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Board of Trustees of Arizona Bricklayers' Pension Trust Fund v. Obeso

United States District Court, D. Arizona

August 30, 2019

Board of Trustees of the Arizona Bricklayers' Pension Trust Fund, Plaintiff,
v.
Rafael G. Obeso, et al., Defendants.

          ORDER

          Honorable Jennifer G. Zipps United States District Judge.

         Pending before the Court is a motion for default judgment filed by Plaintiff Board of Trustees of the Arizona Bricklayers' Pension Trust Fund (Trustees). (Doc. 23). Having reviewed the motion and the filings in this case, the Court will deny the motion without prejudice.

         FACTUAL AND PROCEDURAL BACKGROUND

         Trustees seek reimbursement of monthly pension benefit checks paid to Defendant Rafael Obeso. Trustees argue that Obeso was ineligible to receive the benefits due to his employment in the bricklaying trade in contravention of a collective bargaining agreement. Trustees' complaint asserts one cause of action for Restitution for Unjust Enrichment. The complaint and the affidavit in support of the motion for default allege the following facts.

         The Arizona Bricklayers' Pension Trust Fund (Trust Fund) is a labor-management trust fund under 29 U.S.C. § 186. (Doc. 1 ¶ 4.) The Trust Fund administers a pension benefits program for eligible participants and beneficiaries that is subject to written rules and regulations (Trust Fund Rules). (Doc. 1 ¶ 5.) Plaintiff Trustees is the designated agent of the Trust Fund and is tasked with management of the Fund. (Doc. 1 ¶ 4.) Obeso “is . . . or was an employee participant of the Trust Fund through his employment with employers signatory to a collective bargaining agreement.” (Doc. 1 ¶ 7.)

         Obeso applied for early retirement on or about June 20, 2011, and was approved by the Trustees. (Doc. 1 ¶ 9.) “As a Participant in Early Retirement, [Obeso] was prohibited . . . from working in the bricklaying trade, craft, or industry within the jurisdiction of the collective bargaining agreement (CBA) between the Union and the signatory employers. The jurisdiction of the CBA is the state of Arizona.” (Doc. 1 ¶ 10.) Trustees allege, “[u]pon information and belief, ” that despite his early retirement status, in July, 2011, Obeso resumed working in the bricklaying trade craft, or industry in Arizona. The Trust Fund made monthly payments to Obeso from July 1, 2011 to December 31, 2014, and January 10, 2015 to January 31, 2016, that Obeso “was ineligible to receive due to his employment in the bricklaying trade, craft or industry in the jurisdiction of the CBA and the suspension rules set forth in the Trust Fund Rules.” (Doc. 1 ¶ 12; Doc. 24.) “[I]f . . . benefits are paid in excess of the amount to which a participant is entitled to receive under the Trust Fund Rules, the participant is obligated to repay the Trust Fund the amount of the overpayment.” (Doc. 1 ¶ 13.) In support of its motion for default, Trustees attached estimated time periods Obeso worked in prohibited employment or periods of suspension. (Doc. 24-1 at 2.) The Trustees do not state what work Obeso did in violation of the Trust Fund Rules, the basis for the belief that Obeso was working in prohibited employment, or the manner in which the time periods were determined.

         The Trust Fund sent Obeso a demand letter on February 8, 2018, requesting reimbursement. (Doc. 1 ¶ 15.) When Obeso failed to reimburse the Trust Fund, Trustees filed a Complaint on June 7, 2018, seeking $22, 220 in restitution of losses, $6, 410.87 for lost investment income, reasonable attorneys' fees, costs, and pre- and post-judgment interest. (Doc. 1 at 4-5). Obeso was served with the Summons and Complaint on August 5, 2018, but failed to answer or otherwise defend the claim. (Docs. 12, 14.) Trustees applied for entry of default against Obeso on October 26, 2018, which the clerk entered on October 29, 2018. (Docs. 14, 15). Obeso's wife, Defendant Jane Doe Obeso, whose real name is Elva Obeso, was personally served with the Summons and Complaint on November 27, 2018. (Doc. 20). Trustees applied for entry of default against Elva Obeso on December 21, 2018 after she failed to answer or otherwise defend. Default was entered on December 26, 2018. (Docs. 21 & 22). Trustees now seek entry of default judgment against both Defendants. (Doc 23).[1]

         DISCUSSION

         A. Default Judgment

         After entry of default, a court may enter a default judgment. See Fed. R. Civ. P. 55. Whether to enter a default judgment is within the court's discretion. Aldabe v. Aldabe, 616 F.2d 1089, 1092 (9th Cir. 1980). Several factors guide this determination:

(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 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 v. McCool, 782 F.2d 1470, 1471-72 (9th Cir. 1986). Generally, following default, the court accepts as true the well-pleaded factual allegations in the complaint, except those relating to damages. Cripps v. Life Ins. Co. of N. Am., 980 F.2d 1261, 1267 (9th Cir. 1992); Geddes v. United Fin. Grp., 559 F.2d 557, 560 (9th Cir. 1977). The plaintiff must plead specific facts because “a defendant is not held to admit facts that are not well-pleaded or to admit conclusions of law.” DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007) (internal citation and quotation marks omitted). Furthermore, “necessary facts not contained in the pleadings, and claims which are legally insufficient, are not established by default.” Cripps, 980 F.2d at 1267 (internal citations omitted). Applying the Eitel factors, the Court will deny the Trustees' motion.

         1. Possibility of Prejudice to Plaintiff

         This factor weighs in favor of granting default judgment if a plaintiff would likely have no other course for recovery. PepsiCo, Inc. v. Cal. Sec. Cans, 238 F.Supp.2d 1172, 1176 (C.D. Cal. 2002). Trustees attempted to resolve the issue without judicial intervention by demanding reimbursement. Obeso's failure to reimburse Trustees or respond to the Complaint makes it unlikely that Trustees could recover without entry of default judgment. ...


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