District Council 16 Northern California Health and Welfare Trust Fund v. Herron…

Background

District Council 16 Northern California Health and Welfare Trust Fund and related plaintiffs are employee benefit plans and trustees covered by the Employee Retirement Income Security Act (ERISA). They sued Kevin Herron, Dora Herron, Herron Painting Co., and Herron Painting, Inc., alleging that the defendants operated as a single employer or as continuations, successors, or alter egos of one another.

The plaintiffs alleged that the defendants were required under collective bargaining and trust agreements to report work hours and make contributions to ERISA funds and other plans. They alleged that contributions were not reported or paid for October 2021 through February 2025. The agreements also provided for interest, liquidated damages, and reimbursement of attorneys’ fees and costs.

The pending motion sought default judgment only against Herron Painting Co. and Herron Painting, Inc., referred to as the Entity Defendants. The Entity Defendants had previously answered and participated in a settlement conference, but they stopped defending the case after February 2024. Their counsel withdrew, they did not retain substitute counsel, and they did not respond to the motion or move to set aside the default.

Jurisdiction and liability

The court found subject-matter jurisdiction under ERISA section 502 and the federal law governing collective bargaining agreements. It also found personal jurisdiction because the plaintiffs’ funds were administered in the district, the alleged breach occurred there, the Entity Defendants were properly served, and the defendants had previously appeared and consented to personal jurisdiction.

For a default judgment, well-pleaded factual allegations about liability are generally treated as admitted, but damages must be supported by evidence. The court found that the plaintiffs adequately alleged an ERISA claim for unpaid contributions: the Entity Defendants were employers, the agreements required contributions to multiemployer benefit plans, and the Entity Defendants failed to make timely payments.

The Entity Defendants also failed to respond to requests for admissions. The court treated those requests as admitted, including admissions concerning the agreements binding Herron Painting Co. and Herron Painting, Inc. and the transfer of painting operations between the entities and Kevin Herron’s sole proprietorship. The court concluded that the seven factors used in the Ninth Circuit to evaluate default judgment mostly favored entering judgment.

Damages and fees

The plaintiffs calculated estimated unpaid contributions using procedures adopted by the Trust Funds’ Board of Trustees. They estimated monthly unpaid contributions of $5,567.16 for 41 months, totaling $228,253.56. The opinion’s damages table also listed $45,650.63 in liquidated damages and $19,023.56 in five-percent interest, for a subtotal of $292,927.75.

The court stated that ERISA permits recovery of unpaid contributions, interest, liquidated damages, reasonable attorneys’ fees, and costs. It found that the plaintiffs had shown entitlement to unpaid contributions, liquidated damages, and interest, and its discussion recommended an award of $292,927.75 for those categories.

The plaintiffs requested $20,745 in attorneys’ fees and $2,760.58 in costs. The court found the attorneys’ hourly rates reasonable but deducted $940 for clerical work billed through paralegal time. It awarded $19,805 in attorneys’ fees and found the requested costs reasonable, awarding $2,760.58.

Disposition

The court granted the plaintiffs’ Motion for Default Judgment and entered judgment against Herron Painting Co. and Herron Painting, Inc. The conclusion expressly awarded $228,253.56 in principal, $19,023.56 in prejudgment interest, and $22,565.58 in attorneys’ fees and costs. Although the opinion’s analysis and table included liquidated damages, the conclusion does not separately state an award of liquidated damages or a final grand total. The order did not rule on the plaintiffs’ separate motion for summary judgment against Kevin Herron.