Board of Trustees of Teamsters Local 631 Security Fund for Southern Nevada v. World Wide Exhibits, Inc. ( 2024 )

2 4 6 8 UNITED STATES DISTRICT COURT 9 DISTRICT OF NEVADA 10 11 |} BOARD OF TRUSTEES OF THE Case No.: 2:23-cv-01469-CDS-DJA TEAMSTERS LOCAL 631 SECURITY 12 || FUND FOR SOUTHERN NEVADA; BOARD Order Granting Default CONVENTION INDUSTRY TRAINING Exhibits, Inc. 14 || FUND, [ECF No. 12] 15 Plaintiffs 16 Vs. 17 || WORLD WIDE EXHIBITS, INC., 18 Defendant 19 20 Plaintiffs the Board of Trustees of the Teamsters Local 631 Security Fund for Southern 21 || Nevada and Teamsters Convention Industry Training Fund (“Trust Funds”) request entry of 22 || default judgment against defendant World Wide Exhibits, Inc. Default having been entered 23 || against World Wide, the court having reviewed the plaintiffs’ motion, being fully advised, and 24 || good cause appearing, now makes the following findings of facts and conclusions of law. 25 ||1. ‘Findings of fact. 26 1. Plaintiffs are the Trust Funds and are fiduciaries for purposes of the Employee 27 Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001-1500. 28 1 2. World Wide acted as an employer within the State of Nevada employing person 2 (“Covered Employees”) who perform work covered by a collective bargaining agreemen 3 ||(“CBA”) between World Wide and the International Brotherhood of Teamsters Local 63 4 || CUnion’”). 5 3. The CBA requires World Wide to make employee benefit contributions to th 6 || Trust Funds on behalf of its Covered Employees. 7 4. The Trust Funds are ERISA employee benefit trust funds that provide benefits t 8 || Covered Employees. 9 5. The Trust Funds are established by Trust Agreements (“Trust Agreements”). 10 6. Under ERISA and the Trust Agreements, World Wide is obligated to make it 11 || books and records available for a contract compliance review (“Audit”). 12 7. World Wide has failed to adequately respond to the Trust Funds’ requests to mak 13 || its books and records available for an Audit, by failing to provide all of the needed documents t 14 || complete the Audit. 15 8. The Trust Funds’ governing documents provide that if World Wide fails to mak 16 |{its books and records available for an Audit, the Trust Funds are permitted to presum 17 || contributions in the amount of $100,000 for each year covered by the attempted audit. 18 9. World Wide has repeatedly refused to make its books and records sufficienth 19 || available for the Trust Funds to conduct an Audit. 20 10. World Wide, therefore, is presumed to have failed to meet its obligations to rem: 21 || employee benefit contributions to the Trust Funds as set forth in the CBA and Trust Agreements 22 || and as required by 29 U.S.C. § 1145. 23 11. As a result of its delinquency, World Wide is liable to the Trust Funds for unpai 24 || contributions, interest, liquidated damages, and attorneys’ fees. 25 26 27 28 ] 11. Conclusions of Law. 2 1. “The general rule of law is that upon default the factual allegations of the 3 complaint, except those relating to the amount of damages, will be taken as true.” Geddes 4 ||v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977) (citing Pope v. United States, 323 U.S. 1 5 || 12 (1944)). 6 2. Federal Rule of Civil Procedure 55(b)(2) permits a court to grant default judgmen 7 || against a defendant who has failed to plead or defend an action. To determine whether a defaul 8 || judgment is appropriate, courts may consider the following factors: 9 (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 10 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 11 underlying the Federal Rules of Civil Procedure favoring decisions on the merits. 13 || £itel v. McCool, 782 F.2d 1470, 1471-1472 (9th Cir. 1986). 14 3. As to the first factor, the Trust Funds will suffer prejudice if default judgment 1 15 |{not entered because they “will likely be without other recourse for recovery if default judgment 1 16 |{not entered in their favor.” 7r. of the Bricklayers & Allied Craftworkers Local 13 Define: 17 □□ Contribution Pension Trust for S. Nev. v. Tile Concepts, Inc., 2016 WL 8077987 (D. Nev. 18 ||Dec. 7, 2016) (citing Liberty Ins. Underwriters, Inc. v. Scudier, 53 F. Supp. 3d 1308, 1318 (D. 19 ||Nev. 2013)) (internal quotation marks omitted). World Wide has failed to meet its obligations 20 || to make its books and records available to the Trust Funds and is therefore presumed to have 2] || failed to remit employee benefit contributions. World Wide refused to participate or otherwise 22 ||\defend itself in this action as required by relevant case law. Therefore, because the Trust 23 ||Funds will have no recourse against World Wide unless default judgment is granted, the first 24 ||Eitel factor favors the entry of default judgment. 4. The second and third Fite/ factors address the merits and sufficiency of a plaintiff’ 26 || claim. Fite/, 782 F.2d at 1471-72. The undisputed facts in this case demonstrate that World Wid 27 || failed to meet its obligations to provide requested documents as required under the CBAs 28 || and Trust Agreements to which World Wide is bound. As a result, World Wide is liable to the 1 || Trust Funds for its unpaid contributions, interest, liquidated damages, and attorneys’ fees. 2 || See 29 U.S.C. § 1132(g)(2). Thus, because World Wide had default entered against it, it has 3 || admitted these facts, which should be taken as true. The second and third Eite/ factors therefor 4 || favor the entry of default judgment. 5 5. The fourth Zife/ factor concerns the damages at stake in the case. The damages 1 6 || this case are reasonable and well-documented, based on an the Trust Funds’ governing document 7 || and the calculations performed within the motion for default judgment. Moreover, the damages 8 |}|in this case are also dictated by statute. ERISA states that, in cases like this one, courts shal 9 || award unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonabl 10 || attorney’s fees and the costs of the action, and other legal or equitable relief that the cou 11 || determines appropriate. 29 U.S.C. § 1132(g)(2). This factor also favors the entry of defaul 12 || judgment. 13 6. Regarding the fifth Eite/ factor, there is no possibility of dispute concerning th 14 || material facts. Because World Wide has had a default entered against it, the allegations in th 15 || complaint are deemed admitted and taken as true. Geddes, 559 F.2d at 560 (citing Pope, 323 16 || U.S. at 12). Therefore, the fifth Fite/ factor also favors the entry of default judgment. 17 7. The sixth Eite/ factor demonstrates that excusable neglect is not a factor here. Th 18 || complaint was filed on September 20, 2023. ECF No. 1. A summons was issued to World Wide 19 || on December 1, 2023. ECF No. 4. On December 8, 2023, World Wide was personally served at 20 || its principal place of business in Canada. ECF No. 5. On February 9, 2024, World Wide was 21 || formally served in accordance with Article Five of the Hague Convention through Canada’s 22 || Central Authority. ECF No. 6. Despite being served twice, World Wide did not file an 23 || answer or otherwise appear. The Trust Funds were then forced to file a motion for entry of 24 || clerk’s default on April 17, 2024. ECF No. 7. World Wide again failed to respond, which led 25 || to its failure to adequately plead or otherwise defend the suit, resulting in the entry of default 26 }|on May 10, 2024. ECF No. 10. In short, there is no evidence that World Wide’s default was 27 || due to excusable neglect. The sixth Fife] factor favors the entry of a default judgment. 28 1 8. The seventh and final Zife/ factor also weighs in favor of entering 2 ||default judgment. Despite the general policy that cases “should be decided on the merits 3 || whenever reasonably possible,” Hite/, 782 F.2d at 1472, when defendants fail to answer the 4 || complaint, a decision on the merits is “impractical, if not impossible.” Constr. Laborers Trust 5 || Funds for S. Cal Admin. Co. v. Anzalone Masonry, Inc., 316 F. Supp. 3d 1192 (C.D. Cal. 2018) 6 || (citing PepsiCo, Inc. v. Cal. Sec. Cans, 238 F. Supp. 2d 1172, 1177 (C.D. Cal. 2002). 7 “Thus, the preference to decide a case on the merits does not preclude a court from 8 || granting default judgment.” PepsiCo, 238 F. Supp. 2d at 1177 (citing Kloepping v. 9 || Fireman’s Fund, 1996 WL 75314 (N.D. Cal. Feb. 13, 1996)) (internal quotation marks 10 || omitted). Thus, while this final Zife/ factor always weighs against an entry of default judgment, it 11 || does not preclude me from entering one. 12 9. The damages set forth by the Trust Funds’ and their corresponding calculations 13 ||are supported by the Trust Agreements, the Trust Funds’ Collection Policy, and 29 14 |{U.S.C. 1132(g)(2). 15 | DI. Order 16 IT IS HEREBY ORDERED that plaintiffs’ motion for default judgment [ECF No 17 |}12] is GRANTED. The Clerk of Court is instructed to enter judgment in favor of Board 18 || of Trustees of the Teamsters Local 631 Security Fund for Southern Nevada and Board of 19 || Trustees of the Teamsters Convention Industry Training Fund and against defendant World 20 || Wide Exhibits, Inc. for delinquent employee benefit contributions ($674,973), liquidated 21 || damages ($586,846.39), interest ($586,846.39), audit fees ($550) and attorneys’ fees 22 || ($18,786.50) for a total of $1,868,002.28. Post-judgment interest shall be set at 18%, in 23 accordance with the Trust Funds’ Collection Policies and Procedures. 24 The Clerk of Court is kindly directed to close this case. 25 Dated: July 19, 2024 26 / 27 istina D. Silva 28 ited States District Judge