Balboa et al v. Hawaii Care and Cleaning, Inc. et al

Filing 38

ORDER GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT re: 17 . Signed by JUDGE ALAN C KAY on 4/28/2015. (afc) [Written Order follows hearing held 4/23/2015 on Defendant's Motion for Summary Judgment. Minu tes of hearing: docket entry no. 37 ] CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII

ROOSEBELT BALBOA; BERNALDO
BALDONADO; ROLANDO BALDONALDO;
FLORDELITO BASOL; FRANCISCO
BOCTOT, JR.; GEMMA BOCTOT; DANNY
BUMANGLAG; ANSELMA CABICO;
ROGELIO CANTORNA; AMELIA COMA;
LUZVIMINDA CUANANG; EDWIN DE LOS
SANTOS; REYMUNDA JARAMILLO; FU
LEE; MINA MACABEO; MAURO
MANZANO; JASMINE MARBOU; JONAS
MENOR; JUVE MIJARES; NOEL
MIJARES; BALTAZAR NAVOR; RONALDO
OJEDA; RONALDO ONGCOY; ARNEL
PAJAS; GLORIA PALMA; ARTEMIA
PATAGUE; ANDRES RAMENTO;
CHRISTINA RAMIREZ; ASIS
RAQUINIO; JAYSON RAQUINO; MOJEEB
RINTON; FEDERICO SAHAGUN;
MELANIE (RIVERA) SALVADOR; RUEL
SALVADOR; GENEROSA TULIAO,
Plaintiffs,
v.
HAWAII CARE AND CLEANING, INC.,
Defendant.

) Civ. No. 14-00009 ACK-RLP
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ORDER GRANTING DEFENDANT’S MOTION FOR SUMMARY JUDGMENT
For the following reasons, the Court hereby
GRANTS Defendant Hawaii Care and Cleaning, Inc.’s Motion for
Summary Judgment.

FACTUAL BACKGROUND1/
Defendant Hawaii Care and Cleaning, Inc. (“HCC”)
contracted with Hilton Hotels Corporation, dba Hilton Hawaiian
Village (“Hilton”) to perform certain cleaning services at Hilton
beginning in June of 2004. (Def.’s CSF ¶ 1; Pl.’s CSF ¶ 1.)
Plaintiffs were employees of HCC during the relevant time period
and were apparently assigned by HCC to work at Hilton, performing
the services set forth in the services agreements between Hilton
and HCC.
Specifically, HCC entered into three written agreements
with Hilton beginning in June 2004 (collectively referred to as
the “Services Agreements”). The agreements are: (1) a Public Area
& Window Cleaning Contract effective June 2004 to May 2007,
(Def.’s CSF, Ex. A); (2) a Kitchen Night Cleaning Services
Agreement effective June 2004 to May 2007, (Id., Ex. B); and (3)
a Services Agreement effective August 2009 to March 31, 2011,
(Id., Ex. D.) After the 2009 Services Agreement expired, HCC and
Hilton did not sign another written contract until July of 2013;
however, during the time between written contracts, the parties
operated on a month-to-month basis under the terms of the 2009
Agreement until the new contract was signed. (Pl.’s CSF, Ex. 15

1/

The facts as recited in this Order are for the purpose of
disposing of the current motion and are not to be construed as
findings of fact that the parties may rely on in future
proceedings.
2

(Twyman Depo.) at 67.)
The Public Area & Window Cleaning Contract and the
Kitchen Night Cleaning Services Agreement both contain clauses
stating: “[t]his Agreement is by and between Hilton and
Contractor and there are no other third party beneficiaries to
this Agreement.” (Def.’s CSF, Ex. A at § 13; Id., Ex. B at § 13.)
Similarly, the August 2009 Services Agreement has a clause
stating: “[t]his Agreement is by and between Hotel and Contractor
and, other than as specifically set forth in Section F, there are
no other third party beneficiaries to this Agreement.” (Id., Ex.
D at § 14.) Section F, in turn, states that Hilton affiliates are
third party beneficiaries of the agreement. (Id. §§ F, 15.)
Hilton has a collective bargaining agreement (“CBA”)
with Unite Here Local 5 (“Local 5”), pursuant to which Hilton
must require all of its contractors, including HCC, to pay
employees who perform bargaining unit work at least the rates
specified in the Hilton CBA. (Compl. ¶¶ 42-43; Mot. at 1.)
Plaintiffs admit that they were not bargaining unit members of
Local 5 at any relevant time, and were not covered by the CBA
between Hilton and Local 5. (Pl.’s CSF ¶ 7.)
At some point in 2006, Local 5 initiated a grievance
with Hilton under the CBA, presumably involving wages paid to
subcontractors, including HCC. To resolve the grievance, HCC was
asked to execute an addendum specifically providing that HCC

3

would adhere to the rates specified in the Hilton CBA for
employees performing bargaining unit work, and further providing
that HCC would indemnify Hilton should future grievances arise
over HCC’s failure to adhere to the addendum. (Def.’s CSF, Allen
Decl. ¶ 7.)
Thus, on December 4, 2006, Hilton and HCC executed an
Addendum Agreement (the “2006 Addendum”) to the Public Area &
Window Cleaning Contract to provide that HCC comply with the
subcontracting clause of CBA between Hilton and Local 5. The 2006
Addendum states, inter alia, that “[i]t is the Contractor’s
responsibility to follow all requirements of Sections 6.3B, 6.3D
and 6.3E (“Subcontracting Clause”) of the collective bargaining
agreement (“CBA”) (portions of which are currently in a
memorandum of agreement) between Local 5 of Unite/HERE! and Owner
as to all work to be performed under the Services Agreement.”
(Def.’s CSF, Ex. C at ¶ 2.) It also states that the standard wage
schedule (taken from the CBA) will be applicable to HCC until the
expiration of the Agreement on May 31, 2007. (Id. ¶ 1.) Pursuant
to the 2006 Addendum, HCC paid its employees according to the
minimum union rate schedule on two occasions: in November of 2006
and in May of 2007. (Pl.’s CSF, Ex. 1 (Allen Depo.) at 24.) HCC
was compensated for the November 2006 wage increase through a
price increase from Hilton, but William Allen, the President of
HCC, testified that he was not sure if HCC was so compensated for

4

the May 2007 wage increase. (Id. at 30.) Mr. Allen testified
that, thereafter, Hilton did not further compensate HCC for any
union wage rate increases, and, thus, HCC did not give any
further wage increases to its employees based on the union wage
rates between 2007 and 2013. (Id. at 26-28, 32, 51.) The 2006
Addendum contained no language altering or addressing the third
party beneficiary language in the original contract.
Plaintiffs assert in the instant suit that HCC failed
to pay them the bargaining unit wage rates specified in the
Hilton CBA, as they allege HCC was required to do by the 2006
Addendum and 2009 Services Agreement. (See generally Compl.)
Specifically, Plaintiffs allege that HCC failed to pay the
required wage rates during the time period from December 7, 2007
to June 30, 2013.
PROCEDURAL BACKGROUND
On December 6, 2013, Plaintiffs filed a Complaint in
the Circuit Court of the First Circuit, State of Hawaii, alleging
three causes of action against Defendant Hawaii Care and Cleaning
and Doe Defendants 1-50. (Doc. No. 1, Ex. A.) On January 8, 2014,
HCC timely removed the action to this Court pursuant to 28 U.S.C.
§§ 1441, 1446, 1331, 1367, and 29 U.S.C. § 185(a). (Doc. No. 1.)
The Complaint asserts three causes of action: (1) a
third party beneficiary breach of contract claim for breach of
the Services Agreements between the Hilton and HCC; (2) a

5

statutory claim for withheld wages that Plaintiffs claim were
owing under the Services Agreements; and (3) a claim for unjust
enrichment. (Id., Ex. A.) Plaintiffs seek special, general,
double, trebel, punitive, and exemplary damages, as well as back
pay, front pay, prejudgment interest, and lost employment
benefits. (Id. at 10.)
On August 14, 2014, HCC filed the instant Motion for
Summary Judgment, along with a concise statement of facts and
supporting exhibits. (Doc. Nos. 17 & 18.) On April 2, 2015,
Plaintiffs filed their memorandum in opposition to the motion,
supported by a concise statement of facts and a number of
exhibits. (Doc. Nos. 34 & 35.) HCC filed its reply on April 9,
2015. (Doc. No. 36.) A hearing on the motion was held on April
23, 2015.2/
STANDARD
Summary judgment is appropriate when a “movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.” Fed. R. Civ.
P. 56(a). The central issue is “whether the evidence presents a
sufficient disagreement to require submission to a jury or
whether it is so one-sided that one party must prevail as a
matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

2/

The hearing on the instant motion was continued three
times at the request of Plaintiffs because of a discovery dispute
between the parties. (Doc. Nos. 21, 23, 26.)
6

251–52 (1986).
The moving party bears the initial burden of
demonstrating the absence of a genuine issue of material fact.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). If that
burden has been met, the nonmoving party must then come forward
and establish the specific material facts in dispute to survive
summary judgment. Matsushita Elec. Indus. Co. v. Zenith Radio
Corp., 475 U.S. 574, 588 (1986). The Court must draw all
reasonable inferences in favor of the nonmoving party. Id. at
587.
In supporting a factual position, a party must “cit[e]
to particular parts of materials in the record . . . or show[]
that the materials cited do not establish the absence or presence
of a genuine dispute, or that an adverse party cannot produce
admissible evidence to support the fact.” Fed. R. Civ. P.
56(c)(1). The nonmoving party “must do more than simply show that
there is some metaphysical doubt as to the material facts.”
Matsushita, 475 U.S. at 585. “[T]he requirement is that there be
no genuine issue of material fact . . . . Only disputes over
facts that might affect the outcome of the suit under the
governing law will properly preclude the entry of summary
judgment.” Anderson, 477 U.S. at 247–48 (emphasis in original).
Also, “[t]he mere existence of a scintilla of evidence in support
of the non-moving party’s position is not sufficient[]” to defeat

7

summary judgment. Triton Energy Corp. v. Square D Co., 68 F.3d
1216, 1221 (9th Cir. 1995). Likewise, the nonmoving party “cannot
defeat summary judgment with allegations in the complaint, or
with unsupported conjecture or conclusory statements.” Hernandez
v. Spacelabs Med. Inc., 343 F.3d 1107, 1112 (9th Cir. 2003).
DISCUSSION
In the instant motion, HCC seeks summary judgment as to
all of the claims in the Complaint. The Court will address the
viability of each claim in turn.
I.

Breach of Contract
As their first cause of action, Plaintiffs bring a

breach of contract claim, asserting that they are third party
beneficiaries of the Services Agreements between HCC and Hilton.
(Compl. ¶¶ 46-50.) Specifically, Plaintiffs assert that they were
intended third party beneficiaries of the Services Agreements,
that HCC breached those agreements by failing to pay the
bargaining unit wage rates to Plaintiffs, and that HCC is
therefore liable to Plaintiffs for the breach. (Id.) HCC asserts
in the instant motion that Plaintiffs cannot bring an action to
enforce the Services Agreements because Plaintiffs were not
intended third party beneficiaries of the agreements. The Court
agrees.
Generally, “third parties do not have enforceable
contract rights. The exception to the general rule involves
8

intended third-party beneficiaries.” Pancakes of Hawaii, Inc. v.
Pomare Props. Corp., 944 P.2d 97, 106 (Haw. App. 1997); see also
Ass’n of Apartment Owners of Newtown Meadows ex rel. its Bd. of
Directors v. Venture 15, Inc., 167 P.3d 225, 262 (Haw. 2007), as
corrected on denial of reconsideration (Sept. 20, 2007); Blair v.
Ing, 21 P.3d 452, 473 (Haw. 2001).
A third party beneficiary is “one for whose benefit a
promise is made in a contract but who is not a party to the
contract.” Pancakes of Hawaii, 944 P.2d at 106 (quoting Black’s
Law Dictionary 1480 (6th ed. 1990)). “The rights of the third
party beneficiary must be limited to the terms of the promise,”
and this promise “may be express or it may be implied from the
circumstances.” Remington Typewriter Co. v. Kellogg, 19 Haw. 636,
640 (1909) (internal quotation marks and citation omitted). “[A]
prime requisite to the status of ‘third party beneficiary’ under
a contract is that the parties to the contract must have intended
to benefit the third party, who must be something more than a
mere incidental beneficiary.” Hunt v. First Ins. Co. of Hawaii,
922 P.2d 976, 980 (Haw. App.), cert. dismissed, 925 P.2d 374
(Haw. 1996)).
Here, as HHC points out, the Services Agreements all
contain express provisions stating that the contracting parties
do not intend to create any third party beneficiaries to the
agreements. Specifically, the Public Area & Window Cleaning

9

Contract and the Kitchen Night Cleaning Services Agreement both
contain clauses stating: “[t]his Agreement is by and between
Hilton and Contractor and there are no other third party
beneficiaries to this Agreement.” (Def.’s CSF, Ex. A at § 13;
Id., Ex. B at § 13.) Similarly, the August 2009 Services
Agreement states: “[t]his Agreement is by and between Hotel and
Contractor and, other than as specifically set forth in Section
F, there are no other third party beneficiaries to this
Agreement.” (Id., Ex. D at § 14.) Section F, in turn, states that
Hilton affiliates are third party beneficiaries of the agreement.
(Id. §§ F, 15.) Indeed, the 2009 Services Agreement demonstrates
that, when Hilton and HCC did intend to create third party
beneficiaries, they did so unambiguously by stating that Hilton’s
affiliated entitles “are intended third party beneficiaries.”
(Id.)
The Court concludes that the express language in the
Services Agreements stating that the contracting parties did not
intend to make Plaintiffs third party beneficiaries is
controlling here. See Laeroc Waikiki Parkside, LLC v. K.S.K.
(Oahu) Ltd. Partnership, 166 P.3d 961, 975 n.15 (Haw. 2007)
(noting that, even if the plaintiffs were claiming to be third
party beneficiaries (which they conceded they were not), any such
argument would fail because the express terms of the contract at
issue stated that the contracting parties did not intent to

10

create a third party beneficiary); GECCMC 2005-C1 Plummer St.
Office Ltd. Partnership v. JPMorgan Chase Bank, Nat. Ass’n, 671
F.3d 1027, 1035 (9th Cir. 2012) (“[The] ‘no third-party
beneficiary’ clause stacks the deck against [plaintiff’s] claims
at the outset.”); McKesson HBOC, Inc. v. N.Y. State Common
Retirement Fund, Inc., 339 F.3d 1087, 1091-92 (9th Cir. 2003)
(holding that contract language stating that the agreement was
“not intended to confer upon any person other than the parties
any rights and remedies” defeated any claim of a third party
beneficiary); Lucent Tech., Inc. v. Gateway, Inc., Civ. No.
02-2060-B(CAB), 2007 WL 2900484, at *12 (S.D. Cal. Oct. 1, 2007)
(“The best evidence of whether contracting parties intended their
contract to benefit third parties remains the language of the
contract itself[,]” (internal quotes omitted)).
Plaintiffs have not shown that, notwithstanding the
express provisions stating otherwise, the Service Agreements
represented an agreement between HCC and Hilton “to bestow a
benefit upon [Plaintiffs.]” See Blair, 21 P.3d at 460. Indeed,
Plaintiffs have presented no evidence to suggest that they were
anything more than “incidental” beneficiaries of an agreement
that was entered into for the purpose of mutually benefitting HCC
and Hilton. See GECCMC 2005-C1, 671 F.3d at 1033 (“The fact that
a third party may incidentally benefit under a contract does not
confer on him the right to sue; instead, the parties must have

11

intended to benefit the third party.”). Thus, based on the clear
language of the contracts, the Court concludes that there is no
factual dispute that Plaintiffs were not third party
beneficiaries to the Services Agreements.3/
Plaintiffs nevertheless argue that, by signing the 2006
Addendum,4/ HCC and Hilton evinced an intention to benefit
Plaintiffs by agreeing to the bargaining unit wage rate schedule.
(Opp’n at 5-6.) Plaintiffs point out that the indemnification
provision in the 2006 Addendum states that HCC will indemnify
Hilton for any claims arising out of any failure by HCC to comply
with the terms of the Addendum. (Def.’s CSF, Ex. C at § 4.)
Plaintiffs assert that this indicates that the contracting
parties anticipated that third parties would be able to bring
claims seeking to enforce the bargaining unit wage rate schedule.

3/

The Court need not address HCC’s arguments that any
claims under the Hilton CBA are preempted by Section 301 of the
Labor Management Relations Act, because Plaintiffs state that
they only seek to bring their breach of contract claim as to the
Services Agreement, and they do not claim to be third party
beneficiaries of the Hilton CBA. (Opp’n at 8.)
4/

The parties dispute whether the 2006 Addendum applied to
all of the Services Agreements, or only to the 2004 Public Area &
Window Cleaning Contract. By its terms it appears the Addendum
only applies to the latter.(See Def.’s CSF, Ex. C at 1.)
Moreover, the 2006 Addendum states expressly that it expired on
May 31, 2007. (Id. ¶ 1.) Thus, there is no way it could have been
incorporated into the 2009 Services Agreement. Regardless, it is
immaterial to the Court’s analysis of the first cause of action
whether the bargaining unit wage rates were in place only until
May of 2007 or continued thereafter, because the Court finds that
Plaintiffs are not third party beneficiaries to any of the
Services Agreements.
12

(Opp’n at 5.) The Court disagrees for several reasons.
First, the 2006 Addendum contains no language altering
or addressing in any way the express provision in the Public Area
& Window Cleaning Contract stating that the agreement creates no
third party beneficiaries. (See Def.’s CSF, Ex. C.) Thus, as
discussed above, the express terms of the Services Agreements
foreclose any argument that Plaintiffs are third party
beneficiaries.
Further, the indemnification provision in the 2006
Addendum does not indicate an intention to nevertheless create a
third party beneficiary. The indemnification provision obligates
HCC to pay for any penalties or other claims that Hilton might
incur for a violation of Hilton’s CBA until the termination of
the services agreement on May 31, 2007. (Id. ¶ 4.) The provision
is clearly intended to protect Hilton from claims brought by the
Local 5 union, not those brought by non-union workers such as
Plaintiffs. The purpose of the subcontracting clause of the
Hilton CBA is to discourage Hilton from hiring non-union workers
by increasing the cost of doing so. (See Def.’s CSF, Ex. E ¶
6.3A.) The CBA therefore obligates Hilton to require its
subcontractors to pay wages at a certain level when it
subcontracts bargaining unit work to non-union workers. (Id.) A
breach of the wage provisions of the CBA would give rise to a
claim by Local 5 against Hilton. Hilton’s penalty for violation

13

of the wage rates in the CBA is payment of a monetary penalty to
the union (specifically, to the A.F.L. Hotel and Restaurant
Workers Trust Fund). (Id., Ex. E ¶ 6.3E.) Thus, Hilton entered
into the 2006 Addendum with HCC to protect itself from any such
claims. (See Pl.’s CSF, Ex. 1 (Allen Depo.) at 32 (discussing
HCC’s agreement to the wage rate schedule and stating that it
“was important to [Hilton] and their best interest in not getting
in trouble with the union.”); Def.’s CSF, Allen Decl. ¶ 7.)
Indeed, the January 2007 Memorandum Agreement between
Hilton and Local 5 indicates that Local 5 withdrew a previous
grievance against Hilton (for contracting with HCC in violation
of the subcontracting clause of the CBA) in exchange for Hilton
applying the subcontracting clause to its Public Area & Window
Cleaning Contract with HCC. (Def.’s CSF, Ex. E (CBA) ¶ 6.3A; Ex.
F (Memorandum Agreement) at 6.) The indemnification provision in
the 2006 Addendum is therefore clearly intended to protect Hilton
from any further claims by the union arising out of HCC’s failure
to adhere to the CBA wage rate provisions. (Id., Ex. C.)
The Court therefore concludes that the indemnification
provision in the 2006 Addendum does not, as Plaintiffs argue,
indicate an intent on the part of Hilton and HCC to acknowledge
that non-union third parties may enforce the 2006 Addendum.
Rather, it simply protects Hilton from liability should HCC
breach the wage rate provisions in the CBA. Thus, Plaintiffs are

14

in no way intended beneficiaries of the 2006 Addendum. While the
contract may have granted them the “incidental” benefit of higher
wages, it did not express an intent to specifically confer third
party beneficiary rights upon them.5/

5/

Similarly, the bid proposals and other correspondence
between Hilton and HCC in the period between the expiration of
the 2009 Services Agreement (in 2011) and the signing of a new
agreement (in 2013) likewise do not evince an intent to establish
Plaintiffs as third party beneficiaries. While the numerous
exhibits attached to Plaintiffs’ Concise Statement of Facts
contain discussions between HCC and Hilton regarding increases in
HCC’s pricing schedules to reflect increases in the union wage
rates, Hilton’s Pete Twyman testified in his deposition that,
after the 2009 Services Agreement expired, the parties continued
to operate under its terms on a month-to-month basis until a new
contract was signed in 2013. (Pl.’s CSF, Ex. 15 at 67.) Thus, the
express provision in the 2009 Services Agreement stating that no
third party beneficiaries were created by the agreement (other
than Hilton affiliates) remained in effect during the period
between 2011 and 2013. (See Pl.’s CSF, Ex. 15 at 67.) The Court
notes that Exhibit C to the 2009 Services Agreement contains a
pricing schedule and the following statement: “Price schedule
effective April 1, 2010 through March 31, 2011 will be in line
with the salary increase (if any) based on the Local 5 Union
negotiation in March 2010.” (Def.’s CSF, Ex. D at Ex. C.) This
statement alone, however, does not evince an intent to designate
Plaintiffs as third party beneficiaries such that it overcomes
the express language of the contract restricting the creation of
third party beneficiaries.
Arguably, all of these exhibits containing contract
discussions between HCC and Hilton from 2011 to 2013, indicate an
understanding that HCC’s pricing would include union wage rate
increases, and Hilton would compensate HCC for the same; however,
as discussed herein, there is no evidence that any of the bids
were actually accepted. William Allen’s declaration and
deposition testimony reflect that Hilton never compensated HCC
for union wage rate increases after 2007. (Def.’s CSF, Allen
Decl.; Pl.’s CSF, Ex. 1.) Thus, HCC never received from Hilton an
additional amount for union wage rate increases which could be
characterized as being held in constructive trust for the benefit
of HCC’s employees under a claim of unjust enrichment (although,
as noted below, such a claim would be barred by the express
(continued...)
15

In sum, the Court concludes that Plaintiffs are not
intended third party beneficiaries to the Services Agreements or
to the 2006 Addendum. Thus, while Hilton (a contracting party)
may be entitled to bring a breach of contract claim for the
alleged violation of the wage provision, Plaintiffs clearly may
not do so. The Court therefore GRANTS the motion as to
Plaintiff’s first cause of action.
II.

Withholding of Wages in Violation of Hawaii’s Wage and Hour
Law
In their second cause of action, Plaintiffs assert that

HCC’s alleged failure to pay the wages mandated by the 2006
Addendum violated Chapter 388 of the Hawaii Revised Statutes.
(Compl. ¶¶ 51-55.)
Haw. Rev. Stat. § 388–6 states that: “No employer may
deduct, retain, or otherwise require to be paid, any part or
portion of any compensation earned by any employee except where
required by federal or state statute or by court process or when
such deductions or retentions are authorized in writing by the
employee.” Section 388–11 provides an employee or class of
employees with a cause of action to recover unpaid wages.
Pursuant to § 388–10(a), an employer who fails to pay wages in
violation of any provision of Chapter 388 without equitable

5/

(...continued)
agreement of the parties) or as intended third party
beneficiaries (a claim that, as discussed herein, is barred by
the express language of the contracts between HCC and Hilton).
16

justification is liable to the employee for double damages.
Importantly, however, Plaintiffs may only recover under
Hawaii’s Wage and Hour Law for the willful withholding of wages
that are legally due. See Misc. Service Workers, Drivers &
Helpers, Teamsters Local No. 427 v. Philco-Ford Corp., WDL Div.,
661 F.2d 776, 783 (9th Cir. 1981) (stating that Chapter 388
“serve[s] to prevent the employer from withholding sums or
benefits to which the employee has rights by virtue of his
contract with his employer . . ..”). Here, Plaintiffs do not seek
to recover withheld wages pursuant to a contractual arrangement
between them and HCC. Indeed, there appears to be no dispute that
Plaintiffs were paid the wages that were agreed upon between them
and HCC. Nor, as discussed above, can they assert a legal right
(as third party beneficiaries) to the amounts allegedly withheld
by virtue of HCC’s failure to pay the bargaining unit wage rates
as set forth in the 2006 Addendum.
Thus, because Plaintiffs seek to recover wages to which
they have failed to demonstrate that they are legally entitled,
they cannot bring a statutory claim under Chapter 388. See id.;
see also Casumpang v. ILWU Local 142, 121 P.3d 391, 401 (Haw.
2005) (affirming dismissal of a Chapter 388 claim where the
plaintiff sought payment for unused vacation, which the court
determined did not constitute “wages” because an employee is not
entitled to payment for unused vacation leave); Timpe v. WATG

17

Holdings Inc., Civ. No. 07-00306 JMS-KSC, 2008 WL 2355611, at *7
(D. Haw. June 10, 2008) (holding that plaintiff could not bring a
Chapter 388 claim to recover benefits to which she was not
entitled). The Court therefore GRANTS the motion as to
Plaintiffs’ second cause of action.
III. Unjust Enrichment
Finally, Plaintiffs’ third count asserts that HCC’s
failure to pay the bargaining unit wage rates constitutes unjust
enrichment under Hawaii common law. (Compl. ¶¶ 56-60.) To recover
on an unjust enrichment claim, a plaintiff must prove: (1) the
defendant received a benefit without adequate legal basis; and
(2) unjustly retained the benefit at the expense of the
plaintiff. Chapman v. Journal Concepts, Inc., 2008 WL 5381353, at
*21 (D. Haw. 2008) (citing Small v. Badenhop, 701 P.2d 647, 654
(Haw. 1985); Durrette v. Aloha Plastic Recycling, Inc., 100 P.3d
60, 61 (Haw. 2004). Unjust enrichment is a “broad and imprecise
term.” Durrette, 100 P.3d at 72 (internal citation and quotation
marks omitted). In reviewing unjust enrichment claims, courts
must be guided by the “underlying conception of restitution, the
prevention of injustice.” Id.
As an initial matter, HCC argues that Plaintiffs’
unjust enrichment claim is barred in the face of an express
contract covering the subject of the claim. The Court agrees.
Generally, “[a]n action for unjust enrichment cannot lie in the

18

face of an express contract.” Porter v. Hu, 169 P.3d 994, 1006
(Haw. App. 2007); State Farm Fire & Cas. Co. v. Chung, 882 F.
Supp. 2d 1180, 1192 (D. Haw. 2012). Thus, “[w]here the parties to
a contract have bargained for a particular set of rights and
obligations, all claims involving those express rights and
obligations properly lie in contract law and not in equity.”
Keahole Point Fish LLC v. Skretting Canada Inc., 971 F. Supp. 2d
1017, 1040 (D. Haw. 2013).
Here, HCC asserts, and Plaintiffs do not dispute, that
at all relevant times HCC paid Plaintiffs for all hours worked at
the rate agreed upon by HCC and Plaintiffs. (Def.’s CSF ¶ 8;
Pl.’s CSF ¶ 8.) During the hearing on the instant motion, counsel
for HCC stated that no written employment contract existed
between HCC and Plaintiffs, but that Plaintiffs were paid in
accordance with an agreed-upon amount between the parties. Thus,
the relationship between HCC and Plaintiffs was governed by an
express agreement between them as to the same subject matter
(their wages) at issue in the instant suit. It is therefore “well
settled” that Plaintiffs’ unjust enrichment claim cannot lie.
See, e.g., AAA Hawaii, LLC v. Hawaii Ins. Consultants, Ltd., Civ.
No. 08-00299 DAE-BMK, 2008 WL 4907976 at *3 (D. Haw. Nov. 12,
2008) (“It is . . . well settled in federal courts that equitable
remedies are not available when an express contract exists
between the parties concerning the same subject matter[.] Hawaii

19

law has recently endorsed application of this principle as
well.”) (citing Porter, 169 P.3d at 1007).
Even assuming Plaintiffs’ unjust enrichment claim
weren’t barred by the express agreement as to wages between HCC
and Plaintiffs, there is simply no evidence before the Court to
support such a claim. Plaintiffs assert that an unjust benefit
was conferred upon HCC because HCC did not pay Plaintiffs the
bargaining unit wage rates set forth in the 2006 Addendum, even
while Hilton paid HCC amounts which were based upon that
bargaining unit wage rate. HCC counters that, after 2007, Hilton
never increased contract payments to HCC for the purpose of
increasing Plaintiffs’ wages.
Plaintiffs have introduced evidence that after the 2009
Services Agreement expired, HCC’s proposed contract renewals
included language suggesting that HCC was seeking price increases
to compensate it for the mandatory union wage rate schedule. For
example, in a June 7, 2007 letter to Hilton enclosing a proposed
new contract, HCC Vice President Laura Valhuerdi writes “[i]t is
understood that the pricing schedule (in consideration for the
contracted scope of work described herein) is and shall remain
consistent and directly proportionate to the mandatory union wage
rate schedule in place . . . .” (Pl.’s CSF, Ex. 2 at 1.) This
language is also included in the contract proposal itself. (Id.
at 69, 76, 83.) Several subsequent revised proposals governing

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various services also included similar language. (Id. at Exs. 47.) Moreover, in a July 29, 2011 letter to Hilton, Mr. Allen
writes that “the new wage rate requirements, as well as the
absence of the discount given in exchange for bundling, have
resulted in a 9% increase.” (Id., Ex. 10 at 1.) The letter
appears to be in response to Hilton voicing concerns over the
rising cost of the contracts between the two, (id.,) thus
indicating that HCC was, in fact, raising the prices it charged
Hilton (at least in part) to cover rising union wage rate
requirements. Plaintiffs have also submitted additional emails
exchanged between Hilton and HCC employees indicating that the
union wage rate requirements continued to be a consideration in
contract negotiations through 2012. (Id., Exs. 11-15.)
HCC points out, however, that all of these statements
are taken from pricing proposals and bids that HCC sent to
Hilton, rather than actual contracts. (Reply at 11.) Plaintiffs
have produced no evidence that Hilton actually accepted any of
the bids and paid higher prices so that HCC would pay higher
wages. (Id.) Moreover, William Allen, the President of HCC,
testified in his deposition that he was not aware of any occasion
on which Hilton paid HCC to compensate it for the union wage rate
schedule, but HCC kept the money instead of paying it to its
employees. (Pl.’s CSF, Ex. 1 (Allen Depo.) at 24.) In his
deposition, Mr. Allen stated that he believed that HCC had paid

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its employees according to the minimum union rate schedule on two
occasions: in November of 2006 and May of 2007. (Id.) Mr. Allen
stated that, for the November 2006 wage increase, HCC was
“compensated for it” through a “price increase.”6/ (Id. at 30.)
For the May 2007 wage increase, Mr. Allen stated that he wasn’t
sure if Hilton had compensated HCC, and that “[t]hey may not
have.”7/ (Id.)
Thereafter, Mr. Allen states, HCC did not give any
further wage increases based on the union wage rates between 2007
and 2013.8/ (Id. at 26, 51.) Mr. Allen testified that, after the
first two wage rate increases, Hilton was “unwilling[] to give us
any type of increases” and, therefore, HCC stopped making wage
increases pursuant to the union wage rate schedule at that point.
(Id. at 28, 32.) Plaintiffs have introduced no evidence to

6/

In a seemingly contradictory statement, Mr. Allen stated
in his declaration in support of the instant motion that Hilton
never increased any contract payments to HCC under any of the
Services Agreements based on the 2006 Addendum. (Def.’s CSF,
Allen Decl. ¶ 11.)
7/

As noted above, by its own terms the 2006 Addendum
expired on May 31, 2007. (Def.’s CSF, Ex. C.)
8/

The Court notes that Plaintiffs have attached to their
concise statement of facts only a partial, and heavily edited,
copy of the transcript of Mr. Allen’s deposition. It is therefore
difficult, at times, to determine the entire context and import
of some of his statements. Nevertheless, as discussed below,
based on the evidence the Court actually has before it, the Court
concludes that there is no evidence supporting Plaintiffs’
assertion that HCC was unjustly enriched when it failed to pay
the CBA-mandated union wage rates.
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contradict Mr. Allen’s testimony. Specifically, even though
Plaintiffs acknowledged at the hearing on the instant motion that
they obtained through discovery all of the invoices between
Hilton and HCC, Plaintiffs have nevertheless been unable to
produce any evidence demonstrating that, at any time after May of
2007, Hilton paid HCC higher prices on the assumption that HCC
would pay its employees the union wage rates. Thus, even if
Plaintiffs’ unjust enrichment claim weren’t barred by the
existence of an express agreement between HCC and Plaintiffs as
to their wages, Plaintiffs have failed to produce any evidence
raising a genuine issue of fact as to that claim. The Court
therefore GRANTS the motion as to Plaintiffs’ third cause of
action.
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendant
Hawaii Care and Cleaning, Inc.’s Motion for Summary Judgment.
IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, April 28, 2015

________________________________
Alan C. Kay
Senior United States District Judge

Balboa et al. v. Hawaii Care and Cleaning Inc., Civ. No. 14-00009 ACK RLP,
Order Granting Defendant’s Motion for Summary Judgment.

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