Board of Trustees of the Laborers Health and Welfare Trust Fund for Northern California v. RMT Landscape Contractors, Inc. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 BOARD OF TRUSTEES OF THE Case No. 4:19-cv-01771-KAW LABORERS HEALTH AND WELFARE 8 TRUST FUND FOR NORTHERN ORDER GRANTING PLAINTIFFS' CALIFORNIA, et al., MOTION FOR SUMMARY 9 JUDGMENT Plaintiffs, 10 Re: Dkt. No. 28 v. 11 RMT LANDSCAPE CONTRACTORS, 12 INC., 13 Defendant. 14 15 On April 3, 2019, Plaintiffs filed the instant case against Defendant RMT Landscape 16 Contractors, Inc., alleging that Defendant failed to pay contributions for hours worked by its 17 employees, as required by the Bargaining and Trust Agreements and the Employee Retirement 18 Income Security Act (“ERISA”). Pending before the Court is Plaintiffs’ motion for summary 19 judgment, seeking interest and liquidated damages on late-paid and unpaid contributions, as well 20 as reasonable attorney’s fees and costs. 21 On February 20, 2020, the Court held a hearing, and, upon consideration of the parties’ 22 filings and relevant legal authorities, for the reasons stated below, the Court GRANTS Plaintiffs’ 23 motion for summary judgment. 24 I. BACKGROUND 25 Plaintiffs Laborers Trust Funds are multi-employer, employee benefit plans within the 26 meaning of §§3(3) and 3(37) of the Employee Retirement Income Security Act (“ERISA”), 29 27 U.S.C. §§1002(3) and 1002(37). The Trustees of the Boards of Trustees are the administrators and 1 under Trust Agreements, consist of all employee fringe benefit contributions that are to be made 2 by employers pursuant to collective bargaining agreements as well as all returns on contributions 3 and any other property received or held by the Trust Funds. (Decl. of Michelle Lauziere, “Lauziere 4 Decl.,” Dkt. No. 28-1 at ¶ 10; see Amended and Restated Trust Agreement Establishing the 5 Laborers Pension Trust Fund For Northern California, “Trust Agreement,” Lauziere Decl., Ex. A 6 at 1-4; see also Trust Agreement Art. II § 1, Lauziere Decl., Ex. B.) 7 Defendant RMT Landscape Contractors, Inc. is an employer and a member of the 8 Landscape Contractors Council of Northern California. (Lauziere Decl. ¶ 6, Ex. F.) 9 A. Bargaining Agreements 10 On or about April 21, 1980, Defendant RMT Landscape Contractors, Inc. executed two 11 separate Addenda with the Landscape Contractors Council of Northern California. (Lauziere Decl. 12 ¶ 6; Addenda, Lauziere Decl., Ex. F.) The Addenda cover different jurisdictions, and provide 13 employer contribution rates, for covered work, specific to those jurisdictions. See ids. The 14 Addenda are referred to as the LLCC Master Addendum and the Landscape Tech Addendum. See 15 ids. By virtue of its execution of the Addenda, Defendant became bound to a written collective 16 bargaining agreement with the Northern California District Council of Laborers (“Laborers 17 Union”) entitled the Laborers’ Master Agreement for Northern California (“Master Agreement”). 18 See ids. 19 Section 28 of the Laborers Master Agreement requires that employers make contributions 20 to the Laborers Trust Funds based on the hours that their respective employees worked as laborers. 21 (See Master Agreement §§ 28A, 28B, Lauziere Decl. ¶ 16, Ex. G.) Employers are required to pay 22 the employee fringe benefit contributions on or before the 25th day of the month immediately 23 succeeding the month in which the employee’s work was performed. (Lauziere Decl. ¶ 7.) In the 24 event that the employer fails to make the monthly installments on or before the 25th day of the 25 month in which the employee fringe benefit contributions are due, the employers are subject to 26 interest at the rate of 1.5% per month as well as liquidated damages. (Lauziere Decl. ¶ 16; 27 Liquidated Damage Program - Board Policy, Lauziere Decl., Ex. H.) Liquidated damages are set 1 Damages provisions, for employers signed to the current agreement, 2 1) The Fund Office will first attempt to collect the Liquidated Damages and/or interest by sending the employer a demand 3 letter calling for immediate payment. 4 2) If no response is received, and the employer has incurred at least $2,500.00 in Liquidated Damages and/or interest, the Fund 5 Office will refer the case to Co-Legal Counsel for action. 6 (Liquidated Damage Program - Board Policy § 2(d).) 7 B. Payment and Audit History 8 i. Payment History 9 Due to the four-year statute of limitations in ERISA actions, Plaintiffs are only seeking to 10 collect those funds, that Defendant was delinquent in reporting and paying the contributions owed, 11 from April 2015 to present. (Pls.’ Mot. at 10; Pls.’ Reply at 6.) 12 Defendant does not dispute that it is delinquent, but claims that the amount is at issue 13 because it has been making payments since the lawsuit and the motion for summary judgment 14 were filed. (Def.’s Opp’n at 6.) 15 ii. Audit 16 An audit of Defendant’s records was conducted for the period between July 2017 and 17 March 2019. (Lauziere Decl. ¶ 21, Ex. Q.) The result of the audit was that $3,682.40 was found to 18 be due. See ids. As of November 26, 2019, Defendant paid the balance owed, but did not pay for 19 the interest on that amount. (Lauziere Decl. ¶ 21b, Ex. S.) 20 C. Procedural History 21 On January 10, 2020, Plaintiffs filed the instant motion for summary judgment. (Pl.’s Mot., 22 Dkt. No. 28.) On January 24, 2020, Defendant filed its opposition. (Def.’s Opp’n, Dkt. No. 29.) 23 On January 31, 2020, Plaintiffs filed their reply. (Pls.’ Reply, Dkt. No. 32.) On February 19, 24 2020, Plaintiffs filed a supplemental declaration containing an updated damages calculation. (2d. 25 Suppl. Decl. of Michelle Lauziere, “2d. Suppl. Lauziere Decl., Dkt. No. 33.) 26 II. LEGAL STANDARD 27 “A party may move for summary judgment, identifying each claim or defense—or the part 1 Summary judgment is appropriate when, after adequate discovery, there is no genuine issue as to 2 material facts and the moving party is entitled to judgment as a matter of law. Id.; see Celotex 3 Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Material facts are those that might affect the 4 outcome of the case. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A dispute as to a 5 material fact is genuine if there is sufficient evidence for a reasonable jury to return a verdict for 6 the nonmoving party. Id. 7 A party seeking summary judgment bears the initial burden of informing the court of the 8 basis for its motion and of identifying those portions of the pleadings and discovery responses that 9 demonstrate the absence of a genuine issue of material fact. Celotex, 477 U.S. at 323. Where the 10 moving party will have the burden of proof at trial, it must affirmatively demonstrate that no 11 reasonable trier of fact could find other than for the moving party. Southern Calif. Gas. Co. v. 12 City of Santa Ana, 336 F.3d 885, 888 (9th Cir. 2003). 13 On an issue where the nonmoving party will bear the burden of proof at trial, the moving 14 party may discharge its burden of production by either (1) “produc[ing] evidence negating an 15 essential element of the nonmoving party’s case” or (2) after suitable discovery, “show[ing] that 16 the nonmoving party does not have enough evidence of an essential element of its claim or defense 17 to discharge its ultimate burden of persuasion at trial.” Nissan Fire & Marine Ins. Co., Ltd., v. 18 Fritz Cos., Inc., 210 F.3d 1099, 1106 (9th Cir. 2000); see also Celotex, 477 U.S. at 324-25. 19 Once the moving party meets its initial burden, the opposing party must then set forth 20 specific facts showing that there is some genuine issue for trial in order to defeat the motion. See 21 Fed. R. Civ. P. 56(e); Anderson, 477 U.S. at 250. “A party opposing summary judgment may not 22 simply question the credibility of the movant to foreclose summary judgment.” Far Out Prods., 23 Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001). “Instead, the non-moving party must go beyond 24 the pleadings and by its own evidence set forth specific facts showing that there is a genuine issue 25 for trial.” Id. (citations and quotations omitted). The non-moving party must produce “specific 26 evidence, through affidavits or admissible discovery material, to show that the dispute exists.” 27 Bhan v. NMS Hosps., Inc., 929 F.2d 1404, 1409 (9th Cir. 1991). Conclusory or speculative 1 defeat summary judgment. Thornhill Publ’g Co., Inc. v. Gen. Tel. & Electronics Corp., 594 F.2d 2 730, 738 (9th Cir. 1979). 3 In deciding a motion for summary judgment, a court must view the evidence in the light 4 most favorable to the nonmoving party and draw all justifiable inferences in its favor. Anderson, 5 477 U.S. at 255; Hunt v. City of Los Angeles, 638 F.3d 703, 709 (9th Cir. 2011). 6 III. DISCUSSION 7 There is no dispute that Defendant has not paid all outstanding contributions due. (Pls.’ 8 Mot. at 5-6; Def.’s Opp’n at 2.) Rather, the parties dispute the availability of liquidated damages 9 and the total amount owed. (See Defs.’ Opp’n at 2.) 10 A. Liquidated Damages are available. 11 In opposition, Defendant argues that liquidated damages are not available, because 12 Plaintiff did not send a formal demand letter attempting to collect liquidated damages and/or 13 interest for contributions paid, but paid late, prior to filing the lawsuit. (Def.’s Opp’n at 4; Decl. of 14 Julie Briggs, “Briggs Decl.,” Dkt. No. 30 ¶ 10.) Instead, Defendant claims to have only received 15 monthly statements. See ids. 16 In reply, Plaintiffs contend that the monthly statements Defendant concedes to have 17 received, demanded payment for the balance due and clearly states that “THIS IS A BILL.” (Pls.’ 18 Reply at 6.) Defendant provides no authority to support its contention that a specific format is 19 required to comply with the demand letter requirement, and the monthly statement contains the 20 amount of unpaid principal, liquidated damages and interest owed on late-paid and unpaid 21 contributions. (See Suppl. Decl. of Michelle Lauziere, “2d Suppl. Lauziere Decl.,” Dkt. No. 35 ¶ 22 8, Ex. T at 1.) 23 Accordingly, the Court finds that Plaintiffs complied with the Board Policy pertaining to 24 Liquidated Damages that required that a demand letter be sent to Defendant prior to initiating the 25 lawsuit, thereby entitling Plaintiffs to liquidated damages and interest. 26 B. The Amount owed is not a genuine dispute of material fact. 27 In making the motion, Plaintiffs originally sought $248,271.93 in principal, liquidated 1 Defendant argues that the amount owed is a genuine dispute of material fact, because RMT made 2 payments totaling $88,311.85 in January 2020, such that Plaintiffs cannot receive a judgment in 3 the specific amount requested. (Def.’s Opp’n at 6.) In short, and without providing any applicable 4 legal authority, Defendant is arguing that it can defeat summary judgment by paying down a 5 portion of the balance owed. See id. This argument is unavailing and runs counter to public 6 policy, as it would permit a delinquent employer, who concedes that it is delinquent and does not 7 contest the accuracy of Plaintiffs’ accounting, to proceed to trial, simply because it made some 8 payments. The Court notes that Defendant does not contest the accuracy of Plaintiffs’ records, 9 such that the amounts owed as of the date the motion for summary judgment was filed are 10 unopposed. 11 To the contrary, this is the very type of issue that can be easily resolved on summary 12 judgment, because the only issue is crediting the amount paid to the amounts owed. In sum, this is 13 a mathematical calculation. That said, the Court does agree with Defendant that it would be 14 improper to allow Plaintiff to collect monies that are no longer delinquent. In ERISA cases, 15 interest is constantly accruing, so Plaintiffs are correct that the balance on a given date “can only 16 be a ‘snapshot in time’”. (Pls.’ Reply at 6.) 17 As of February 19, 2020, the balance owed to Plaintiffs’ was calculated as follow: 18 Under the LLC Master Addendum: Liquidated Damages and Interest on 19 $44,652.87 Contributions Paid, but Paid Late: 20 • Contributions Reported, Not Paid: 21 § 1132(g)(2)(A) unpaid contributions $89,204.27 22 § 1132(g)(2)(B) interest $5,676.69 23 § 1132(g)(2)(C) interest $5,676.69 24 Subtotal $100,557.65 25 Under the Landscape Tech Addendum: 26 Liquidated Damages and Interest on $3,269.58 27 Contributions Paid, but Paid Late: 1 § 1132(g)(2)(A) unpaid contributions $37,268 2 § 1132(g)(2)(B) interest $594.98 3 § 1132(g)(2)(C) interest $594.98 4 Subtotal $38,457.96 Pursuant to Audit Under the LLC Master 5 Addendum: 6 Liquidated Damages and Interest on 7 Contributions Not Reported, Not Paid: 8 § 1132(g)(2)(B) interest $893.66 9 § 1132(g)(2)(C) interest $893.66 10 Subtotal $1,787.32 11 TOTAL $188,725.38 12 (2d Suppl. Lauziere Decl. ¶ 2, Exs. U-AA.) At the hearing, Defendant did not contest the 13 accuracy of Plaintiffs’ damages calculation. 14 Accordingly, the Court finds that Defendant owes $188,725.38 in unpaid contributions, 15 liquidated damages, and interest. 16 C. Attorneys’ fees and costs 17 Plaintiffs seek attorney’s fees and costs in the amount of $20,524.12. (Pls.’ Mot. at 19.) 18 This amount consists of $19,977.00 in attorneys’ fees for hours worked by Plaintiffs’ counsel. (See 19 Pls.’ Mot. at 19; Decl. of Ronald L. Richman, “Richman Decl.,” Dkt. No. 28-21 ¶ 5, Ex. A.) 20 Plaintiffs also seek costs in the amount of $547.12. (See Pls.’ Mot. at 19; Richman Decl. ¶ 6, Ex. 21 B.) ERISA, §502(g)(2)(D) and the Trust Agreement, Article IV, Section 3, provide that the 22 employer is to reimburse the Laborers Trust Funds for attorneys’ fees and costs incurred in a suit 23 to enforce payment of outstanding contributions. (Pls.’ Mot. at 19; Lauziere Decl. ¶ 13, Ex. D.) 24 Based on this contractual authorization, Defendant is liable for the reasonable attorney’s fees and 25 costs incurred by the Trust Funds in seeking to collect the delinquencies. Kemner v. Dist. Council 26 of Painting & Allied Trades No. 36, 768 F.2d 1115, 1120 (9th Cir. 1985). 27 i. Attorneys’ fees 1 reasonableness of these fees. Kemmis v. McGoldrick, 706 F.2d 993, 997-98 (9th Cir.1983) (stating 2 that § 1132(g)(2) “now makes the award of attorney’s fees mandatory when the trustees prevail in 3 actions to enforce and collect benefit fund contributions”). The Ninth Circuit has articulated five 4 factors that should be considered in determining reasonable attorney fees: (1) the degree of the 5 opposing parties’ culpability or bad faith; (2) the ability of the opposing parties to satisfy an award 6 of fees; (3) whether an award of fees against the opposing parties would deter others from acting 7 under similar circumstances; (4) whether the parties requesting fees sought to benefit all 8 participants and beneficiaries of an ERISA plan or to resolve a significant legal question regarding 9 ERISA; and (5) the relative merits of the parties’ positions. Hummell v. S.E. Rykoff & Co., 634 10 F.2d 446, 453 (9th Cir. 1980). These factors are intended to guide the court in its discretion, but 11 none of the factors are dispositive; any combination can support an award of fees. Credit 12 Managers Ass’n of S. Cal. v. Kennesaw Life & Acc. Ins. Co., 25 F.3d 743, 749 (9th Cir. 1994). 13 Here, the award of attorney’s fees would deter other employers from becoming delinquent 14 on employee contributions, because fees can add greatly to the amount of unpaid contributions. 15 An award of fees further encourages employers to be more diligent in their record keeping and 16 prompt with their payment. Also, Plaintiffs’ straightforward claims have been adequately 17 supported and the merits of their position are well-grounded. Accordingly, the undersigned finds 18 that the above factors weigh in favor of awarding attorney’s fees. 19 Once fees under ERISA are awarded, the court must calculate the lodestar amount to 20 assess the reasonableness of attorney’s fees. Credit Managers Ass’n of S. Cal., 25 F.3d at 750. The 21 lodestar amount is determined by “multiplying the number of hours reasonably expended on the 22 litigation by a reasonable hourly rate.” Id. (internal quotations omitted). In awarding attorney’s 23 fees, courts must look to the prevailing market rates in the relevant community. Bell v. Clackamas 24 Cnty., 341 F.3d 858, 860 (9th Cir. 2003). 25 To date, Plaintiffs have incurred $19,977.00 in attorney’s fees in bringing this enforcement 26 action. (Pls. Mot. at 19; Richman Decl. ¶ 5, Ex. A.) 27 Ronald L. Richman is senior counsel and shareholder with the law firm. (Richman Decl. ¶ 1 time was billed at the shareholder rate of $345.00 per hour. (Richman Decl. ¶ 5.) Mr. Richman 2 spent 28.4 hours on this matter, incurring $9,798.00 in attorneys’ fees. (See Richman Decl. ¶ 5, 3 Ex. A.) 4 Sarah Bowen is an associate with the law firm. (Richman Decl. ¶ 5.) Ms. Bowen’s time 5 was billed at the associate rate of $290.00 per hour. Id. Ms. Bowen spent 35.1 hours on this 6 matter, incurring $10,179.00 in attorneys’ fees. Id. 7 a. Reasonableness of the Hourly Billing Rate 8 To determine the appropriate lodestar amount, the reasonableness of the hourly billing rate 9 must be assessed. Credit Managers Ass’n of S. Cal., 25 F.3d at 750. In doing so, the court must 10 look to the prevailing market rates in the relevant community for similar work by attorneys of 11 comparable skill, experience, and reputation. Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 979 12 (9th Cir.2008). Generally, the relevant community is the forum where the district court sits. Id. 13 Here, Plaintiffs’ claimed hourly rates range from $290.00 to $345.00 per hour. (Richman 14 Decl. ¶¶ 4-5.) Plaintiffs’ hourly rates are within the range found reasonable in ERISA actions by 15 other judges in the Northern District. See, e.g., Bd. of Trustees v. Diversified Concrete Cutting, 16 Inc., No. 17-CV-06938-MEJ, 2018 WL 3241040, at *7 (N.D. Cal. July 3, 2018), report and 17 recommendation adopted sub nom. Bd. of Trustees as Trustees of Laborers Health & Welfare Tr. 18 Fund for N. California v. Diversified Concrete Cutting, Inc., No. 17-CV-06938-RS, 2018 WL 19 4775429 (N.D. Cal. July 27, 2018) (finding hourly rates of $345 reasonable in ERISA case). After 20 reviewing Plaintiffs’ billing records and considering the experience of counsel, the undersigned 21 finds that the hourly rates are reasonable and consistent with the prevailing market rates in the 22 Northern District. Additionally, the Court notes that Defendant does not address the 23 reasonableness of the billed hourly rates, and has, therefore, waived any arguments pertaining to 24 their reasonableness. 25 b. Reasonableness of the Hours Billed 26 In order to assess whether the number of hours billed is reasonable, Plaintiffs must submit 27 detailed records justifying the hours that have been expended. Chalmers v. City of Los Angeles, 1 Here, Plaintiffs’ counsel billed a total of 63.5 hours of attorney time from February 11, 2 2019 through December 26, 2019, incurring $19,997.00 in fees. (Richman Decl. ¶ 5, Ex. A.) 3 Defendant does not contest that attorneys’ fees sought, and, after reviewing Plaintiffs’ declaration 4 and billing records in this matter, the undersigned finds the number of hours billed reasonable. 5 Thus, the undersigned awards Plaintiffs reasonable attorneys’ fees in the amount of 6 $19,997.00. 7 ii. Costs 8 Plaintiffs seek reimbursement of costs in the amount of $547.12. (Richman Decl. ¶ 6, Ex. 9 A at 9-10.) Costs were incurred for court filing fees and the service of the summons and 10 complaint. See ids. 11 These costs appear reasonable, and, therefore, the undersigned awards costs in the amount 12 of $547.12. 13 IV. CONCLUSION 14 For the reasons set forth above, the Court GRANTS Plaintiffs’ motion for summary 15 judgment against Defendant RMT Landscape Contractors, Inc., and awards Plaintiffs the 16 following: 17 Under the LLC Master Addendum: Liquidated Damages and Interest on 18 $44,652.87 Contributions Paid, but Paid Late: 19 • Contributions Reported, Not Paid: 20 § 1132(g)(2)(A) unpaid contributions $89,204.27 21 § 1132(g)(2)(B) interest $5,676.69 22 § 1132(g)(2)(C) interest $5,676.69 23 Subtotal $100,557.65 24 Under the Landscape Tech Addendum: 25 Liquidated Damages and Interest on $3,269.58 Contributions Paid, but Paid Late: 26 § 1132(g)(2)(A) unpaid contributions $37,268 27 1 § 1132(g)(2)(C) interest $594.98 2 Subtotal $38,457.96 3 Pursuant to Audit Under the LLC Master Addendum: 4 Liquidated Damages and Interest on 5 Contributions Not Reported, Not Paid: 6 § 1132(g)(2)(B) interest $893.66 7 § 1132(g)(2)(C) interest $893.66 8 Subtotal $1,787.32 9 Attorneys’ Fees and Costs: $20,524.12 10 TOTAL $209,249.50 11 IT IS SO ORDERED. «3 12 || Dated: February 28, 2020 . 2B Kane A. fuse 14 United States Magistrate Judge © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28