Board of Trustees of the Construction Industry and Laborers Health and Welfare Trust v. Sentinel Maintenance of Las Vegas, LLC

1 Christopher M. Humes Esq., Nevada Bar No. 12782 William D. Nobriga, Esq., Nevada Bar No. 14931 [2] BROWNSTEIN HYATT FARBER SCHRECK, LLP 3 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 4 Telephone: 702.382.2101 Facsimile: 702.382.8135 5 Email: chumes@bhfs.com Email: wnobriga@bhfs.com [6] 7 Attorneys for Plaintiffs [8] UNITED STATES DISTRICT COURT [9] DISTRICT OF NEVADA [10] 11 BOARD OF TRUSTEES OF THE CASE NO.: 2:22-cv-00565-JCM-NJK CONSTRUCTION INDUSTRY AND 12 LABORERS HEALTH AND WELFARE TRUST; THE BOARD OF TRUSTEES OF 13 THE CONSTRUCTION INDUSTRY AND MOTION TO SEEK LEAVE TO PROVIDE LABORERS JOINT PENSION TRUST; THE REVISED CALCULATION OF DAMAGES 14 BOARD OF TRUSTEES OF THE CONSTRUCTION INDUSTRY AND 15 LABORERS VACATION TRUST; and THE AND BOARD OF TRUSTEES OF THE 16 SOUTHERN NEVADA LABORERS REQUEST FOR ENTRY OF JUDGMENT LOCAL 872 TRAINING TRUST, [17] Plaintiffs, [18] v. [19] SENTINEL MAINTENANCE OF LAS 20 VEGAS, LLC, a Nevada limited liability company, SMI, LLC, a Nevada limited 21 liability company 22 Defendants. [23] 24 Plaintiffs, Board of Trustees of the Construction Industry and Laborers Health and 25 Welfare Trust, the Construction Industry and Laborers Joint Pension Trust, the Construction 26 Industry and Laborers Vacation Trust, and the Southern Nevada Laborers Local 872 Training 27 Trust (collectively, the “Trust Funds”) file this motion to seek leave to provide a revised damages 28 calculation representing amounts owed by Sentinel Maintenance of Las Vegas, LLC and SMI, 1 LLC, jointly and severally, to the Trust Funds and request that the Court enter a proposed order 2 for judgment. This filing is based on the Employee Retirement Income Security Act of 1974 3 (“ERISA”), the Court’s recent ruling on the Parties’ Motion for Summary Judgment (ECF No. 4 69), the pleadings on file in this case, and the points and authorities below. 5 I. Argument. 6 On March 27, 2024, this Court issued an order granting the Trust Funds’ Motion for 7 Summary Judgment and denying the Defendants’ Motion for Summary Judgment. See ECF No. 8 69 (the “Order”). In the Order, the Court permitted the Trust Funds to seek leave to provide an 9 updated calculation of damages and ordered that the Trust Funds provide a proposed judgment. 10 See id. at 19-21. The Trust Funds submit both below and also demonstrate that the post-judgment 11 interest rate should be set at the rate included in the Trust Funds’ governing documents. 12 A. Revised calculation of damages. 13 The Trust Funds respectfully seek leave to provide an updated damages calculation to this 14 Court. If granted leave, the Trust Funds submit the outline of current damages immediately 15 below. 16 As the Court found, Defendants are delinquent in paying $972,795.81 in employee benefit 17 contributions as detailed in the revised audit. The revised audit also states that Defendants owe 18 $327,118 in interest, but only calculates interest through June 30, 2023. See ECF No. 45, at Ex. 19 35. Additional interest has accrued through the date of the instant filing. Given that the Trust 20 Funds’ Collection Policy and Procedures provide an interest rate of 14% (see id. at Ex. 40 at § 21 III(B)), the daily amount of interest accruing is $373.13.1 Since the revised audit, 277 days have 22 passed, making the additional interest $103,356 (rounded to the nearest dollar). The updated 23 amount of interest is therefore $430,474, as of April 2, 2024.2 24 Similarly, the liquidated damages have also increased. Liquidated damages are either 20% 25 of the delinquent contributions or the amount of the interest, whichever is higher. See 29 U.S.C. § 26 1132(g)(2)(C). Here, 20% of the delinquent contributions is $194,479, which is less than the [27] 1 $972,795.81 * .14 / 365 days = $373.13 28 2 $103,356 + $327,118 = $430,474 1 amount of interest. Liquidated damages have also increased to $430,474. 2 Taking these amounts, and adding the $7,810 awarded in audit fees, the Trust Funds 3 respectfully request that the Court utilize the updated amount of damages and find that 4 $1,841,553.813 is owed to the Trust Funds by Defendants in its order granting judgment. 5 B. Post-judgment interest should be set at the rate in the Collection Policy, which is 14%. [6] 7 The post-judgment interest rate in the judgment should be set at 14%, as dictated by the 8 Trust Funds’ governing documents. While a default post-judgment interest rate is provided in 28 9 U.S.C. § 1961 , the Ninth Circuit Court of Appeals has held that “[a]n exception to § 1961 exists 10 when the parties contractually agree to waive its application.” Fidelity. Fed. Bank, FSB v. Durga 11 Ma Corp., 387 F.3d 1021, 1023 (9th Cir. 2004). In ERISA actions seeking delinquent employee 12 benefit contributions, multiple district courts in the Ninth Circuit have found that the interest rate 13 listed in the benefit plan’s governing documents should be the post-judgment interest rate. See 14 Trustees of the S. California IBEW-NECA Pension Plan v. Arce, No. 2:22-CV-00748-CAS-KSX, [15] 2022 WL 1620200 , at *6 (C.D. Cal. May 23, 2022) (“pursuant to 29 U.S.C.A. § 1132 (g)(2), the 16 Court finds that post-judgment interest is appropriate, at the same rate [as the plan’s governing 17 documents].”); Bd. of Trustees of Laborers Health & Welfare Tr. Fund for N. Cal. v. Shade 18 Const. & Eng’g, No. C 06-6830 PJH, 2007 WL 3071003 , at *10 (N.D. Cal. Oct. 19, 2007) (“Until 19 paid (whether pre-judgment or post-judgment), Plaintiffs are entitled to a rate of 1.5% per month 20 for the unpaid contributions (rather than the rate provided by 28 U.S.C. § 1961 ).”); Moreno v. 21 Casrik, Inc., No. C 05-1250 MJJ (JL), 2006 U.S. Dist. LEXIS 33346 , at *18 (N.D.Cal. May 25, 22 2006) (report and recommendation) (using the plan document interest rate in an ERISA 23 contributions collections case). 24 The Seventh Circuit of Appeals has also addressed this issue. Cent. States, Se. & Sw. 25 Areas Pension Fund v. Bomar Nat., Inc., 253 F.3d 1011 , 1019 (7th Cir. 2001). In Bomar, a party 26 “contends that this award was in error because 28 U.S.C. § 1961 , not the pension trust agreement, 27 should govern the calculation of post-judgment interest.” The Seventh Circuit found, however, 28 3 $972,795.81 + $430,474 + $430,474 + $7,810 = $1,841,553.81 1 that the Defendant had agreed to the plan’s trust agreement, that the interest rate in the 2 plan document was applicable and noted that “[i]t is well established that parties can agree 3 to an interest rate other than the standard one contained in 28 U.S.C. § 1961 .” Id. 4 As such, the proposed judgment attached to this filing provides that post-judgment interest 5 will accrue at 14%. 6 C. Proposed judgment. 7 Pursuant to Federal Rule of Civil Procedure 58(d) and as directed by the Court in its 8 Order, the Trust Funds request entry of judgment in this matter in accordance with the Court’s 9 Order and the updated calculation of interest and liquidated damages provided above. A proposed 10 order granting judgment this request for judgment is attached at Exhibit 1. [11] 12 Dated: April 2, 2024 BROWNSTEIN HYATT FARBER SCHRECK, LLP 13 /s/ Christopher M. Humes Christopher M. Humes, Esq. [14] Nevada Bar No. 12782 15 William D. Nobriga, Esq. Nevada Bar No. 14931 16 100 North City Parkway, Suite 1600 Las Vegas, Nevada 89106-4614 [17] Attorneys for Plaintiffs [28] 1 CERTIFICATE OF SERVICE [2] Pursuant to Federal Rule of Civil Procedure 5(b), I certify that I am an employee of [3] Brownstein Hyatt Farber Schreck, LLP and that on April 2, 2024, I served a true copy of the [4] foregoing MOTION TO SEEK LEAVE TO PROVIDE REVISED CALCULATION OF [5] DAMAGES AND REQUEST FOR ENTRY OF JUDGMENT via the Court’s CM/ECF [6] 7 System upon: 8 Lawrence J. Semenza, III, Esq. Jarrod L. Rickard, Esq. 9 Katie L. Cannata, Esq. SEMENZA KIRCHER RICKARD [10] 10161 Park Run Drive, Suite 150 11 Las Vegas, Nevada 89145 Telephone: (702) 835-6803 [12] Pro Hac Vice 13 Michael J. Underwood, Esq. Greg M. Daughterty, Esq. [14] PORTER WRIGHT MORRIS & ARTHUR 15 LLP 41 S. High Street, Suite 3100 16 Columbus, Ohio 43215 Telephone: (614) 227-2274 [17] Attorneys for Defendants [19] 20 I declare under penalty of perjury that the foregoing is true and correct. 21 /s/ Ebony Davis An Employee of Brownstein Hyatt Farber Schreck, LLP [28] 1 Christopher M. Humes Esq., Nevada Bar No. 12782 William D. Nobriga, Esq., Nevada Bar No. 14931 [2] BROWNSTEIN HYATT FARBER SCHRECK, LLP 3 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 4 Telephone: 702.382.2101 Facsimile: 702.382.8135 5 Email: chumes@bhfs.com Email: wnobriga@bhfs.com [6] 7 Attorneys for Plaintiffs [8] UNITED STATES DISTRICT COURT [9] DISTRICT OF NEVADA [10] 11 BOARD OF TRUSTEES OF THE CASE NO.: 2:22-cv-00565-JCM-NJK CONSTRUCTION INDUSTRY AND 12 LABORERS HEALTH AND WELFARE TRUST; THE BOARD OF TRUSTEES OF 13 THE CONSTRUCTION INDUSTRY AND INDEX OF EXHIBITS TO MOTION TO LABORERS JOINT PENSION TRUST; THE SEEK LEAVE TO PROVIDE REVISED 14 BOARD OF TRUSTEES OF THE CALCULATION OF DAMAGES CONSTRUCTION INDUSTRY AND 15 LABORERS VACATION TRUST; and THE BOARD OF TRUSTEES OF THE AND 16 SOUTHERN NEVADA LABORERS LOCAL 872 TRAINING TRUST, REQUEST FOR ENTRY OF JUDGMENT [17] Plaintiffs, [18] v. [19] SENTINEL MAINTENANCE OF LAS 20 VEGAS, LLC, a Nevada limited liability company, SMI, LLC, a Nevada limited 21 liability company 22 Defendants. [23] 24 1. Exhibit 1 – Proposed Order [28] EXHIBIT 1 PROPOSED ORDER 1 || Christopher M. Humes Esq., Nevada Bar No. 12782 William D. Nobriga, Esq., Nevada Bar No. 14931 2 || BROWNSTEIN HYATT FARBER SCHRECK, LLP 3 || 100 North City Parkway, Suite 1600 Las Vegas, NV 89106-4614 4 || Telephone: 702.382.2101 Facsimile: 702.382.8135 || Email: chumes@bhfs.com 6 Email: wnobriga@bhfs.com 7 || Attorneys for Plaintiffs 8 UNITED STATES DISTRICT COURT DISTRICT OF NEVADA [10] 11 || BOARD OF TRUSTEES OF THE CASE NO.: 2:22-cv-00565-JCM-NJK CONSTRUCTION INDUSTRY AND 12 || LABORERS HEALTH AND WELFARE TRUST; THE BOARD OF TRUSTEES OF 2 a 13 || THE CONSTRUCTION INDUSTRY AND ORDER GRANTING LABORERS JOINT PENSION TRUST; THE | ENTRY OF JUDGMENT 14 || BOARD OF TRUSTEES OF THE CONSTRUCTION INDUSTRY AND 15 || LABORERS VACATION TRUST; and THE BOARD OF TRUSTEES OF THE 16 || SOUTHERN NEVADA LABORERS LOCAL 872 TRAINING TRUST, [17] Plaintiffs, [18] v. [19] SENTINEL MAINTENANCE OF LAS 20 | VEGAS, LLC, a Nevada limited liability company, SMI, LLC, a Nevada limited 21 || liability company 22 Defendants. [23] 24 On March 27, 2024, this Court issued an order granting the Plaintiffs’, the Boards of 25 || Trustees of the Construction Industry and Laborers Health and Welfare Trust, the Construction 26 || Industry and Laborers Joint Pension Trust, the Construction Industry and Laborers Vacation 27 || Trust, and the Southern Nevada Laborers Local 872 Training Trust (collectively, the “Trust [28] 1 Funds”), motion for summary judgment and denying the Defendants’, SMI, LLC and Sentinel 2 Maintenance of Las Vegas, LLC, Motion for Summary Judgment. ECF No. 69. In that order, this 3 Court found that the Defendants were liable to the Trust Funds for delinquent employee benefit 4 contributions, interest, liquidated damages and audit fees. The bases for the Defendants’ liability 5 to the Trust Funds, as outlined in the Order, are that (1) Sentinel Maintenance of Las Vegas, LLC 6 assumed a collective bargaining agreement (“CBA”) that requires contributions be made to the 7 Trust Funds; (2) Defendants satisfied the elements required to find an alter ego relationship 8 between the two and therefore both Defendants are bound by the provisions of the 9 aforementioned CBA; and (3) Defendants satisfied the elements required to find that the two 10 Defendants are a single employer, also making them both bound by the CBA. 11 IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED, based on the evidence 12 provided to the Court in the Trust Funds Motion for Summary Judgment (ECF No. 45) and their 13 Revised Calculation of Damages (ECF No. 70), that the clerk of court enter judgment in favor of 14 Trust Funds and against SMI, LLC, and Sentinel Maintenance of Las Vegas, LLC, jointly and 15 severally, for the following amounts: 16 Contributions: $972,795.81 17 Interest: $430,474 18 Liquidated Damages: $430,474 19 Audit Fees: $7,810 20 TOTAL: $1,841,553.81 21 IT IS FURTHER ORDERED that post-judgment interest shall accrue on the delinquent 22 employee benefit contributions at the rate of 14%. 23 /// [25] 26 /// [28] ] IT IS FURTHER ORDERED that the Trust Funds may bring a motion to recover 2 || attorney’s fees and costs in accordance with 29 U.S.C. § 1132 (g)(2)(D) and the applicable Federal 3 Rules of Civil Procedure. [4] 5 DATED April 26, 2024. [6] 7 Bttus ©. Malan JAMESC.MAHAN UNITED STATES DISTRICT JUDGE [10] 1]