Laborers Health & Welfare Trust Fund for Northern California v. Four M's…

Background

The plaintiffs were the boards of trustees for four employee benefit funds: the Laborers Health and Welfare Trust Fund for Northern California, Laborers Pension Trust Fund for Northern California, Laborers Vacation-Holiday Trust Fund for Northern California, and Laborers Training and Retraining Trust Fund for Northern California. The opinion states that these funds are employee benefit plans governed by the Employee Retirement Income Security Act (ERISA) and the Labor Management Relations Act.

Four M’s became subject to agreements requiring it to make hourly contributions to the funds for covered work performed or paid for by its employees. The agreements also authorized the funds to audit Four M’s’ books and records. They provided for monthly interest and liquidated damages when contributions were unpaid or late.

The plaintiffs alleged that an audit found $338,809.48 in delinquent contributions. They sought unpaid contributions, interest, liquidated damages, attorneys’ fees, costs, and an order requiring a further audit.

Procedural History

The plaintiffs moved for default judgment under Federal Rule of Civil Procedure 55(b)(2). Four M’s did not respond to the motion or appear at the February 21, 2024 hearing.

Court’s Analysis

The court found that it had federal-question jurisdiction under ERISA and the labor-agreement statute. It also found personal jurisdiction because the funds were administered in Pleasanton, California, and found that Four M’s had properly waived service of the summons and complaint.

The court applied the seven factors used to decide whether to enter default judgment. It found that the plaintiffs would otherwise lack a way to recover the contributions, that the complaint adequately alleged ERISA and contract claims, and that the claims appeared meritorious. The court also found that the amount sought was authorized by the agreements and related to Four M’s’ alleged misconduct. Four M’s had not disputed the material facts, and the record did not indicate that its default resulted from excusable neglect. These factors outweighed the general preference for decisions on the merits.

Because Four M’s defaulted, the well-pleaded allegations concerning liability were treated as true. The court separately required evidence supporting the damages and other relief.

Relief

For unpaid contributions, interest, and liquidated damages, the plaintiffs sought $338,809.48 in unpaid contributions, $362,358.31 in interest, and only $750 in liquidated damages, although they calculated a larger liquidated-damages amount. The court awarded $701,917.79 for these categories.

The court ordered Four M’s to submit to an audit of its records for October 2020 through the present. It relied on the agreements’ audit provision, which required Four M’s to permit an examination of records needed to determine whether it was making all required payments.

The court awarded $31,530.00 in attorneys’ fees and $3,454.44 in costs. The total judgment was $736,902.23.

Disposition

The court granted the plaintiffs’ motion for default judgment and ordered the monetary awards and audit described above.