Id. ¶ 18.

         Plaintiffs now seek payments and penalties which are due and owing under the terms of the Master Agreement, as well as associated attorneys fees and costs. Specifically:

• For the periods June-December 2015, January-September 2016, December 2016, and January-March 2017 where Defendant paid its contributions but not on time, Plaintiffs assert that section 28A of the Master Agreement entitles them to 1.5% interest and $150 liquidated damages, both assessed on a per-month basis until the full payment is received. See Master Agreement § 28A. Plaintiffs calculate that, for all of the payments Defendant did not make on time, they are owed $11, 864.13 in interest and liquidated damages. Lauziere Decl. ¶ 17 and Ex. I (chart showing per-month breakdown liquidated damages and interest incurred due to late payments).
• For the periods May-August 2017, November 2017, and December 2017 where Defendant did not pay its contributions owed, Plaintiffs argue that 29 U.S.C. §§ 1134(g)(2) entitles them to recover $327, 931.12, broken down as follows: (1) $303, 850.68 in “unpaid contributions, ” § 1132(g)(2)(A); (2) $12, 040.22 in “interest on the unpaid contributions, ” § 1132(g)(2)(B), calculated using the per-month 1.5% interest and $150 liquidated damages fee under section 28A of the Master Agreement; and (3) $12, 040.22 in “an amount equal to the greater of-- interest on the unpaid contributions, or liquidated damages provided for under the plan. . ., ” § 1132(g)(2)(C).[1] Lauziere Decl. ¶¶ 18-28 and Ex. J (chart of per-month unpaid contributions) and Ex. V (chart of per-month liquidated damages and interest).
• Plaintiffs also seek attorneys fees and costs incurred by its counsel in the underlying collection efforts and in this litigation, which total $14, 961.00. Declaration of C. Todd Norris (“Norris ...

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