Operating Engineers Health And Welfare Trust Fund For Northern California v…

Background

The plaintiffs were various Operating Engineers Trust Funds. They sued Precision Drilling, Inc. (PDI), alleging violations of the Employee Retirement Income Security Act (ERISA), including failure to permit an audit of its records and failure to make required contributions.

PDI entered three Memorandum Project Agreements with Operating Engineers Local No. 3. Those agreements incorporated the terms of Master Agreements and Trust Agreements. The agreements required covered employers to make contributions to specified Trust Funds, permitted the Trust Funds to examine relevant records, and provided for liquidated damages, interest, and collection expenses when contributions were delinquent.

The plaintiffs alleged that PDI failed to comply with an audit covering January 2014 through December 2017. They also alleged that PDI failed to report and pay contributions for specified months from January 2018 through August 2021, and that it made a September 2019 contribution late, resulting in liquidated damages and interest.

The plaintiffs repeatedly sought an audit before and after filing suit. They filed the action in October 2021 and served PDI in March 2022. After PDI failed to respond timely, the Clerk entered PDI’s default in May 2022. PDI later appeared and filed an answer in May 2024, but it did not move to set aside the default. After PDI again failed to provide documents for the audit, the court granted the plaintiffs’ motion to strike PDI’s answer and allowed the plaintiffs to renew their motion for default judgment.

Default Judgment Analysis

The court first found that service of process was proper. The summons and complaint were personally delivered to Tyrone Dennis Amundson, whom California filings identified as PDI’s CEO/President and agent for service of process.

The court applied the factors used to decide whether to enter default judgment. It concluded that the factors favored judgment for the plaintiffs. The court found that denying the motion would likely leave the Trust Funds without a remedy, that the requested monetary relief was tied to PDI’s alleged misconduct, and that PDI’s conduct made a decision after a full dispute of the facts impractical.

The court also found that the agreements established PDI’s obligations to comply with an audit and make contributions. Because PDI’s default had been entered, the court treated the complaint’s factual allegations as true except for the amount of damages. The court concluded that the plaintiffs had stated claims under applicable law and the agreements.

PDI’s opposition argued that unauthorized individuals signed the Memorandum Project Agreements, that the agreements were signed under duress or misunderstanding, that the requested audit was unreasonable, and that PDI no longer had many records because it ceased operations during the COVID pandemic. The court stated that PDI had missed its opportunity to raise a dispute concerning material facts because it had been given multiple opportunities to comply with the audit and seek relief from the default.

Relief Awarded

The court awarded $373.56 in liquidated damages and $312.13 in interest for PDI’s late-paid September 2019 contribution. It also ordered PDI to submit to an audit covering January 2014 through December 2021. The court found that the broader audit period was consistent with the complaint and that PDI had notice of the request and an opportunity to address it.

The court awarded $42,322 in attorneys’ fees and $3,141.70 in costs. It relied in part on ERISA’s fee provisions and found that the fees and costs were justified because the plaintiffs had made good-faith efforts to obtain the audit, audit compliance served an important purpose, and PDI’s conduct caused the plaintiffs to incur substantial time and expense.

Disposition

The court granted the plaintiffs’ motion for default judgment, directed entry of a final judgment, and instructed the Clerk to close the file. The court stated that the plaintiffs could move to alter or amend the judgment if the audit showed that additional amounts were owed. The order disposed of Docket No. 51.