Boards of Trustees of the AGC-Operating Engineer Health and Welfare Fund v. K.F. Jacobsen & Co., Inc.

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

BOARDS OF TRUSTEES OF THE AGC- Case No. 3:19-cv-0621-SI

OPERATING ENGINEER HEALTH AND

WELFARE FUND; OPERATING OPINION AND ORDER

ENGINEERS PENSION FUND; and

INTERNATIONAL UNION OF

OPERATING ENGINEERS LOCAL 701-

AGC TRAINING TRUST FUND,

Plaintiffs,

v.

K.F. JACOBSEN & CO., INC., an Oregon

Corporation, Oregon Registry No. 020263-18,

Defendant.

Michael H. Simon, District Judge.

Plaintiffs Boards of Trustees of the AGC-Operating Engineer Health and Welfare Fund,

Operating Engineers Pension Fund, and International Union of Operating Engineers Local 701-

AGC Training Trust Fund bring this action against Defendant K.F. Jacobsen & Co., Inc. They

sue under the Employee Retirement Income Security Act of 1974 (“ERISA”) and the applicable

collective bargaining agreement (“CBA”) for the collection of unpaid contributions, liquidated

damages, and attorney’s fees and costs. Before the Court is Plaintiffs’ motion for entry of default

judgment under Federal Rule of Civil Procedure 55(b). For the following reasons, the Court

grants Plaintiffs’ motion, and will enter a default judgment against Defendant.

STANDARDS

Under Federal Rule of Civil Procedure 55(a), the Clerk of the Court is required to enter

an order of default if a party against whom affirmative relief is sought fails timely to answer or

otherwise defend an action. Fed. R. Civ. P. 55(a) (“When a party against whom a judgment for

affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by

affidavit or otherwise, the clerk must enter the party’s default.”). Upon the entry of default, the

Court accepts “the well-pleaded factual allegations” of the complaint “as true.” DIRECTV, Inc. v.

Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (quoting Cripps v. Life Ins. Co. of N. Am., 980

F.2d 1261, 1267 (9th Cir. 1992)); see also Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th

Cir. 1977). The court, however, does not accept as admitted facts that are not well-pleaded,

conclusions of law, or facts relating to the amount of damages. DIRECTV, 503 F.3d at 854;

Geddes, 559 F.2d at 560; see also Derek Andrew, Inc. v. Poof Apparel Corp., 528 F.3d 696, 702

(9th Cir. 2008) (“‘The general rule of law is that upon default the factual allegations of the

complaint, except those relating to the amount of damages, will be taken as true.’” (quoting

TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987))).

After default has been entered against a defendant, a court may enter a default judgment

against that defendant. See Fed. R. Civ. P. 55(b). “The district court’s decision whether to enter a

default judgment is a discretionary one.” Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980);

see also Dreith v. Nu Image, Inc., 648 F.3d 779, 786 (9th Cir. 2011) (noting that a district’s court

decision whether to enter a default judgment is reviewed for abuse of discretion). In Eitel v.

McCool, 782 F.2d 1470 (9th Cir. 1986), the Ninth Circuit set out factors to guide a district

court’s consideration of whether to enter a default judgment. See DIRECTV , 503 F.3d at 852

(noting that Eitel “set[] out factors to guide district court’s determination regarding the

appropriateness of granting a default judgment”).

The Ninth Circuit in Eitel held:

Factors which may be considered by courts in exercising discretion

as to the entry of a default judgment include: (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.

Eitel, 782 F.2d at 1471-72 (punctuation in original). The “starting point” of the court’s analysis,

however, “is the general rule that default judgments are ordinarily disfavored.” Id. at 1472.

BACKGROUND

Plaintiffs are the Boards of Trustees of the Health and Welfare Fund,

Pension Fund, and Training Fund (collectively “Trust Funds”) of the AGC-International Union

of Operating Engineers Local 701 (“Local 701). Defendant K.F. Jacobsen & Co. (“K.F.

Jacobsen” or “Defendant”) is an Oregon corporation. It is a signatory to a CBA with Local 701,

which incorporates agreements governing each of the Trust Funds (“Trust Agreements”).

The Trust Agreements obligate K.F. Jacobsen to pay fringe benefits to the Trust Funds

for covered hours worked by its employees and to remit union dues and other ancillary funds—

all on a monthly basis. If K.F. Jacobsen does not make fringe benefits contributions on time, it is

liable for (1) the late fringe benefit contributions, (2) 12 percent interest annually from the date

the contributions were due until paid, and (3) liquidated damages of 10 percent of the delinquent

or late paid fringe benefit contributions for each month that the contributions are late or

delinquent. If K.F. Jacobsen does not remit union dues on time, it is liable for the late or

delinquent dues and 9 percent interest on the late or delinquent dues from the date payment was

due until paid. The CBA also permits Plaintiffs to recover reasonable attorney’s fees and costs.

Defendant did not pay any fringe benefit contributions to the Trust Funds from February 2019 to

June 2019, and Plaintiffs sued for damages equal to the amounts stated above.

Plaintiffs filed its initial complaint alleging violation of ERISA and the CBA on April 23,

2019. Plaintiffs served process on Defendant on May 2, 2019, but received no responsive

pleading within the 21-day window. Plaintiffs thus moved for an entry of default on

June 19, 2019, which the Court granted on July 2, 2019. On August 26, 2019, Plaintiffs filed a

motion for default judgment. The Court now considers Plaintiffs’ motion for default judgment.

DISCUSSION

A. Eitel Factors

The Court finds that all the Eitel factors weigh in favor of entering a default judgment.

Plaintiffs will be prejudiced if the Court does not enter default judgment because Defendant’s

failure to respond to the Complaint leaves Plaintiffs with no alternative avenues of redress. See

Minnesota Life Ins. Co. v. Gomez, 2015 WL 4638351, at *4 (D. Ariz. Aug. 4, 2015) (finding that

not entering default judgment would prejudice Plaintiffs because it would leave them without

any other way of resolving the claim). The factual allegations of the Complaint, which the Court

accepts as true, are sufficient to support Plaintiffs’ claims. The CBA requires Defendant to pay

fringe benefit contributions to the Trust Funds, and Defendant failed to do so in a timely manner.

Plaintiffs request total damages of $28,830.81. Plaintiffs have provided extensive documentation

describing how it arrived at this damages figure. Additionally, the amount is not unreasonable

given the seriousness of Defendant’s conduct. There is no room for “dispute concerning material

facts.” Eitel, 782 F.2d at 1471-72. The Court must accept Plaintiffs’ factual allegations because

default has already been entered. Plaintiffs have also adduced additional evidence on the amount

of damages. It is unlikely that the default was due to excusable neglect—Defendant was served

with process but has not appeared or responded in any form. Finally, although policy disfavors

default judgments, judgment on the merits is impossible where Defendant has not answered or

made a responsive pleading. Thus, the Eitel factors favor entry of a default judgment in this case.

B. Damages

Although the Court accepts as true Plaintiffs’ well-pleaded factual allegations, the Court

does not accept allegations relating to damages. Plaintiffs must prove the amount of damages. To

support their damages figure, Plaintiffs submitted the declaration of Traci Pardee, the

Delinquency Coordinator for the Trust Funds, along with five exhibits (“Pardee Decl.”), and the

declaration of Noelle Dwarzski (“Dwarzski Decl.”), one of Plaintiffs’ attorneys.

Ms. Pardee gives a detailed description of Plaintiffs’ role with respect to the Trust Funds,

employees, and employers; the Trust Funds themselves; the requirement that employers pay

contributions; and other general aspects relating to the Trust Funds and the CBA. Relating to

damages, Ms. Pardee discusses the requirement in the various agreements relating to interest,

liquidated damages, costs, and attorney’s fees. Exhibit 7 to Ms. Pardee’s declaration is a “Claim

Summary of Amounts Due and Owing.” Ms. Pardee’s office prepared this worksheet and it

summarizes the amounts due each month for contributions, interest, and liquidated damages. The

combination of the amounts due and the procedure for calculating damages is adequate proof of

damages for contributions, liquidated damages, and interest.

C. Attorney’s Fees and Costs

The Court reviews the requested attorney’s fees award for reasonableness, even though

Defendant has not objected to the number of hours billed or the hourly rate applied. See Gates v.

Deukmejian, 987 F.2d 1392, 1401 (9th Cir. 1993). The preferred method is calculation of the

lodestar figure, the product of the number of hours reasonably spent on the litigation and a

reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424, 433 (1983). The party seeking an

award of attorney’s fees “has the burden of submitting billing records to establish that the

number of hours it has requested [is] reasonable.” Gonzalez v. City of Maywood, 729 F.3d

1196, 1202 (9th Cir. 2013). Similarly, the fee applicant has the burden of proving that the

requested hourly rate is reasonable. See Camacho v. Bridgeport Fin. Inc., 523 F.3d 973, 980 (9th

Cir. 2008).

The CBA, the Trust Agreements, and § 502(g)(2)(D) of ERISA all provide for payment

of attorney’s fees and costs by Defendant. See Pardee Decl. ¶ 15, Ex. 6. Plaintiffs request

attorney’s fees for 4.5 hours of Attorney Noelle Dwarzski’s time. See Dwarzski Decl. ¶ 4. In

support of this request, Attorney Dwarzski submitted billing records detailing the time spent on

each specific task. See Dwarzski Decl., Ex. B. The Court has reviewed the billing invoice and

finds that the requested hours are reasonable.

Plaintiffs request hourly rates of $275 for Attorney Dwarzski. See Dwarzski Decl. ¶ 4. In

determining reasonable hourly rates, typically “[a]ffidavits of the plaintiffs’ attorney and other

attorneys regarding prevailing fees in the community, and rate determinations in other cases,

particularly those setting a rate for the plaintiffs’ attorney, are satisfactory evidence of the

prevailing market rate.” United Steelworkers of Am. v. Phelps Dodge Corp., 896 F.2d 403, 407

(9th Cir. 1990). Attorney Dwarzski has given no information about her typical rates. Nor does

her affidavit state how many years of experience she has, which would also help determine the

reasonableness of her hourly rate. However, the 2017 Oregon State Bar Economic Survey

(“OSB 2017 Survey”) contains data on attorney billing rates based on type of practice,

geographic area of practice, and years of practice. The average hourly rate across all of Oregon is

$286 per hour, and the average in Portland is $324 per hour. Attorney Dwarzski’s requested

hourly rate of $275 is below both these means. Although the Court would have preferred more

detailed information on Attorney Dwarzski’s background and rate determinations in other cases,

it finds that the hourly rate is reasonable based on the OSB 2017 Survey. See Webb v. Ada Cty.,

Idaho, 195 F.3d 524, 526 (9th Cir. 1999) (noting that the Court has “considerable discretion” in

assessing the reasonableness of a fee award). Finally, Attorney Dwarzski included an E-filing

receipt and process service invoice. See Dwarzski Ex. A. These are sufficient to support the $535

in costs that Plaintiffs request.

CONCLUSION

Plaintiffs’ motion for default judgment is GRANTED. For violations from February 2019

to June 2019, Defendant is ordered to pay $24,263.80 for unpaid contributions, $2,088.14 in

liquidated damages, $706.37 in interest, $1,237.50 in attorney’s fees, and $535.00 in costs.

IT IS SO ORDERED.

DATED this 20th day of September, 2019.

/s/ Michael H. Simon

Michael H. Simon

United States District Judge