Geller v. Steiny & Co.

• Decision Date: 29 November 2016
• Docket Number: Case No. 15-cv-01452-KAW
• Court: U.S. District Court — Northern District of California
• Parties: MIKE GELLER, et al., Plaintiffs, v. STEINY AND COMPANY INC, Defendant.

MIKE GELLER, et al., Plaintiffs, v. STEINY AND COMPANY INC, Defendant.

Case No. 15-cv-01452-KAW

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

November 29, 2016

REPORT AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT; ORDER REASSIGNING CASE TO A DISTRICT JUDGE

Re: Dkt. No. 22

On April 22, 2016, Plaintiffs filed a motion for default judgment against Defendant Steiny and Co., Inc., a California corporation, pursuant to section 502 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132, and section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185. (Plfs.' Mot., Dkt. No. 22.) Plaintiffs' motion follows an entry of default by the clerk on December 28, 2015. (Dkt. No. 14.) Defendant has not appeared in this action, nor did it respond to Plaintiffs' Complaint or motion for default judgment.

On November 17, 2016, the Court held a hearing on Plaintiffs' motion for default judgment, at which Defendant did not appear. Since Defendant, by the very virtue of being in default, has not consented to the undersigned, the Court reassigns this action to a district judge and recommends that Plaintiffs' motion be GRANTED IN PART AND DENIED IN PART.

I. INTRODUCTION

This action arises under ERISA, as amended by the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"). Plaintiffs Mike Geller and Ronald Bennett, acting as Trustees of the International Brotherhood of Electrical Workers Local 302 Health and Welfare and Pension Trust Funds, filed this action to collect contributions from Defendant Steiny and Co. Plaintiffs seek entry of default judgment against Defendant for unpaid contributions plus interest, liquidated damages, attorneys' fees, and costs as follows:

Unpaid Contributions

$34,294.67

15% Liquidated Damages

$3,689.86

10% Interest

$530.91

Attorneys' Fees

$9,213.75

Costs

$555.00

TOTAL

$48,284.19

(Garcia Decl. ¶ 8, Dkt. No. 22-2, Exh. A at 2; Campbell Decl. ¶¶ 5, 6, Dkt. No. 22-3, Exh. D, E.)

II. BACKGROUND

Plaintiffs are trustees of the Health, Welfare and Employee Trust Funds for electrical workers, all of which are Taft-Hartley funds as described by 29 U.S.C. §186 and employee pension benefit plans as defined by 29 U.S.C. § 1002(1)(2). (Compl. ¶ 3, Dkt. No. 1.) Defendant is an employer under ERISA operating in Solano County, California. (Id. ¶ 4.) Defendant signed a Letter of Assent authorizing the Contra Costa Chapter of the National Electrical Contractors Association, Inc. ("CC NECA") as its bargaining representative to bind Defendant to the terms and conditions of the Inside Wireman Agreement ("CBA") between the International Brotherhood of Electrical Workers ("I.B.E.W.") Local 302 and the CC NECA. (Compl. ¶¶ 3-7; Hansen Decl. ¶¶ 1-4, Exhs. A, B.) The CBA covers wages, hours and working conditions of employment and requires Defendant to make payments, for each hour worked by their employees, to the I.B.E.W. Local 302 Health and Welfare and Pension Trust Funds, which include the following Plans: the Health and Welfare Trust, Retirement Trust Fund, the Electrical Industry Apprenticeship Trust Fund, the NLMCC Fund, Dues Check-Off Fund, the National Electrical Benefit Fund, and the NECA Dues Fund ("Trust Fund Plans"). (Compl. ¶¶ 6-7; Hansen Decl. ¶ 3, Dkt. No. 22-1, Exh. B.)

The Health and Welfare Plan is contractually authorized to collect the monies due the TrustFund Plans and provides for the Plan Administrator to prepare a Status Report on a delinquency, including the period of delinquency, the actual or estimated amount owed, liquidated damages, and interest and to include copies of any payroll reports submitted before or during the delinquency. (Compl. ¶¶ 6-7; Hansen Decl. ¶ 8, Exh. D; Garcia Decl. ¶ 3, Exh. A.)

Pursuant to the CBA and the Trust Fund Plans, Defendant is required to submit to a depository, by the 15th day of each month following the month the work was performed, payment contributions to the Trust Funds Plans for each hour worked by its employees and is required to enumerate these hours and contributions in their monthly Transmittal Report Forms. (Hansen Decl. ¶ 6, Exh. C at 4.) Under the CBA and the Trust Fund Plans, employers who fail to make the required contributions are liable for the unpaid contributions owed; plus liquidated damages at the rate of 15% for contributions not postmarked by the 20th of the month following the month in which the work was performed; interest at the rate of 10% per annum, compounded, on the whole amount due, which includes the unpaid contributions plus liquidated damages; administrative costs; and attorney fees and court costs. (Compl. ¶¶ 8-9; Hansen Decl. ¶¶ 9, 11, Exh. B at 34.)

Plaintiffs' Complaint and Motion sought unpaid contributions for the period December 2014 through February 2015 as follows: for December 20, 2014 in the amount of $8,845.05; for January 20, 2015 in the amount of $6,572.16; and for February 20, 2015 in the amount of $6,184.20 for a total of $20,773.37. (Dkt. No. 1 ¶10; Garcia Decl. ¶ 4, Exh. A.) Defendant subsequently paid the contributions for this period of December 2014 through February 2015, and the payments were applied to the liquidated damages first. (Garcia Decl. ¶ 4, Exh. A.) The Terms of Plan's Revised Delinquency and Collection Procedures permit the trustees to apply current and future principal payments to the liquidated damages first when an employer makes unpaid principal contributions payments. (Hansen Decl., Exh. D at 3.) It is the policy of the Fund Administrator to apply principal payments to liquidated damages first. (Garcia Decl. ¶ 2.) For this period covering December 2014 through February 2015, Defendant was assessed liquidated damages at the rate of 15% for all unpaid contributions not postmarked on the 20th day of the month following the month in which the work was performed and 10% interest per annum, compounded, on the whole amount due as follows: Liquidated Damages in the amount of$5,012.76 and interest in the amount of $111.90. (Compl. ¶¶ 8-10; Garcia Decl. ¶ 4, Exh. A.)

The Complaint put Defendant on notice that Plaintiff's intended to seek all unpaid contributions, liquidated damages and interest as follows, "[O]n information and belief, additional monies are due for the periods March 1, 2015 to the present" and continues as follows: "[T]he obligation of said Defendants, pursuant to the collective bargaining agreement set forth in paragraph 7 above is a continuing obligation; Defendants may be continuing to breach said agreement by failure to pay monies due thereunder to Plaintiffs. The additional sums still due and owing, because of said breach, are presently unknown, but will be determined hereafter." (Compl. ¶¶ 12-13.) Plaintiffs' Complaint also included language that they be allowed to recover reasonable attorney fees and court costs and amend the Complaint should it be deemed necessary by the court to recover any and all additional sums due. (Id. ¶ 9, 13.)

From March 2015 through March 2016, Defendant was delinquent each and every month in the payment of contributions as detailed in the Steiny Status Report and in Defendant's own monthly submitted Transmittal Reports showing employee hours and the dates the amounts were paid by Defendant. (Garcia Decl. ¶ 5, Exh. A, C.) For the period covering March 20, 2015 through March 15, 2016, Defendant was assessed liquidated damages at the rate of 15% for all unpaid contributions not postmarked on the 20th day of the month following the month in which the work was performed and 10% interest, compounded, on the whole amount due as follows: Payments made by Defendant were applied first to the due and owing unpaid liquidated damages balance and then to unpaid contributions leaving an unpaid contribution balance of $2,060.28 and interest on this amount of $16.24. (Id.)

Defendant made two contribution payments as follows: On July 26, 2016 in the amount of $3,357.07 and on August 25, 2016 in the amount of $808.53. (Garcia Decl. ¶ 6; Exh. A.) Payments made by Defendant were applied first to the due and owing unpaid liquidated damages balance and then to unpaid contributions leaving an unpaid contribution balance of $9,616.66; interest on this amount of $78.90, for a total for this period of $9,695.56. (Id.)

Plaintiffs further allege in their Motion that for the pay period of April 15, 2016 through August 15, 2016, and pursuant to Defendant's own Transmittal Reports, Defendant failed to makethe monthly payment Trust Fund Plans contributions as follows: For April 15, 2016 contributions in the amount of $10,178.82; for May 15, 2016 contributions in the amount of $10,061.57; for June 15, 2016 contributions in the amount of $10,372.04; for July 15, 2016 contributions in the amount of $3,357.07; and for August 15, 2016 contributions in the amount of $808.43. The total unpaid contributions due and owing for the May 2016 through August 2016¹ contributions are $24,599.11. (Garcia Decl. ¶ 6, Exhs. A, D, E.) For this period covering April 15, 2016 through August 15, 2016, Plaintiffs assessed liquidated damages at the rate of 15% for all unpaid contributions not postmarked on the 20th day of the month following the month in which the work was performed and 10% interest, compounded, on the whole amount due as follows: liquidated damages in the amount of $3,389.86 and interest in the amount of $530.91. (Garcia Decl. ¶ 6, Exh. A.)

In their motion for default, Plaintiffs seek a total amount of damages as follows: $34,294.67 ($9,695.66 + $24,599.11) in unpaid contributions, $3,689.86 in liquidated damages at 15% pursuant to the contract; $530.91 in interest at 10% pursuant to the contract; $9,213.75 in attorney fees; and costs of $555.00. (Plfs.' Mot. at 6.)

III. LEGAL STANDARD

Federal Rule of Civil Procedure 55(b)(2) permits a court, following default by a defendant, to enter default judgment in a case. "The district court's decision whether to enter default judgment is a...