Bay Area Painters and Tapers Pension Trust Fund v. SLK

Background

The court reviewed Magistrate Judge Westmore’s report and recommendation concerning plaintiffs’ motion for default judgment against dissolved corporate defendant SLK, Inc., and individual defendants JC Jackson and Shirley Jackson. The defendants filed no objections. The court found the report correct, well-reasoned, and thorough.

Service of Process

Before entering default judgment, the court examined whether it had personal jurisdiction over the defendants. It agreed that substituted service on JC Jackson and Shirley Jackson satisfied Federal Rule of Civil Procedure 4(e)(2)(B). The court also clarified that this substituted service constituted service on SLK, Inc. under Rule 4(h)(1)(B), because the individual defendants owned the corporation and held officer positions. The court described this conclusion as applying in the limited circumstances where an agent of a dissolved corporation is not readily identifiable and service is made on those ultimately controlling the dissolved entity.

Attorney’s Fees

The magistrate judge had recommended $11,250.50 in attorney’s fees. The court found that counsel’s declaration, when combined with the hours billed by each timekeeper, effectively used five block bills. Because block billing made it difficult to evaluate whether the hours were reasonable, the court reduced the recommended fee award by 10 percent and awarded $10,125.45.

Ruling

Subject to the service clarification and fee reduction, the court adopted the report and granted plaintiffs’ motion for default judgment. It awarded plaintiffs $216,299.95: $157,251 in unpaid withdrawal liability, $31,450.20 in liquidated damages, $13,074.78 in interest accrued from June 1, 2018, through the order’s date at $21.54 per day, $10,125.45 in attorney’s fees, and $4,398.52 in costs.

The court also ordered the defendants to provide information needed to determine whether businesses under common control with SLK, Inc. existed and whether fraudulent transfers or improper transactions had occurred to evade or avoid withdrawal liability. The court retained jurisdiction to enforce that injunction and to consider additional motions for money judgments if the information revealed an improper transaction.