Boards of Trustees of the AGC-Operating Engineer Health and Welfare Fund v. Ross Island Sand & Gravel Co

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

BOARDS OF TRUSTEES OF THE AGC- Case No.: 3:24-cv-00944-AN

OPERATING ENGINEER HEALTH AND

WELFARE FUND, OPERATING ENGINEERS

PENSION FUNDS, and INTERNATIONAL

UNION OF OPERATING ENGINEERS LOCAL OPINION AND ORDER

701-AGC TRAINING TRUST FUND,

Plaintiffs,

v.

ROSS ISLAND SAND & GRAVEL CO,

Defendant.

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

Operating Engineers Pension Funds, and International Union of Operating Engineers Local 701-AGC

Training Trust Fund bring this action for damages against defendant Ross Island Sand & Gravel Co,

alleging a claim for unpaid fringe benefit contributions. The Court entered a default against defendant on

July 24, 2024. Plaintiffs now move for default judgment pursuant to Federal Rule of Civil Procedure

55(b)(2). For the reasons set forth below, plaintiffs' motion is GRANTED.

LEGAL STANDARD

After entering an order of default, a district court has discretion to issue a default judgment.

See Fed. R. Civ. P. 55(b); DirecTV, Inc. v. Huynh, 503 F.3d 847, 852 (9th Cir. 2007), cert. denied, 555 U.S.

937 (2008). The district court has "considerable leeway as to what it may require as a prerequisite to the

entry of a default judgment." TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917 (9th Cir. 1987) (per

curiam) (footnote omitted); see Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). In exercising their

discretion, courts in the Ninth Circuit consider the factors set forth in Eitel v. McCool, 782 F.2d 1470 (9th

Cir. 1986). The Eitel factors are:

"(1) the possibility of prejudice to the plaintiff; (2) the merits of plaintiff's substantive

claims; (3) the sufficiency of the operative complaint; (4) the sum of money at stake in the

litigation; (5) the possibility of 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 decision on the merits."

782 F.2d at 1471-72. However, the "starting point" of a court's analysis "is the general rule that default

judgments are ordinarily disfavored" and that cases should be decided upon the merits "whenever

reasonably possible." Id. at 1472 (citation omitted).

All well-pleaded factual allegations in the complaint must be taken as true, other than the

amount of damages. TeleVideo Sys., Inc., 826 F.2d at 917-18 (citation omitted); DirecTV, Inc., 503 F.3d at

854 (citations omitted); see Fed. R. Civ. P. 8(b)(6). "However, a 'defendant is not held to admit facts that

are not well-pleaded or to admit conclusions of law.'" DirecTV, Inc., 503 F.3d at 854 (quoting Nishimatsu

Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975)).

BACKGROUND

Plaintiffs are the Boards of Trustees ("Trustees") of the AGC-Operating Engineer Health

and Welfare Fund ("Health and Welfare Fund"), Operating Engineers Pension Funds ("Pension Funds"),

and International Union of Operating Engineers Local 701-AGC Training Trust Fund ("Training Fund")

(collectively, the "Trust Funds"). Compl., ECF [1], ¶ 1. This Court has jurisdiction under the Employee

Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132, 1145. Id. ¶¶ 2-10. The Health and Welfare

Fund and the Training Fund are "employee welfare benefit plans" as defined by 29 U.S.C. § 1002(1), and

the Trust Funds are "multiemployer plans" as defined by 29 U.S.C. § 1002(37)(A). Id. ¶¶ 2-3. The Trustees

are "fiduciaries" of the funds as defined by 29 U.S.C. § 1002(21)(a), and defendant is an "employer" who

has been engaged in an "industry or activity affecting commerce" as defined by 29 U.S.C. § 1002(5), (12),

and the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 152(1)-(3). Id. ¶¶ 4, 6.

Defendant is bound by collective bargaining agreements ("CBAs") that incorporate the

terms and conditions of the Trust Funds' governing trust agreements ("Trust Agreements"). Id. ¶¶ 7-8;

Decl. of Traci Pardee ("Pardee Decl."), ECF [10], ¶¶ 7-9; see Pardee Decl. Exs. 1-7. The CBAs obligate

defendant to submit monthly fringe benefit contributions to the Trust Funds for covered hours worked by

employees of the International Union of Operating Engineers Local 701 ("Local 701"), monthly remittance

reports, and union dues and other ancillary funds, by the twentieth day of the month following the month

in which work was performed. Id. ¶¶ 8, 12. The Trust Agreements provide that if an employer fails to

timely submit fringe benefit contributions, that employer is liable for the delinquent contributions, interest

on the delinquent contributions at a rate of twelve percent annually, and liquidated damages in the amount

of ten percent of the delinquent or untimely paid fringe benefit contributions. Id. ¶ 13. The Trust

Agreements permit the Trustees to recover a reasonable attorney's fee in the event that an employer fails to

timely pay fringe benefit contributions resulting in legal proceedings. Id. ¶ 17.

Defendant submitted remittance reports for the period of February through July 2024 for

work done by covered employees but failed to submit contribution payments for that period. Id. ¶¶ 15-16;

Pardee Decl. ¶ 10. Based on all these allegations, plaintiffs seek to recover the unpaid contributions, interest

on those contributions, liquidated damages, and attorney's fees and costs.

Plaintiffs served defendant's registered agent on June 14, 2024, ECF [4], and then, after

defendant failed to appear or file an answer, filed a motion for entry of default on July 18, 2024, ECF [5].

This Court granted plaintiffs' motion and entered default against defendant on July 24, 2024. ECF [7]; ECF

[8]. Plaintiffs filed the instant motion for default judgment on August 23, 2024. Pls. Mot. for Default J.

("Mot."), ECF [9]. Plaintiffs seek $103,751.84 in contributions; $2,501.19 in interest (calculated through

August 20, 2024) for the February through July 2024 delinquent period; $8,924.01 in liquidated damages;

$2,185.50 in attorney's fees; and $500.00 in costs. Mot. 6. Defendant has not filed any responsive pleadings

or a notice of intent to appear.

DISCUSSION

A. Entry of Default Judgment

The Eitel factors support entry of default judgment in this case. First, the refusal to grant

a default judgment would be prejudicial to plaintiffs. See Eitel, 782 F.2d at 1471-72; Cortes v. Calderon,

No. 1:20-cv-00221, 2021 WL 6550820, at *2 (D. Or. Dec. 15, 2021). If the Court does not enter a default

judgment in plaintiffs' favor, plaintiffs would be left without a remedy. See, e.g., Cortes, 2021 WL

6550820, at *2 (quoting J & J Sports Prods., Inc. v. Frei, No. 4:12-cv-0127-BLW, 2013 WL 3190685, *1

(D. Idaho June 21, 2013)) ("[I]f default judgment were not granted, [the p]laintiff would be denied a legal

remedy against the defendants for their allegedly unlawful actions and 'would be left without a remedy

given defendant's [sic] failure to appear and defend themselves.'").

To satisfy factors two and three, plaintiffs must state a valid claim in a well-pleaded

complaint. See id.; Eitel, 782 F.2d at 1471-72. ERISA requires "[e]very employer" obligated to make

contributions to a multiemployer plan to make such contributions consistent with the terms of the plan. 29

U.S.C. § 1145. Fiduciaries are entitled to sue on behalf of a plan to enforce an employer's obligations

arising under ERISA. Id. § 1132(g)(2). Plaintiffs here allege that defendant is an employer who failed to

make required contributions to the Trust Funds, which are multiemployer plans, from February 2024

onward, and that plaintiffs, as Trustees, meet ERISA's definition of fiduciaries. Compl. ¶¶ 4, 6, 12, 15.

These allegations, taken as true, are sufficient to state a claim for unpaid fringe benefit contributions. See

Carpenters Sw. Admin. Corp. v. TBL Constr., Inc., No. CV 08-0505 GAF, 2008 WL 11409515, at *3 (C.D.

Cal. Aug. 28, 2008).

Regarding the fourth factor, there is at least $115,177.04 in damages, plus $2,685.50 in

attorney fees and costs, at stake in this action. See Mot. 5-6; Pardee Decl. ¶ 19. With respect to the fifth

factor, there is no apparent material dispute of fact. See Cortes, 2021 WL 6550820, at *2-3 (reasoning that

"because all well-pleaded allegations of the complaint are deemed true after entry of default, 'no likelihood

that any genuine issue of material fact exists' after default has been entered" (quoting Elektra Entm't Grp.

Inc. v. Crawford, 226 F.R.D. 388, 393 (C.D. Cal. 2005))). Regarding the sixth factor, defendant has not

provided this Court with any explanation that might constitute excusable neglect. And lastly, although

policy favors decisions on the merits, defendant's failure to respond or appear has made such a decision

impossible. See id. at *3.

Therefore, the Eitel factors support an entry of default judgment in this case.

B. Amounts Owed

Because the Court accepts as true all well-pleaded allegations in the complaint except those

related to the amount of damages, plaintiffs are required to prove the amount of damages they seek in this

action. See Heidenthal, 826 F.2d at 917-18; see also Fed. R. Civ. P. 8(b)(6).

1. Contributions, Interest, and Liquidated Damages

A plan is entitled to an award in its favor when three requirements are met: "(1) the

employer must be delinquent at the time the action is filed; (2) the district court must enter a judgment

against the employer; and (3) the plan must provide for such an award." Nw. Adm'rs, Inc. v. Albertson's,

Inc., 104 F.3d 253, 257 (9th Cir. 1996). In an ERISA action in which judgment is rendered in favor of the

plan, the court shall award unpaid contributions, interest, liquidated damages provided for in the plan, and

reasonable attorney's fees and costs. 29 U.S.C. § 1132(g)(2). Liquidated damages cannot exceed twenty

percent of the delinquent contributions. Id. § 1132(g)(2)(c)(ii).

As noted above, taking the factual allegations in the complaint as true, plaintiffs have

established their claim against defendant for unpaid fringe benefit contributions. The declarations and

supporting documentation accompanying plaintiffs' motion for default judgment, as well as the

supplemental declaration submitted by plaintiffs at this Court's direction, together make clear that (1) there

were unpaid contributions; (2) the plan provides for a twelve percent (12%) annual interest rate on those

delinquent contributions, and (3) liquidated damages of ten percent (10%) are also permitted by the plan.

See Pardee Decl. ¶¶ 10, 15, 18 & Exs. 1-8; Decl. of Noelle Dwarzski Supp. Pls. Mot. for Default J.

("Dwarzski Decl."), ECF [11], at ¶ 2; Suppl. Decl. Noelle Dwarzski ("Suppl. Dwarzski Decl."), ECF [13],

at ¶ 4. Based on the evidence provided, the Court finds that plaintiffs are entitled to recover the requested

amounts: $103,751.84 in contributions; $2,501.19 in interest (calculated through August 20, 2024) for the

February through July delinquent period; and $8,924.01 in liquidated damages.

2. Attorney's Fees and Costs

Pursuant to 17 U.S.C. § 505, district courts have the discretion to allow the recovery of full

costs by or against any party, and "the court may also award a reasonable attorney's fee to the prevailing

party as part of the costs." In ERISA cases, fee awards "are calculated using a hybrid lodestar/multiplier

approach." McElwaine v. US W., Inc., 176 F.3d 1167, 1173 (9th Cir. 1999). "To calculate the 'lodestar'

amount, [courts] multiply the number of hours reasonably expended by the attorney(s) on the litigation by

a reasonable hourly rate, raising or lowering the lodestar according to factors identified by [the Ninth

Circuit]." Id. The Ninth Circuit instructs courts to consider:

"(1) the time and labor required; (2) the novelty and difficult of the questions presented;

(3) the skill requisite to perform the legal services properly; (4) the preclusion of

employment by the attorney due to acceptance of the case; (5) the customary fee; (6)

whether the fee is fixed or contingent; (7) time limitations imposed by the client or the

circumstances; (8) the amount involved and the results obtained; (9) the experience,

reputation, and ability of the attorneys; (10) the 'undesirability' of the case; (11) the nature

and length of the professional relationship with the client; and (12) awards in similar cases."

Seymour v. Hull & Moreland Eng'g, 605 F.2d 1105, 1117 (9th Cir. 1979). The burden is on the petitioner

to prove "that the requested rates are in line with those prevailing in the community for similar services by

lawyers of reasonably comparable skill, experience, and reputation." Blum v. Stenson, 465 U.S. 886, 895

n.11 (1984); see Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 (9th Cir. 2008) (indicating that a

reasonable billing rate is determined based on the "prevailing market rate" in the relevant community).

Plaintiffs have provided two declarations by their attorney regarding fees and costs. The

declarations, in accordance with the lodestar method, provide the attorney's and paralegal's hourly rates and

the number of hours expended, a comparison of the attorney's hourly rate to the billing rates set forth in the

Oregon State Bar 2022 Economic Survey Report Findings, as well as an accounting of claimed costs. See

Dwarzski Decl. ¶¶ 3-6 & Exs. 1-2; Suppl. Dwarzski Decl. ¶¶ 15-20. Based on the evidence provided, the

Court finds that plaintiffs are entitled to recover the requested amounts: $2,185.50 in attorney's fees and

$500.00 in costs.

CONCLUSION

Plaintiffs' Motion for Default Judgment, ECF [9], is GRANTED. Defendant is ordered to

pay plaintiffs:

1. Contributions in the principal amount of $103,751.84;

2. Interest on the unpaid contributions (calculated through August 20, 2024) for the

February through July 2024 delinquent period in the amount of $2,501.19;

3. Liquidated damages in the amount of $8,924.01;

4. Attorney's fees in the amount of $2,185.50; and

5. Costs in the amount of $500.00.

IT IS SO ORDERED.

DATED this 22nd day of January, 2025.

□ 7

Lhd eume 2 ft LSLOY,

Adrienne Nelson

United States District Judge