New Bankruptcy Opinion: OPERATING ENGINEERS’HEALTH AND WELFARE TRUST FUND v. TUTTLE EXCAVATION, INC. – Dist. Court, ND California, 2015

OPERATING ENGINEERS’ HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, et al., Plaintiffs,

v.

TUTTLE EXCAVATION, INC., a California corporation; and MICHAEL B. PHILLIPS, an individual, Defendants.

Case No. C15-5346-KAW.

United States District Court, N.D. California.

December 14, 2015.

NOTICE OF ACKNOWLEDGMENT AND JUDGMENT PURSUANT TO STIPULATION

KANDIS A. WESTMORE, District Judge.

IT IS HEREBY STIPULATED and AGREED (the “Stipulation”) by and between the parties hereto that Judgment shall be entered in the within action in favor of Plaintiffs Operating Engineers’ Health and Welfare Trust Fund for Northern California, et al. (“Plaintiffs” or “Trust Funds”) and against Defendant Tuttle Excavation, Inc., a California corporation, and Defendant Michael B. Phillips, an individual (collectively “Defendants”), as follows:

1. Defendant Tuttle Excavation, Inc. is signatory to and bound by the terms of a Collective Bargaining Agreement (“Bargaining Agreement”) with the Plaintiff Union (“Union”). The Bargaining Agreement is still in full force and effect.

2. Defendant Michael B. Phillips confirms that he is authorized to enter into this Stipulation on behalf of Defendant Tuttle Excavation, Inc., and confirms that he is personally guaranteeing the amounts due herein.

3. Defendant Michael B. Phillips hereby acknowledges that he is authorized to receive service on behalf of Defendants and has received the following documents in this action: Complaint (Dkt. #1); Civil Cover Sheet (Dkt. #1-1); Notice of Assignment of Case to a United States Magistrate Judge for Trial; Consent to Proceed Before A United States Magistrate Judge (Blank Form); Declination to Proceed Before a Magistrate Judge and Request for Reassignment to a United States District Judge (Blank Form); ECF Registration Information; Filing Procedures (Oakland); Standing Order for All Judge of the Northern District of California, Contents of Joint Case Management Statement; Magistrate Judge Westmore’s Standing Order—General; ADR Dispute Resolution Procedures; Instructions for Completion of ADR Forms Regarding Selection of an ADR Process; Stipulation and Proposed Order Selecting ADR Process (Blank Form); Notice of Need for ADR Phone Conference (Blank Form); ADR Certification by Parties and Counsel (Blank Form); Certification of Interested Entities or Persons Pursuant to Civil Local Rule 3-16 (Dkt. #2); Proposed Summons (Dkt. #3); Notice of Case Assignment (Dkt. #4); Order Setting Initial Case Management Conference And Adr Deadlines (Dkt. #5); Summons (Dkt. #6); and Plaintiffs’ Consent To Proceed Before a United States Magistrate Judge (Dkt. #7).

4. Defendants specifically consent to the Court’s jurisdiction, as well as the use of a Magistrate Judge for all proceedings, including entry of judgment herein. Defendants further confirm that all successors in interest, assignees, and affiliated entities (including, but not limited to, parent or other controlling companies), and any companies with which Defendants join or merge, if any, shall also be bound by the terms of this Stipulation as Guarantors. This shall include any additional entities in which Defendants are an officer, owner or possess any controlling ownership interest. All such entities shall specifically consent to the Court’s jurisdiction, the use of a Magistrate Judge for all proceedings, and all other terms herein, in writing, at the time of any assignment, affiliation or purchase.

5. Defendants are currently indebted to the Trust Funds as follows:

Total 20% 10% Interest
Work Contributions Unpaid Liquidated (thru Subtotal
Month Reported Due Contributions Damages [1] 10/31/15) Due

10/14 $5,291.70 $229.66 $1,058.34 $238.52

11/14 $3,613.15 $3,122.93 $722.63 $260.86

6/15 $4,267.50 $4,267.50 $853.50 $91.98

7/15 $3,237.30 $3,237.30 $647.46 $47.68

Subtotals: $16,409.65 $10,857.39 $3,281.93 $639.04

Total due, as shown above, for 10/14-11/14 and 6/15-7/15 (through 10/31/15): $14,778.36

10% Liquidated Damages for Prior Late-Paid Contributions (4/14-5/14; 7/14-
9/14;1/15-5/15): $3,640.54
10% Per Annum Interest for Prior Late-Paid Contributions (4/14-5/14; 7/14-
9/14;1/15-5/15): $380.90

Attorneys’ Fees (through 11/22/15): $1,449.00
Complaint Filing Fee: $400.00

TOTAL JUDGMENT: $20,648.80

REQUIREMENTS UNDER THE TERMS OF THIS STIPULATION

6. Notice requirements pursuant to the terms of this Stipulation are as follows:

a) Notices to Defendants: Michael B. Phillips, Tuttle Excavation, Inc., PO Box 1465, Merced, CA 95341; email: [email protected]

b) Notices to Plaintiffs: Michele R. Stafford, Saltzman & Johnson Law Corp., 44 Montgomery Street, #2110, San Francisco, CA 94104; email: [email protected], copy to [email protected]

7. The requirements pursuant to the terms of this Stipulation are as follows:

a) Monthly Payments: Defendants shall conditionally pay the amount of $13,726.33, representing all of the above amounts, less liquidated damages in the amount of $6,922.47.

i) Payments in the amount of $500.00 per month shall begin on December 15, 2015, and continue on or before the 15th day of each month thereafter for a period of three (3) months.

ii) Beginning on March 15 2016, and continuing on or before the 15th day of each month thereafter for a period of nine (9) months, Defendants shall make payments in the amount of $1,475.00 per month. Plaintiffs may require that Defendants pay electronically by ACH/wire transfer, or by cashier’s check.

iii) Defendants shall have the right to increase the monthly payments at any time and there is no penalty for prepayment.

iv) Payments shall be applied first to interest, at the rate of 10% per annum in accordance with the Bargaining Agreement(s) and Trust Agreements. Interest shall begin to accrue on November 1, 2015.

b) Contributions: Beginning with contributions due for hours worked by Defendants’ employees during the month of November 2015, and for every month thereafter until this Judgment is satisfied, Defendants shall remain current in reporting and payment of contributions due to Plaintiffs under the terms of the Collective Bargaining Agreement(s).

c) Job Report: Beginning with the month of November 2015, and for every month thereafter, Defendants shall fully disclose all jobs on which they are working by providing Plaintiffs with fully completed job reports on the form attached hereto as Exhibit A. Upon request by Plaintiffs, Defendants shall also provide Plaintiffs with copies of Certified Payroll Reports.

d) Audit: Should the Trust Funds request an audit of Defendants’ payroll records pursuant to the requirements of the Bargaining Agreement(s) and/or Trust Agreements, Defendants must contact the auditor within seven days of receiving notice, and must schedule the audit as requested.

i) In the event that amounts are found due to Plaintiffs as a result of the audit, Plaintiffs shall send a copy of the audit report and written demand for payment to Defendants. In the event that the audit findings are not contested, payment in full shall be delivered to Michele R. Stafford at the address provided above.

ii) In the event that Defendants dispute the audit findings, Defendants must provide the dispute in writing, with all supporting documentation, within ten days of the date of the demand. Defendants shall be notified as to whether revisions will be made to the audit. If revisions are not made, payment will be immediately due. If revisions are made, payment in full of the revised amount shall be immediately due.

iii) If Defendants are unable to make payment in full, Defendants may submit a request to add the amounts found due to this Stipulation. If the Stipulation is so revised, Defendants shall execute the Amended Judgment or Amendment to Judgment within ten days of receipt. Failure to execute the revised agreement shall constitute a default of the terms herein.

iv) Failure by Defendants to submit either payment in full or a request to add the amounts due to this Judgment within ten days of receipt shall constitute a default of the obligations under this agreement. All amounts found due on audit shall immediately become part of this Judgment.

e) Fees: Defendants shall pay all additional attorneys’ fees and costs incurred through Satisfaction of Judgment, whether or not a default occurs.

8. In summary, Defendants shall deliver the following payments and documents to Plaintiffs, at the following locations, on or before the following delivery deadlines, until this Stipulation has been fully satisfied:

Required Submissions Delivery deadlines [2] Delivery locations

Stipulated payments in the 15th day of each month Michele R. Stafford
amount of $500.00 for three (3) (12/15/15-2/15/16) Saltzman & Johnson Law Corp.
months, beginning on 44 Montgomery Street, #2110
December 15, 2015 San Francisco, CA 94104
payable to Operating Engineers
Trust Funds

Stipulated payments in the 15th day of each month Michele R. Stafford
amount of $1,475.00 for nine (3/15/16-11/15/16) Saltzman & Johnson Law Corp.
(9) months, beginning on 44 Montgomery Street, #2110
March 15, 2016 San Francisco, CA 94104
payable to Operating Engineers
Trust Funds

Current contribution reports 15th day of each month Michele R. Stafford
and payments (12/15/15-11/15/16) Saltzman & Johnson Law Corp.
payable to Operating Engineers 44 Montgomery Street, #2110
Trust Funds San Francisco, CA 94104;

Plus copies to:
[email protected]
(subject: “Tuttle Excavation, Inc.”);
Operating Engineers Trust Funds
P.O. Box 3157
Hayward, CA 94540-3157

Required Submissions Delivery deadlines2 Delivery locations

Completed job reports (form 15th day of each month [email protected]
attached as Exhibit A to (12/15/15-11/15/16) (subject: “Tuttle Excavation, Inc.”)
Stipulation) or
Michele R. Stafford
and Certified Payroll (if Saltzman & Johnson Law Corp.
requested) 44 Montgomery Street, #2110
San Francisco, CA 94104

9. Failure to comply with any of the above terms, including submitting a payment that does not clear the bank, shall constitute a default of the obligations under this Stipulation.

DEFAULTS UNDER THE TERMS OF THIS STIPULATION

10. If default occurs, Plaintiffs shall make a written demand to Defendants to cure said default within seven (7) days of the date of the notice from Plaintiffs. In the event default is not cured within the required time frame, all amounts remaining due hereunder (after application of principal payments made, if any) shall be due and payable on demand by Plaintiffs. These amounts shall include any conditionally waived liquidated damages, additional (current) contributions/liquidated damages/interest, and additional attorney’s fees and costs incurred herein.

11. Any unpaid or late-paid contributions, together with 20% liquidated damages and 10% per annum interest, shall become part of this Judgment. Plaintiffs reserve all rights available to collect any contributions and related amounts not included herein. This includes, but is not limited to, any amounts due pursuant to employee timecards or paystubs, by audit, or other means. Should Defendants fail to submit a report for any month, contributions shall be estimated pursuant to Trust Fund policy. Defendants specifically waive the defense of the doctrine res judicata as to any such additional amounts determined as due.

12. A Writ of Execution may be obtained without further notice, in the amount of the unpaid balance plus any additional amounts due under the terms herein. Such Writ of Execution may be obtained solely upon declaration by a duly authorized representative of Plaintiffs setting forth the balance due as of the date of default.

MISCELLANEOUS PROVISIONS

13. The above requirements remain in full force and effect regardless of whether or not Defendants have ongoing work, whether Defendants’ account with the Trust Funds is active, or whether Defendants are signatory to a Collective Bargaining Agreement with the Union. If, for any reason, Defendants have no work to report during a given month, Defendants shall submit the job report form (Exhibit A attached hereto) indicating that there are no current jobs. If Defendants have no contributions to report, Defendants shall submit the applicable contribution report stating “no employees.”

14. Payments made by joint check shall be endorsed on behalf of Defendants prior to submission, and may be applied toward Defendants monthly stipulated payment, provided that the issuer of the joint check is not requesting a release in exchange for the payment. Joint checks for which a release is requested may not be applied toward Defendants monthly stipulated payment, but shall be deducted from the total balance owed under this Stipulation, provided the payment is for contributions included in this Stipulation.

15. Prior to the last payment pursuant to this Stipulation, Plaintiffs shall advise Defendants as to the final amount due, including additional interest, any current contributions and related amounts, and all additional attorneys’ fees and costs incurred by Plaintiffs, whether or not Defendants default herein. Any additional amounts due shall be paid in full with the final stipulated payment due on November 15, 2016.

16. The conditional waiver of liquidated damages shall be presented to the Collections Manager and Board of Trustees for consideration only after all amounts due under the terms of this Stipulation are paid in full, and Defendants’ account is otherwise current. If the waiver is granted, a Satisfaction of Judgment will be filed with the Court once all payments have cleared the bank. If the waiver is not granted, the liquidated damages will be immediately due.

17. Defendants waive any notice of Entry of Judgment or of any Request for a Writ of Execution, and expressly waive all rights to stay of execution and appeal.

18. Any failure on the part of Plaintiffs to take any action as provided herein in the event of any breach of the provisions of this Stipulation shall not be deemed a waiver of any subsequent breach.

19. The parties agree that any payments made pursuant to the terms of this Judgment shall be deemed to have been made in the ordinary course of business as provided under 11 U.S.C. Section 547(c)(2) and shall not be claimed by Defendants as a preference under 11 U.S.C. Section 547 or otherwise.

20. Should any provisions of this Stipulation be declared or determined by any court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining parts, terms or provisions shall not be affected thereby and said illegal, unenforceable or invalid part, term, or provisions shall be deemed not to be part of this Stipulation.

21. This Stipulation is limited to the agreement between the parties with respect to the unpaid and delinquent contributions and related sums enumerated herein, owed by Defendants to Plaintiffs. This Stipulation does not in any manner relate to withdrawal liability claims, if any. Defendants acknowledge that Plaintiffs expressly reserve their right to pursue withdrawal liability claims, if any, against Defendants and control group members, as provided by Plaintiffs’ Plan documents, Trust Agreements incorporated into their Bargaining Agreements, and applicable laws and regulations.

22. This Stipulation contains all of the terms agreed to by the parties and no other agreements have been made. Any changes to this Stipulation shall be effective only if made in writing and signed by all parties hereto.

23. This Stipulation may be executed in any number of counterparts and by facsimile, each of which shall be deemed an original and all of which shall constitute the same instrument.

24. Defendants represent and warrant that they have had the opportunity to be or have been represented by counsel of their own choosing in connection with entering this Stipulation under the terms and conditions set forth herein, that they have read this Stipulation with care and are fully aware of and represent that they enter into this Stipulation voluntarily and without duress.

25. The parties agree that the Court shall retain jurisdiction of this matter until this Judgment is satisfied.

TUTTLE EXCAVATION, INC., a California
Corporation
By: /S/
______________________________________________
Michael B. Phillips, President/RMO/CEO of
Defendant Tuttle Excavation, Inc. MICHAEL B. PHILLIPS
By: /S/
______________________________________________
Michael B. Phillips, individually, as Defendant SALTZMAN & JOHNSON LAW
CORPORATION

By: /S/
______________________________________________
Adrian L. Canzoneri, Attorneys for Operating
Engineers Health and Welfare Trust Fund, et al. OPERATING ENGINEERS LOCAL 3
TRUST FUNDS
By: /S/
______________________________________________
David E. Hayner, Collections Manager for
Plaintiffs, Operating Engineers Local 3 Trust
Funds

IT IS SO ORDERED.

IT IS FURTHER ORDERED that the calendar in this matter is vacated, and that the Court shall retain jurisdiction over this matter.

Exhibit A: JOB REPORT FORM Completed Forms Due by the 15th day of each month by email to [email protected] (subject line: El Camino Paving), or delivered to Saltzman & Johnson, 44 Montgomery St., Ste. 2110, San Francisco, CA 94104

Employer: EL CAMINO PAVING, INC.

Report for the month of _______________, 20__ Submitted by: ______________________

Project Name: Public or Private?
(Circle one)
Project Address:

General Contractor:

General Contractor
Address:

General Contractor Project Manager
Phone #: Name:

Project Manager Project Manager
Phone #: email address:
Contract #: Contract Date:

Total Contract Value:

Work Start Date: Work Completion
Date:
Project Bond #: Surety:

Project Name: Public or Private?
(Circle one)
Project Address:

General Contractor:

General Contractor
Address:

General Contractor Project Manager
Phone #: Name:

Project Manager Project Manager
Phone #: email address:
Contract #: Contract Date:

Total Contract Value:

Work Start Date: Work Completion
Date:

Project Bond #: Surety:

[1] Liquidated damages are calculated on the total reported due, per the terms of the Bargaining and Trust Agreements.

[2] If the Stipulation has not been fully satisfied by 11/15/16, all monthly submission requirements shall continue until all amounts have been paid and a Satisfaction of Judgment has been filed with the Court.

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