U.A. Local 393 Health and Welfare Trust Fund v. THE KRAUTSTRUNK COMPANY, INC.
- Jacquelyn Corley
- 3:22-cv-01372
- U.S. District Court · Northern District of California
- 5
In U.A. Local 393 Health and Welfare Trust Fund v. THE KRAUTSTRUNK COMPANY, INC., Judge Corley granted default judgment for damages.
The order affects the two Trust Funds and their trustees as plaintiffs, and THE KRAUTSTRUNK COMPANY, INC. as the defendant whose damages were determined after default.
What happened
U.A. Local 393 Health and Welfare Trust Fund v. THE KRAUTSTRUNK COMPANY, INC. involved claims that the company failed to pay employee-benefit contributions required under federal benefits law. The court had already granted judgment establishing the company’s liability and postponed deciding damages while the plaintiffs provided more information about interest.
The plaintiffs explained that the governing collection procedures required 10% simple annual interest on unpaid contributions, excluding liquidated damages. The court accepted their calculation method and awarded $6,855.97 in interest through August 15, 2023, including $2,364.72 in additional interest.
Judge Jacquelyn Scott Corley granted the plaintiffs’ motion for default judgment on damages and stated that the award totaled $37,892.55. The order also listed unpaid contributions, liquidated damages, attorney’s fees, and costs, but those listed amounts do not add up to the stated total.
The detailed version
- U.A. Local 393 Health and Welfare Trust Fund v. THE KRAUTSTRUNK COMPANY, INC. · No. 3:22-cv-01372
- Jacquelyn Corley
- Sept. 8, 2023
Background
U.A. Local 393 Health and Welfare Trust Fund, U.A. Local 393 Pension Fund, and Trustees Alex Hall and Eric Mussynski sued THE KRAUTSTRUNK COMPANY, INC. The plaintiffs alleged that the company failed to pay required contributions for hours its employees worked, violating the Employee Retirement Income Security Act of 1974, a federal employee-benefits law.
On August 1, 2023, the court granted the plaintiffs’ motion for default judgment as to liability but postponed deciding damages. The court requested additional information about how the plaintiffs calculated accrued interest. The plaintiffs then submitted a declaration from Matthew Minser and the Restated Delinquency Collection Procedures adopted by the Trust Funds.
Interest calculation
The court held that the Collection Procedures bound the parties because the Trust Agreements authorized the Trust Funds’ Board of Trustees to adopt administrative rules, and the Board adopted the Collection Procedures under that authority.
The Collection Procedures stated that simple interest at 10% per year applied to unpaid contributions, but not to liquidated damages, after the contributions became delinquent. The plaintiffs calculated daily interest by multiplying unpaid contributions by 10%, dividing by 365, and multiplying by the number of delinquent days. The court found that the plaintiffs’ calculation of $4,491.25 in interest through September 15, 2022, was accurate under the procedures. It also approved $2,364.72 in additional interest through August 15, 2023, for total interest of $6,855.97.
The opinion contains an apparent inconsistency about the delinquency date: it describes the procedures as using the 18th day of the following month, while the court’s discussion of the calculations refers to the 19th day.
Ruling
Judge Jacquelyn Scott Corley granted the plaintiffs’ motion for default judgment as to damages. The conclusion states that the total award was $37,892.55 and lists these components: $25,863.82 in unpaid contributions, $5,172.76 in liquidated damages, $6,855.97 in interest, $11,922.01 in reasonable attorney’s fees, and $1,009.69 in costs.
The listed components add up to $50,824.25, not $37,892.55. The opinion does not explain this discrepancy. The order states, “IT IS SO ORDERED.”
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.