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

Background

The plaintiffs were employee benefit plans and trustees authorized to sue for the plans. Robert Charles Sinnock, individually and doing business as Neighborhood Glass Network, was an employer under the Employee Retirement Income Security Act of 1974 (ERISA). He signed two collective bargaining agreements that incorporated trust agreements. Those agreements required employers to contribute to the plans based on employees’ hours worked and imposed liquidated damages, interest, attorney’s fees, and other expenses for delinquent contributions.

An audit covering October 1, 2013, through December 31, 2018, found that Sinnock owed unpaid contributions. The plaintiffs said he did not dispute the audit findings or pay the amounts demanded. They served him personally with the lawsuit and the filings related to the motion for default judgment, but he did not respond or appear. The Clerk of Court entered his default.

Court’s analysis

The court found federal-question jurisdiction under ERISA and the Labor Management Relations Act. It also found personal jurisdiction, adequate service, and proper venue. Under Federal Rule of Civil Procedure 55, a court may enter default judgment against a defendant who fails to plead or otherwise defend, but default does not automatically require judgment. The court considered the factors commonly used to decide whether default judgment is appropriate, including prejudice, the merits and sufficiency of the claims, the amount at stake, possible factual disputes, excusable neglect, and the preference for decisions on the merits.

The court concluded that those factors favored judgment. The plaintiffs’ allegations and supporting declarations established that the plans were multiemployer plans, that the agreements required Sinnock to make contributions, and that he failed to make timely payments. The court also found that the plaintiffs provided notice of the damages through the audit, demand letters, motion papers, and supporting documents.

Damages and fees

The court found the plaintiffs had proved their damages through declarations and other evidence. It awarded unpaid contributions, liquidated damages, interest, audit fees, attorney’s fees, and costs. The total was $53,223.08, consisting of the amounts listed in the court’s damages table. The court also awarded five-percent simple interest on the unpaid contributions from March 18, 2021, until paid. It found the requested $21,118 in attorney’s fees and $819.45 in costs reasonable.

Disposition

Judge Laurel Beeler granted the plaintiffs’ motion for default judgment. The court entered judgment in favor of the plaintiffs for $53,223.08 plus the specified five-percent interest and stated that it would separately enter the plaintiffs’ proposed form of judgment.