Opinion
20-cv-02110-PJH (LB)
03-25-2021
SHEET METAL WORKERS PENSION TRUST OF NORTHERN CALIFORNIA, et al., Plaintiffs, v. EVOLUTION SHEET METAL & METAL FABRICATION, INC., Defendant.
REPORT AND RECOMMENDATION TO GRANT MOTION FOR DEFAULT JUDGMENT RE: ECF NO. 25
LAUREL BEELER, United States Magistrate Judge.
INTRODUCTION
The plaintiffs - benefits plans and trustees (collectively, the Plans) - sued the defendant Evolution Sheet Metal for failing to make contributions to the benefits plans as required by the parties' collective bargaining agreement, the trust agreement, the Labor Management Relations Act (LMRA) and the Employee Retirement Income Security Act of 1974 (ERISA). Evolution did not appear in the case and, after the Clerk entered its default, the Plans moved for default judgement. The undersigned recommends granting the motion and entering judgment of $82, 914.05 for unpaid contributions, liquidated damages, interest through December 31, 2020 (and daily simple interest at 10 percent thereafter), attorney's fees, and costs.
STATEMENT
1. The Parties
The pension trusts and pension plans are “employee benefit plans” as defined in ERISA § 3(3), 29 U.S.C. § 1002(3), and “multiemployer plans” as defined in ERISA §§ 3(37) and 4001(a)(3) (29 U.S.C. §§ 1002(37) & 1301(a)(3)). Rick Werner and Sean O'Donoghue are trustees authorized to bring this action on behalf of the plans under ERISA §§ 4301(a)(1) and § 502(a)(3) (29 U.S.C. §§ 1451(a)(1) and 1132(a)(3)).
Compl. - ECF No. 1 at 1-2 (¶1). Citations refer to the Electronic Case File (ECF); pinpoint citations are to the ECF-generated page numbers at the top of documents.
Evolution, a California corporation, is an employer as defined in ERISA § 3(5), 29 U.S.C. § 1002(5), and NLRA § 2(2), 29 U.S.C. § 152(2). Christopher Ensslin is its owner and CEO.
Id. at 2 (¶ 2).
Do Decl. - ECF No. 29 at 2 (¶¶ 4-5); State License, Ex. A to id. - ECF No. 29-2 at 1; Statement of Information, Ex. C to id. - ECF No. 29-2 at 4.
2. The Agreements
Mr. Ensslin signed the bargaining agreement on August 13, 2018, and it remains in effect. The Plans are third-party beneficiaries of the bargaining agreement. The bargaining agreement incorporates the trust agreement, thus binding Evolution to the terms and conditions of the trust agreement. Each month, employers self-report the hours worked by their employees in a report called a Contribution Report that they submit to the plan administrator. Employers must make contributions - to the plans described in the bargaining agreement and to the union for union dues - based on the hours that their employees worked. An employer's contributions to the trust are due by the 10th day of the month following the month that hours were worked and are delinquent if they are not received or postmarked by the 20th day of the month.
Compl. - ECF No. 1 at 3 (¶ 9); Werner Decl. - ECF No. 28 at 1-2 (¶¶ 2-4); Labor Agreement, Ex. A to id. - ECF No. 28-2 at 23.
Compl. - ECF No. 1 at 3-4 (¶ 10); Werner Decl. - ECF No. 28 at 2 (¶ 6); Addendum 1 to Labor Agreement, Ex. A to Werner Decl. - ECF No. 28-2 at 27-29; Trust Agreement, Ex. B to Werner Decl. - ECF No. 28-2 at 113.
Compl. - ECF No. 1 at 4 (¶ 11); Werner Decl. - ECF No. 28 at 2 (¶ 5); Addendum 1 to Labor Agreement, Ex. A to Werner Decl. - ECF No. 28-2 at 27-29.
Werner Decl. - ECF No. 28 at 2 (¶ 6); Addendum 1 to Labor Agreement, Item 4, Ex. A to id. - ECF No. 28-2 at 27-28; Trust Agreement, Ex. B to id. - ECF No. 28-2 at 113-14.
Werner Decl. - ECF No. 28 at 3 (¶ 8); Addendum 1 to Labor Agreement, Item 4, Ex. A to id. - ECF No. 28-2 at 27-28 (incorporating Trust Agreement and providing that “[a]ll contributions shall be made monthly and shall be made on or before the 20th day of the succeeding month”); Trust Agreement, Ex. B to id. - ECF No. 28-2 at 113-14.
The bargaining and trust agreements required employers like Evolution to pay liquidated damages and interest on delinquent contributions.
Liquidated damages on unpaid contributions initially are five percent of unpaid contributions or $100, whichever is greater. Liquidated damages increase to 20 percent if the trust refers collection of unpaid contributions to “Collection Counsel.”
Werner Decl. - ECF No. 28 at 3 (¶ 9); Trust Agreement, Ex. B to id. - ECF No. 28-2 at 115. The process is slightly more complicated. Under the Payroll Audit Billing Process, there is an audit, a demand for payment with liquidated damages at 10 percent, a finalization of the audit, the referral to Collection Counsel, and the resulting increase to 20 percent for liquidated damages. Collection Procedures, Ex. A to Guzman Decl. - ECF No. 27-2 at 4, 7-8.
Interest on delinquent contributions is 10 percent, calculated from the day that the contributions are delinquent. Employers also must pay reasonable attorney's fees and other expenses incurred in connection with delinquent payments.
Werner Decl. - ECF No. 28 at 3 (¶ 9); Trust Agreement, Ex. B to id. - ECF No. 28-2 at 117.
Werner Decl. - ECF No. 28 at 3 (¶ 10); Trust Agreement, Ex. B to id. - ECF No. 28-2 at 117-18.
The agreements provide that the Plans' trustees “may establish rules as part of the Collection Procedure Guidelines on how Liquidated Damages, Interest and other charges are assessed when amounts are determined to be owed as a result of a payroll audit.” The agreements' collection procedures provide that when an employer fails or refuses to submit missing contribution reports, unreported contributions are estimated based on the greater of (1) the last report submitted, (2) the average of the last three months reported, or (3) the average of the last three months.
Trust Agreement, Ex. B to Werner Decl. - ECF No. 28-2 at 117.
Guzman Decl. - ECF No. 27 at 3 (¶ 9); Collection Procedures, Ex. A to id. - ECF No. 27-2 at 2.
3. Unpaid Contributions
A third-party payroll-compliance manager audited Evolution's payroll records for August 1, 2018 through June 30, 2019 and determined that Evolution owed $19, 916.39 in unpaid contributions plus liquidated damages and interest. On July 15, 2019, the auditor sent a draft audit report to Evolution, which - through its owner - acknowledged that it had two weeks to dispute the findings in writing. Evolution asked for an electronic copy of the report on July 29, 2019, and the auditor sent it on July 30, 2019. Evolution did not dispute the draft audit, and the auditor finalized the audit without making any changes. Collection Counsel sent a letter to Evolution on October 18, 2019 demanding payment. A third-party plan administrator calculated the resulting liquidated damages of $3, 983.28 (at 20 percent) and interest of $2, 948.40 (at 10 percent through December 31, 2020).
Compl. - ECF No. 1 at 4-5 (¶ 13); Coates Decl. - ECF No. 26 at 2 (¶¶ 3-4); 7/15/19 Letter, Ex. A to Coates Decl. - ECF No. 26-2 at 1-3.
Coates Decl. - ECF No. 26 at 2 (¶¶ 3-5); 7/15/19 Letter, Ex. A to id. - ECF No. 26-2 at 1-3 (has Evolution's signed acknowledgment).
Do Supp. Decl. - ECF No. 40 at 2 (¶ 3); Letter, Ex. C to id. at 6-13.
Guzman Decl. - ECF No. 27 at 2 (¶ 7).
Evolution did not report and pay liquidated damages and interest on late-paid contributions for December 2018 and February 2019, resulting in liquidated damages of $1, 817.89 (calculated at 20 percent) and interest of $24.86 (calculated at 10 percent through December 31, 2020). Collection Counsel sent a letter to Evolution on June 11, 2019 about the amounts due and, after Evolution did not pay the damages and interest, sent a second letter on August 7, 2019.
Id. at 3 (¶ 8).
Do Supp. Decl. - ECF No. 40 at 1-2 (¶ 2); Letters, Exs. A-B to id. - ECF No. 40 at 3-5.
Evolution did not report and pay contributions for May 2019 and June 2019. It reported $18, 072.10 for February 2019, $17, 004.55 for March 2019, and $16, 285.01 for April 2019, which results in an average of $17, 120.55 per month. This results in total unpaid contributions of $34, 141.10 for May and June 2019, $6, 848.22 in liquidated damages ($3, 424.11 per month calculated at 20 percent), and $5, 093.34 in interest ($2, 617.02 for May and $2, 476.32 for June, calculated at 10 percent through December 31, 2020). Collection Counsel's August 7, 2019 letter demanded payment for the May and June delinquent contributions.The Plans also seek attorney's fees of $6, 939.50 and costs of $1, 101.07.
Guzman Decl. - ECF No. 27 at 3 (¶ 9).
Id. (¶¶ 9-10); Contribution Reports, Ex. B to id. at 13-25.
Do Supp. Decl. - ECF No. 40 at 1-2 (¶ 2); Letter, Ex. B to id. - ECF No. 40 at 4-5.
Mot. - ECF No. 25 at 9; Do Decl. - ECF No. 29 at 4-5 (¶¶ 11-14).
In sum, the total amounts that the Plans seek are as follows:
| Work Period | Unpaid Contrib. | 20% Liquidated Damages | 10% Interest to 12/31/2020 | Subtotal |
| 5/2019 | $17, 120.55 | $3, 424.11 | $2, 617.02 | $23, 161.68 |
| 6/2019 | $17, 120.55 | $3, 424.11 | $2, 476.32 | $23, 020.98 |
| 8/1/2018-6/30/2019 | $19, 916.39 | $3, 983.28 | $2, 948.40 | $26, 848.07 |
| 12/2018 & 2/2019 | $1, 817.89 | $24.86 | $ 1, 842.75 | |
| Subtotal: | $74, 873.48 | |||
| Attorney's Fees: | $ 6, 939.50 | |||
| Costs: | $ 1, 101.07 | |||
| TOTAL: | $82, 914.05 |
4. Procedural History
The Plans filed the complaint on March 26, 2020. Evolution's agent for service of process is its owner and CEO Christopher Ensslin, and the Plans tried to serve him several times at addresses associated with the business and ultimately served him personally in Spring Hill, Tennessee.Evolution did not respond to the complaint or otherwise appear in the action. The Clerk of Court entered Evolution's default, and the Plans moved for default judgment, serving Evolution with copies of all documents. The court held a hearing on March 25, 2021. Evolution did not appear.
Compl. - ECF No. 1.
The Plans tried to serve Evolution three times at 804 Black Diamond Way, Lodi, California, and two times at 1925 Lexington Drive, Lodi, California. Renewed Req. - ECF No. 19 at 2 (¶¶ 2-4). Ultimately, they personally served Mr. Ensslin. Proof of Serv. - ECF No. 16.
Entry of Default - ECF No. 20; Proof of Serv. - ECF No. 21; Mot. - ECF No. 25 at 1, 26 (proof of service). The Clerk initially declined to enter default because the Plans did not serve Evolution at the correct address. The Plans then served Evolution and renewed the request, and the clerk's office entered Evolution's default. Declination of Default - ECF No. 18; Renewed Req. - ECF No. 19.
JURISDICTION AND SERVICE
Before entering default judgment, a court must determine whether it has subject-matter jurisdiction over the action and personal jurisdiction over the defendant. Tuli v. Republic of Iraq (In re Tuli), 172 F.3d 707, 712 (9th Cir. 1999). A court must also ensure the adequacy of service on the defendant. Timbuktu Educ. v. Alkaraween Islamic Bookstore, No. C 06-03025 JSW, 2007 WL 1544790, at *2 (N.D. Cal. May 25, 2007).
First, the court has federal-question subject-matter jurisdiction under ERISA and the LMRA. 29 U.S.C. § 1132; 29 U.S.C. § 185; see 28 U.S.C. § 1331(a). Second, the court has personal jurisdiction over Evolution. 29 U.S.C. § 1132(e). Evolution has its principal places of business in the Northern District of California, and the breach took place here. Third, the Plans properly served Evolution by personal service on Christopher Ensslin, Evolution's agent for service of process.
Compl. - ECF No. 1 at 2-3 (¶ 6).
Proof of Serv. - ECF No. 16.
ANALYSIS
Under Federal Rule of Civil Procedure 55(b)(2), a plaintiff may apply to the district court for - and the court may grant - a default judgment against a defendant who has failed to plead or otherwise defend an action. After entry of default, well-pleaded allegations in the complaint regarding liability and entry of default are taken as true, except as to damages. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002); TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987). The court need not make detailed findings of fact. Combs, 285 F.3d at 906. “A default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c).
“A defendant's default does not automatically entitle the plaintiff to a court-ordered judgment.” PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1174 (C.D. Cal. 2002). The decision to grant or deny a default judgment lies within the court's discretion. Draper v. Coombs, 792 F.2d 915, 924-25 (9th Cir. 1986).
In deciding whether to enter a default judgment, the court considers: “(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.” Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). “Of all the Eitel factors, courts often consider the second and third factors to be the most important.” Mohanna v. Bank of Am., N.A., No. 16-cv-01033-HSG, 2017 WL 976015, at *3 (N.D. Cal. Mar. 14, 2017) (cleaned up and quotation omitted).
The Eitel factors favor entry of default judgment against Evolution.
1. The Possibility of Prejudice to the Plaintiff (First Eitel Factor)
The first Eitel factor considers whether the plaintiff will suffer prejudice if default judgment is not entered, and whether such potential prejudice to the plaintiff weighs in favor of granting default judgment. Eitel, 782 F.2d at 1471; Craigslist, Inc. v. Naturemarket, Inc., 694 F.Supp.2d 1039, 1054-55 (N.D. Cal. 2010).
Without a default judgment, the Plans have no recourse to recover Evolution's unpaid contributions. This factor weighs in favor of granting default judgment.
2. The Merits and Sufficiency of the Claims (Second and Third Eitel Factors)
The second and third Eitel factors consider the merits of the claim and the sufficiency of the complaint. Eitel, 782 F.2d at 1471. “The Ninth Circuit has suggested that [these factors] require that plaintiffs' allegations ‘state a claim on which the [plaintiffs] may recover.'” Kloepping v. Fireman's Fund, No. C 94-2684 TEH, 1996 WL 75314, at *2 (N.D. Cal. Feb. 13, 1996) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).
29 U.S.C. § 1145 states that “every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or 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 a plan or such agreement.” Section 1145 creates a cause of action against employers who do not make timely contributions that are required under a collective bargaining agreement. Bd. of Trs. v. RBS Washington Blvd. LLC, No. C 09-0660 WHA, 2010 WL 145097, at *2 (N.D. Cal. Jan.8, 2010).
Here, the Plans must prove the following: (1) the trusts are multiemployer plans as defined by 29 U.S.C. § 1002(37); (2) the collective bargaining agreement obligated Evolution to make contributions; and (3) Evolution did not make the required contributions. 29 U.S.C. § 1145; Bd. of Trs. of the Sheet Metal Workers Health Care Plan of N. Cal. v. Gervasio Env't Sys., No. C 03- 4858 WHA, 2004 WL 1465719, at *2 (N.D. Cal. May 21, 2004).
The allegations and declarations set forth by the Plans establish that they are multiemployer plans as defined by 29 U.S.C. § 1002(37) and that Evolution breached the bargaining agreement and its statutory duties under ERISA § 515, 29 U.S.C. § 1145, by failing to timely pay contributions. Evolution is an “employer” under ERISA, signed and is a party to the bargaining agreement (and the incorporated trust agreement), owed contributions under the agreements, and is liable under the agreements for the unpaid contributions, liquidated damages, interest, and reasonable attorney's fees and expenses. Operating Eng'rs' Health & Welfare Tr. Fund. v. Redline Directional, Inc., No. 17-cv-07345-JSC, 2019 WL 3782205, at *5-6 (N.D. Cal. July 3, 2019), report and recommendation adopted, 2019 WL 3779682 (N.D. Cal. Aug. 12, 2019). These factors weigh in favor of granting default judgment.
3. The Sum of Money at Stake (Fourth Eitel Factor)
The fourth Eitel factor considers the amount of money at stake in the litigation. Eitel, 782 F.2d at 1471. When the money is substantial or unreasonable, default judgment is discouraged. Id. at 1472 (three-million-dollar judgment, considered in light of parties' dispute as to material facts, supported decision not to enter default judgment); Tragni v. S. Elec. Inc., No. C 09-32 JF (RS), 2009 WL 3052635, at *5 (N.D. Cal. Sept. 22, 2009); Bd. of Trs. v. RBS Wash. Blvd., LLC, No. C 09-00660 WHA, 2010 WL 145097, at *3 (N.D. Cal. Jan. 8, 2010). When the sum of money at stake is tailored to the specific misconduct of the defendant, default judgment may be appropriate. Bd. of Trs. of the Sheet Metal Workers Health Care Plan v. Superhall Mech., Inc., No. C-10-2212 EMC, 2011 WL 2600898, at *3 (N.D. Cal. June 20, 2011) (the amount of unpaid contributions, liquidated damages, and attorney's fees were appropriate because they were supported by adequate evidence provided by the plaintiffs).
The Plans ask for $82, 914.05 in unpaid contributions, liquidated damages, interest, costs, and attorney's fees (plus daily interest starting January 1, 2021 of 10 percent). This amount is tailored to Evolution's specific misconduct (in the form of its failure to pay contributions) and is supported by evidence in the record. The amount sought here is appropriate for default judgment. Cf. Bd. of Trs. of the Pac. Coast Roofers Pension Plan v. Fryer Roofing Co., Inc., No. 16-CV-02798-LHK, 2017 WL 6539868, at *5 (N.D. Cal. Dec. 21, 2017) (finding fourth Eitel factor weighed in favor of default judgment of $2.4 million in ERISA case where “[a]lthough substantial, these sums of actual and statutory damages are tailored to Defendant's ‘specific misconduct' of complete withdrawal from the Plan and other damages required under ERISA”). This factor weighs in favor of granting default judgment.
4. Factual Dispute or Excusable Neglect (Fifth and Sixth Eitel Factors)
The fifth and sixth Eitel factors consider the potential of factual disputes and whether a defendant's failure to respond likely was due to excusable neglect. Eitel, 782 F.2d at 1471-72. In Eitel, there was a factual dispute and excusable neglect. Id. at 1472. The defendant disputed material facts in the (untimely) answer and counterclaim. Id. Moreover, the defendant's response was late because the parties had previously agreed to “what appeared to be a final settlement agreement, ” and “[the defendant] reasonably believed that the litigation was at an end[.]” Id. Because of his reasonable reliance and prompt response when the agreement dissolved, there was excusable neglect for the defendant's untimely response. Id.
No facts suggest excusable neglect. The plaintiffs sent Evolution the audit, gave it an opportunity to dispute it, and served it with all papers related to the lawsuit. Evolution has not responded. These factors weigh in favor of default judgment.
5. The Strong Policy Favoring Decisions on the Merits (Seventh Eitel Factor)
The seventh Eitel factor is the strong policy favoring decisions on the merits. Eitel, 782 F.2d at 1472. Although default judgment is disfavored, “[t]he very fact that F.R.C.P. 55(b) exists shows that this preference, standing alone, is not dispositive.” Kloepping, 1996 WL 75314 at *3. “While the Federal Rules do favor decisions on the merits, they also frequently permit termination of cases before the court reaches the merits[, ] . . . [as] when a party fails to defend against an action[.]” Id.
Evolution has not appeared or responded to the lawsuit. Litigation on the merits is not possible. Default judgment is thus appropriate. Fed.R.Civ.P. 55(a); RBS Wash. Blvd., 2010 WL 145097, at *4. This factor supports default judgment.
* * *
In sum, the Eitel factors weigh in favor of entering default judgment.
6. Relief Sought
The Plans seek $82, 914.05 plus daily interest of 10 percent (starting January 1, 2021).
The first issue is whether the Plans gave fair notice of the damages they seek. Under Federal Rule of Civil Procedure 54(c), “[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.” Fed.R.Civ.P. 54(c). The purpose of this rule is to ensure that a defendant is put on notice of the damages being sought against him so that he may make a calculated decision as to whether or not it is in his best interest to answer. McDonald v. Checks-N-Advance, Inc. (In re Ferrell), 539 F.3d 1186, 1192-93 (9th Cir. 2008) (rejecting requests for damages and fees because the prayer for relief lacked the “requisite specificity to put defendants on notice that the [plaintiff] sought attorneys' fees and costs on the default judgment”); Bd. of Trs. of the Sheet Metal Workers Loc. 104 Health Care Plan v. Total Air Balance Co., Inc., No. 08-2038 SC, 2009 WL 1704677, at *4 (N.D. Cal. June 17, 2009) (the defaulting defendant's due-process rights were not violated “because the defendant had been served with all of the papers justifying the pension fund's request and leading up to the final determination”).
In the complaint, the Plans sought damages in the form of (1) unpaid and delinquent trust fund contributions, (2) liquidated damages and interest on these contributions, (3) liquidated damages and interest on late-paid contributions, and (4) attorney's fees and costs. Although the complaint did not allege a specific amount in damages, “[c]ourts have awarded damages not specifically mentioned in complaints in ERISA cases where the defaulting defendants were on notice of the post-complaint amounts sought.” Bricklayers Loc. No. 3 Pension Tr. v. Martin, 13-CV-04293-VC, 2014 WL 1998047, at *3 (N.D. Cal. May 12, 2014) (collecting cases); accord, e.g., Total Air Balance, 2009 WL 1704677, at *4-5.
Compl. - ECF No. 1 at 6-7.
Here, the complaint gives notice of Evolution's responsibility for unpaid contributions reflected on employee payroll records or through audits. The auditor sent Evolution the audit.Collection Counsel sent letters demanding payment. The default-judgment motion summarizes the calculations, and the supporting documents prove them. The Plans gave fair notice to Evolution about the damages they seek. Cf. Martin, 2014 WL 1998047, at *3-4 (in an ERISA case, held that “Plaintiffs are entitled to recover the full scope of damages requested” where “Plaintiffs have kept Defendant apprised of the scope of his alleged liability, ” “served Defendant by mail with all the filings in this case, including the motion for default judgment and the supplemental [ ] declaration, a fact that weights in favor of awarding post-complaint damages, ” and “communicated with Defendant by phone, email, and letter regarding his delinquent contribution reports before and after the complaint was filed”); Total Air Balance, 2009 WL 1704677, at *5 (“find[ing] it appropriate in this case to consider all damages that had occurred by the time that default was entered against [defendant]” where defendant's continued nonpayment rendered amount of delinquency a “moving target”).
Id. at 4-5 (¶¶ 13-16).
Coates Decl. - ECF No. 26 at 2 (¶ 3); 7/15/19 Letter, Ex. A to id. - ECF No. 26-2 at 1-3.
Do Supp. Decl. - ECF No. 40 at 1-2 (¶¶ 2-3); Letters, Exs. A-C to id. - ECF No. 40 at 3-13.
Mot. - ECF No. 25 at 11-12.
The second issue is whether the Plans established the amount of their damages. “To recover damages after securing a default judgment, a plaintiff must prove the relief it seeks through testimony or written affidavit.” Bd. of Trs. of the Laborers Health & Welfare Tr. Fund v. A and B Bldg. Maint. Co. Inc., No. C 13-00731 WHA, 2013 WL 5693728, at *4 (N.D. Cal. Oct. 17, 2013); accord Cannon v. City of Petaluma, No. C 11-0651 PJH, 2011 WL 3267714, at *2 (N.D. Cal. July 29, 2011) (“In order to ‘prove up' damages, a plaintiff is generally required to provide admissible evidence (including witness testimony) supporting damage calculations.”); see Bd. of Trs. of Bay Area Roofers Health & Welfare Tr. Fund v. Westech Roofing, 42 F.Supp.3d 1220, 1232 n.13 (N.D. Cal. 2014) (“It is Plaintiffs' burden on default judgment to establish the amount of their damages.”).
As summarized in the table in the Statement, the Plans seek $82, 914.05 comprised of $54, 157.49 in unpaid contributions, $12, 649.39 in liquidated damages, $8, 066.60 in interest through December 31, 2020 (and daily interest at 10 percent thereafter), $6, 939.50 in attorney's fees, and $1, 101.07 in costs. The Plans proved the damages and are entitled to them under ERISA:
In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of -
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),
(D) reasonable attorney's fees and costs of the action, to be paid by the defendant, and
(E) such other legal or equitable relief as the court deems appropriate.
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of Title 26.29 U.S.C. § 1132(g)(2) .
6.1 Unpaid Contributions, Liquidated Damages, and Interest
The Plans seek $54, 157.49 in unpaid contributions, $12, 649.39 in liquidated damages (calculated at 20 percent), and $8, 066.60 in interest (calculated at 10 percent), for a total of $74, 873.48. Where, as here, the employer is delinquent and the plan provides for it, an award of unpaid contributions, interest, and liquidated damages “is mandatory and not discretionary.” Nw. Adm'rs, Inc. v. Albertson's, Inc., 104 F.3d 253, 257 (9th Cir. 1996) (quotation omitted). The undersigned recommends the court award the Plans $74, 873.48.
Guzman Decl. - ECF No. 27 at 2-3 (¶¶ 6-10).
6.2 Attorney's Fees
The Plans seek $6, 939.50 in attorney's fees. An award of reasonable attorney's fees is mandatory under 29 U.S.C. § 1132(g)(2). Albertson's, 104 F.3d at 257. To determine a reasonable fee award in a case like this, federal courts use the lodestar method. Grove v. Wells Fargo Fin. Cal., Inc., 606 F.3d 577, 582 (9th Cir. 2010). The court calculates a “lodestar amount” by multiplying the number of hours counsel reasonably spend on the litigation by a reasonable hourly rate. Id.
6.2.1 Reasonable Hourly Rate
A reasonable hourly rate is that prevailing in the community for similar work performed by attorneys of comparable skill, experience, and reputation. Moreno v. City of Sacramento, 534 F.3d 1106, 1111 (9th Cir. 2008); Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008). The relevant community is “the forum in which the district court sits, ” which here is the Northern District of California. Camacho, 523 F.3d at 979. The party requesting fees must produce satisfactory evidence - in addition to the attorney's own affidavits or declarations - that the rates are in line with community rates. Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984); Jordan v. Multnomah Cty., 815 F.2d 1258, 1263 (9th Cir. 1987).
Here, the motion described the qualifications and hourly rates of attorneys Michele R. Stafford ($220), Lez Mendoza ($215), and Tina Do ($215), and paralegal Alicia Wood ($125). “Saltzman & Johnson has specialized in the representation of multiemployer, collectively bargained employee benefit plans for over 36 years in both the private and public sectors. Over 90% of its work involves the representation of employee benefit plans. All of the attorneys have extensive experience resolving legal issues pertaining to multiemployer collectively bargained benefit plans which are jointly managed by representatives of labor and management.”
Do Decl. - ECF No. 29 at 3-4 (¶ 10).
Id. at 3 (¶ 8).
Based on the submissions and the court's knowledge about prevailing rates, the rates are reasonable. Cf., e.g., Echague v. Metro. Life Ins. Co., 69 F.Supp.3d 990, 996 (N.D. Cal. 2014) (associate hourly rates of $250 and paralegal hourly rates of $150 are reasonable in an ERISA case); Reyes v. Bakery & Confectionary Union and Indus. Int'l Pension Fund, 281 F.Supp.3d 833, 853 (N.D. Cal. 2017) (attorney hourly rates of $200 to $625 and paralegal hourly rates of $125 are reasonable in an ERISA case).
6.2.2 Reasonable Hours Expended
Reasonable hours expended on a case are hours that are not “‘excessive, redundant, or otherwise unnecessary.'” McCown v. City of Fontana, 565 F.3d 1097, 1102 (9th Cir. 2009) (quoting Hensley v. Eckerhart, 461 U.S. 424, 434 (1983)). A party must provide detailed time records documenting the tasks completed and the time spent. Hensley, 461 U.S. at 437, 440; McCown, 565 F.3d at 1102; Welch v. Metro. Life Ins. Co., 480 F.3d 942, 945-46 (9th Cir. 2007).
The Plans request attorney's fees for 27.1 hours of attorney time and 8.8 hours of paralegal time for tasks that include preparing the complaint, accompanying documents, the request for entry of default, the default-judgment documents, and other filings. The hours are reasonable.
Id. at 5 (¶ 12); Billing Report, Ex. D to id. - ECF No. 29-2 at 6-10.
* * *
In sum, the Plans' submissions establish that the fees are reasonable, and the undersigned recommends $6, 939.50 in attorney's fees.
6.3 Costs of Suit
The Plans asks for costs of $1, 101.07: (1) a $400 filing fee; (2) $684.57 for costs of service; and (3) $16.50 for legal research. An award of reasonable costs is mandatory under 29 U.S.C. § 1132(g)(2). Albertson' s, 104 F.3d at 257. The costs are reasonable.
Id. . at 5 (¶ 14); Billing Report, Ex. D to id. - ECF No. 29-2 at 11. ---------
CONCLUSION
The court recommends entry of judgment in favor of the plaintiffs of $82, 914.05 (as summarized in the table in the Statement and in the Plans' proposed judgment at ECF No. 30) plus daily simple interest of 10 percent on the unpaid contributions from January 1, 2021 until paid.
Any party may file objections to this Report and Recommendation with the district judge within fourteen days after being served with a copy. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); N.D. Cal. Civ. L.R. 72. Failure to file an objection may waive the right to review of the issue in the district court.
The court directs the Plans to serve Evolution by mail with a copy of this Report and Recommendation and to file proof of service within three business days.
IT IS SO RECOMMENDED.