Hawaii Annuity Trust Fund for Operating Engineers v. Kauai Veterans Express Company, Ltd.
ORDER GRANTING PLAINTIFFS TRUSTEES OF THE HAWAII ANNUITY TRUST FUND FOR OPERATING ENGINEERS' MOTION FOR SUMMARY JUDGMENT, ECF NO. 87 "For the foregoing reasons, Trustees' motion for summary j udgment, ECF No. 87, is GRANTED. Kauai Veterans is ordered to submit to Trustees its reports and Trust Fund contributions for the period starting July 1, 2017 until the CBA expires or is legally terminated. Th e parties are directed to meet and confer in an attempt to reach an agreement as to: (1) liquidated damages and interest for the late May and June 2017 contributions; (2) unpaid contributions and liquidated damages for the unpaid contributions; (3) i nterest on the unpaid contributions through the date of this order; (4) audit fees; and (5) if possible, reasonable attorneys fees and costs. If the parties reach an agreement, they shall file a stipulation by April 1, 2019. If the parties are unable to reach an agreement, Trustees shall file by April 8, 2019, a declaration explaining all interest calculations and supporting reasonable audit fees. Kauai Veterans shall file a response to Trustees declaration by April 22, 2019. If the parties are unable to agree on reasonable attorneys fees and costs, Trustees may file a separate motion after entry of judgment." Signed by CHIEF JUDGE J. MICHAEL SEABRIGHT on 3/12/2019 (jo)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
HAWAII ANNUITY TRUST FUND FOR
OPERATING ENGINEERS, BY ITS
TRUSTEES; LANCE WILHELM;
KATHLEEN THURSTON; MARNIE
KOGA HURSTY; CHAD
DEMPSEY; RUSSELL E. BURNS;
PANE MEATOGA, JR.; DAN REDING;
STEVE INGERSOLL; AND MICHAEL
Civ. No. 16-00615 JMS-RT
ORDER GRANTING PLAINTIFFS
TRUSTEES OF THE HAWAII
ANNUITY TRUST FUND FOR
MOTION FOR SUMMARY
JUDGMENT, ECF NO. 87
KAUAI VETERANS EXPRESS
COMPANY, LTD., a Hawaii corporation,
ORDER GRANTING PLAINTIFFS TRUSTEES OF THE HAWAII
ANNUITY TRUST FUND FOR OPERATING ENGINEERS’ MOTION FOR
SUMMARY JUDGMENT, ECF NO. 87
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:
Tractor Trailer (Hauling Equipment)
Truck Driver (Slip-in or Pup)
Truck Driver (Semi-Trailer, Rock Cans, Semi-Dump Or RollTandem Dump Truck
Freight Truck Driver
The December 1 Order also granted Trustees’ motion for summary judgment and
denied Kauai Veterans’ motion for summary judgment as to Kauai Veterans’ most favored
nations defense. Kauai Veterans, 2017 WL 5972691, at *4.
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:
WAGE AND CLASSIFICATION SCHEDULE
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 OffSite work performed by the Employer.
*The Union shall allocate increases to wages and/or fringe
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:
Together, the 2011 and 2014 Agreements comprise the current operative CBA. For
purposes of this Order and unless otherwise indicated, references to the “CBA” are to the 2011
and 2014 Agreements.
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
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
On April 27, 2018, an NLRB Administrative Law Judge (“ALJ”) issued his Decision in
favor of the Union and ordered Kauai Veterans to resume its reporting and contribution
obligations under the CBA (the “April 27 Decision”). See Pls.’ CSF ¶ 5; Pls.’ Ex. A, ECF No.
88-8. Kauai Veterans filed its Exception to the Decision, which remains pending before the
NLRB. See Pls.’ CSF ¶5.
The December 1 Order took judicial notice of the NLRB proceedings and of documents
accessible through the NLRB website. See Kauai Veterans, 2017 WL 5972691, at *2 n.3.
Trustees again ask the court to take judicial notice of these proceedings, particularly the April 27
Decision. ECF No. 89. The “court may take judicial notice of matters of public record,” Lee v.
City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001) (internal quotation marks and citation
omitted), and Kauai Veterans has not opposed the Trustees’ request. Therefore, the court takes
judicial notice of the NLRB proceedings, documents, and April 27 Decision to the extent
necessary to resolve the instant motion.
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. 963; 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. ¶¶ 417, 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.
III. STANDARD OF REVIEW
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).
Kauai Veterans opposes the instant motion contending that the
allegedly misclassified employees for whom Trustees claim Kauai Veterans should
have made Trust contributions were not covered under the CBA. More
specifically, Kauai Veterans argues that (1) the 2014 Agreement modified the CBA
to exclude freight truck drivers, (2) the CBA never covered mechanic helpers, and
(3) because Stanley Morinaka, Jr. is the son of Kauai Veterans’ president, he is not
a covered employee. See Def.’s Opp’n at 6-7; Def.’s CSF at 3; id. ¶¶ 4-17;
Taniguchi Decl. ¶¶ 2-15. Kauai Veterans further argues that even if it owes
contributions for these employees, it should not be ordered to make such payments
now because it would not likely be reimbursed should the NLRB or Federal Court
of Appeals determine that the CBA terminated on June 30, 2017. The court
addresses these arguments in turn.
Interpretation of the CBA
The construction of a CBA is a question of law for the court.
Santa Monica Culinary Welfare Fund v. Miramar Hotel Corp., 920 F.2d 1491,
1493 (9th Cir. 1990). Courts interpret CBAs in accordance with “ordinary
principles of contract law” to the extent “those principles are not inconsistent with
federal labor policy.” Am. Fed’n of Musicians of U.S. & Canada v. Paramount
Pictures Corp., 903 F.3d 968, 977 (9th Cir. 2018) (quoting M&G Polymers USA,
LLC v. Tackett, 135 S. Ct. 926, 933 (2015)) (other citation omitted). And when
interpreting a CBA, “as with any other contract, the parties’ intentions control.”
Tackett, 135 S. Ct. at 933 (quotation omitted).
In this endeavor, a CBA’s written terms are to be “given their
ordinary meaning,” and read in the context of the entire agreement. Klamath
Water Users Protective Ass’n v. Patterson, 204 F.3d 1206, 1210 (9th Cir. 2000)
(citations omitted). There is a presumption that “every provision was intended to
accomplish some purpose, and that none are . . . superfluous.” Chaly-Garcia v.
United States, 508 F.3d 1201, 1204 (9th Cir. 2007) (quoting Harris v. Epoch Grp.,
L.C., 357 F.3d 822, 825 (8th Cir. 2004)).
Where a CBA’s written terms are “clear and unambiguous, its
meaning is to be ascertained in accordance with its plainly expressed intent.” Am.
Fed’n of Musicians of U.S. & Canada, 903 F.3d at 977 (quoting Tackett, 135 S. Ct.
at 933). But where a CBA’s written terms are ambiguous, the court may consider
extrinsic evidence “to determine the parties’ intentions.” Id. (citing Ariz. Laborers,
Teamsters & Cement Masons Local 395 Health & Welfare Tr. Fund v. Conquer
Cartage Co., 753 F.2d 1512, 1517-18 (9th Cir. 1985) (other citation omitted)).
Such evidence may include, but is not limited to, the parties’ conduct after
execution of the CBA. See Pierce Cty. Hotel Emps. & Restaurant Emps. Health
Tr. v. Elks Lodge, 827 F.2d 1324, 1327 (9th Cir. 1987); see also Ariz. Laborers,
Teamsters & Cement Masons Local 395 Health & Welfare Tr. Fund, 753 F.2d at
1519 (“In resolving the question of the parties’ intent, district courts give great
weight to the parties’ conduct subsequent to contract formation.” (citation and
quotation marks omitted)).
A contract is not ambiguous simply because the parties dispute its
meaning; rather, a contract “is only ambiguous if reasonable people could find its
terms susceptible to more than one interpretation.” Patterson, 204 F.3d at 1210
(citation omitted); see Trs. of S. Cal. IBEW-NECA Pension Tr. Fund v. Flores, 519
F.3d 1045, 1047 (9th Cir. 2008) (“Written terms are ambiguous only if multiple
reasonable interpretations exist.”) (citation omitted). Where a contract is
ambiguous and contrary reasonable inferences as to the parties’ intent are possible,
an issue of material fact exists that generally precludes summary judgment. Ariz.
Laborers, Teamsters & Cement Masons Local 395 Health & Welfare Tr. Fund,
753 F.2d at 1518 (citations omitted). However, “contrary inferences are not
possible where undisputed and conclusive evidence as to the intent of the parties is
before the court,” and in those instances, “summary judgment would be
appropriate.” Id. n.9
Freight Truck Drivers
The parties dispute whether an alleged agreement 4 between the Union
and Kauai Veterans operated to modify the CBA to exclude freight truck drivers as
The 2011 Agreement covers “all Employees . . . performing work
under the classifications set forth in Exhibit ‘A’ . . . attached hereto.” 2011
Agreement § 02.01.00. Exhibit A specifically includes “freight truck driver[s].”
The 2011 Agreement further provides that it “shall not be modified except by
written document signed by parties hereto,” id. § 21.01.00, and that it “contains the
For purposes of this analysis, the court assumes (without determining) that such an
entire agreement of the parties and neither party has made representations to the
other which are not contained herein,” id. § 22.01.00. The 2014 Agreement
provides that “unless modified by this Memorandum of Agreement, the terms and
conditions of the existing collective bargaining agreement shall be unchanged.”
2014 Agreement at 1. The December 1 Order determined that “the existing
collective bargaining agreement,” to which the 2014 Agreement refers, is the 2011
Agreement. See Kauai Veterans, 2017 WL 5972691, at *5. There is no dispute
that the 2014 Agreement did not modify §§ 21.01.00 and 22.01.00 and therefore
those provisions remain unchanged and fully effective.
Kauai Veterans contends that written evidence of an agreement with
the Union that freight truck drivers were excluded from coverage was part of the
2014 Agreement and therefore operated to modify the CBA. The court disagrees.
The “parol evidence rule . . . bar[s] extrinsic evidence of an agreement
inconsistent with an unambiguous writing.” Pace v. Honolulu Disposal Serv., Inc.,
227 F.3d 1150, 1157-58 (9th Cir. 2000) (citing Elks Lodge, 827 F.2d at 1327). In
Pace, the Ninth Circuit determined that the CBAs at issue “unambiguous[ly] . . .
cover[ed] . . . all regular full time employees of the Contractor employed . . . in the
classifications set forth in . . . Exhibit A,” and “the proffered oral agreement . . . to
restrict the bargaining unit to a handful of drivers is unquestionably inconsistent
with . . . the CBAs.” Id. at 1159. In addition, the CBAs included (1) a clause
prohibiting oral modification — “This Agreement shall not be amended, modified,
changed, altered or waived except by written document executed by mutual
agreement between the parties” — and (2) an integration clause — “This document
contains the entire Agreement of the parties and neither party has made any
representations to the other which are not contained herein.” Id. at 1153-54.
Explaining that the oral agreement “direct[ly] contradict[ed] . . . a crucial term of
coverage” set forth unambiguously in the CBAs and there were “provisions in the
CBAs that specifically disavow supplemental oral agreements,” the Ninth Circuit
held that the parol evidence rule barred consideration of the oral agreement. Id. at
Similarly, Elks Lodge affirmed the exclusion of extrinsic evidence —
an employer’s oral side agreements with a union confirmed by a written letter
exempting temporary workers from trust fund contributions — to defend an action
by the trust fund for unpaid contributions pursuant to a series of CBAs. 827 F.2d
at 1327 (explaining that because the CBAs “unambiguously require contributions
for temporary employees, the [district] court correctly disregarded extrinsic
evidence of the parties’ intent”).
Kauai Veterans concedes that an oral agreement alone may not be
sufficient to modify the CBA. See Opp’n. at 6 (citing Kemmis v. McGoldrick, 706
F.2d 993, 997 (9th Cir. 1983) (oral agreement between union representative and
employer did not change employer’s duty to pay funds under the CBA)). But its
argument that written evidence of an oral agreement — particularly emails — is
sufficient to amend the terms of a contract, see id. at 6-7, is unavailing.
First, none of the cases Kauai Veterans relies on for this argument
involve modification of a CBA. Second, the CBA unambiguously covers “the
classifications set forth in Exhibit ‘A’ . . . attached [to the 2011 Agreement],”
which expressly includes “8433 Freight Truck Driver[s].” 2011 Agreement
§ 02.01.00, Ex. A. Third, the CBA unambiguously precludes modification of its
terms unless such modification is set forth in the 2014 Agreement itself or in a
written document signed by Kauai Veterans and the Union. See 2014 Agreement
at 1; 2011 Agreement § 21.01.00. Fourth, none of the documents Kauai Veterans
relies on to support its modification argument — the August 19 letter, January 22
email, or Morinaka’s handwritten note — are signed by both parties. Fifth, the
2014 Agreement itself neither identifies nor defines the specific classifications set
forth in Exhibit A to the 2011 Agreement. And sixth, the CBA unambiguously
provides that it “contains the entire agreement of the parties and neither party has
made representations to the other which are not contained herein.” 2011
Agreement § 22.01.00.
The 2014 Agreement itself does not modify the classifications set
forth in Exhibit A to the 2011 Agreement. And the parol evidence rule bars
consideration of the separate alleged agreement between Kauai Veterans and the
Union that contributions need not be made for freight truck drivers. See Pace, 227
F.3d at 1159; Elks Lodge, 827 F.2d at 1326-27. In short, the CBA was not
modified to exclude freight truck drivers.
Kauai Veterans admits that the following employees worked as freight
truck drivers during the period January 2014 through June 2017: Loreto Bagaoisan,
Jr., Pedryn Baniaga, James A. Berardi, Alan W. Jeffries, John Kahokuloa, Tom
Kanahele, Ross Kaui, Wesley Ladera, Bernard Rita, Jr., Alfred Rapacon, and
Tyson J. Silva. Def.’s CSF ¶¶ 4-6, 9-12, 14-17; Taniguchi Decl. ¶¶ 2-4, 7-10, 1215, ECF No. 94-3. Moreover, based on the audit, HBAI determined that each of
these employees performed covered truck driver work. See Tagaban Decl. ¶¶ 1517; Exs. F, H, ECF Nos. 88-13, 88-15. Because these employees performed work
covered under the CBA, Kauai Veterans is obligated to make Trust Fund
contributions for the hours these employees worked.
The court next addresses whether the CBA covers employees
classified by Kauai Veterans as shop or mechanic helpers.
The CBA covers employees who performed mechanic duties
By its terms, the CBA provides that it covers “all Employees
employed by Employer performing work under the classifications set forth in
Exhibit ‘A,’” which includes “mechanic” and drivers of the following types of
trucks: (1) tractor trailer; (2) slip-in or pup; (3) semi-trailer, rock cans, semi-dump,
or roll-off; (4) tandem dump; and (5) freight. 2011 Agreement § 02.01.00
(emphasis added); id. Ex. A. And the CBA expressly excludes employees with the
following specific job titles or classifications: “heavy equipment operators,
professional employees, guards and watchmen, office clerical employees and
supervisory employees as defined by the Labor-Management Relations Act of
1947, as amended.” Id. § 02.01.00.
The CBA does not define the phrase “performing work under
[specified] classifications” to clarify whether employees are covered: (1) whenever
they perform the tasks or duties that would fall under a specified classification; or
(2) only when Kauai Veterans designates them in a specified job classification.
Nevertheless, when considering other provisions of the CBA, it is clear that the
parties intended the CBA to cover all employees who perform the tasks or duties
that would fall under the specified classifications.
First, based on the ordinary meaning of the CBA’s written terms,
“performing work under” means actual work done, and does not refer to some
arbitrary, ad hoc classification. See Patterson, 204 F.3d at 1210 (explaining that a
CBA’s written terms are to be “given their ordinary meaning”).
Second, interpreting the CBA as covering only employees based on
specified classifications regardless of the tasks or duties actually performed would
render the words “performing work under” superfluous. And such an
interpretation is contrary to basic contract interpretation principles. See, e.g.,
Frommert v. Conkright, 738 F.3d 522, 529-30 (2d Cir. 2013) (recognizing that
interpretation of ERISA plan under federal contract law should not “render some
provisions of the plan superfluous); Chaly-Garcia, 508 F.3d at 1204 (“Under
federal common law, we presume that every provision was intended to accomplish
some purpose, and that none are deemed superfluous.” (internal quotation marks
and citations omitted)).
Third, § 14.01.00 of the CBA requires Kauai Veterans to make Trust
Fund contributions for “each hour worked or paid each Employee covered by this
Agreement.” Interpreting § 02.01.00 such that the CBA covers only employees
with specified classifications regardless of the tasks or duties actually performed is
not reasonable when considered in conjunction with § 14.01.00. That is, under
such an interpretation, Kauai Veterans theoretically could circumvent § 14.01.00’s
contribution requirement simply by classifying certain employees in uncovered
classifications but having them perform the work of a covered classification. See
United States Postal Serv. v. Ester, 836 F.3d 1189, 1195 (9th Cir. 2016)
(recognizing that courts must interpret each provision of a CBA with reference to
the whole and give preference to “reasonable interpretations”); see, e.g., W. Wash.
Painters Defined Contribution Pension Tr. v. W. Industrial, Inc., 2012 WL
3704993, at *17 (W.D. Wash. Aug. 27, 2012) (recognizing the absurdity of
interpreting a CBA to allow an employer theoretically to classify employees doing
covered work in uncovered classifications in order to avoid providing pension
Fourth, even if the CBA’s written terms could be construed as
ambiguous, the parties provided conclusive extrinsic evidence corroborating their
common understanding that the CBA covers employees who perform the tasks or
duties of the specified classifications. For example, Trustees provided the Union’s
assertions that classifications set forth in Exhibit A “are based on the type of work
being done,” Costello Decl. ¶ 2, ECF No. 96-1, and that “[t]ruck driving and
mechanic duties are covered by the [CBA],” Victorino Decl. at 2, ECF No. 88-6
(emphasis added). And Kauai Veterans confirmed that it made Trust Fund
contributions for employees it considered to be in a classification not covered by
the CBA when those employees performed the work of a covered classification.
See Taniguchi Decl. ¶ 20 (“Whenever the Freight Truck Drivers performed Tractor
Trailer work, [Kauai Veterans] made Trust Fund contributions . . . .”).
In sum, the court finds as a matter of law that the CBA
unambiguously covers all employees who performed the work of a mechanic,
regardless of Kauai Veterans’ classification of such employees. See Am. Fed’n of
Musicians of U.S. & Canada, 903 F.3d at 977 (explaining that where a CBA’s
written terms are unambiguous, its meaning must be ascertained in accordance
with its “plainly expressed intent” (citing Tacket, 135 S. Ct. at 933)); see also Bds.
of Trs. of the Nw. Insulation Workers Welfare Tr. v. Thermal Mech. Insulation,
2016 WL 6561290, at *2-3 (D. Mont. Nov. 4, 2016) (holding that employer was
required to make contributions on behalf of employees doing certain type of work
set forth in the CBA, even when those employees belonged to a classification
specifically excluded under the CBA); see also Reed v. Insituform Techs., Inc., 994
F. Supp. 2d 1022, 1028 (D. Minn. 2014) (finding that even without some critical
definitions, the CBAs clearly were intended to cover certain types of work
regardless of whether the employee performed such work while employed under a
specific job title with respect to fringe benefit contributions).
The CBA does not define the tasks or duties performed by a
“mechanic.” Trustees provided evidence that mechanics “maintain, repair, or
service [Kauai Veterans] trucks.” Victorino Decl. at 2. Applying this definition,
descriptions on Kauai Veterans’ Trucking Tags (time sheets showing the hours and
specific work each employee performed each day), Tagaban Decl. ¶ 9, such as
“‘changed tire of Truck and Trailer’, ‘work on Truck 22 brake chamber bracket’,
‘cut slot on 5th wheel lock (handle) . . . [and] help Kimo install new belts on Truck
39’ . . . fit the job of a mechanic,” id. ¶ 14. And after reviewing Kauai Veterans’
records — including Trucking Tags and payroll, tax, and Trust reporting
documents, see id. ¶¶ 9-10 — the audit revealed that from January 2014 through
June 2017, the following Kauai Veterans employees, who were not classified by
Kauai Veterans as mechanics, performed mechanic work: Kainoa Barino,
Lawrence Duque, Kelvin K. Keamoai, Bernard Rita, Jr., and Tyson J. Silva. See
Pl.’s CSF ¶¶ 9, 13-14; Tagaban Decl. ¶¶ 14-18; Pl.’s Exs. F (the audit), H, 5 I, 6 J, 7
K, 8 ECF Nos. 88-13, 88-15 to 88-18; Second Tagaban Decl. ¶ 5. 9
Exhibit H is a schedule of under-reported hours showing the names of employees who
performed covered work between January 2014 and June 2017, the number of hours each
employee worked each month as reported by Kauai Veterans, the number of hours each
employee worked each month as determined by audit, the difference between the two
calculations, and based on such difference, the amounts of unpaid contributions and liquidated
damages owed per year. Tagaban Decl. ¶ 13.
Exhibit I includes examples of Trucking Tags with descriptions HBAI determined to be
mechanic or truck driving duties. Tagaban Decl. ¶ 9, 11.
Exhibit J includes Kauai Veterans’ employee classifications for 2014 and 2015.
Tagaban Decl. ¶ 15. According to Tagaban, Kauai Veterans “did not provide job classifications
after 2015, so [he] used classifications from previous years.” Id. ¶ 10.
Exhibit K is a chart comparing by year, specific employees’ classifications as reported
by Kauai Veterans and as determined by audit, as well as the total under-reported hours per year
per employee, as determined by audit. Tagaban Decl. ¶ 18.
Despite slight discrepancies among these documents, Trustees’ determinations of the
names of specific employees, hours worked, and amounts owed are consistent with the audit
Kauai Veterans did not provide evidence disputing Trustees’
definition of mechanic duties or the audit determination that these employees
actually performed mechanic duties. Rather, Kauai Veterans asserts only that the
employees at issue “worked as . . . Mechanics helper[s].” Def.’s CSF ¶¶ 7-8, 13;
see Taniguchi Decl. ¶¶ 5-6, 11; but see Def.’s CSF ¶¶ 15, 17 (classifying Rita and
Silva as freight truck drivers); Ex. J (classifying Barino, Duque, and Silva as shop
helpers). Kauai Veterans’ assertion alone is insufficient to create a genuine issue
of material fact as to either the definition of mechanic duties or that these
employees performed mechanic duties. Thus, having performed mechanic duties,
these employees are covered under the CBA. Kauai Veterans is obligated to make
Trust Fund contributions for the hours these employees worked.
Stanley Morinaka, Jr.
Kauai Veterans contends that the CBA does not cover Stanley
Morinaka, Jr. solely because he is the son of Kauai Veterans’ president. See Def.’s
Opp’n at 7; Def.’s CSF ¶ 27; Morinaka Decl. ¶ 6 (“Stanley Morinaka, Jr. is my
son.”). The court disagrees.
As set forth above, the CBA requires Kauai Veterans to make
contributions to the Trust Fund “for each hour worked or paid each Employee
covered by this Agreement.” 2011 Agreement, § 14.01.00. The CBA defines
covered employees as “all Employees . . . performing work under the
classifications set forth in Exhibit ‘A.’” Id. § 02.01.00 (emphasis added).
Although the CBA expressly excludes employees with specific job titles or
classifications, being a member of Stanley Morinaka, Sr.’s family is not among the
excluded classifications. See id. Thus, the CBA unambiguously covers any
employee who performs work under the classifications set forth in Exhibit A,
whether or not that employee is a member of Stanley Morinaka, Sr.’s family.
Kauai Veterans improperly relies on Parisoff Drive-In Market, Inc.,
201 N.L.R.B. 813 (1973), which addressed a challenge to the inclusion of close
relatives within a bargaining unit for purposes of collective bargaining itself.
Parisoff Drive-In Market involved a supermarket owned by several members of the
same family in which three children of one 25%-owner worked. The NLRB
affirmed the exclusion of votes regarding whether to certify a union by the three
children, who worked part-time at the supermarket and lived in the owner’s home.
Id. Parisoff Drive-In Market did not involve interpretation of a CBA and is
inapplicable to this action involving an ERISA claim for trust fund contributions
pursuant to a CBA. See Moriarty v. Svec, 233 F.3d 955, 962 (7th Cir. 2000)
(rejecting LMRA definition of employee in favor of ERISA definition for purposes
of interpreting CBA provision requiring trust fund contributions); see also IBTL
Local 727 v. O Donnell-Bartz-Schultz Funeral Home, 1996 WL 41510, at *1-2
(N.D. Ill. Feb. 2, 1996) (having found that owner and his son were covered
employees for purposes of trust contributions, court denied reconsideration of
whether owner was a covered employee explaining that “it is the collective
bargaining agreements which must be looked to in order to establish who is
covered for purposes of contributions and benefits under health and pension trust
Based on the audit of Kauai Veterans’ records, Stanley Morinaka, Jr.
performed covered truck driver work. See Tagaban Decl. ¶¶ 15-17; Second
Tagaban Decl. ¶ 9; Exs. F, H, K. Kauai Veterans provided no evidence disputing
this determination. Thus, having performed covered work, Stanley Morinaka, Jr. is
covered under the CBA. Kauai Veterans is obligated to make Trust Fund
contributions for the hours he worked.
Enforcement of the CBA
The December 1 Order determined that the 2014 Agreement is
enforceable by the Trustees, notwithstanding the pending dispute before the NLRB
regarding the validity of the CBA after July 1, 2017. See ECF No. 78 at 19; Kauai
Veterans, 2017 WL 5972691, at *7 (agreeing with Cal. Serv. Emps. Health &
Welfare Tr. Fund v. Command Sec. Corp., 2012 WL 2838863 (N.D. Cal. July 10,
2012), that based on MacKillop, 58 F.3d at 1446, “where there are ongoing
disputes as to the CBA’s validity, the employer’s obligations to the Trust Funds
continue unabated until the issue is adjudicated”). And since this court’s last
ruling, the ALJ ordered Kauai Veterans to comply with the 2014 Agreement’s
requirement to report and make contributions to the Trust. See April 27, 2018
Decision, Pls.’ Ex. A, ECF No. 88-8; https://www.nlrb.gov/case/20-CA-193339.
Although Kauai Veterans filed an Exception to the ALJ’s decision, there is no
ruling yet from the NLRB that the 2014 Agreement lacks force and effect. See
https://www.nlrb.gov/ case/20-CA-193339 (last visited Mar. 11, 2019). Nor has
the 2014 Agreement expired.
The December 1 Order also determined that pursuant to Section 301
of the Labor Management Relations Act, 29 U.S.C. § 1985(a), this court has
jurisdiction to determine whether Kauai Veterans complied with the terms of the
CBA. ECF No. 78 at 20-21; Kauai Veterans, 2017 WL 5972691, at *7-8. Thus,
the court has jurisdiction to determine whether Kauai Veterans complied with
§§ 14.01.00 to 14.03.02, requiring Kauai Veterans to report and make the
contributions owed under the CBA. That is, this court has jurisdiction to enforce
ERISA’s Section 515 provides that “[e]very employer who is
obligated to make contributions to a multiemployer plan under the terms of the
plan or under the terms of a collectively bargained agreement shall, to the extent
not inconsistent with law, make such contributions in accordance with the terms
and conditions of such plan or such agreement.” 29 U.S.C. § 1145. And where a
judgment is obtained in an action to enforce Section 515, ERISA Section 502(g)(2)
authorizes an award of the following amounts:
(A) the unpaid contributions,
(B) interest on the unpaid contributions,
(C) an amount equal to the greater of —
(i) interest on the unpaid contributions, or
(ii) liquidated damages provided for under the plan
in an amount not in excess of 20 percent (or such
higher percentage as may be permitted under
Federal or State law) of the amount determined by
the court under subparagraph (A),
(D) reasonable attorney’s fees and costs of the action, to
be paid by the defendant, and
(E) such other legal or equitable relief as the court deems
For purposes of this paragraph, interest on unpaid
contributions shall be determined by using the rate
provided under the plan, or, if none, the rate prescribed
under section 6621 of Title 26.
29 U.S.C. § 1132(g)(2).
Section 14.03.04 of the CBA, governing delinquent contributions and
collections, similarly provides that “[a]n Employer responsible for . . . delinquent
contributions shall pay to [the] Fund:
(1) the unpaid contributions,
(2) interest on the unpaid contributions at the rate of
twelve percent (12%) per annum, or the rate prescribed
under Section 6621 of the Internal Revenue Code of
1954, whichever is greater . . . . Interest shall be
computed from the first (1st) day following the month for
which Trust Fund contributions are owed,
(3) an amount equal to the greater of: (i) interest on the
unpaid contributions, or (ii) liquidated damages in the
amount of twenty percent (20%) or such delinquent and
unpaid contributions due to each respective Fund of
twenty dollars ($20.00) whichever is greater, for each
and every delinquent monthly contribution.
(4) all audit and collection costs, and
(5) if the delinquency is turned over to an attorney for
collection, reasonable attorney’s fees and costs of the
action as provided for by [ERISA], together with all
other reasonable expenses incurred in connection with
such suit or claim . . . .
ECF No. 1-1 at 8.
Having determined that freight truck drivers, employees who
performed mechanic work regardless of classification, and Stanley Morinaka, Jr.,
are all covered employees for whom Trust Fund contributions are required, the
court must determine whether Trustees met their burden of establishing their
Trustees provided evidence to support their claim that Kauai Veterans
under-reported hours worked by specific employees who performed covered work
during the period January 2014 through June 2017. This evidence includes the
declaration of Noelle Tagaban, HBAI Payroll Auditor, that in performing the audit,
he reviewed the following records provided by Kauai Veterans:
Trucking Tags for the period January 2014 through June 2017;
Hawaii Withholding Summary of Deposits and Filings from 3rd
Quarter 2014 to 2nd Quarter 2017;
Form 940 for 2014 to 2016;
Federal Withholding Summary of Deposits and Filings (Form 941) for
3rd Quarter 2014 to 2nd Quarter 2017;
Hawaii Unemployment Summary of Deposits and Filings 3rd Quarter
2014 to 2nd Quarter 2017;
W-2 Wage and Tax Statement for 2014 to 2016;
Payroll Register (Ceridian) covering Pay Date July 15, 2014 through
Pay Date June 30, 2017;
General Excise/Use Tax Return from July 2014 to June 2017;
Certified Payrolls for the “Lihue Mill Bridge to Rice Street Project”
covering Period Ending January 4, 2014 to February 25, 2017;
Job Classifications from 2014 to 2015; and
Employer’s Report of Contributions from December 2016 to January
Tagaban Decl. ¶ 9. Tagaban also reviewed declarations of former Kauai Veterans
employees Pedryn Baniaga and Ross Kaui, who identified certain co-workers as
performing truck driver or mechanic duties during their time of employment, and
received assistance and corroboration of his findings from Buddy Victornio, the
Union’s Business Representative. Id. ¶¶ 11, 19; see also Victorino Decl. at 2-4.
Trustees also provided undisputed evidence of their calculations
regarding delinquent and unpaid contributions, liquidated damages, and interest.
See Ilacqua Decl. ¶¶ 11-13; Tagaban Decl. ¶ 12; Second Tagaban Decl. ¶ 5; Pl.’s
Exs. B to D, F to H.
With the exception of the assertions and arguments addressed
elsewhere in this order, Kauai Veterans does not otherwise dispute Trustees’
evidence and calculations. Thus, the court finds that Trustees are entitled to
Stay of Enforcement is not Warranted
Kauai Veterans asks the court to stay enforcement of the CBA — that
is, to stay any order requiring payment of amounts due to the Trust Funds —
pending a ruling on Kauai Veterans’ Exception to the April 27, 2018 Decision in
the NLRB proceedings, and a possible appeal to the Federal Court of Appeals.
Kauai Veterans argues that ordering it to pay now will waste judicial resources and
is unfair because it would not likely be able to recoup that money if the NLRB
and/or Federal Court of Appeals rules that the CBA terminated on June 30, 2017.
See Def.’s Opp’n at 2, 9. The court is not persuaded and declines to stay
enforcement of the CBA.
First, there is no dispute that the CBA was valid through June 30,
2017. Thus, a ruling in the NLRB proceedings is irrelevant to amounts owed to the
Trust Funds for work performed during the period January 2014 through June
Second, as this court previously explained, Kauai Veterans’
contribution obligations continue unabated until the NLRB or an appeals court
rules that the CBA lacks force and effect. See Kauai Veterans, 2017 WL 5972691,
at *6-8 (citing MacKillop, 58 F.3d at 1444 (“[A]n employer’s assertion that the
CBA is invalid due to lack of majority status is not a defense in an action brought
by an ERISA plan or its trustees to collect employer contributions.”)).
Third, under similar circumstances, the Ninth Circuit affirmed a
district court’s refusal to stay a federal action for unpaid employer pension and
health plan contributions pending resolution of a separate NLRB proceeding
addressing the validity of the applicable CBAs. See MacKillop, 58 F.3d at 1446.
And fourth, Kauai Veterans fails to provide any legal authority to
support a stay under these circumstances. The cases Kauai Veterans relies on
address refunds for contributions made due to employer mistake and are
inapplicable to payments made pursuant to court order. See Def.’s Opp’n at 9.
For the foregoing reasons, Trustees’ motion for summary judgment,
ECF No. 87, is GRANTED. Kauai Veterans is ordered to submit to Trustees its
reports and Trust Fund contributions for the period starting July 1, 2017 until the
CBA expires or is legally terminated.
The parties are directed to meet and confer in an attempt to reach an
agreement as to: (1) liquidated damages and interest for the late May and June
2017 contributions; (2) unpaid contributions and liquidated damages for the unpaid
contributions; (3) interest on the unpaid contributions through the date of this
order; (4) audit fees; and (5) if possible, reasonable attorneys’ fees and costs. If the
parties reach an agreement, they shall file a stipulation by April 1, 2019. If the
parties are unable to reach an agreement, Trustees shall file by April 8, 2019, a
declaration explaining all interest calculations and supporting reasonable audit
fees. Kauai Veterans shall file a response to Trustees’ declaration by April 22,
2019. If the parties are unable to agree on reasonable attorneys’ fees and costs,
Trustees may file a separate motion after entry of judgment.
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, March 12, 2019.
/s/ J. Michael Seabright
J. Michael Seabright
Chief United States District Judge
Haw. Annuity Tr. Fund for Operating Eng’rs, v. Kauai Veterans Express Co., Civ. No. 16-00615
JMS-RT; Order Granting Plaintiffs Trustees of the Hawaii Annuity Trust Fund for Operating
Engineers’ Motion for Summary Judgment, ECF No. 87
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