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Hawaii Annuity Trust Fund v. Kauai Veterans Express Company, Ltd.

United States District Court, D. Hawaii

March 12, 2019

KAUAI VETERANS EXPRESS COMPANY, LTD., a Hawaii corporation, Defendant.


          J. Michael Seabright, Chief United States District Judge


         Plaintiffs (“Trustees”) are trustees of the Hawaii Annuity Trust Fund for Operating Engineers (“the Trust”), a multiemployer employee benefit plan within the meaning of the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1001, et seq., that was established pursuant to a trust agreement incorporated in a collective bargaining agreement (“CBA”) between Defendant Kauai Veterans Express Company, Ltd. (“Kauai Veterans”) and the Operating Engineers Local Union No. 3 of the International Union of Operating Engineers, AFL-CIO (“the Union”). See Compl. ¶¶ 1-5, ECF No. 1. Trustees seek summary judgment on their asserted right to enforce the CBA and an order requiring Kauai Veterans to (1) pay delinquent contributions, liquidated damages, and interest in the amounts determined by audit of Kauai Veterans' payroll records and (2) submit reports and monetary contributions for the period starting July 1, 2017 until the CBA expires or is legally terminated. See Mot. at 2, ECF No. 87; Reply at 2, ECF No. 95. Trustees also seek audit fees, attorneys' fees, and costs incurred in this action, as well as partial judgment pursuant to Federal Rule of Civil Procedure 54. Mot. at 2.

         For the reasons stated below, Trustees' Motion is GRANTED.


         On December 1, 2017, this court issued a comprehensive order that granted Trustees' motion for partial summary judgment and denied Kauai Veterans' motions for partial summary judgment (the “December 1 Order”). ECF No. 78; Haw. Annuity Tr. Fund for Operating Eng'rs v. Kauai Veterans Express Co., 2017 WL 5972691 (D. Haw. Dec. 1, 2017). More specifically, the December 1 Order (1) set forth a detailed factual background, (2) granted Trustees' request for further audit of Kauai Veterans' payroll records, (3) determined that pursuant to MacKillop v. Lowe's Market, Inc., 58 F.3d 1441 (9th Cir. 1995), Kauai Veterans' contribution obligations continue until adjudication of pending NLRB proceedings regarding the validity of the CBA, and thus (4) denied summary judgment to Kauai Veterans as to its contention that based on its withdrawal of Union recognition, its contribution obligations ended on July 1, 2017.[1] Kauai Veterans, 2017 WL 5972691, at *1-3, 6-8. The court presumes a detailed familiarity with the December 1 Order and therefore, sets forth only those facts necessary to address the instant Motion.

         Kauai Veterans and the Union entered into a CBA entitled “Kauai Trucking Agreement 2011-2014” (“the 2011 Agreement”). ECF No. 1-1. With exceptions not relevant here, the 2011 Agreement covers all Kauai Veterans employees “performing work under the classifications set forth in Exhibit ‘A' (Wage and Classification Schedule) attached hereto . . . .” Id. § 02.01.00, Ex. A. The classifications listed in Exhibit A include:

• 8011 Tractor Trailer (Hauling Equipment)
• 8461 Truck Driver (Slip-in or Pup)
• 8431 Truck Driver (Semi-Trailer, Rock Cans, Semi-Dump Or Roll-Offs)
• 7732 Tandem Dump Truck
• 8433 Freight Truck Driver
• 4645 Mechanic

Id., Ex. A. The 2011 Agreement requires that the “Employer . . . permit an audit of the Employer's payroll records . . . to ascertain whether all contributions due have been paid.” Id. § 14.03.02.

         The 2011 Agreement also provides it “shall not be modified except by written document signed by the parties, ” id. § 21.00.00, and that it “contains the entire agreement of the parties and neither party has made representations to the other which are not contained herein, ” id. § 22.01.00. The 2011 Agreement lasted through at least June 30, 2014, but it remained in effect thereafter unless Kauai Veterans provided the Union with written notice of termination consistent with “Section 8(d) of the National Labor Relations Act, as amended.” Id. § 01.01.00.

         In July or August 2014, Kauai Veterans and the Union entered into another agreement (“the 2014 Agreement”), which states: “It is understood that unless modified by this Memorandum of Agreement, the terms and conditions of the existing collective bargaining Agreement shall be unchanged.” ECF No. 1-2 at 1. The 2014 Agreement states that it is effective from July 1, 2014 through June 30, 2019, and will remain in effect thereafter unless Kauai Veterans provides the Union with written notice of termination consistent with “Section 8(d) of the National Labor Relations Act, as amended.” Id. § 01.01.00. The 2014 Agreement also provides, in part:

Exhibit “A”
Excluding projects on which Davis-Bacon and GCLA/BILA wage and fringe benefit rates must be paid, wage and fringe benefit rates as set forth in Exhibit “A” Wage and Classification Schedule, shall apply to all Off-Site work performed by the Employer.
Effective Dates
Wage increase:











*The Union shall allocate increases to wages and/or fringe benefits

Id. at 1; Def.'s Ex. C at 4, ECF No. 94-6. On July 2, 2014, the 2014 Agreement modifying the CBA was ratified by the Union membership.[2] See Meatoga Decl. ¶ 4, ECF No. 96-2; Pls.' Ex. A, ECF No. 96-4; Def.'s Ex. C at 1.

         On August 19, 2014, Sharon Costello, Director of Contracts for the Union, wrote a letter to Kauai Veterans advising, in pertinent part, that:

Pursuant to the current Agreement with the [Union] and [Kauai Veterans], . . . effective July 1, 2014, the existing wages shall be increased as indicated below:









8433-Truck Driver




All other terms and conditions of the existing Agreement shall remain unchanged. . . .

Def.'s Ex. D, ECF No. 94-7.

         During a meeting held sometime in 2014 or 2015, Union Representative Ana Tuiasosopo allegedly told Stanley Morinaka, Sr., President of Kauai Veterans, that “he may ‘leave out' the ‘freight boys' from the Trust Fund contributions.” Morinaka Decl. ¶ 4, ECF No. 94-2. On January 22, 2015, Pane Meatoga, the Union's District Representative, sent an email to Susan Taniguchi, Kauai Veterans' Office Manager, stating that after the 2014 Agreement was ratified, Kauai Veterans raised an issue regarding “wages for freight.” Def.'s Ex. C at 1. The email further stated that in response, Meatoga had “explained that freight from the pier or warehouses were in the jurisdiction of the Teamsters Union. As such we will not acknowledge that work in our contracts.” Id. at 2; Meatoga Decl. ¶ 3. Based on the August 19, 2014 letter, the January 22, 2015 email, and information discussed during the meeting with Tuiasosopo, Morinaka instructed his employees not to make contributions to the Trust for “Freight Truck Drivers.” Morinaka Decl. ¶ 5.

         On February 1, 2017, Kauai Veterans purportedly withdrew recognition from the Union, effective July 1, 2017, based on an alleged lack of majority support. Def.'s Concise Statement of Facts (“CSF”) ¶ 1, ECF No. 94; see also Def.'s Amended CSF ¶¶ 13-14, ECF No. 49 (filed in support of a prior motion for partial summary judgment). In response, the Union filed charges of unfair labor practices against Kauai Veterans with the National Labor Relations Board (“NLRB”).[3]

         The parties agree that Kauai Veterans' reports and contribution payments to the Trust for May and June 2017 were late and that Kauai Veterans did not submit reports and contributions from July 2017 to July 2018. Pls.' CSF ¶ 6, ECF No. 88; Def.'s CSF at 2, ECF No. 94. Kauai Veterans underwent audits for 2014 through June 2017 that were performed by Hawaii Benefit Administrators, Inc. (“HBAI”) Payroll Auditor Noelle Tagaban. See Tagaban Decl. ¶¶ 1, 7-10, ECF No. 88-3; Ilacqua Decl. ¶ 13, ECF No. 88-2. Based on these audits, Trustees determined that from January 2014 through June 2017, Kauai Veterans under-reported and failed to make contributions for certain “misclassified” employees who performed truck driver or mechanic duties. See Pls.' CSF ¶¶ 9-14; Tagaban Decl. ¶¶ 9-19; Second Tagaban Decl. ¶ 5, ECF No. 96-3; Pls.' Exs. F, H to K, ECF Nos. 88-13, 88-15 to 88-18. Trustees further determined that Kauai Veterans owes the following amounts: (1) liquidated damages and interest of $1, 003.50 and $5.88, respectively, for the late May and June 2017 contributions; (2) unpaid contributions of $65, 088.13 and liquidated damages of $13, 017.72 for those unpaid contributions; and (3) $22, 358.03 in interest as of September 30, 2018 (at $21.40 per diem), for a total amount due of $101, 473.67, plus additional interest, audit fees, attorneys' fees and costs. See Pls.' CSF ¶¶ 6-7, 9, 16; Ilacqua Decl. ¶¶ 11-13; Tagaban Decl. ¶¶ 12; Pls.' Exs. B to D, G to H, ECF Nos. 88-9 to 88-11, 88-14 to 88-15.

         According to Kauai Veterans, the employees allegedly misclassified were in fact freight truck drivers, mechanic helpers, or the son of Kauai Veterans' president, and therefore, not covered under the CBA. See Def.'s CSF at 3; id. ¶¶ 4-17, 27; Morinaka Decl. ¶ 6; Taniguchi Decl. ¶¶ 2-15, ECF No. 94-3.

         Trustees filed their motion for summary judgment on October 10, 2018. ECF No. 87. Kauai Veterans filed its opposition on December 10, 2018. ECF No. 93. And Trustees filed their reply on December 17, 2018. ECF No. 95. A hearing was held on January 7, 2019.


         Summary judgment is proper when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). “A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses that demonstrate the absence of a genuine issue of material fact.” Soremekun v. Thrifty Payless, Inc., 509 F.3d 978, 984 (9th Cir. 2007) (citing Celotex, 477 U.S. at 323); see also Jespersen v. Harrah's Operating Co., 392 F.3d 1076, 1079 (9th Cir. 2004). “When the moving party has carried its burden under Rule 56[(a)] its opponent must do more than simply show that there is some metaphysical doubt as to the material facts [and] come forward with specific facts showing that there is a genuine issue for trial.Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (citation and internal quotation marks omitted).

         “An issue is ‘genuine' only if there is a sufficient evidentiary basis on which a reasonable fact finder could find for the nonmoving party, and a dispute is ‘material' only if it could affect the outcome of the suit under the governing law.” In re Barboza, 545 F.3d 702, 707 (9th Cir. 2008) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). When considering the evidence on a motion for summary judgment, the court must draw all reasonable inferences in the light most favorable to the nonmoving party. Friedman v. Live Nation Merch., Inc., 833 F.3d 1180, 1184 (9th Cir. 2016).

         “When the party moving for summary judgment would bear the burden of proof at trial, ‘it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial.'” C.A.R. Transp. Brokerage Co., Inc. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (quoting Houghton v. South, 965 F.2d 1532, 1536 (9th Cir. 1992)). In this instance, then, Trustees “must establish beyond peradventure all of the essential elements of the claim . . . to warrant judgment in [their] favor.” Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986).

         IV. ...

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