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Peltier v. Almar Management, Inc.

United States District Court, D. Hawaii

June 29, 2017

CRAIG U. PELTIER, Plaintiff,
v.
ALMAR MANAGEMENT, INC., Defendant.

          ORDER GRANTING DEFENDANT ALMAR MANAGEMENT, INC.'S RENEWED MOTION FOR PARTIAL JUDGMENT ON THE PLEADINGS WITH LEAVE TO AMEND

          DERRICK K. WATSON, UNITED STATES DISTRICT JUDGE

         INTRODUCTION

         Almar Management, Inc. (“Almar”) renews its Motion for Partial Judgment on the Pleadings with respect to former employee Craig Peltier's claim as a third-party beneficiary of a contract between Almar and a state agency. The Court finds that permitting Peltier's third-party beneficiary claim to proceed, as currently alleged, would be contrary to the Court's prior determination of, and circumvent, the lack of a private right of action to enforce Hawaii Revised Statutes (“HRS”) Section 103-55 for the failure to pay wages, because Peltier does not assert a contractual breach independent of the statutory violation. While Almar's Motion is therefore granted with respect to Count II, Peltier is permitted leave to amend to attempt to allege a third-party beneficiary claim within the limits discussed more fully below.

         BACKGROUND

         Because the parties and the Court are familiar with the factual and procedural background in this matter, the Court recounts only those matters relevant to the instant Motion. Additional background facts are set forth in the Court's January 17, 2017 Order, which dismissed Peltier's Count I claim for violation of HRS § 103-55 and denied without prejudice Almar's motion for judgment on the pleadings with respect to Count II.[1] See Peltier v. Almar Mgmt., Inc., - F.Supp.3d -, 2017 WL 187137, at *1 (D. Haw. Jan. 17, 2017), Dkt. No. 23.

         Peltier was employed by Almar from May 1, 2012 until his termination on March 3, 2014 at the Kewalo Basin Harbor, a commercial small boat harbor controlled by the State of Hawaii. Complaint ¶¶ 8, 12. The state agency responsible for the harbor, the Hawaii Community Development Authority (“HCDA”), contracted with Almar to provide operations and maintenance services.

         In Count II, Peltier seeks to enforce the terms of the contract between Almar and the HCDA as a third-party beneficiary. According to Peltier, the contract required Almar to enforce relevant Hawaii Administrative Rules (“HAR”) related to Kewalo Basin Harbor and to pay wages to its employees consistent with HRS § 103-55, but that it failed to do so. Complaint ¶¶ 9-10, 13. As detailed more fully below, that contract, effective March 1, 2009, provides in Appendix G (“Request for Proposal [RFP] for Providing Operations and Management Services for Kewalo Basin Harbor”), Section 2.21, that Almar shall comply with Section 103-55 and notify its employees of both the provisions of that section and also of the current wage rates for public employees performing similar work. Almar Ex. A (3/1/2009 Contract), Dkt. No. 31-3. In Section 2.22, the contract provides for price adjustments due to wage increases to public employees and a percentage increase for fringe benefits, if applicable. Id. Peltier maintains that these portions of the contract exceed Section 103-55's statutory obligations. Almar, on the other hand, contends that Peltier fails to assert any claims based on contractual provisions independent of Section 103-55 and renews its request for dismissal of Count II.

         STANDARD OF REVIEW

         The standard governing a Rule 12(c) motion for judgment on the pleadings is functionally identical to that governing a Rule 12(b)(6) motion. United States ex rel. Caffaso v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1054 n.4 (9th Cir. 2011). For a Rule 12(c) motion, the allegations of the nonmoving party are accepted as true, while the allegations of the moving party that have been denied are assumed to be false. See Hal Roach Studios v. Richard Feiner & Co., 896 F.2d 1542, 1550 (9th Cir. 1989). A court evaluating a Rule 12(c) motion must construe factual allegations in a complaint in the light most favorable to the nonmoving party. Fleming v. Pickard, 581 F.3d 922, 925 (9th Cir. 2009). Under Rule 12(c), “[j]udgment on the pleadings is properly granted when, accepting all factual allegations as true, there is no material fact in dispute, and the moving party is entitled to judgment as a matter of law.” Chavez v. United States, 683 F.3d 1102, 1108 (9th Cir. 2012) (quoting Fleming, 581 F.3d at 925); see also Jensen Family Farms, Inc. v. Monterey Bay Unified Air Pollution Control Dist., 644 F.3d 934, 937 n.1 (9th Cir. 2011).

         DISCUSSION

         Almar argues that Peltier's breach of contract claim should be dismissed because it is based on nothing more than its alleged failure to comply with HRS § 103-55. In opposition, Peltier counters that the contract's provisions (1) requiring Almar to give notice to employees of the requirements of Section 103-55 and (2) allowing Almar to seek a contract price adjustment based in part on the percentage of fringe benefits paid, are substantive obligations, in addition to those required by Section 103-55, that Almar has breached. Because Count II as currently pled, however, does not sufficiently allege breaches of these provisions or any other breach of the contract independent of the statutory obligations relating to prevailing wages under Section 103-55, the Court grants Almar's Motion. Peltier is granted leave to amend to attempt to allege a breach of contract claim, with instructions below.

         I. Count II Is Dismissed Without Prejudice

         As noted in the January 17, 2017 Order, guided by Astra USA, Inc. v. Santa Clara Cty., Cal., 563 U.S. 110, 118 (2011), where no private right of action exists to enforce a statutory violation, courts will not allow a third-party breach of contract claim where “[t]he statutory and contractual obligations, . . . are one and the same.” 2017 WL 187137, at *7 (quoting Astra, 563 U.S. at 118). To the extent Peltier's claim arising from the contract between Almar and HCDA simply mirrors Almar's obligation to pay wages in accordance with Section 103-55, it is “in essence a suit to enforce the statute itself, ” Astra, 563 U.S. at 118, and is inconsistent with the legislative scheme, which does not provide a private right of enforcement.

         The relevant statute provides in part-

Wages, hours, and working conditions of employees of contractors performing services. (a) Before any offeror enters into a contract to perform services in excess of $25, 000 for any governmental agency, the offeror shall certify that the services to be performed will be performed under the following conditions:
Wages. The services to be rendered shall be performed by employees paid at wages or salaries not less than the wages paid to public officers and employees for similar work.

HRS § 103-55.

         Here, Count II alleges that-

62. The Contract required Almar to pay its employees a wage no less than the wage paid to a public employee ...

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