Operating Engineers Health And Welfare Trust Fund v. Mercoza
- Edward Chen
- 3:24-cv-03007
- U.S. District Court · Northern District of California
- 10
In Operating Engineers v. Mercoza, Magistrate Judge Beeler recommended default judgment after defendants failed to appear, including $21,398.49 and an audit injunction.
The plaintiffs—Operating Engineers Health And Welfare Trust Fund and the other employee benefit plans and trustees—could receive the recommended monetary relief and audit order. The recommendations would affect defendants Mercoza and Jason A. Duran Martinez, who did not appear in the case. A district judge still had to address the recommendation.
What happened
Operating Engineers Health And Welfare Trust Fund and related plaintiffs sued Mercoza and Jason A. Duran Martinez over late payments to employee benefit plans and failure to provide payroll records for an audit. The defendants did not appear, and the clerk entered default.
The court found that service, jurisdiction, and the factors governing default judgment supported the plaintiffs’ request. It recommended $21,398.49 in liquidated damages, interest, attorney’s fees, and costs, along with an order requiring an audit of specified payroll records.
In Operating Engineers Health And Welfare Trust Fund v. Mercoza, Magistrate Judge Laurel Beeler reassigned the case to a district judge and recommended default judgment; the recommendation was not itself the final judgment. Parties could object within 14 days after service.
The detailed version
- Operating Engineers Health And Welfare Trust Fund v. Mercoza · No. 3:24-cv-03007
- Edward Chen
- May 7, 2025
Background
The plaintiffs were employee benefit plans and their trustees. They sued Mercoza and Jason A. Duran Martinez for amounts arising from late contributions to the plans and for an audit of payroll records. The agreements required monthly contributions, 10% annual interest on delinquent contributions, 20% liquidated damages if a lawsuit was filed, and submission to audits. Martinez personally guaranteed the amounts at issue.
The defendants failed to make contributions for March through May 2023 and September through November 2024 and did not respond to audit requests. The contributions were later paid, but the 2023 contributions were not paid until July 2024 and the 2024 contributions were not paid until February 2025. The defendants did not appear in the case. The clerk entered default, and the plaintiffs moved for default judgment.
Jurisdiction and service
The court found federal-question jurisdiction under the Employee Retirement Income Security Act (ERISA) and the Labor Management Relations Act. It also found personal jurisdiction over the defendants and concluded that service was adequate. Mercoza was served through the California Secretary of State, and Martinez was served by publication. The defendants were also served with the notice of default and the motion for default judgment.
Default-judgment analysis
Applying the seven factors used to evaluate default judgment, the court concluded that the factors favored the plaintiffs. The court treated the well-pleaded allegations about liability as true, but separately evaluated the requested damages. It concluded that the allegations supported a claim that Mercoza violated ERISA section 515 and the agreements by failing to make timely contributions and comply with an audit request. The court also considered the allegation that Martinez personally guaranteed the amounts at issue.
The court found that the requested $21,398.49 was reasonable. That total included liquidated damages, interest, attorney’s fees, and costs. The court also found the requested attorney’s fees and $2,581.71 in process-server costs reasonable. The requested audit order covered payroll records from July 1, 2022, through June 30, 2023, and the court concluded that the agreements authorized the audit and that monetary damages alone were inadequate to determine whether additional amounts were owed.
Disposition
Because the defendants had not appeared and therefore had not consented to magistrate-judge jurisdiction, Magistrate Judge Laurel Beeler directed the clerk to reassign the case to a district judge. She issued a report and recommendation recommending default judgment in the form of the proposed order and judgment, including $21,398.49 in monetary relief and the requested injunction. The report and recommendation stated that any party could object within 14 days after being served. The opinion does not state that the district judge had entered the final judgment.
Read the full 10-page opinion on CourtListener, the free public archive maintained by the Free Law Project.