EDWARD M. CHEN, District Judge.
Plaintiffs in this case are as follows:
They have filed an ERISA action against the following defendants for, inter alia, failure to comply with an audit and failure to pay contributions to the above Trust Funds, see Compl. ¶¶ 15-16:
Currently pending before the Court is Plaintiffs' motion for summary judgment or, in the alternative, summary adjudication. The motion seeks relief against WAD only, and not Mr. Bealum. It appears that Mr. Bealum died in 2016. See Stafford Decl. ¶ 6 (testifying that Plaintiffs were informed by defense counsel that he had passed away). WAD failed to file a written opposition to Plaintiffs' motion. In addition, WAD failed to make an appearance at the hearing on the motion. Having considered the papers submitted, as well as the oral argument of counsel and all other evidence of record, the Court hereby
As an initial matter, the Court takes into consideration that, at the time Plaintiffs filed suit against WAD in May 2016, it was a suspended corporation. See Compl. ¶ 3. On September 12, 2018, the day before Plaintiffs filed the pending motion, they checked the status of WAD on the California Secretary of State website. WAD was still listed as a suspended corporation. See Minser Decl. & Ex. D. There is no indication that that status has changed since that date.
That being the case, WAD cannot defend itself in this action (and, in fact, has not defended itself, as noted above, by failing to file a written opposition). As the Ninth Circuit has explained:
United States v. 2.61 Acres of Land, 791 F.2d 666, 668 (9th Cir. 1985).
Because WAD cannot defend itself as a suspended corporation, the Court focuses on the evidence provided by Plaintiffs.
On November 18, 2011, WAD signed the 2011 Master Agreement with District Council 16. See Christophersen Decl., Ex. A (2011 Master Agreement). The 2011 Master Agreement remained in force until June 30, 2014, and thereafter renewed for one-year periods absent notice by a party. See Christophersen Decl., Ex. A (2011 Master Agreement, art. 15).
Article 13 of the Master Agreement concerns payments to trust funds.
On October 16 2015, WAD entered into the 2015 Master Agreement with District Council 16. See Christophersen Decl., Ex. B (2015 Master Agreement). The 2015 Master Agreement remained in force until June 30, 2018, and thereafter renewed for one-year periods absent notice by a party. See Christophersen Decl., Ex. B (2015 Master Agreement, art. 15).
The 2015 Master Agreement contains the same basic terms discussed above in reference to the 2011 Master Agreement.
Plaintiffs have provided evidence that WAD has violated the Master Agreements and/or Trust Agreements. The specific violations are itemized below.
WAD "has failed to comply with an audit of its records. The audit period is March 1, 2013 through the date of the audit." Christophersen Decl. ¶ 13. (The audit request was made on December 23, 2015. See Nicolette Decl. ¶ 4). Although Plaintiffs obtained some payroll documentation as part of settlement discussions, Plaintiffs have not obtained all relevant records. See, e.g., Minser Decl. ¶¶ 16-17 (testifying that, in May 2018, "I received some payroll documentation . . . covering a portion of the audit period" but "Plaintiffs have received no other information necessary to complete the audit"); Nicolette Decl. ¶¶ 7-8 (testifying that, "[i]n May 2018, I received from payroll records' but "the records do not fully cover the Testing Period" — "payroll records are missing for the following time periods:" March-December 2013, January-July 2014, and June 2016-present).
WAD paid contributions for July-November 2015 but the payments were late and so liquidated damages ($3,750) and interest ($1,850.32) are due. See Christophersen Decl. ¶ 18.
For December 2015, WAD self-reported that $32,286.40 were due in contributions but WAD did not make the payment on time. Subsequently, WAD partially paid, leaving a balance of $16,129.30 still due. See Christophersen Decl. ¶¶ 14-15. Liquidated damages are due for the delinquency ($6,457.28). Interest is also assessed ($207.74 + $2,002.26 = $2,210).
WAD failed to report and pay contributions for May-July 2016 and July 2017-present. See Christophersen Decl. ¶ 17.
Based on WAD's failure to comply with the agreements, Plaintiffs' counsel has incurred costs totaling $1,171.76. See Stafford Decl. ¶ 12. In addition, Plaintiffs' counsel has incurred fees totaling $30,101.50 for work performed from January 11, 2016, through September 7, 2018. See Stafford Decl. ¶ 10.
Federal Rule of Civil Procedure 56 provides that a "court shall grant summary judgment [to a moving party] if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). An issue of fact is genuine only if there is sufficient evidence for a reasonable jury to find for the nonmoving party. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). "The mere existence of a scintilla of evidence . . . will be insufficient; there must be evidence on which the jury could reasonably find for the [nonmoving party]." Id. at 252. At the summary judgment stage, evidence must be viewed in the light most favorable to the nonmoving party and all justifiable inferences are to be drawn in the nonmovant's favor. See id. at 255.
In their motion for summary judgment, Plaintiffs assert that they have a right to audit WAD's records and that WAD has failed to comply with their audit request.
Plaintiffs have adequately established that they have a right to audit WAD's records. That right comes from the Master Agreements which specifically allow for an inspection.
Cf. Bd. of Trs. v. Charles B. Harding Constr., Inc., No. C-14-1140 EMC, 2014 U.S. Dist. LEXIS 175680, at *15-16 (N.D. Cal. Dec. 18, 2014) ("`Where a Fund's trust documents, to which an employer has bound itself, specifically provide that Fund trustees can examine any of the employer's records, an employer must comply with such agreed upon obligations.'") (citing, inter alia, Central States, Southeast & Southwest Pension Fund v. Central Transport, Inc., 472 U.S. 559 (1985)).
In addition, there is an independent source for the right to inspect that comes from 29 U.S.C. § 1132. Subsection (g) provides that, "[i]n any action under this title by a fiduciary for or on behalf of a plan to enforce section 515 [29 U.S.C. § 1145 (delinquent contributions)] in which a judgment in favor of the plan is awarded, the court shall award the plan . . . (E) such other legal or equitable relief as the court deems appropriate." 29 U.S.C. § 1132(g)(2)(E). See International Painters & Allied Trades Indus. Pension Fund v. R.W. Amrine Drywall Co., Inc., 239 F.Supp.2d 26, 31 (D.D.C. 2002) ("ERISA authorizes the court to provide for other legal or equitable relief as the court deems appropriate [under 29 U.S.C. § 1132(g)(2)(E)]. This relief can include an injunction requiring a defendant to permit, and cooperate with, an audit of its books and records.").
Plaintiffs have established not only the right to inspect but also that WAD "has failed to comply with an audit of its records. The audit period is March 1, 2013 through the date of the audit." Christophersen Decl. ¶ 13. (The audit request was made on December 23, 2015. See Nicolette Decl. ¶ 4). Plaintiffs have admitted that they obtained some payroll documentation as part of settlement discussions, but they have provided evidence that they have not obtained all relevant records. See, e.g., Minser Decl. ¶¶ 16-17 (testifying that, in May 2018, "I received some payroll documentation . . . covering a portion of the audit period" but "Plaintiffs have received no other information necessary to complete the audit"); Nicolette Decl. ¶¶ 7-8 (testifying that, "[i]n May 2018, I received from payroll records' but "the records do not fully cover the Testing Period" — "payroll records are missing for the following time periods:" March-December 2013, January-July 2014, and June 2016-present).
Accordingly, Plaintiffs are summary judgment on the audit.
Plaintiffs assert that they have the right to contributions, and the right to liquidated damages and/or interest if there are delinquent contributions (unpaid or late), and that WAD failed to pay all contributions owed which means that contributions are due, as well as liquidated damages and/or interest.
Plaintiffs have adequately established that they have the right to contributions. Both the Master Agreements and Trust Agreements require employers to make contributions.
And under 29 U.S.C. § 1145, "[e]very employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145; see also 29 U.S.C. § 1132(a)(3) (authorizing, inter alia, a fiduciary to bring a civil action to enforce an employer's § 1145 obligation).
Plaintiffs have also established the right to liquidated damages and/or interest if there are delinquent contributions. Such is specified by the Master Agreements and/or Trust Agreements. Also, under 29 U.S.C. § 1132(g)(2), a court shall award a fiduciary who prevails in a § 1145 claim not only the unpaid contributions but also (1) interest on the unpaid contributions and (2) an amount equal to the greater of (a) the interest on the unpaid contributions, or (b) liquidated damages as specified in the plan (generally not to exceed 20 percent of the unpaid contributions). See 29 U.S.C. § 1132(g)(2).
Finally, Plaintiffs have established the failure to pay contributions, which means contributions are owed as well as liquidated damages and/or interest.
Because there is nothing to indicate that the numbers supplied by Plaintiffs are incorrect, Plaintiffs are awarded the sums above on summary judgment, which total $30,396.90. See also Mot. at 9.
Finally, Plaintiffs claim the right to attorney's fees and costs pursuant to 29 U.S.C. § 1132(g)(2), which provides that, "[i]n any action under this title by a fiduciary for or on behalf of a plan to enforce section 515 [29 U.S.C. § 1145 (delinquent contributions)] in which a judgment in favor of the plan is awarded, the court shall award the plan. . . . (D) reasonable attorney's fees and costs of the action, to be paid by the defendant." 29 U.S.C. § 1132(g)(2)(D). The award of attorney's fees and costs is mandatory, although this is somewhat tempered by the qualification that such be "reasonable." See Kemmis v. McGoldrick, 706 F.2d 993, 997 (9th Cir. 1983) (noting that § 1132(g)(2), "makes the award of attorney's fees mandatory when the trustees prevail in actions to enforce and collect benefit fund contributions").
In the instant case, Plaintiffs' counsel represents that it has incurred costs totaling $1,171.76. See Stafford Decl. ¶ 12. Also, it has incurred fees totaling $30,101.50 for work performed from January 11, 2016, through September 7, 2018. See Stafford Decl. ¶ 10.
The costs are reasonable and therefore are awarded. See Stafford Decl. ¶ 12 (representing that the costs consist of "the Complaint filing fee, messenger services to the Court for filing of documents and the service of process on Defendant").
As for fees, while the hourly rates are reasonable, the Court has some concern about the number of hours (i.e., 168.1 hours). Although the lawsuit was filed back in May 2016, no real litigation has taken place in the case, except for settlement discussions. The Court therefore applies a 10% "haircut" and reduces the fee request to $27,091.35. Cf. Moreno v. City of Sacramento, 534 F.3d 1106, 1112 (9th Cir. 2008) (stating that "the district court can impose a small reduction, no greater than 10 percent — a `haircut' — based on its exercise of discretion and without a more specific explanation").
In their proposed order, Plaintiffs ask the Court to retain jurisdiction. This is reasonable particularly because, after the audit is conducted, Plaintiffs will likely want an amended judgment. See Harding, 2014 U.S. Dist. LEXIS 175680, at *16-17 (noting that "[c]ourts of this district have found such action to be appropriate in ERISA cases"; thus, retaining jurisdiction "with regard to any contributions and/or damages determined to be owed to the Trust Funds after the latest audit has been completed and Harding Construction's monthly contribution reports provided").
For the foregoing reasons, the Court grants Plaintiffs' motion for summary judgment and orders the following relief.
Within seventy-five (75) days of the date of this order, Plaintiffs shall either move for an amended judgment based on the results of the audit or shall file a statement stating that no additional relief is sought. If Plaintiffs file a motion, the Court shall resolve that motion and thereafter direct the Clerk of the Court to enter a final judgment.
This order disposes of Docket No. 61.
