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Hawaii Carpenters Trust Funds v. H.E. Johnson Company, Inc.

United States District Court, D. Hawaii

May 8, 2018

HAWAII CARPENTERS TRUST FUNDS, Health & Welfare Fund by its trustees Russell Young, Glen Kaneshige, Eric Hashizume, George Ehara, Ronald Taketa, Kyle Chock, Shayne Chung, Conrad C. Verdugo, Jr., Ralph Hoohuli, Travis Murakami and Alika Fujimoto; Apprenticeship & Training Fund by its trustees Claude Matsumoto, Thomas Toma, Conrad Murashige, Dale Sakamoto -Yoneda, Roy Morioka, Vince Nihipali, Sheri Mau, Kyle Chock, Ronald Taketa, Mitchell Tynanes, Sean Newcamp, Ralph Hoohuli, Travis Murakami and Barbara Kono; Vacation & Holiday Fund by its trustees James Watanabe, Paul Silen, Paul Sasaki, Jay Kadowaki, Roy Morioka, Kyle Chock, Sean Newcamp, Mitchell Tynanes, Ralph Hoohuli, Travis Murakami, Tom Broderick and Blake T. Inouye; Market Recovery Program Fund by its trustees Thalia Choy, Alan Shintani, Justin Izumi, Ken Kawamoto, Bill Wilson, Lance Wilhelm, Sean Newcamp, Kyle Chock, Mitchell Tynanes, Ralph Hoohuli, Travis Murakami and Dale Sakamoto-Yoneda; Financial Security Fund by its trustees Kenneth Spence, Conrad Murashige, Kenneth Sakurai, Alan Shintani, Kyle Chock, Ronald Taketa, Shayne Chung, Sean Newcamp, Ralph Hoohuli, Clyde Sugawa, Joyce Furukawa, Travis Murakami and Michael Inouye; Drywall Training Fund by its trustees Vince Nihipali, Sr., Lito Alcantra, Bert Beaman, Mike Goodnight, Kevin Respecki, Sean Newcamp, Garrett Takara, Edmund Aczon, David Samson and Ivan Lay; 401-K Fund by its trustees Kenneth Spence, Conrad Murashige, Kenneth Sakurai, Alan Shintani, Kyle Chock Ronald Taketa, Shayne Chung, Sean Newcamp, Ralph Hoohuli, Clyde Sugawa, Joyce Furukawa, Travis Murakami and Michael Inouye Plaintiffs,
v.
H.E. JOHNSON COMPANY, INC.; JOHN DOES 1-100;JANE DOES 1-100; DOE CORPORATIONS 1-100; DOE PARTNERSHIPS 1-100; DOE ENTITIES 1-100; DOE GOVERNMENTAL UNITS 1-100, Defendants.

          ORDER DENYING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND PLAINTIFFS' REQUEST FOR SANCTIONS

          Alan C. Kay Sr. United States District Judge.

         For the reasons discussed below, the Court DENIES Defendant H.E. Johnson Company, Inc.'s Motion for Summary Judgment and DENIES Plaintiff Hawaii Carpenters Trust Funds' request for sanctions.

         PROCEDURAL BACKGROUND

         On January 31, 2018, Plaintiffs Hawaii Carpenters Trust Funds and its trustees (“Plaintiffs” or the “Trust Funds”) filed a Complaint against H.E. Johnson Company, Inc. (“HEJ”) and numerous Doe Defendants. The Complaint alleges that HEJ failed to make certain employee benefit contributions to its covered employees and their eligible dependents, in violation of: (1) the Labor-Management Relations Act of 1947(“LMRA”), 29 U.S.C. § 141 et seq.; (2) the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq.; and (3) the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”), 29 U.S.C. §§ 1381-1461. Compl. ¶ 2.

         HEJ filed a pre-discovery Motion for Summary Judgment on February 20, 2018 (“MSJ”). ECF No. 11. On April 6, 2018, the Trust Funds filed a Memorandum in Opposition to Defendant H.E. Johnson Company's Motion for Summary Judgment (“Opp.”) ECF No. 19. HEJ filed its Reply on April 16, 2018 (“Reply Br.”). ECF No. 21. HEJ's Reply noted that the Trust Funds failed to file a separate document containing a single concise statement that admits or disputes the facts set forth in HEJ's concise statement of facts, as well as sets forth all material facts as to which the Trust Funds contend there exists a genuine issue necessary to be litigated. Id. at 14 (citing Local Rule 56.1(b)).

         On April 17, 2018, the Trust Funds filed a Responsive Concise Statement of Facts and the Supplemental Declaration of Jeffrey P. Miller. ECF Nos. 22, 23. By minute order entered April 19, 2018, the Court construed the Trust Funds' filings together as a motion for an extension of time to file a concise statement of facts compliant with Local Rule 56.1(b) and granted the motion. ECF No. 24. However, the Court permitted HEJ to submit a response to the Trust Funds' late-filed Responsive Concise Statement of Facts, see id., which HEJ filed on April 24, 2018, ECF No. 25.

         The Court held a hearing on HEJ's MSJ at on April 30, 2018. At the hearing, the Court gave the parties until May, 4, 2018, to submit supplemental briefing on the availability of HEJ's termination defense, which the parties had not addressed. See ECF No. 26. The parties submitted their supplemental briefs on May 4, 2018. See ECF Nos. 27 (“HEJ's Suppl. Mem.”), 28 (“TF Suppl. Mem.”). Later that same day, HEJ filed an erratum to its supplemental brief. ECF No. 29.

         FACTUAL BACKGROUND

         I. The Collective Bargaining Agreement

         On or about October 25, 2012, HEJ entered into a Collective Bargaining Agreement (“CBA”) with the United Brotherhood of Carpenters & Joiners of America, Local 745, AFL-CIO (the “Union”). Compl. Exhibit (“Ex.”) A, ECF No. 1-1; see also Compl. Ex. B (“Certification of Receipt and Acceptance” or “CRA”), ECF No. 1-2. The CBA was effective September 1, 2007 to and including August 31, 2012, CBA at 11, [1] but before the time of HEJ's execution, it had been amended to remain effective to and including August 31, 2014, CRA at 75.

         Among other topics, the CBA obligated HEJ to make specified employee benefit contributions to the Trust Funds, which the Trust Funds would in turn use toward paying certain employee benefits to HEJ's covered employees and their eligible dependents. CBA at 26-28 and ¶ 6. To that end, the CBA established the procedural and substantive requirements governing HEJ's contribution payments and provided for penalties in the event HEJ became delinquent on these contribution payments. Id. at 28-29.

         Significant here, the CBA also contained provisions governing its duration and termination. CBA Section 1, entitled “Duration, ” states:

1.1 This Agreement shall be binding upon the respective parties effective September 1, 2007, to and including August 31, 2012, and shall be considered as renewed from year to year thereafter unless either party hereto shall give written notice to the other of its desire to modify, amend, or terminate the same.

Id. at 17 (emphasis added); HEJ's Memorandum in Support of Motion (“Def.'s Mem.”) at 2-3. With respect to written notice of modification, amendment, or termination, a different provision within CBA Section 1 further provides:

1.2 Any such notice must be given by the parties desiring to modify, amend, or terminate the Agreement, at least one hundred eighty (180) calendar days prior to the expiration date, but not more than two hundred ten (210) calendar days prior to the expiration date. In the event such notice is given, and only in such event, negotiations for a new agreement shall commence as soon as possible. If such notice is not given, the Agreement will be deemed to automatically renew for the succeeding year.

Id. at 17 (emphasis added); Def.'s Mem. at 3.

         II. HEJ's Purported March 3, 2016 Termination of the CBA

         On March 3, 2016, HEJ contends that it hand delivered a notice of termination to the Union. HEJ's Concise Statement of Facts (“Def.'s CSF”) ¶ 1, ECF No. 12; Def.'s CSF, Decl. of Brian Hall (“Hall Decl.”) ¶¶ 1-2, ECF No. 12-1. The notice of termination stated that HEJ desired to terminate the CBA and the CRA pursuant to CBA Section 1.1. Def.'s CSF Ex. 1, ECF No. 12-3. By purportedly hand delivering the notice of termination to the Union on March 3, 2016, HEJ states that it provided 181 days' notice that it desired to terminate the Agreement pursuant to CBA Section 1.1-i.e., it desired to terminate the CBA before renewal, effective August 31, 2016. Def.'s Mem. at 3; Reply Br. at 4-5.

         The Trust Funds dispute that the Union ever received HEJ's March 3, 2016 notice of termination. Opp. at 8-11; Trust Funds' Responsive Concise Statement of Facts (“Pls.' CSF”) ¶ 1, ECF No. 22; Declaration of Joy Nishino (“Nishino Decl.”) ¶ 3. They support their contention with several declarations from Union- or Trust Fund-affiliated individuals. First, the Trust Funds submit the Declaration of Joy Nishino, one of the custodians of record for the Hawaii Regional Council of Carpenters (“HRCC”) of the United Brotherhood of Carpenters and Joiners of America. Mrs. Nishino claims that she could not find HEJ's notice of termination in HRCC's records after conducting a thorough search. Nishino Decl. ¶¶ 2-3. Mrs. Nishino also states that HRCC's offices followed a standard protocol upon receipt of all hand-delivered notices of termination-including date stamping the notice and forwarding it for legal review-but has no record of this protocol being followed in relation to HEJ's notice of termination. Id. ¶¶ 5-6. The notice of termination HEJ submits is not date-stamped and contains no indication that any HRCC official received it. See Def.'s CSF, Hall Decl. Ex. 1.

         Second, the Trust Funds submit the Declaration of Ronald I. Taketa (“Taketa Decl.”), who was HRCC's Executive Secretary and Treasurer on March 3, 2016. Taketa Decl. ¶ 1, ECF No. 19-11. Mr. Taketa, whose responsibilities included supervising the relationships between HRCC and its signatory employers like HEJ, claims that he had no knowledge of HEJ's March 3, 2016 notice of termination or intention to terminate the CBA until after the Trust Funds initiated this action. Id. ¶¶ 2-3. Further, Mr. Taketa declares that had he received HEJ's notice of termination, he would have conducted an inquiry with legal counsel and sent any acceptance of the termination in writing. Id. ¶ 4.

         Finally, the Trust Funds submit the Declaration of Sarah M. Kobayashi (“Kobayashi Decl.”), who was at all relevant times a Contribution Accounting Supervisor with Hawaii Benefit Administrators, Incorporated (“HBAI”). Kobayashi Decl. ¶ 1, ECF No 19-4. HBAI is a third-party benefit administrator for the Trust Funds responsible for the collection and accounting of employer contributions of fringe benefits under the CBA. Id. ¶ 2. Ms. Kobayashi was one of the custodians of records for HBAI tasked with documenting HEJ's contracts and correspondence with HBAI. Id. Ms. Kobayashi outlines the standard procedure she and her staff would have followed if HRCC would have received and forwarded HEJ's March 3, 2016 notice of termination, but declares that: (1) she could not locate HEJ's notice of termination in HBAI's records despite an exhaustive search; and (2) HBAI has no record that its normal procedure was completed in relation to HEJ's March 3, 2016 notice of termination. Id. ¶¶ 4-5.

         III. This Action is Commenced

         HEJ contends that it made no further contribution payments under the CBA after August 2016, and the Trust Funds did not audit HEJ after August 2016. Def.'s CSF ¶ 2; id., Hall Decl. ¶ 4. The Trust Funds, in contrast, assert that they consistently requested audit materials from HEJ after the period HEJ now claims it terminated the CBA. Kobayashi Decl. ¶ 6. They claim that on February 6, 2017, they mailed HEJ a partial pay stub audit for the period from June 2016 to December 2016. Id. and Ex. 1; Pls.' CSF ΒΆ 3. The Trust Funds contend that HEJ thereafter provided necessary audit materials on August 3, ...


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