Board of Trustees of the Laborers Health and Welfare Trust Fund for Northern…

Background

The plaintiffs are four boards of trustees identified in the caption. They sued Juan Manuel Loza, an individual doing business as Loza & Sons Construction. The original complaint alleged breach of a collective bargaining agreement to recover unpaid trust-fund contributions and sought mandatory injunctive relief. The First Amended Complaint was filed on January 13, 2020, after an audit, and Loza was personally served with it on January 17, 2020.

The clerk entered Loza’s default on January 30, 2018. The filing states that Loza had been without a lawyer during the relevant period, and that he obtained counsel only after counsel recently learned about the default. The parties also stated that a court-issued bench warrant related to Loza’s failure to comply with a demand for an audit resulted in his arrest. After his release, he agreed to comply with the audit request.

Stipulation and proposed basis for relief

The parties asked the court to set aside the notice of entry of default under Federal Rule of Civil Procedure 55(c), which permits a court to set aside an entry of default for “good cause.” The filing described three factors: whether the defendant’s conduct caused the default, whether the defendant had a potentially valid defense, and whether setting aside the default would prejudice the plaintiffs.

The parties stated that Loza believed in good faith that he was not bound by the Laborers’ Master Agreement for Northern California and therefore mistakenly believed he did not need to respond. They also stated that Spanish was his first language and that his limited English fluency made it harder for him to understand his obligations. As a potential defense, Loza asserted that much of his work during the audit period was residential landscaping that may not have been covered by the Master Agreement. The plaintiffs consented to setting aside the default and stated that doing so would not prejudice them.

These assertions were presented as the parties’ basis for their stipulation; the court did not decide whether the work was covered by the agreement, whether contributions were owed, or whether the plaintiffs were entitled to their requested relief.

Ruling

Based on the parties’ stipulation and a finding that good cause appeared, the court ordered that the default entered against Loza be set aside and vacated. The court gave him 10 days to file and serve an answer to the First Amended Complaint. The order did not resolve the underlying claims or defenses.