Bds. of Trs. of the Inland Empire Elec. Workers Welfare Tr. v. Excel Elec. Servs.
| Decision Date | 27 April 2022 |
| Docket Number | 2:21-cv-00200-MKD |
| Parties | BOARDS OF TRUSTEES OF THE INLAND EMPIRE ELECTRICAL WORKERS WELFARE TRUST; 112/73 RETIREMENT TRUST FUND NECA-IBEW; and LU 112-NECA ELECTRICAL TRAINING TRUST FUND, Plaintiffs, v. EXCEL ELECTRICAL SERVICES, INC., a Washington state foreign corporation, UBI No. 602 717 875, Defendant. |
| Court | U.S. District Court — District of Washington |
Before the Court is Plaintiffs' Motion and Declaration for Entry of Default Judgment, ECF No. 8. The Court has considered the briefing, the record, and is fully informed. For the reasons discussed below, the Court grants the motion and enters default judgment against Defendant Excel Electrical Services Inc.
This case arises under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. ECF No. 1 at 2. Plaintiffs “are the duly qualified and acting Trustees” of the Inland Empire Electrical Workers Welfare Trust, 112/73 Retirement Trust Fund NECA-IBEW, and 112-NECA Electrical Workers Training Trust Fund. ECF No. 1 at 2. Plaintiffs initiated this action against Defendant Excel Electrical Services for its alleged failure to comply with an audit of its payroll records. ECF No. 1 at 4.
According to the Complaint, on November 19, 2007, Defendant entered into a collective bargaining agreement with the Inland Empire Chapter of the National Electrical Contractors Association and the International Brotherhood of Electrical Workers Local 112 by executing a Letter of Assent. ECF No. 1 at 3. The Letter of Assent bound Defendant to the local Collective Bargaining Agreement and any successor agreements (collectively, the Labor Agreements). ECF No. 1 at 3. The Labor Agreements bound Defendant to the wage rates, fringe benefit contribution rates, apprentice contribution rates and “the Trust Agreements that govern [the trust funds].” ECF No. 1 at 3.
Under the Trust Agreements, “[Defendant] must submit to an audit of its payroll records at the request of the Plaintiff[s].” ECF No. 1 at 3. On April 6, 2020 Plaintiffs requested Defendant comply with an audit of its records from January 2019 through December 2019. ECF No. 8 at 4. Defendant failed to comply with the requested audit. ECF No. 1 at 4; ECF No. 8 at 4.
On July 1, 2021, Plaintiffs filed a Complaint, ECF No. 1, and issued a Summons to Defendant, ECF No. 2. The Summons and Complaint were properly served upon Defendant's registered agent on July 10, 2021. ECF No. 4; ECF No. 5 at 3. Proof of Service was filed with the Court on July 14, 2021. ECF No. 4. Defendant did not file an Answer or otherwise appear. See ECF No. 5 at 1. On August 18, 2021, Plaintiffs sent Defendant a Notice of Intent to Move for Entry of Default via First Class Mail to Defendant's registered agent. Plaintiffs also sent the notice via First Class Mail to 322 E. McKinney Avenue in Hermiston, Oregon and by email to excelelectrical@charter.net. ECF No. 5-3. On September 15, 2021, Plaintiffs filed a Motion for Entry of Default. ECF No. 5. The Clerk entered an Order of Default the same day. ECF No. 6. On November 19, 2021, Plaintiffs filed a Motion for Default Judgment. ECF No. 8.
“In enacting ERISA, Congress set out to protect participants in employee benefit plans by establishing standards of conduct, responsibility, and obligations for fiduciaries of employee benefit plans, and by providing for appropriate remedies.” Yeseta v. Baima, 837 F.2d 380, 383 (9th Cir. 1988); see also 29 U.S.C. § 1001. Generally speaking, ERISA requires that plan participants are provided with information about their benefits, imposes fiduciary responsibilities on those who manage and control plan assets, and gives to certain defined entities the right to sue for violations of the law.
Under 29 U.S.C. § 1132(a), “[a] civil action may be brought [under ERISA] . . . by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief . . . or to enforce any provision of this subchapter or the terms of the plan.” 29 U.S.C. § 1132(a)(3). An ERISA “plan” includes a “fund.” 29 U.S.C. § 1002(1), (2), (3) () (emphasis added); see Hawaii Masons' Pension Trust Fund v. Global Stone Hawaii, Inc., 292 F.Supp.3d 1063, 1066 (D. Haw. 2017) ( that a pension trust fund, training trust fund, and welfare trust fund “are jointly trusteed labor-management trust funds maintained under 29 U.S.C § 186(c)(5) that operate as employee benefit plans.”).
“[T]he district courts of the United States shall have exclusive jurisdiction of civil actions [under ERISA] . . . brought by . . . a participant, beneficiary [or] fiduciary.” 29 U.S.C. § 1132(e)(1). In addition, “[t]he district courts of the United States shall have jurisdiction, without respect to the amount in controversy or the citizenship of the parties, to grant the [equitable] relief provided for in subsection (a) of this section in any action.” 29 U.S.C. § 1132(f).
An ERISA action “may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found.” 29 U.S.C. § 1132(e)(2). Plaintiffs state the trust funds are administered within this District in Spokane, Washington. ECF No. 1 at 2.
1. Procedural Requirements
Under the Federal Rules of Civil Procedure, obtaining a default judgment is a two-step process. Fed.R.Civ.P. 55. First, “[w]hen a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend . . . the clerk must enter the party's default.” Fed.R.Civ.P. 55(a). Second, the moving “party must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b). Under the Local Civil Rules, the moving party must then provide LCivR 55(a)(1). The moving party is also required to, LCivR 55(b)(1).
Plaintiffs have satisfied both procedural requirements of Fed.R.Civ.P. 55. The first requirement was satisfied on September 15, 2021, when Plaintiffs moved for an entry of default and the Clerk entered an Order of Default. ECF Nos. 5, 6. Plaintiffs satisfied the second requirement on November 19, 2021 when they moved for default judgment. ECF No. 8.
Plaintiffs also satisfied the requirements of the Local Rules. Plaintiffs provided Defendant with written notice of their intention to move for entry of default judgment on August 18, 2021, see ECF No. 5-3, more than 14 days prior to filing their Motion for Default Judgment on November 19, 2021. See ECF No. 8. Plaintiffs also filed a declaration specifying that Defendant is neither an infant nor an incompetent person and that the Servicemembers Civil Relief Act does not apply. ECF No. 8 at 3. 2. Substantive Requirements-Eitel Factors
“[T]he decision to enter a default judgment is discretionary.” Alan Neuman Productions, Inc. v. Albright, 862 F.2d 1388, 1392 (9th Cir. 1988). The Ninth Circuit has established seven factors, known as the Eitel factors, that Courts may consider when exercising their discretion to enter a default judgment. Eitel v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). These seven factors are:
(1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff's substantive claim, (3) the sufficiency of the complaint, (4) the sum of money at stake in the action; (5) the possibility of a dispute concerning material facts; (6) whether the default was due to excusable neglect, and (7) the strong policy underlying the Federal Rules of Civil Procedure favoring decisions on the merits.
Id. In weighing these factors, “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977).
The first Eitel factor considers the possibility of prejudice to Plaintiff if default judgment is not entered. Eitel, 782 F.2d at 1471-72. “Prejudice exists where the plaintiff has no ‘recourse for recovery' other than default judgment.” Curtis v. Illumination Arts, Inc., 33 F.Supp.3d 1200, 1211 (W.D. Wash. 2014).
In this case, Plaintiffs are authorized by the Trust Agreements “to audit and examine the pertinent payroll records of the signatory employers to ensure the proper reporting of hours and contributions.” ECF No. 8 at 4. Defendant, a signatory employer bound by the Trust Agreements, was selected for an audit in April 2020. ECF No. 8 at 4. Defendant failed to respond to all attempts to perform the audit and has not provided any of the requested documents. ECF No. 8 at 4. Defendant has also failed to participate in this action. ECF No. 6.
Until receiving the results of the audit, Plaintiffs cannot determine if Defendant has made the required contributions under the Trust Agreements. Plaintiffs...
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