Board of Trustees of the California Ironworkers Field Pension Trust v. Streamline Integration

Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 1 of 14 Page ID #:301 'O' [7] 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA [11] CV 21-08301-RSWL-KES x 12 BOARD OF TRUSTEES OF THE CALIFORNIA IRONWORKERS ORDER re: MOTION FOR 13 FIELD PENSION TRUST, ET SUMMARY JUDGMENT [20] AL., [14] Plaintiffs, [15] 16 v. 17 STREAMLINE INTEGRATION, [18] Defendant. [19] 20 Plaintiffs, trustees of the California Ironworkers 21 Field Pension Trust (“Pension Trust”), California 22 Ironworkers Field Welfare Plan (“Welfare Plan”), 23 California Field Iron Workers Vacation Trust Fund 24 (“Vacation Trust”), California Field Ironworkers 25 Apprenticeship Training and Journeyman Retraining Fund 26 (“Training Fund”), California Ironworkers Field Defined 27 Contribution Pension Trust Fund (“DC Fund”), California 28 Field Iron Workers Administrative Trust (“Admin. [1] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 2 of 14 Page ID #:302 1 Trust”), California Field Ironworkers Labor Management 2 Cooperative Trust Fund (“LMC Trust”), and the 3 Ironworkers Workers’ Compensation Trust (“Workers’ Comp. 4 Trust”), (collectively “the Trust Funds”), bring this 5 Action against Defendant Streamline Integration 6 (“Defendant”) for Breach of Written Collective 7 Bargaining Agreement and Related Trust Agreements, 8 Violation of Section 515 of the Employee Retirement 9 Income Security Act (“ERISA”), and for an injunction 10 requiring Defendant submit to an audit of Defendant’s 11 books and records. 12 Currently before the Court is Plaintiffs’ Motion 13 for Summary Judgment. Defendant failed to file an 14 opposition or objection to Plaintiffs’ Motion. 15 Having reviewed all papers submitted pertaining to 16 this Motion, the Court NOW FINDS AND RULES AS FOLLOWS: 17 the Court GRANTS Plaintiffs’ Motion and ORDERS Defendant 18 to submit to an audit of Defendant’s books and records 19 relevant to its obligation to contribute to the Trust 20 Funds. 21 I. BACKGROUND 22 A. Factual & Procedural Background 23 The Trust Funds are multi-employer trust funds 24 created and maintained pursuant to ERISA and 25 Section 302(c) of the Labor Management Relations Act of 26 1947, 29 U.S.C. § 186 (c). Plfs.’ Statement of 27 Uncontroverted Facts (“Plfs.’ SUF”) ¶¶ 2-3, ECF No. 2028 4. These Trust Funds are funded by contributions paid [2] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 3 of 14 Page ID #:303 1 by individual employers. Id. ¶ 4 . The Ironworkers 2 Employees’ Benefit Corporation (the “IEBC”) is a non- 3 profit that administers the Trust Funds. Decl. of Mark 4 Ellis ¶ 2, ECF No. 20-2. 5 On or about June 7, 2020, Defendant executed the 6 Iron Workers Independent Agreement (“Independent 7 Agreement”) and the Contributing Employers Agreement 8 with the District Council of Iron Workers of the State 9 of California and Vicinity (the “Union”). Id. ¶¶ 6-7 . 10 These two agreements provide that Defendant shall comply 11 with the provisions and rules set forth in the 12 collective bargaining agreement governing employers 13 obligated to contribute to the Trust Funds. Id. ¶¶ 814 10. Therefore, under these agreements, Defendant agreed 15 and is obligated to submit contributions to the Trust 16 Funds. Id. ¶¶ 5-9 . 17 Specifically, Defendant must submit monthly reports 18 and pay to the Trust Funds certain monetary 19 contributions for each hour paid for or worked by 20 employees performing work covered by the collective 21 bargaining agreement. Id. ¶¶ 9-10 . Contributions are 22 due on the fifteenth day of each month following the 23 month in which Defendant’s employees were paid and/or 24 worked, and such contributions are considered delinquent 25 if not received by the twenty-fifth day of the month. [26] Id. ¶¶ 11-12 . The agreements governing the Trust Funds 27 make clear that the prompt payment of contributions is 28 essential, and that liquidated damages resulting from [3] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 4 of 14 Page ID #:304 1 failure to timely pay contributions are presumed to be 2 ten percent of the delinquent contributions if paid 3 within ten days of becoming delinquent, or twenty 4 percent if paid after the ten days, but no less than 5 $50.00 under any circumstances.1 Id. ¶ 15 . These 6 agreements provide that unpaid contributions shall bear 7 interest at the rate of ten percent per annum.2 Id. 8 ¶ 16. 9 The agreements also authorize the Trust Funds to 10 examine and audit Defendant’s books and records to 11 determine whether the employer is making full and prompt 12 payment of the contributions to the Trust Funds. Id. 13 ¶ 17. If an audit reveals that Defendant has failed to 14 correctly report and pay contributions for reason other 15 than clerical error or omission, Defendant shall be 16 liable for an hourly charge for the audit, the unpaid 17 contributions, liquidated damages, reasonable attorney’s 18 fees, and any other costs of collection. Id. ¶ 18 . 19 Defendant failed to submit contributions to the 20 Trust Funds from July 2020 through November 2020. Id. 21 ¶ 19. As a result, Defendant currently owes the Trust 22 Funds $36,149.06, broken down as follows: $25,327.77 in 23 delinquent contributions, $5,688.50 in liquidated 24 damages, $5,027.79 in interest, and $105.00 in audit [25] 1 The Admin Trust deviates from this formula, instead 26 assessing liquidated damages at ten percent what was due without increasing those damages to twenty percent at any time. Id. [27] 2 Unpaid contributions to the Admin Trust bear interest at 28 seven percent per annum. Id. [4] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 5 of 14 Page ID #:305 1 costs. Id. ¶¶ 21-24, 27 . 2 Plaintiffs filed their Complaint [1] on October 20, 3 2021, and Defendant answered [11] on January 14, 2022. 4 Plaintiffs filed the instant Motion [20] on October 13, 5 2022. Defendant has not opposed or objected to the 6 instant Motion. 7 II. DISCUSSION 8 A. Legal Standard 9 Summary judgment is appropriate when the moving 10 party “shows that there is no genuine dispute as to any 11 material fact and the movant is entitled to judgment as 12 a matter of law.” Fed. R. Civ. P. 56(a). A fact is 13 “material” if it might affect the outcome of the suit, 14 and the dispute is “genuine” if the evidence is such 15 that a reasonable factfinder could return a verdict for 16 the nonmoving party. Anderson v. Liberty Lobby, 477 U.S 17 242, 248 (1986). 18 The moving party bears the initial burden of 19 proving the absence of a genuine dispute of material 20 fact. Celotex Corp. v. Catrett, 477 U.S. 317 , 323 21 (1986). Where the nonmoving party bears the burden of 22 proof at trial, the moving party need only show “an 23 absence of evidence to support the nonmoving party’s 24 case.” Id. at 325 . If the moving party meets its 25 burden, the burden then shifts to the nonmoving party to 26 present “specific facts showing that there is a genuine 27 issue for trial.” Anderson, 477 U.S at 250. The 28 nonmoving party “must show more than the mere existence [5] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 6 of 14 Page ID #:306 1 of a scintilla of evidence . . . or some ‘metaphysical 2 doubt’ as to the material facts at issue.” In re Oracle 3 Corp. Sec. Litig., 627 F.3d 376, 387 (9th Cir. 2010). 4 The evidence, and all reasonable inferences based 5 on underlying facts, must be construed in the light most 6 favorable to the nonmoving party. Scott v. Harris, 550 7 U.S. 372 , 378 (2007). In reviewing the record, the 8 court’s function is not to weigh the evidence but only 9 to determine if a genuine issue of material fact exists. 10 Anderson, 477 U.S. at 255 . “A district court’s ruling 11 on a motion for summary judgment may only be based on 12 admissible evidence.” In re Oracle Corp. Sec. Litig., [13] 627 F.3d at 385 . “While the evidence presented at the 14 summary judgment stage does not yet need to be in a form 15 that would be admissible at trial, the proponent must 16 set out facts that it will be able to prove through 17 admissible evidence.” Norse v. City of Santa Cruz, 629 18 F.3d 966, 973 (9th Cir. 2010). 19 B. Analysis 20 Defendant does not oppose the present motion. In 21 the absence of an opposition, the Court nevertheless 22 decides a motion for summary judgment on its merits. 23 See Cristobal v. Siegel, 26 F.3d 1488, 1494-95 (9th Cir. 24 1994) (holding that an unopposed motion for summary 25 judgment may be granted only after the court determines 26 there are no material issues of fact). Plaintiffs, 27 therefore, must still meet their burden of showing the 28 absence of a genuine issue of material fact. [6] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 7 of 14 Page ID #:307 1 Plaintiffs allege that Defendant breached contracts 2 obligating it to contribute to the Trust Funds, that 3 Defendant’s failure to contribute violated ERISA, and 4 the Defendant must submit to a further audit. See 5 generally Compl., ECF No. 1. The Court’s analysis 6 centers on Plaintiffs’ ERISA claim and request for an 7 injunction.3 8 1. ERISA 9 Plaintiffs contend that Defendant failed to timely 10 submit contributions to the Trust Funds in violation of 11 ERISA. See Plfs.’ Mem. of P. & A. in Supp. of Mot. for 12 Summ. J. (“Mem.”), ECF No. 20-1. Section 515 of ERISA 13 states that “[e]very employer who is obligated to make 14 contributions to a multiemployer plan under the terms of 15 the plan or under the terms of a collectively bargained 16 agreement shall . . . make such contributions in 17 accordance with the terms and conditions of such plan or 18 such agreement.” 29 U.S.C. § 1145 . 19 a. Defendant is Obligated to Make 20 Contributions to the Trust Funds 21 On June 7, 2020, Defendant entered into an 22 Independent Agreement and a Contributing Employers [23] 3 In 1980, Congress amended ERISA to provide trustees of 24 multiemployer benefit plans with an effective federal remedy to collect delinquent contributions. Laborers Health & Welfare Tr. 25 Fund For N. California v. Advanced Lightweight Concrete Co., 484 U.S. 539, 541 (1988). Therefore, section 514(a) of ERISA 26 preempts state law claims that “relate to” employee benefits plans. 29 U.S.C. § 1144 (a). Accordingly, “ERISA preempts common [27] law theories of . . .breach of contract.” Ellenburg v. Brockway, 28 Inc., 763 F.2d 1091, 1095 (9th Cir. 1985). [7] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 8 of 14 Page ID #:308 1 Agreement with the Union. See Decl. of Mark Ellis, Exs. 2 A-B (“Independent Agreement” and “Contributing Employers 3 Agreement,” respectively), ECF No. 20-2. By entering 4 the Independent Agreement, Defendant agreed to comply 5 with the conditions and provisions of the collective 6 bargaining agreement and to accept, assume, and be bound 7 by any trust agreements, plans, or rules pertaining to 8 the collective bargaining agreement. See Independent 9 Agreement. The Independent Agreement also established 10 that Defendant “agree[d] to pay all monetary 11 contributions for each hour paid for or worked by 12 employees performing work covered by the [collective 13 bargaining agreement] to . . .the Trust Funds specified 14 in [the collective bargaining agreement] . . . .” Id. 15 Therefore, Plaintiffs have adequately shown that 16 the Trust Funds are a multiemployer plan that Defendant 17 is obligated to contribute to under the Independent 18 Agreement, Contributing Employer Agreement, and related 19 agreements. See generally Mem.; Independent Agreement; 20 Contributing Employer Agreement; Collective Bargaining 21 Agreement. 22 b. Defendant Failed to Make Contributions to 23 the Trust Funds from June 2020 Through 24 November 2020 25 Here, Plaintiffs have satisfied their burden of 26 showing there is no genuine issue of material fact 27 regarding whether Defendant failed to contribute to the 28 Trust Funds in accordance with the agreements. The [8] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 9 of 14 Page ID #:309 1 agreements clearly required Defendant to submit monthly 2 reports and contributions to the Trust Funds, Defendant 3 did not do so, and Defendant has admitted as much. See 4 Independent Agreement; Collective Bargaining Agreement; 5 Decl. of Jason J. Kennedy ¶¶ 2-4, ECF No. 20-3; Decl. of 6 Jason J. Kennedy, Ex. A, ECF No. 20-3. 7 Mr. Mark Ellis, the Employer Accounts/Collection 8 Supervisor for the Trust Funds, oversees the collection 9 of contributions to the Trust Funds. Decl. of Mark 10 Ellis ¶ 7. He also supervises the assessment of 11 liquidated damages and interest owed to the Trust Funds 12 by employers bound by the collective bargaining 13 agreement and related agreements. Id. Mr. Ellis 14 submitted a declaration stating that he has in his 15 possession, custody, and control the books and records 16 of the Trust Funds, including: (1) reports and 17 contributions that the Trust Funds received from 18 Defendant; (2) correspondence between Defendant and the 19 Trust Funds; (3) records of contributions Defendant owes 20 to the Trust Funds; and (4) calculations of amounts owed 21 by Defendant to the Trust Funds. Id. ¶ 8. 22 Mr. Ellis provided a copy of a spreadsheet 23 “prepared by the IEBC staff reflecting the total 24 contributions, interest, and liquidated damages owed by 25 Defendant, less credit for payment received from a claim 26 on a bond, for July 2020 through November 2020.” Id. 27 ¶ 36. These amounts were “derived from the records of 28 the Trust Funds and calculation of the IEBC staff” under [9] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 10 of 14 Page ID #:310 1 Mr. Ellis’s direction and supervision. Id. This 2 spreadsheet reveals that Defendant failed to pay 3 contributions owed to the Trust Funds from July 2020 4 through November 2020. See Decl. of Mark Ellis, Ex. M 5 (“Spreadsheet”), ECF No. 20-2. 6 Plaintiffs also supplied their First Set of 7 Requests for Admissions propounded upon Defendant. See 8 Decl. of Jason J. Kennedy, Ex. A. These Requests for 9 Admission ask Defendant to admit that (1) Defendant 10 entered into the Independent Agreement and Contributing 11 Employers Agreement; (2) Defendant had an obligation to 12 submit monthly reports and pay contributions to the 13 Trust Funds; (3) Defendant employed ironworker employees 14 from June 2020 through November 2020; (4) Defendant had 15 an obligation to pay benefit contributions from June 16 2020 through November 2020; (5) Defendant failed to 17 timely submit full contribution payments; (6) On January 18 7, 2020, Defendant’s President/Chief Executive Officer 19 executed a declaration stating the entire amount of the 20 audit claimed in this Action was accurate; (7) On 21 January 7, 2020, Defendant’s President/Chief Executive 22 Officer executed a declaration stating that the entire 23 amount of the audit claimed in this Action was owed by 24 Defendant; and (8) Defendant has an obligation to pay 25 the Trust Funds liquidated damages and interest for 26 contributions not timely paid. See id. 27 Defendant did not respond to Plaintiffs’ Requests 28 for Admissions. Decl. of Jason J. Kennedy ¶ 3. Federal [10] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 11 of 14 Page ID #:311 1 Rule of Civil Procedure 36(a)(1) provides that “[a] 2 matter is admitted unless, within [thirty] days of being 3 served, the party to whom the request is directed serves 4 on the requesting party a written answer or objection 5 addressed to the matter and signed by the party or its 6 attorney.” Consequently, Defendant’s failure to respond 7 amounts to admissions of the information set forth in 8 Plaintiffs’ requests. Thus, Defendant has admitted to 9 failing to contribute to the Trust Funds from June 2020 10 through July 2020 in violation of the Independent 11 Agreement, Contributing Employer Agreement, and related 12 agreements. 13 Therefore, Plaintiffs have satisfied their burden 14 of showing that there is no genuine issue of material 15 fact that Defendant has failed to comply with its 16 obligations under the Independent Agreement, 17 Contributing Employer Agreement, and related contracts. 18 Having concluded that Defendant failed to pay 19 contributions to the Trust Funds from June 2020 through 20 November 2020, the Court finds that Defendant violated 21 ERISA. 22 c. Damages Defendant Owes the Trust Funds 23 Pursuant to 29 U.S.C. § 1132 (g)(2), “[i]n any 24 action under this subchapter by a fiduciary for or on 25 behalf of a plan to enforce section 1145 . . . in which 26 a judgment in favor of the plan is awarded,” a court 27 shall award: (A) the unpaid contributions, (B) interest 28 on the unpaid contributions, (C) the greater of the [11] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 12 of 14 Page ID #:312 1 interest or liquidated damages provided for under the 2 plan in an amount not in excess of twenty percent, 3 (D) reasonable attorney’s fees and costs of the action, 4 to be paid by the defendant, and (E) such other legal or 5 equitable relief as the court deems appropriate. 6 The agreements provide that a delinquent employer 7 will be liable for unpaid contributions, interest, and 8 liquidated damages. SUF ¶¶ 15-16. An employer will 9 also be liable for audit costs, reasonable attorney’s 10 fees, and any other costs of collection if an audit 11 reveals the employer has failed to correctly report and 12 pay contributions. Id. ¶ 18 . Liquidated damages 13 resulting from failure to timely pay contributions are 14 presumed to be ten percent of the delinquent 15 contributions if paid within ten days of becoming 16 delinquent, or twenty percent if paid after the ten 17 days.4 Id. ¶ 15 . Unpaid contributions bear interest at 18 the rate of ten percent per annum.5 Id. ¶ 16 . 19 Once the Court issues judgment in the Trust Funds’ 20 favor, award of these damages is mandatory, so long as: 21 (1) the employer is delinquent at the time of the 22 action; (2) the Court enters judgment against the 23 employer; and (3) the plan provides for the award. See, 24 e.g., Nw. Adm’rs, Inc. v. Albertson’s, Inc., 104 F.3d 25 4 The Admin Trust assesses liquidated damages at ten percent 26 what was due and does not increase liquidated damages to twenty percent. Id. [27] 5 Unpaid contributions to the Admin Trust bear interest at 28 seven percent per annum. Id. [12] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 13 of 14 Page ID #:313 1 253, 257 (9th Cir. 1996); Kemmis v. McGoldrick, 706 F.2d 2 993, 997 (9th Cir. 1983). These conditions have been 3 met here, so the Trust Funds are entitled to judgment in 4 the amounts discussed below. 5 The Court awards the Trust Funds: (1) $25,327.77 in 6 unpaid contributions; (2) $5,027.79 in interest; 7 (3) $5,688.50 in liquidated damages; and (4) $105.00 in 8 audit costs. See SUF ¶¶ 21-24, 27; Spreadsheet. 9 Plaintiffs’ fees for filing, service of process, and 10 discovery are reasonable and recoverable, thus the 11 Plaintiffs may file a Notice of Application to the Clerk 12 to Tax Costs within thirty days of the Court entering 13 judgment. C.D. Cal. L.R. 54-3.1, 54-3.2, 54-3.10. 14 2. Audit 15 Plaintiffs request the Court issue an injunction 16 requiring Defendant to submit to an audit of the months 17 of “December 2020 to present to ascertain whether the 18 correct amounts of contributions have been reported and 19 paid and whether Defendant owes further contributions to 20 Plaintiffs.” Plfs.’ Notice of Mot and Mot. for Summ. J. 21 ¶ 4, ECF No. 20. The Supreme Court has held that where 22 a collective bargaining agreement gives the trustees of 23 an employee benefit plan the right to audit an 24 employer’s books and records, it will be enforced. 25 Cent. States, Se. & Sw. Areas Pension Fund v. Cent. 26 Transp., Inc., 472 U.S. 559, 569 (1985). 27 Here, Plaintiffs have identified the agreements 28 which require a signatory employer to submit to an audit [13] Case 2:21-cv-08301-RSWL-KES Document 24 Filed 12/19/22 Page 14 of 14 Page ID #:314 1 of its books and records. See Independent Agreement; 2 Collective Bargaining Agreement. Therefore, Plaintiffs 3 have presented sufficient evidence to show they are 4 entitled to injunctive relief in the form of a court 5 order compelling Defendant to submit to an audit of its 6 records. 7 Accordingly, the Court orders Defendant to submit 8 to a full audit for the period of December 2020 through 9 the present by auditors selected by the Trust Funds at 10 the premises of Defendant during business hours, at a 11 reasonable time or times, and to allow the auditors to 12 examine such books and records of Defendant relevant to 13 the enforcement of the Independent Agreement, 14 Contributing Employer’s Agreement, collective bargaining 15 agreement, and related agreements. 16 III. CONCLUSION 17 Based on the foregoing, the Court GRANTS 18 Plaintiffs’ Motion for Summary Judgment in the amount of 19 $36,149.06. The Court ORDERS Defendant to submit to an 20 audit of Defendant’s books and records relevant to its 21 obligation to contribute to the Trust Funds. [22] 23 IT IS SO ORDERED. [24] 25 DATED: December 19, 2022 _ _ _ _ _ _ _/S_/ _R_O_N_A_L_D_ S_._W_. _LE_W_________ HONORABLE RONALD S.W. LEW [26] Senior U.S. District Judge