The Board of Trustees v. Garrison Demolition and Engineering

Background

The plaintiffs are trustees of four multi-employer employee-benefit plans: the Laborers Health and Welfare Trust Fund for Northern California, the Laborers Vacation-Holiday Trust Fund for Northern California, the Laborers Pension Trust Fund for Northern California, and the Laborers Training and Retraining Trust Fund for Northern California. They sued Garrison under the Employee Retirement Income Security Act of 1974 (ERISA), alleging that Garrison failed to make required contributions and comply with reporting requirements under a collective bargaining agreement and related agreements.

The plaintiffs alleged at least $47,178.36 in unpaid fringe-benefit contributions, at least $10,029.70 in interest and liquidated damages on contributions reported but not paid, and at least $825.66 in interest and liquidated damages on contributions paid late. They also sought $8,226.50 in attorneys’ fees, $1,559.04 in costs, and injunctive relief requiring timely future reports and contributions. Garrison did not answer, seek to set aside the entry of default, or otherwise participate.

Motion for Default Judgment

The plaintiffs moved for default judgment under Federal Rule of Civil Procedure 55(b)(2). In deciding whether to enter default judgment, the court applied the factors from Eitel v. McCool. The court treated the complaint’s factual allegations as true for purposes of evaluating liability, but explained that damages must be supported by evidence.

The court concluded that it had subject-matter jurisdiction under federal-question jurisdiction and ERISA’s grant of federal jurisdiction. It also concluded that personal jurisdiction existed because Garrison was alleged to be a California corporation and therefore had sufficient contacts with the United States and California. The court found that service appeared proper because Kris Huff, who signed Garrison’s agreement as its president, was an officer who could receive service for the corporation.

The court found that most of the default-judgment factors favored entering judgment or did not apply. It also concluded that the plaintiffs had pleaded a meritorious ERISA claim because the allegations sufficiently described Garrison’s failure to pay contributions required by the benefit plans and collective bargaining agreement.

Damages and Fees

The court found that the plaintiffs had not provided enough underlying evidence to prove the amounts of unpaid contributions, interest, and liquidated damages. The plaintiffs relied on summaries prepared by the funds, while the supporting declaration stated that the summaries were based on Garrison’s reports, books, records, and an employee’s check stubs. Those underlying reports, books, records, and check stubs were not included in the record. The plaintiffs also had not explained or supported how they calculated interest and liquidated damages for each unpaid or late-paid contribution, including the relevant due dates, payment dates, and cutoff dates.

The court therefore ordered the plaintiffs to show cause why the requests for unpaid contributions, interest, and liquidated damages should not be denied. The plaintiffs were directed either to provide the evidence on which they relied or explain why that evidence was unnecessary, and to explain their calculations for each late-paid or unpaid contribution.

As to costs, the court stated that it intended to recommend granting the request for $1,559.04. The court found the requested billing rates reasonable and most of the claimed work reasonably connected to the case. But it identified a $1,279 portion of the fee request associated with research into other entities and unrelated matters, as well as time spent preparing a complaint draft that apparently was not used. The court ordered the plaintiffs to show cause why that $1,279 should not be denied.

Injunctive Relief and Next Steps

The plaintiffs requested an injunction requiring Garrison to submit monthly contribution reports and make future payments. The court noted that the motion did not explain why permanent injunctive relief was warranted or why money damages would be inadequate. It therefore ordered the plaintiffs to show cause why the injunctive-relief request should not be denied.

The court also discussed the plaintiffs’ references to a possible audit. Because the motion and proposed order did not clearly request an audit injunction, and because the plaintiffs had not explained what an audit order would require or how it fit within the complaint, the court directed them to address those issues if they intended to pursue that relief. The court further stated that retaining jurisdiction might be appropriate if an injunction were granted, while later collection of additional amounts might otherwise require a motion to amend the judgment.

Disposition

Judge Marina J. Cisneros did not enter default judgment in this order. Instead, she ordered the plaintiffs to show cause why their motion should not be denied in part as to: (1) all unpaid contributions, interest, and liquidated damages; (2) $1,279 in attorneys’ fees; and (3) injunctive relief. The response was due September 23, 2025. After reviewing the response, Judge Cisneros would prepare a report and recommendation for review by District Judge Trina Thompson.