The opinion
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4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
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7 U.A. LOCAL 393 HEALTH AND Case No. 22-cv-01372-JSC
WELFARE TRUST FUND, et al.,
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Plaintiffs, ORDER GRANTING MOTION FOR
9 DEFAULT JUDGMENT ON DAMAGES
v.
10 Re: Dkt. No. 37
THE KRAUTSTRUNK COMPANY, INC.,
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Defendant.
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U.A. Local 393 Health and Welfare Trust Fund, U.A. Local 393 Pension Fund, and
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Trustees Alex Hall and Eric Mussynski (“Plaintiffs”) allege Kraustrunk Company, Inc.
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(“Defendant”) failed to pay contributions for hours its employees worked in violation of the
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Employee Retirement Income Security Act of 1974 (“ERISA”). On August 1, 2023, this Court
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granted Plaintiffs’ motion for default judgment of liability, but deferred judgment on damages
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pending Plaintiffs’ supplemental submission regarding the calculation of accrued interest. (Dkt.
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No. 36.) Having reviewed Plaintiffs’ supplemental submission (Dkt. No. 37), the Court GRANTS
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Plaintiffs’ motion for default judgment and awards the full amount of damages sought.
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BACKGROUND
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Plaintiffs submitted a supplemental declaration from Matthew Minser explaining their
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interest calculation. (Dkt. No. 37.) In the declaration, Plaintiffs introduce a document that
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governs the delinquency collection procedures of U.A. Local 393 Health and Welfare Trust Fund
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and U.A. Local 393 Pension Fund (the “Trust Funds”). (Dkt. No. 37 ¶ 8.) Plaintiffs contend that
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based on this document, contributions are considered delinquent if they are not received on the
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eighteenth (18th) day rather than the fifteenth (15th) of the month following the month hours were
1 worked. (Dkt. No. 37 ¶¶ 9-10.) Moreover, interest is calculated based on unpaid contributions,
2 but not liquidated damages. (Dkt. No. 37 ¶ 11.) In addition, Plaintiffs request additional interest
3 accruing at the same rate of ten percent per annum from September 16, 2022 to August 15, 2023.
4 (Dkt. No. 37 ¶ 12.)
5 LEGAL STANDARD
6 On default judgment, the factual allegations relating to a defendant’s liability are taken as
7 true, but not the allegations regarding the amount of damages. TeleVideo Systems, Inc. v.
8 Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987); see also Fed. R. Civ. P. 8(b)(6) (“An allegation
9 – other than one relating to the amount of damages – is admitted if a responsive pleading is
10 required and the allegation is not denied.”). Thus, a plaintiff must prove the amount of damages
11 sought in the complaint. Lasheen v. Embassy of The Arab Republic of Egypt, 625 F. app’x 338,
12 341 (9th Cir. 2015) (citing Geddes v. United Financial Group, 559 F.2d 557, 560 (9th Cir. 1977).
13 This process is limited by Federal Rule of Civil Procedure 54(c), which states “[a] default
14 judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings.”
15 DISCUSSION
16 Under ERISA § 502(g), 29 U.S.C. 1132(g)(2)(b), an employer is liable for interest on
17 unpaid contributions if judgment is entered against them for delinquent contributions. See also
18 ERISA § 515, 29 U.S.C. § 1145. Plaintiffs support their interest request by (1) justifying their
19 calculation method (Dkt. No. 37 ¶ 8.) and (2) detailing their calculations (Id. ¶¶ 13-15.). Plaintiffs
20 also request additional interest because the delinquent contributions remain unpaid since
21 September 21, 2022 when Plaintiffs filed their motion for default judgment.
22 1. Plaintiffs’ Calculation Method Is Justified by the Collection Procedures
23 Plaintiffs proffer the Restated Delinquency Collection Procedures (“Collection
24 Procedures”)1 to explain their calculation method. (Dkt. No. 37 ¶ 8.)
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1 The Collection Procedures document Plaintiffs proffer became effective on June 20, 2022, but
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the time period at issue is October to December of 2020. (Dkt. No. 37-1 at 48.) However,
Plaintiffs explain this document is the “most current executed version,” and calculations pursuant
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to this document do not result in more owed by Defendant than calculations pursuant to the
1 A. The Collection Procedures Binds the Parties
2 The Collection Procedures binds the parties because the Trust Funds adopted them
3 pursuant to the Trust Agreements. (Dkt. No. 37 ¶ 8.) The Court previously recognized that the
4 Trust Agreements binds Defendant and Plaintiffs Trust Funds. (Dkt. No. 36 at 6; Dkt. No. 37 ¶ 5;
5 Dkt. No. 20-1 at 102, 104.) The Trust Agreements authorize the Trust Funds’ Board of Trustees
6 to “adopt rules and regulations as appropriate for the administration” of the Trust Funds. (Dkt.
7 No. 37 ¶¶ 6-7; Dkt. No. 37-1 at 17; id. at 31.) In accordance with this authorization, the Board of
8 Trustees adopted the Collection Procedures. (Dkt. No. 37 ¶ 8; Dkt. No. 37-1 at 48.) Therefore,
9 Plaintiffs’ reliance on the Collection Procedures is justified.
10 B. The Collection Procedures Justify Plaintiffs’ Interest Calculations
11 The Court’s prior order found Plaintiffs’ interest calculation of $4,491.25 as of September
12 15, 2022 did not reflect the calculation method Plaintiffs described. (Dkt. No. 36 at 10.)
13 The calculation method in the Collection Procedures differs from Plaintiffs’ previous
14 method in two ways. First, contributions are considered delinquent if they are not received by the
15 “18th day of the month following the month hours were worked.” (Dkt. No. 37 ¶¶ 9-10; Dkt. No.
16 37-1 at 50.) Second, “simple interest of 10% per annum is assessed on contributions (and not on
17 liquidated damages) received or remaining unpaid after the delinquency date.” (Dkt. No. 37 ¶ 11;
18 Dkt. No. 37-1 at 58.) In this way, the Collection Procedures adequately explain Plaintiffs’
19 calculations based on the delinquency date of the 19th day of the month following the month
20 worked and based on unpaid contributions excluding liquidated damages.
21 2. Plaintiffs’ Interest Calculations Are Accurate Under the Collection Procedures
22 Plaintiffs explain interest is calculated by multiplying the total unpaid contributions
23 (excluding liquidated damages) by ten percent, dividing it by 365 to compute daily interest2, and
24 multiplying daily interest by the number of days that have passed since the contribution was
25 delinquent. (Dkt. No. 31 ¶ 7.) If, pursuant to the Collection Procedures, the delinquency date is
26 the 19th day of the month following the month hours were worked and interest of ten percent per
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1 annum is calculated on unpaid contributions and not liquidated damages, Plaintiffs’ interest
2 calculation of $4,491.25 as of September 15, 2022 is accurate. (Dkt. No. 37 at 9.) Calculations
3 are outlined in the table below.
4 3. Plaintiffs’ Request for Additional Interest Is Justified
5 Plaintiffs contend they are entitled to additional interest because Defendant has not made
6 any payment towards their balance since September 21, 2022, when Plaintiffs filed their motion
7 for default judgment. (Dkt. No. 37 ¶ 12.) Plaintiffs’ original motion requested interest accrued
8 through September 15, 2022. (Id.; Dkt. No. 21.) They now request interest accrued through
9 August 15, 2023.
10 Plaintiffs’ request is justified. Under the Collection Procedures, “simple interest of 10%
11 per annum is assessed on contributions (and not on liquidated damages) received or remaining
12 unpaid after the delinquency date.” (Dkt. No. 37 ¶ 11; Dkt. No. 37-1 at 58.) More time has
13 passed since the delinquency date so more interest has accrued at the same rate. Based on this
14 calculation method, Plaintiffs are entitled to an additional interest of $2,364.72 for a total of
15 $6,855.97 for unpaid contributions as of August 15, 2023. (Dkt. No. 37 ¶¶ 13-15.)
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IInntteerreesstt uunnttiill SSeepptt.. 1155,, 22002222
1 17 8 CCooUU nnttnn rrpp iibbaa uuiidd ttiioonn IInn11 tte0 e0 r% r% eess tt IInn ((DD //tt 33eeaa 66rrii el 5el 5yy s )s ) tt SSttaarrtt DDaattee EEnndd DDaattee ((~~## 99 /o /o 11ff 55 DD //22aa 00yy 22ss 22)) ((dd II ##aann i i l ol ot yt y ffee i d*i d*r nr n a a e te t yyeess sr sree tt ))sstt
19 OOcctt--2200 $$ 77,,338877..0066 $$ 773388..7711 $$ 22..0022 1111//1199//22002200 99//1155//22002222 666666 $$ 11,,334455..3322
NNoovv--2200 $$ 99,,998811..8899 $$ 999988..1199 $$ 22..7733 1122//1199//22002200 99//1155//22002222 663366 $$ 11,,773366..2288
20 DDeecc--2200 $$ 88,,449944..8877 $$ 884499..4499 $$ 22..3333 11//1199//22002211 99//1155//22002222 660055 $$ 11,,440099..6655
21 $$ 44,,449911..2255
22 AAddddiittiioonnaall iinntteerreesstt rreeqquueesstteedd -- aaccccrruuiinngg ffrroomm SSeepptt.. 1166,, 22002222 -- AAuugg.. 1155,, 22002233
2 23 4
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OOcctt--2200 $$ 77,,338877..0066 $$ 773388..7711 $$ 22..0022 99//1166//22002222 88//1155//22002233 333344 $$ 667744..6688
NNoovv--2200 $$ 99,,998811..8899 $$ 999988..1199 $$ 22..7733 99//1166//22002222 88//1155//22002233 333344 $$ 991111..8822
26 DDeecc--2200 $$ 88,,449944..8877 $$ 884499..4499 $$ 22..3333 99//1166//22002222 88//1155//22002233 333344 $$ 777788..2222
$$ 22,,336644..7722
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KE Berane mae NLU IID)
2 . 10% Daily Interest
Unpaid # of Days (daily interest
4 Contribution Interest Interest | Start Date | End Date (~8/15/2023) □
(/365) # of days )
4 $ 7,387.06 738.71|$ 2.02 | 11/19/2020] 8/15/2023 1000] □□□□□□□□□□
$ 9,981.89 | $ 998.19 12/19/2020] 8/15/2023 $ 2,648.1¢
5 $ 8,494.87]$ 349.49]$ 233] 1/1972021] 8/15/2023 $ 2,187.87
6 $ 6,855.97
7 CONCLUSION
8 For the reasons stated above, the Court GRANTS Plaintiffs’ motion for default judgment
9 as to damages in the total amount of $37,892.55, which consists of $25,863.82 in unpaid
10 contributions, $5,172.76 in liquidated damages, $6,855.97 in interest, plus $11,922.01 in
ll reasonable attorney’s fees, and $1,009.69 in costs.
a 12 IT IS SO ORDERED.
13 Dated: September 8, 2023
,
ne
JA@MQUELINE SCOTT CORL
A 16 United States District Judge
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