Bay Area Roofers Health & Welfare Trust Fund v. Platinum Roofing, Inc.

Background

The plaintiffs were several multi-employer employee-benefit trust funds and two trustees. They sued Platinum Roofing, Inc. under the Labor Management Relations Act and the Employee Retirement Income Security Act for unpaid fringe-benefit contributions. The opinion states that Platinum had entered collective bargaining agreements with union branches Local 40, Local 81, and Local 95. Those agreements required Platinum to make monthly contributions for covered roofing, waterproofing, and contracting work.

After the plaintiffs noticed missing payments, a third-party audit reviewed Platinum’s payroll records. The audit found that Platinum had underreported or reported late tens of thousands of hours on multiple projects. Platinum failed to defend the action, and the clerk entered default on March 1, 2021. The plaintiffs then moved for default judgment.

Court’s analysis

The court first found that it had authority to hear the case and personal jurisdiction over Platinum. It concluded that the plaintiffs properly served Platinum with the summons, complaint, and entry of default.

The court applied the seven factors used for deciding whether to enter default judgment. It found that the factors favored the plaintiffs because Platinum’s failure to defend limited the plaintiffs’ ability to recover, the claims were adequately supported, the requested damages were proportional to the alleged unpaid contributions, and there was no meaningful prospect of a factual dispute because Platinum was not represented. The court also found nothing suggesting that Platinum’s failure to defend resulted from excusable neglect.

The court concluded that Platinum was bound by the collective bargaining agreements and owed contributions under them. It relied on the employee-benefit statute requiring employers to make contributions to multi-employer plans according to the applicable plan or agreement.

Damages and ruling

The plaintiffs limited their request to the period from August 1, 2018, through March 31, 2019. They sought $2,062,886.46 in unpaid contributions, liquidated damages, and $542,501.55 in interest calculated through July 15, 2021. They did not seek attorney’s fees, costs, or other relief.

The court found that the audit supported $2,062,886.46 in unpaid contributions. It also found the evidence sufficient to support interest at 10 percent per year on the principal amount, based on the binding agreements. The conclusion states: “default judgment is GRANTED for plaintiffs and against defendant in the amount of $2,811,676.66.”