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Inc.

United States District Court, D. Hawaii

May 2, 2016

CARPET LINOLEUM AND SOFT TILE LOCAL UNION 192 6 TRUST FUNDS, ET AL., Plaintiffs,
v.
IGD HOSPITALITY, INC.; LAYTON CONSTRUCTION CO., INC.; JOHN DOES 1-10; JANE DOES 1-10; DOE CORPORATIONS 1-10; DOE PARTNERSHIPS 1-10; DOE GOVERNMENTAL AGENCIES 1-10, AND DOE TRUSTS 1-10, Defendants.

          FINDINGS AND RECOMMENDATION TO GRANT IN PART AND DENY IN PART PLAINTIFFS' MOTION FOR DEFAULT JUDGMENT AGAINST DEFENDANT IGD HOSPITALITY, INC. [1]

          Richard L. Puglisi United States Magistrate Judge

         Before the Court is Plaintiffs' Motion for Default Judgment Against Defendant IGD Hospitality, Inc., filed on March 30, 2016 ("Motion"). ECF No. 28. Defendant IGD Hospitality, Inc. was served with a copy of the Motion, but did not file an opposition or otherwise respond to the Motion. See ECF No. 28-8. The Court found the Motion suitable for disposition without a hearing pursuant to Rule 7.2(d) of the Local Rules of Practice of the United States District Court for the District of Hawaii. ECF No. 29. After careful consideration of the Motion, the declarations, exhibits, and the record established in this action, the Court FINDS AND RECOMMENDS that the Motion be GRANTED.

         BACKGROUND

         Plaintiffs filed their Complaint against Defendants on September 22, 2015. ECF No. 1. The Complaint alleges that Defendant IGD Hospitality, Inc. (“IGD”) executed a contract agreeing to abide by certain collective bargaining agreements, which required Defendant IGD to contribute and pay to Plaintiffs certain amounts for employee benefits for work performed by its covered employees. Compl. ¶¶ 8, 12. Contributions were to be paid on or before due dates specified in the collective bargaining agreements. Id. ¶ 12. Plaintiffs claim that Defendant IGD failed to make required contributions for March, May, and June 2015. Id. ¶ 19. The Complaint also alleges that Plaintiffs, Defendant IGD, and Defendant Layton Construction Co., Inc. (“Layton”) entered into an agreement dated February 20, 2015, wherein Defendant Layton agreed to issue payment by joint check to Defendant IGD and Plaintiffs to pay Defendant IGD’s obligations under the bargaining agreements for ongoing work performed by Defendant IGD’s employees on Defendant Layton’s project. Id. ¶ 11. Plaintiffs allege that Defendant Layton breached its obligations under that agreement by issuing checks solely in Defendant IGD’s name and assert a claim for breach of contract against Defendant Layton. Id. ¶ 25. Plaintiffs did not allege any claim against Defendant IGD related to breach of the joint check agreement. Id.

         The Clerk entered default against Defendant IGD pursuant to Rule 55(a) of the Federal Rules of Civil Procedure on November 2, 2015. ECF No. 12. Plaintiffs received $41, 757.82 from Defendant Layton in settlement of all Plaintiffs’ claims against Defendant Layton. ECF No. 28-1 at 6. Plaintiffs and Defendant Layton entered into a Stipulation for Dismissal of Claims against Defendant Layton Construction Co., Inc. With Prejudice, which was approved by the court on February 26, 2016. ECF No. 26. The present Motion followed. In the present Motion, Plaintiffs ask the Court to enter default judgment against Defendant IGD for outstanding contributions, liquidated damages, and attorneys’ fees and costs. ECF No. 28-1 at 6.

         DISCUSSION

         Default judgment may be entered for the plaintiff if the defendant has defaulted by failing to appear and the plaintiff’s claim is for a “sum certain or for a sum which can by computation be made certain[.]” Fed.R.Civ.P. 55(b)(1), (2). The granting or denial of a motion for default judgment is within the discretion of the court. Haw. Carpenters’ Trust Funds v. Stone, 794 F.2d 508, 511-12 (9th Cir. 1986). Entry of default does not entitle the non-defaulting party to a default judgment as a matter of right. Valley Oak Credit Union v. Villegas, 132 B.R. 742, 746 (9th Cir. 1991). Default judgments are ordinarily disfavored, and cases should be decided on their merits if reasonably possible. Eitel v. McCool, 782 F.2d 1470, 1472 (9th Cir. 1986). The court should consider the following factors in deciding whether to grant a motion for default judgment:

(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.

         On default “the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.” TeleVideo Sys., Inc. v. Heidenthal, 826 F.2d 915, 917-18 (9th Cir. 1987) (quoting Geddes v. United Fin. Group, 559 F.2d 557, 560 (9th Cir. 1977)). The allegations in the complaint regarding liability are deemed true, but the plaintiff must establish the relief to which she is entitled. Fair Hous. of Marin v. Combs, 285 F.3d 899, 906 (9th Cir. 2002). Also, “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default.” Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992) (citing Danning v. Lavine, 572 F.2d 1386, 1388 (9th Cir. 1978)).

         A. Jurisdiction

         Before considering the merits of default judgment, the Court has an affirmative obligation to determine whether or not it has subject matter jurisdiction over this action and personal jurisdiction over Defendant IGD. See In re Tuli, 172 F.3d 707, 712 (9th Cir. 1999) (“To avoid entering a default judgment that can later be successfully attacked as void, a court should determine whether it has the power, i.e., the jurisdiction, to enter the judgment in the first place.”). First, the Court has subject matter jurisdiction over Plaintiffs’ claims against Defendant IGD related to unpaid contributions pursuant to the Employment Retirement Income Security Act of 1974, as amended. See 29 U.S.C. §§ 1132(e), 1145.

         Second, the Court has personal jurisdiction over Defendant IGD. Personal jurisdiction can be acquired by a defendant’s “minimum contacts” with the jurisdiction. Cripps, 980 F.2d at 1267 (citing Burnham v. Superior Court of California, 495 U.S. 604 (1990)). Specific personal jurisdiction exists if (a) the defendant has performed some act or consummated some transaction within the forum or otherwise purposefully availed itself of the privileges of conducting activities in the forum; (b) the claim arises out of or results from the defendant’s forum related activities; and (c) the exercise of jurisdiction is reasonable. Boschetto v. Hansing, 539 F.3d 1011, 1021 (9th Cir. 2008).

         a. ...


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