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: [email protected] [email protected] 6 7 Attorneys for Plaintiffs 8 9 UNITED STATES DISTRICT COURT 10 DISTRICT OF NEVADA 11 BOARD OF TRUSTEES OF THE CASE NO.: 2:23-cv-00782-MMD-BNW 12 CONSTRUCTION INDUSTRY AND LABORERS JOINT PENSION TRUST FOR 13 SOUTHERN NEVADA and THE CONSTRUCTION INDUSTRY AND ORDER FOR DEFAULT JUDGMENT 14 LABORERS JOINT PENSION TRUST FOR AGAINST JOHN JORY, LLC, JOHN SOUTHERN NEVADA JORY CORPORATION AND 15 JOHNSON & JORY PROPERTIES, Plaintiffs, LLC 16 vs. 17 JOHN JORY, LLC, a Nevada limited liability 18 company, JOHN JORY CORPORATION, a California corporation; JOHNSON & JORY 19 PROPERTIES, LLC, a Delaware limited liability company 20 Defendants. 21 22 Before the Court is Plaintiffs’, the Boards of Trustees of the Construction Industry Joint 23 Pension Trust for Southern Nevada (“Board of Trustees”) and the Construction Industry Joint 24 Pension Trust for Southern Nevada (the “Pension Trust”) (collectively referred to as “Plaintiffs”) 25 Motion for Default Judgment (the “Motion”) against John Jory, LLC, John Jory Corporation and 26 Johnson & Jory Properties, LLC (“Defendants”). Default having been entered against Defendants, 27 the Court having reviewed the Plaintiffs’ Motion, being fully advised, and good cause appearing, 28 1 the Court now makes the following findings of facts and conclusions of law. 2 I. Findings of Fact. 3 1. The Board of Trustees is made up of fiduciaries for the purposes of the Employee 4 Retirement Income Security Act of 1974 (“ERISA”). 5 2. The Pension Trust is an “employee benefit pension plan” as defined in

1002(2); and a “multiemployer plan” as defined in

(37) and 1301(a)(3). 7 3. Defendant, John Jory, LLC (“John Jory”) is a Nevada limited liability company 8 and is an employer within the meaning of

(5). 9 4. Defendant, John Jory Corporation is a California corporation and is an employer 10 within the meaning of

(5), pursuant to

(b)(1). 11 5. Defendant, Johnson & Jory Properties, LLC is a Delaware limited liability 12 company and is an employer within the meaning of

(5), pursuant to

1301(b)(1). 14 6. John Jory was signatory to a collective bargaining agreement that required John 15 Jory to make employee benefit contributions to the Pension Trust. 16 7. John Jory permanently ceased all covered operations under the plan and/or ceased 17 to have an obligation to contribute under the plan. This constituted a “complete withdrawal” 18 under the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”). 19 8. On December 5, 2022, the Pension Trust sent a withdrawal liability assessment 20 and demand for payment to John Jory in the amount of $969,278, with the first quarterly payment 21 of $22,017 due on January 4, 2023. 22 9. Since the withdrawal liability assessment was sent, John Jory failed to submit a 23 request for review, as required by

(b)(2). John Jory also failed to timely initiate 24 mandatory arbitration as required by

(a)(1). Therefore, John Jory is barred from 25 contesting the withdrawal liability assessment. 26 10. John Jory has failed to make any of its quarterly withdrawal liability payments to 27 the Trust. 28 11. In response, on March 7, 2023, the Pension Trust sent John Jory a Notice of 1 Default, in which it gave John Jory 60 days to cure the default, as required by law. 2 12. To date, John Jory has failed to cure the default and make quarterly payments to 3 the Trust for its assessed withdrawal liability obligation. 4 13. The Pension Trust provided John Jory with a withdrawal liability assessment, and 5 John Jory has failed to make the required payments. The Pension Trust gave John Jory a 60-day 6 period to cure the default, but John Jory has failed to do so. 7 14. Federal law states that for the purposes of withdrawal liability, “all employees of 8 trades or businesses (whether or not incorporated) which are under common control shall be 9 treated as employed by a single employer and all such trades and businesses as a single 10 employer.”

(b)(1). 11 15. Defendants John Jory, John Jory Corporation, and Johnson & Jory Properties, LLC 12 are all under common control (the “John Jory Controlled Group”). 13 16. Due to John Jory’s and its controlled group members’ failure to make payments on 14 the schedule set by the Pension Trust, Plaintiffs seek a judgment against the John Jory Controlled 15 Group for the entire assessed withdrawal liability amount, as well as interest, liquidated damages, 16 and attorney’s fees. 17 17. Any finding of fact more appropriately designated as a conclusion of law will be 18 treated as such. Any conclusion of law more appropriately designated as a finding of fact will be 19 treated as such. 20 II. Conclusions of Law. 21 1. Federal Rule of Civil Procedure 8(b)(6) provides that where a party fails to appear 22 or otherwise defend against an allegation the “allegation—other than one relating to the amount 23 of damages—is admitted . . . .” 24 2. In turn, Rule 55(b)(2) provides that the Court may enter a default judgment against 25 any party that has failed to plead or otherwise defend against a claim. Fed. R. Civ. P. 55(b)(2). 26 3. “The general rule of law is that upon default the factual allegations of the 27 complaint, except those relating to the amount of damages, will be taken as true.” Geddes v. 28 United Fin. Group,

, 560 (9th Cir. 1977) (citing Pope v. U.S.,

, 12 1 (1944)). 2 4. Defendants failed to file an Answer and were defaulted. As a result, the facts 3 alleged in the Complaint are deemed admitted 4 5. Federal Rule of Civil Procedure 55(b)(2) permits a court to grant default judgment 5 against a defendant who has failed to plead or defend an action. Courts may, in their discretion, 6 enter a default judgment. Eitel v. McCool,

(9th Cir. 1986). To determine 7 whether a default judgment is appropriate, courts may consider the following factors: 8 (1) the possibility of prejudice to the plaintiff, (2) the merits of plaintiff’s 9 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) 10 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. 11 12

at 1471–72. 13 6. As to the first Eitel factor, the Plaintiffs will suffer prejudice if default is not 14 entered because they “‘will likely be without other recourse for recovery’ if default judgment is 15 not entered in their favor.” Tr. of the Bricklayers & Allied Craftworkers Local 13 Defined 16 Contribution Pension Trust for S. Nev. v. Tile Concepts, Inc., No. 2:16-cv-01067-GMN-GWF, 17

(D. Nevada Dec. 7, 2016) (quoting Liberty Ins. Underwriters, Inc. v. Scudier, 18

(D. Nevada July 8, 2013)). 19 7. Defendants have failed to respond to the withdrawal liability assessment via any of 20 the avenues allowed by federal statute and regulation. Defendants have not requested a review of 21 the withdrawal liability assessment. They did not initiate mandatory arbitration to contest the 22 withdrawal liability assessment and Defendants have failed to plead in this action, which seeks to 23 reduce their indisputably owed withdrawal liability to judgment. Defendants have been wholly 24 unresponsive. Without entering default judgment, Plaintiffs will have no recourse against 25 Defendants. Therefore, the first Eitel factor favors the entry of default judgment. 26 27 28 1 8. The second and third Eitel factors address the merits and sufficiency of a 2 Plaintiffs’ claims alleged in their Complaint. Eitel,

. Plaintiffs’ withdrawal 3 liability claim has merit. “ERISA and the MPPAA impose withdrawal liability on an employer 4 that withdraws from a plan under certain circumstances.” Bd. of Trustees of Constr. Indus. & 5 Laborers Joint Pension Tr. for S. Nevada v. Recreation Dev. Co., LLC, No. 2:22-CV-00052ART- 6 DJA,

, at *3 (D. Nev. Feb. 24, 2023) (citing 29 U.S.C. §§ 1381–453; Bay Area 7 Laundry & Dry Cleaning Pension Tr. Fund v. Ferbar Corp. of California,

, 196 8 (1997)). One such circumstance is when an “employer ‘permanently ceases to have an obligation 9 to contribute under the plan’ or ‘permanently ceases all covered operations under the plan.’”

10 9. Once an employer withdraws from a pension plan, the pension plan must assess 11 the withdrawal liability that the employer incurred. There is a general framework that the 12 employer must follow to challenge such a withdrawal liability assessment. See id. at *4-5. 13 10. First, an employer must request review of the withdrawal liability assessment 14 within 90 days. See id. at *4 (citing

(b)(2)). If an employer does not request 15 review, all substantive arguments against the withdrawal liability assessment are waived. Sheet 16 Metal Workers of N. California Pension Tr. Fund v. Shillingsburg Ventures, No. 20-CV-01334- 17 JCS,

, at *7 (N.D. Cal. Dec. 18, 2020), report and recommendation adopted, 18 No. 20-CV-01334-JST,

(N.D. Cal. Jan. 7, 2021) (“Rebarber’s failure to 19 submit a timely request for review waived its right to initiate arbitration under the MPAA, and 20 thus waived its right to dispute the withdrawal liability assessed.”). 21 11. Second, if an employer requests review, and the Pension Trust does not rescind its 22 withdrawal liability assessment, then the employer must challenge the assessment through 23 mandatory arbitration. See

(a). The employer must initiate arbitration within the 24 earlier of 60 days from the date that the Trust Fund responds to the request for review, or 180 25 days from the date that the employer sends its request for review. Bd. of Trustees of Constr. 26 Indus. & Laborers Joint Pension Tr. for S. Nevada., LLC,

, at *4. If the 27 employer fails to timely initiate arbitration, then the employer “waives any objection to the 28 withdrawal liability assessed by the plan.”

(collecting cases). 1 12. On January 5, 2023, the Pension Trust sent a demand of withdrawal liability to 2 John Jory and outlined a quarterly payment schedule. 3 13. John Jory did not request review, nor did it initiate arbitration. As a result, the 4 entire withdrawal liability assessment is due and owing to Plaintiffs. Any argument to the 5 contrary has been waived. 6 14. Defendants are all members of a control group, so while John Jory was the only 7 entity that received a withdrawal liability notice, notice to John Jory constitutes notice to all 8 members of the control group. See, e.g., Teamsters Pension Tr. Fund-Bd. of Trustees of W. Conf. 9 v. Allyn Transp. Co.,

, 506 (9th Cir. 1987) (holding that notice of a withdrawal 10 liability assessment to one member of a control group is notice to all of the members of the 11 control group); Trustees of Chicago Truck Drivers, Helpers & Warehouse Workers Union 12 (Indep.) Pension Fund v. Cent. Transp., Inc.,

(7th Cir. 1989) (same); UNITE 13 HERE Ret. Fund v. Edward Vill. Grp., LLC, No. 21-CV-2141 (LJL),

, at *4 14 (S.D.N.Y. Nov. 16, 2021) (“A plan cannot collect withdrawal liability unless it provides this 15 notice, but it need only provide notice to one member of a control group, because constructive 16 notice is then imputed to the other members of a control group.”). 17 15. Thus, by nature of Defendants’ control group status, notice to John Jory constitutes 18 notice to all of the control group members, and failure of Defendants to request review and 19 initiate arbitration waived any arguments against the withdrawal liability assessment. 20 16. Accordingly, these Eitel factors also weigh in favor of granting summary 21 judgment. Plaintiffs’ claims are all meritorious and are adequately pleaded in their Complaint. 22 17. The fourth Eitel factor concerns the damages at stake in the case. The damages in 23 this case are reasonable and well-documented, based on the Pension Trust’s governing documents 24 and calculations performed above. In addition, the amount of damages in this case are largely 25 dictated by statute. Because Defendants did not pay the quarterly installments assessed by the 26 Pension Trust, and because Defendants did not cure that nonpayment within 60 days, the Pension 27 Trust “has the option to accelerate and collect the entire debt. . . .” Bay Area Laundry & Dry Cleaning Pension Tr. Fund,

. Under

(b), the failure to make the 28 1 required payments requires this Court to treat the action as one to recover unpaid benefit 2 contributions. In cases to recover unpaid contributions, courts must award unpaid contributions, 3 interest on the unpaid contributions, liquidated damages, reasonable attorney’s fees and the costs 4 of the action, and other legal or equitable relief that the court determines appropriate.

1132(g)(2). These damages are easily calculated by simple mathematical formulas and are not 6 open to much substantive dispute or debate. This factor also favors the entry of default judgment. 7 18. Regarding the fifth Eitel factor, there is no possibility of dispute concerning the 8 material facts. Because Defendants has had a default entered against them, the allegations in the 9 complaint are deemed admitted and taken as true. Geddes v. United Fin. Group, 559 F.2d at 560. 10 Nor could the facts be subject to dispute. It is indisputable that Defendants did not request review 11 or initiate arbitration, and therefore all substantive arguments are waived. Moreover, the damages 12 amount that arise out of Plaintiffs’ withdrawal liability demands are clear and definite. Therefore, 13 the fifth Eitel factor also favors the entry of default judgment. 14 19. The sixth Eitel factor demonstrates that excusable neglect is not a factor in this 15 case. All Defendants in this action were timely served. The Complaint was first filed on May 18, 16 2023 and the summons was issued as to John Jory that same day. (ECF No. 1); (ECF No. 4). John 17 Jory was served on June 5, 2023. The other Defendants were added as parties by way of the First 18 Amended Complaint, which was filed on July 26, 2023. (ECF No. 8). Summons were issued as to 19 the two other Defendants on July 27, 2023. (ECF No. 10). They were served on July 31, 2023. 20 (ECF No. 11). All Defendants were defaulted on October 4, 2023. (ECF No. 15). In that time, 21 none of the Defendants have responded to the Complaint. There is no evidence that Defendants’ 22 default was the result of excusable neglect. The sixth Eitel factor favors the entry of a default 23 judgment. 24 20. The seventh and final Eitel factor also weighs in favor of entering default 25 judgment. Despite the general policy that cases “should be decided on the merits whenever 26 reasonably possible,” Eitel,

, when defendants fail to answer the complaint, a 27 decision on the merits is “impractical, if not impossible.” Anzalone,

*7 (citing 28 PepsiCo v. Cal. Sec. Cans,

(C.D. Cal. Dec. 27, 2002)). “Thus, ‘the 1 || preference to decide a case on the merits does not preclude a court from granting default 2 || judgment.” PepsiCo,

(quoting Kloepping v. Fireman’s Fund, No. C 94- 3 |} 2684 TEH,

(N.D. Cal. Feb. 13, 1996)). Therefore, this factor also weighs in 4 || favor of the entry of a default judgment. 5 21. The damages are dictated by

(g)(2), as Defendants defaulted on 6 || their withdrawal liability payments and failed to cure the default. See

(c)(5); 29

(b). 8 22. Under 29 ULS.C. § 1132(g)(2) the Court shall award: (1) the unpaid contributions 9 (§ 1132(g)(2)(A)), (2) interest on the unpaid contributions at the rate provided by the □□□□□□□□□□□ 10 || plan documents (§ 1132(g)(2)(B) and the unnumbered last paragraph of § 1132(g)), (3) liquidated 11 || damages not in excess of 20% or the interest amount, whichever is higher (§ 1132(g)(2)(C)(1)), 12 || (4) reasonable attorney fees and costs of the action (§ 1132(g)(2)(D)), and (5) such other legal or : 13 |] equitable relief as the court determines (§ 1132(g)(2)(E)). 14 IT IS HEREBY ORDERED that judgment is entered against John Jory, John Jory 15 |} Corporation and Johnson & Jory Properties, LLC, jointly and severally, for withdrawal liability 16 |} ($969,278), liquidated damages ($193,855), interest (through April, 22, 2024) ($131,059), and 17 || attorney’s fees and costs ($7,034) for a total of $1,301,226. 18 DATED THIS 22" Day of April 2024. 19 20 MIRANDA M. DU 2] CHIEF UNITED STATES DISTRICT JUDGE 22 3 Respectfully submitted by: BROWNSTEIN HYATT FARBER SCHRECK, LLP 24 /s/ Christopher M. Humes 25 || Christopher M. Humes, Esq., Nevada Bar No. 12782 William D. Nobriga, Esq. Nevada Bar No. 1493 26 || 100 North City Parkway, Suite 1600 97 || Las Vegas, Nevada 89106-4614 28