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

United States District Court, D. Oregon

September 20, 2019

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, Plaintiffs,
v.
K.F. JACOBSEN & CO., INC., an Oregon Corporation, Oregon Registry No. 020263-18, Defendant.

          OPINION AND ORDER

          Michael H. Simon United States 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. ...


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