Dunn v. Hatch et al

Filing 110

FINDINGS OF FACT & CONCLUSIONS OF LAW & ORDER. NOW THEREFORE IT IS HEREBY ORDERED, that Plaintiff Allen's claims are dismissed. IT IS FURTHER ORDERED, that Plaintiff Dunn is awarded additional wages in the sum of $1,905.45, the costs of the handwriting expert Hannah McFarland, and The attorney fees Dunn incurred for his attorney's time in preparing for and taking the deposition of McFarland. IT IS FURTHER ORDERED, that plaintiffs' counsel shall file within 30 days from the date of this decision any motion for attorney fees and an affidavit detailing the amount of costs and fees awarded here. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

ELI DUNN and COLIN ALLEN,

Case No. 1:15-cv-479-BLW
Plaintiffs,
FINDINGS OF FACT &
CONCLUSIONS OF LAW &
ORDER

v.

BRYCE HATCH and HATCH MARINE
ENTERPRISE, LLC, in personam; the F/V
SILVER BULLET, Official Number
991159, her engines, machinery,
appurtenances and cargo, in rem;

Defendants

INTRODUCTION
Plaintiffs Dunn and Allen brought this action to recover wages due to them for
working as deckhands on a fishing boat operated by defendant Hatch. The Court held a
bench trial on November 13, 2017, and requested further briefing that was received on
December 7, 2017. The matter is now at issue. For the reasons set forth below, the Court
will award plaintiff Dunn the sum of $1,905.45 and sanctions as set forth below, and will
dismiss the claims of plaintiff Allen.
FINDINGS OF FACT
Plaintiff Dunn

Findings of Fact & Conclusions of Law & Order – page 1

Plaintiff Dunn was employed by defendant Hatch as a deckhand aboard the F/V
Silver Bullet for the 2013 Bristol Bay (Alaska) salmon season during the months of June
and July. He was verbally promised a wage equal to 10% of the value of the catch minus
certain expenses.
The Silver Bullet completed its fishing operations in early July of 2013, and Hatch
sold all those fish to Leader Creek Fisheries, receiving a payment of $184,274.52 based
on the market price for salmon at that time. To calculate Dunn’s wage, Hatch started
with a figure equal to 10% of $184,274.52, and then deducted the agreed-upon expenses,
ultimately paying Dunn $14,946.73.
At the end of each year, Leader Creek Fisheries calculates its profits and pays boat
owners a share of those profits as an incentive to keep them as suppliers. The profit
sharing sum is distributed by increasing the price-per-pound paid for the Red Salmon.
For the 2013 season, Leader Creek Fisheries increased the price per pound paid to Hatch
by 18 ½ cents, and made two profit-sharing payments to Hatch – one in late December
2013, and the other on April 1, 2014. Those two payments totaled $19,054.53.
This payment was described by plaintiffs as a “price adjustment” and by the
defendants as “profit-sharing.” Actually, it was both: Profits were shared by adjusting
the price. But the label is unimportant because the testimony was consistent that this
money was often shared with deckhands, if they were returning for the next fishing
season, making it part of the “highest wage in the port,” a finding that will be explained
in the Conclusions of Law section of this decision.
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For example, Dunn testified that he had been a deckhand on Bristol Bay fishing
boats for one season prior to the 2013 season, and that it was commonly understood that
the 10% wage due experienced deckhands like himself would include the final priceadjusted payments that were typically made in December and April, whether called price
adjustments or profit sharing. Steve Kurian, a fishing boat owner who has operated for
many years in Bristol Bay, testified that he paid his experienced deckhands a 10% wage,
and that he shared Leader Creek’s profit-sharing payment in 2013 with his crew members
who agreed to return the next year.
Therefore, the highest wage in the Bristol Bay port was equal to 10% of the value
of the catch, including the profit-sharing/price adjustment payment received in December
and April. The Leader Creek profit sharing/ price adjustment payment to Hatch for the
fish sold from the Silver Bullet for the 2013 salmon season was $19,054.53. Ten percent
of $19,054.53 is $1,905.45.
Plaintiff Allen
Plaintiff Allen did not attend the trial, and no testimony was elicited from him
either by video or through a trial deposition. Consequently, defendant Hatch had no
opportunity to cross-examine Allen regarding the allegations he made in pre-trial
submissions, such as the complaint and affidavits.
Allen’s counsel asks the Court to take judicial notice of Allen’s pre-trial filings in
this case that, he argues, establish Allen’s right to a wage equal to 10% of the catch as an
experienced deckhand. But throughout this case, Hatch has disputed Allen’s claims, and
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argued that Allen was not experienced and worked only as a “bleeder,” meaning that his
wage would be lower than even the 5% allowed to inexperienced deckhands. Hatch
claims to have paid that smaller wage in full in July of 2013.
If the Court were to take judicial notice of Allen’s allegations, fairness would
require taking judicial notice of Hatch’s contrary allegations – the resulting stalemate
would do nothing to advance Allen’s case. But more importantly, making any factual
findings in favor of Allen – and ignoring the fact that he skipped trial and avoided crossexamination – would be fundamentally unfair to Hatch. Moreover, judicial notice is only
allowed for facts “not subject to reasonable dispute,” and that condition does not apply to
the disputed duties performed by Allen on board the ship. See Rule of Evidence 201(b).
Allen’s counsel argues that Dunn’s testimony at trial established that Allen had the
experience necessary to be considered an experienced deckhand and be entitled to the
10% wage. But once again it would be entirely unjust to allow Dunn to be a surrogate for
Allen and deprive Hatch of his right of cross-examination.
Finally, on the eve of trial, Allen’s counsel moved for a partial summary judgment
that Allen be entitled to a 5% wage based on an affidavit of Steve Kurian submitted by
the defense about 19 months earlier. See Kurian Affidavit (stating that as a boat owner he
paid inexperienced crew members a wage equal to 5% of the value of the catch). Allen’s
motion was filed more than a year after the deadline for dispositive motions and should
be rejected for that reason alone. But as discussed above, the dispute over Allen’s duties

Findings of Fact & Conclusions of Law & Order – page 4

precludes any summary judgment on this issue, and requires that Allen attend trial and be
subject to cross-examination.
For all the reasons stated above, the Court cannot make any factual findings
relating to plaintiff Allen. Accordingly, his claims must be dismissed.
CONCLUSIONS OF LAW
A seaman who is cheated on his wages has three options. If his contract was not
in writing, he can obtain his wages and, in some instances an additional sum, pursuant to
46 U.S.C. §§ 106011 and 11107.2 If his contract was in writing, he has two options.
First, he can proceed in rem, to obtain a lien against – and ultimately sell – the vessel as
provided in 46 U.S.C. § 10602(a)3, or he can proceed in personam against his employer
under § 10602(c)4 and receive damages under general maritime law.
Dunn had only an oral contract. His remedy is therefore set by §§ 10601 & 11107.
To protect seamen, Congress declared under § 10601 that all contracts for hire must be in

1

Section 10601 states in part as follows: “Before proceeding on a voyage, the owner . . . of a
fishing vessel . . . shall make a fishing agreement in writing with each seaman employed on board.”
2

Section 11107 states in part as follows: “An engagement of a seaman contrary to a law of the
United States is void. A seaman so engaged may leave the service of the vessel at any time and is entitled
to recover the highest rate of wages at the port from which the seaman was engaged or the amount agreed
to be given the seaman at the time of engagement, whichever is higher.”
3

Section 10602(a) states in part as follows: “When fish caught under an agreement under section
10601 . . . are . . . sold, the vessel is liable in rem for the wages and shares of the proceeds of the seamen.
An action under this section must be brought within six months after the sale of the fish.”
4

Section 10602(c) states as follows: “This section does not affect a common law right of a
seaman to bring an action to recover the seaman's share of the fish or proceeds.”
Findings of Fact & Conclusions of Law & Order – page 5

writing. To add teeth to this requirement, Congress declared in § 11107 that an oral
contract is void, allowing a seaman to quit at any time and still be able to “recover the
highest rate of wages at the port from which the seaman was engaged or the amount
agreed to be given the seaman at the time of engagement, whichever is higher.” In other
words, these statutes were designed to penalize ship owners who failed to offer written
contracts for hire. See Seattle-First Nat. Bank v. Conway, 98 F. 3d 1195, 1198 (9th Cir.
1996) (agreeing that Ҥ 11107 provides a penalty against vessel owners who employ
seamen without written agreements in violation of § 10601”) (emphasis added). The
Ninth Circuit has interpreted those statutes to award to a seaman with an oral contract
“either the wages he orally agreed to, or the highest rate of wages that could be earned by
a seaman at the port of hire who has the same rating as the complainant.” TCW Special
Credits v. Chloe Z Fishing Co., Inc., 129 F.3d 1330, 1333 (9th Cir. 1997).
Dunn was rated as an experienced deckhand. As discussed above, the highest
wage in the Bristol Bay port for an experienced deckhand was equal to 10% of the catch,
including the profit-sharing/price adjustment payment received in December and April.
It is true that the testimony established that the profit-sharing money is only shared with
crew members who agree to return the next season, and Dunn did not agree to return.
But § 11107 imposes a penalty equal to the highest wage in the port for a seaman of
Dunn’s rating, and says nothing about eliminating that penalty to comply with various
conditions that ship captains impose at their whim. Applying such conditions would
emasculate the statutory penalty and ignore the rule that “legislation for the benefit of
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seamen is to be construed liberally in their favor.” McMahon v. U.S., 342 U.S. 25, 27,
(1951).
The Court therefore finds that plaintiff Dunn is entitled to an additional $1,905.45
(10% of $19,054.53).
Hatch’s Motion for Judgment
After plaintiffs’ case-in-chief, Hatch moved for judgment under Rule 52(c),
arguing that plaintiffs failed to prove the elements of their case. The Court will grant the
motion regarding plaintiff Allen, for the reasons stated above.
Regarding plaintiff Dunn, plaintiffs’ counsel failed to call any witness at trial to
establish the amount of the profit sharing/price adjustment paid by Leader Creek. But
Hatch had earlier filed – in this case – the affidavit of David Miller, the General Manager
of Leader Creek, showing that the sum was $19,054.53. See Miller Affidavit (Dkt. No.
78-2)(Exhibits A & B). Hatch filed that affidavit in support of his motion for summary
judgment.
While the parties argued over whether the Court could take judicial notice of the
Miller Affidavit, the real issue is whether the facts contained in the affidavit, submitted
by Hatch in support of his motion, are deemed admitted by Hatch. They are. Factual
assertions in pleadings are considered judicial admissions conclusively binding on the
party who made them. See American Title Ins. v. Lacelaw Corp., 861 F.2d 224, 226 (9th
Cir.1988). Because Hatch submitted proof of the sums paid by Leader Creek – and there
was no dispute over the accuracy of those figures – that submission was binding on
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Hatch, and Dunn was not required to prove those sums separately at trial. The motion is
accordingly denied as to plaintiff Dunn.
Litigation Fraud
Dunn alleges that Hatch committed litigation fraud by submitting a Crew Contract
containing Dunn’s signature that had been forged. Hatch submitted that Crew Contract
as part of a motion to dismiss early in this case. In his brief accompanying the motion,
counsel stated that “Dunn signed an employment contract with Hatch Marine,” see Brief
(Dkt. No. 16) at p. 5. In support, the brief cites an attached affidavit of Hatch. That
affidavit had been originally filed in another case in this District (Hatch v. Dunn, 1:14CV-518-REB), and a copy of that affidavit was attached to Hatch’s affidavit in this case.
Hatch states in the affidavit that “Dunn signed an employment contract to work for me,
Bryce Hatch, the owner of the Silver Bullet, for the June 1, 2013, through August 1,
2013, salmon season.” See Hatch Affidavit (Dkt. No. 16-1) at ¶ 5. Hatch attached a
“Crew Contract” to his affidavit containing a signature of Dunn, and accompanied by the
affidavits of Phillips Hayman and Roy Gartner, who swore that “Eli Dunn was one of the
other crewmembers who signed crew contracts at this time.” See Gartner Affidavit (Dkt.
No. 16-1) at ¶ 2.
Dunn immediately declared the contract a forgery. See Response Brief (Dkt. No.
20). Hatch responded not by admitting the forgery or by forswearing all use of the Crew
Contract but instead by arguing that forgery cannot form the basis for a civil action. See
Reply Brief (Dkt. No. 23). In April of 2016, Hatch was still arguing that “Dunn signed an
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employment contract to work for me . . . .”, and arguing that forgery cannot form the
basis for a civil action. See Reply Brief (Dkt. No. 58).
On August 8, 2016, the Court ruled that submitting a forged document to the court
could constitute litigation fraud, and could subject the party submitting the forgery to
sanctions by the court. See Sun World, Inc. v. Olivarria, 144 F.R.D. 384 (E.D. Cal. 1992)
(court awarded sanctions to plaintiff after finding defendant fabricated documents and
gave perjured testimony). At this point, quite predictably, plaintiffs pursued the fraudon-the-court charge, and retained a handwriting expert, Hannah McFarland, whose
deposition was taken on September 25, 2017. McFarland is certified with the National
Association of Document Examiners and has been qualified as an expert in document
examination in at least 75 legal proceedings. See Deposition at p. 7. At trial, the Court
admitted the deposition into evidence.
Dunn testified at trial that he never signed that contract. In her deposition,
McFarland testified that she compared the signature on the Crew Contract submitted by
Hatch with an earlier contract actually signed by Dunn, and found that the two signatures
were identical in every aspect, something that would be “virtually impossible” to do
“manually with the hand.” Id. at p. 14. She concluded that “one or more of the
signatures and initials had to have been artificially placed on one or both of the
documents.” Id. at p. 12. In other words, forged. There is no contrary evidence in the
record. And the Court can only conclude that Phillips Hayman and Roy Gartner must
have been lying when they said they saw Dunn sign the Crew Contract.
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Hatch argues that the Crew Contract is irrelevant because he is not relying on it in
any way. But this is not a case where a forged document was filed unintentionally and
could easily be ignored. Hatch deliberately filed the document, represented in at least
two court filings that Dunn signed it, and filed the false affidavits of Hayman and Gartner
doubling down on his own lie.
What did Hatch expect Dunn to do, ignore this fraud? That is simply
preposterous. Even if Hatch was not relying on the Crew Contract for any legal defense,
it was quite predictable and legitimate for Dunn to expend time and resources to reveal
the fraud and challenge Hatch’s credibility, if for no other reason.
Under its inherent powers, a court may impose sanctions where a party has “acted
in bad faith, vexatiously, or for oppressive reasons.” Octane Fitness, LLC v. ICON Health
& Fitness, Inc., 134 S.Ct. 1749, 1758 (2014). These powers, however, “must be exercised
with restraint and discretion.” Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991).
Accordingly, the bad-faith requirement sets a “high threshold,” Primus Auto. Fin. Servs.,
Inc. v. Batarse, 115 F.3d 644, 649 (9th Cir.1997), which may be met by willful
misconduct, or recklessness that is coupled with an improper purpose. Fink v. Gomez,
239 F.3d 989, 993–94 (9th Cir.2001).
Hatch has had many opportunities to rebut or explain the charge of forgery, but
has not done so. Based on the discussion above, the Court finds that Hatch forged
Dunn’s signature, intentionally filed it with the Court, represented in at least two court
filings that Dunn signed the contract, and procured two additional persons to vouch for
Findings of Fact & Conclusions of Law & Order – page 10

the authenticity of Dunn’s forged signature. This willful conduct satisfies the “high
threshold” for finding that Hatch acted in bad faith, and warrants an award of sanctions.
Therefore, the Court will award to Dunn as sanctions the following: (1) The costs
of the handwriting expert Hannah McFarland – that is, her fees for drafting her expert
report and her fees for attending the deposition; and (2) The attorney fees Dunn incurred
for his attorney’s time in preparing for and taking the deposition of McFarland and in
otherwise addressing the issue of whether Dunn had signed and employment contract.
Conclusion
Plaintiff Allen’s claims are dismissed. Plaintiff Dunn is awarded (1) additional
wages in the sum of $1,905.45; (2) The costs of the handwriting expert Hannah
McFarland – that is, her fees for drafting her expert report and her fees for attending the
deposition; and (3) The attorney fees Dunn incurred for his attorney’s time in preparing
for and taking the deposition of McFarland, and otherwise addressing the issue of
whether Dunn had signed an employment contract. Regarding items (2) and (3) on this
list, plaintiffs’ counsel shall submit an affidavit to the Court within thirty days from this
decision detailing the costs and fees awarded here. If plaintiffs’ counsel believes he is
entitled to attorney fees generally, he shall file his motion within the same time frame,
thirty days. The Court expresses no opinion whether plaintiffs are entitled to costs and
attorney fees generally and, if so, whether those fees should be supplemental, or in
addition, to the costs and fees awarded as sanctions.
The Court will enter a separate Judgment as required by Rule 58.
Findings of Fact & Conclusions of Law & Order – page 11

ORDER
In accordance with the Findings of Fact and Conclusions of Law set forth above,
NOW THEREFORE IT IS HEREBY ORDERED, that Plaintiff Allen’s claims are
dismissed.
IT IS FURTHER ORDERED, that Plaintiff Dunn is awarded (1) additional wages
in the sum of $1,905.45; (2) The costs of the handwriting expert Hannah McFarland –
that is, her fees for preparing and drafting her expert report, and her fees for attending the
deposition; and (3) The attorney fees Dunn incurred for his attorney’s time in preparing
for and taking the deposition of McFarland.
IT IS FURTHER ORDERED, that plaintiffs’ counsel shall file within thirty days
from the date of this decision (1) any motion for attorney fees, and (2) an affidavit
detailing the amount of costs and fees awarded here.

DATED: January 4, 2018

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Findings of Fact & Conclusions of Law & Order – page 12