Employee Painters' Trust Health & Welfare Plan et al v. Sherman et al

Filing 46

ORDER denying Wesco's 37 Motion for Attorney Fees and granting in part and denying in part Plaintiffs' 42 Motion for Default Judgment by Judge Thomas S. Zilly.Plaintiffs' to submit status report within four months. (LMK)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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EMPLOYEE PAINTERS’ TRUST
HEALTH & WELFARE PLAN, et al.,

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Plaintiffs,

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v.

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C13-687 TSZ
ORDER

DONNIE SHANE SHERMAN, et al.,

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Defendants.

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THIS MATTER comes before the Court on a motion brought by defendant Wesco

12 Insurance Company (“Wesco”) for attorneys’ fees and costs, docket no. 37, and a motion
13 brought by plaintiffs for default judgment, docket no. 42. Having reviewed both motions,
14 to which no responses were filed, the Court enters the following order.
15 Discussion
16 A.

Attorneys’ Fees and Costs

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Wesco seeks an award of $4,786.76 in attorneys’ fees and costs pursuant to

18 RCW 4.84.250, which provides that, when the amount of damages pleaded is $10,000 or
19 less, the “prevailing party” is entitled to “as a part of the costs of the action a reasonable
20 amount to be fixed by the court as attorneys’ fees.” In an opinion issued after Wesco
21 filed its motion, the Washington Supreme Court clarified that, to trigger the small claim
22 attorney fee provision, the following three-part test must be satisfied: (i) the damages
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1 sought must be equal to or less than $10,000; (ii) the entity seeking attorneys’ fees must
2 be the “prevailing party”; and (iii) a judgment must have been entered. AllianceOne
3 Receivables Mgmt., Inc. v. Lewis, 325 P.3d 904 (Wash. 2014). In the absence of a
4 judgment, no entity can be deemed the “prevailing party.” Id.
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In this case, although Wesco moved for summary judgment, the Court treated the

6 motion as one for dismissal based on insufficient service of process. Order at 6 (docket
7 no. 36). Plaintiffs’ claims against Wesco were dismissed without prejudice, and no
8 judgment was entered. See id.; see also Order at 5 n.6 (docket no. 45) (indicating that the
9 limitation period for plaintiffs’ claims against Wesco had been tolled while the claims
10 were pending and for thirty days after they were dismissed). Wesco is not the “prevailing
11 party” within the meaning of RCW 4.84.250, and it is not entitled to attorneys’ fees, as
12 part of costs, under such statute. Wesco’s motion is therefore DENIED.
13 B.

Default Judgment

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Plaintiffs move for default judgment against defendants Donnie Shane Sherman

15 and his wife (“Donnie Shane”), Don Duane Sherman and his wife (“Don Duane”), Scott
16 William Sherman and his wife (“Scott William”), and SWS Flooring, LLC. Donnie
17 Shane and Scott William are brothers; Don Duane is their father. Compl. at ¶ 19 (docket
18 no. 1). In two previous cases, plaintiffs obtained default judgments against the father,
19 Don Duane, doing business as Sherman & Sons Flooring Co. (“Father’s Co.”), for
20 delinquent contributions, liquidated damages, audit fees, prejudgment interest, attorneys’
21 fees, and costs, relating to the period September 2006 through May 2009, in the
22 aggregate amount of $272,077.49. See Exs. K & L to Read Decl. (docket no. 42-2). In
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1 this action, plaintiffs seek to hold Donnie Shane, Scott William, and SWS Flooring, LLC
2 liable for the judgment rendered against Don Duane, doing business as Father’s Co.
3 Plaintiffs have not made a sufficient showing to obtain such relief.
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Donnie Shane, doing business as Sherman Flooring, performed floor covering and

5 countertop work from January 2003 through May 2009. See http://dor.wa.gov/content/
6 doingbusiness/registermybusiness/brd/Results.aspx?RequestType=3&UBI=602261981;
7 https://secure.lni.wa.gov/verify/Detail.aspx?UBI=602261981&LIC=SHERMF*976BN&
8 SAW=. Donnie Shane and Sherman Flooring operated at 162 Charles Street in Monroe,
9 Washington. Id.
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SWS Flooring, LLC was created in June 2009, and became inactive in October

11 2011. See http://www.sos.wa.gov/corps/search_detail.aspx?ubi=602930140. Scott
12 William is the sole member of SWS Flooring, LLC. Id. SWS Flooring, LLC also
13 performed floor covering and countertop work, and was located at 162 Charles Street in
14 Monroe, Washington. See http://dor.wa.gov/content/doingbusiness/registermybusiness/
15 brd/Results.aspx?RequestType=3&UBI=602930140; https://secure.lni.wa.gov/verify/
16 Detail.aspx?UBI=602930140&LIC=SWSFLFL910L9&SAW=.
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In contrast, Don Duane, doing business as Father’s Co., had a mailing address and

18 business location of P.O. Box 43 in Gold Bar, Washington. 1 See http://dor.wa.gov/
19 content/doingbusiness/registermybusiness/brd/Results.aspx?RequestType=3&UBI=
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The Complaint
Duane and Father’s
at
21 Charles Street in indicates that Donat ¶ 9 (docket no. 1). Co. had a principal place of businessthe162
Monroe. Compl.
This information is contradicted by
publicly
available records of the Washington State Department of Labor and Industries and the Washington State

22 Department of Revenue, of which the Court takes judicial notice. See Fed. R. Evid. 201.
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1 602642445. Don Duane, doing business as Father’s Co., operated from September 2006
2 until January or March 2008, specializing in “carpet laying” and “resilient f/counter
3 m/plastic.” Id.; https://secure.lni.wa.gov/verify/Detail.aspx?UBI=602642445&LIC=
4 SHERMSF944OR&SAW=.
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In asserting that SWS Flooring, LLC is the alter ego of Don Duane, doing business

6 as Father’s Co., plaintiffs rely on the following allegation in their Complaint: “In 2008 or
7 2009, the Washington Department of Labor and Industries (“LNI”) found SWS LLC to
8 be the successor of SF [Sherman Flooring] for the purposes of enforcing liabilities
9 relating to unpaid taxes or other assessments SF was obligated to remit to LNI.” Compl.
10 at ¶ 30 (docket no. 1). Even assuming the truth of this assertion, in light of defendants’
11 defaults, see DirecTV, Inc. v. Huynh, 503 F.3d 847, 851 (9th Cir. 2007) (“in defaulting,
12 defendants are deemed to have admitted all well-pleaded factual allegations contained in
13 the complaints”), the Court concludes that plaintiffs have failed to establish the requisite
14 link. At most, the Complaint establishes that SWS Flooring, LLC is the alter ego of
15 Donnie Shane and Sherman Flooring, which operated from the same location during the
16 six-year period immediately preceding SWS Flooring, LLC’s inception. Donnie Shane,
17 doing business as Sherman Flooring, is not, however, the subject of the default judgments
18 that plaintiffs are seeking to enforce against SWS Flooring, LLC.
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Plaintiffs have not demonstrated the requisite relationship between Don Duane,

20 doing business as Father’s Co, and SWS Flooring, LLC. See UA Local 343 v. Nor-Cal
21 Plumbing, Inc., 48 F.3d 1465, 1471 (9th Cir. 1994) (“the ‘alter ego’ theory requires a
22 threshold showing that [the entities] constitute a single employer,” the criteria for which
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1 are “(1) common ownership, (2) common management, (3) interrelation of operations,
2 and (4) centralized control of labor relations”). Indeed, Don Duane, doing business as
3 Father’s Co., ceased operations at least 15 months before SWS Flooring, LLC was
4 created, and conducted business from a different location, in another city. Father’s Co.
5 and SWS Flooring, LLC were dissimilar in both ownership and structure, and plaintiffs
6 offer no evidence that SWS Flooring, LLC even had any employees. Thus, with regard
7 to SWS Flooring, LLC, Scott William Sherman, and Jane Scott Sherman, plaintiffs’
8 motion for default judgment is DENIED. Moreover, as to Donnie Shane Sherman, doing
9 business as Sherman Flooring, plaintiffs do not appear to contend that any alter ego
10 relationship with Don Duane or Father’s Co. exists, and plaintiffs provide no explanation
11 for needing yet another default judgment against Don Duane Sherman and his wife.
12 Thus, plaintiffs’ motion for default judgment is DENIED as to the amounts set forth in
13 the previous default judgments.
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With respect to Donnie Shane and Jane Donnie Sherman, doing business as

15 Sherman Flooring, and Don Duane and Jane Don Sherman, doing business as Sherman &
16 Sons Flooring Co., however, plaintiffs’ motion for default judgment is GRANTED as to
17 the requested audit. Such defendants, pursuant to the labor agreements to which they are
18 parties, see Exs. A-J to Read Decl. (docket no. 42-2), are hereby DIRECTED to submit
19 their payroll and related records to plaintiffs and their auditor within twenty-eight (28)
20 days of the date of this Order. Within four (4) months of the date of this Order, plaintiffs
21 shall submit a status report, indicating whether any additional contributions, liquidated
22 damages, and/or prejudgment interest are owed by Donnie Shane (Sherman Flooring)
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1 and/or Don Duane (Father’s Co.) or whether this matter may be dismissed. The Court
2 defers ruling on whether plaintiffs are entitled to attorney’s fees, audit fees, or costs.
3 Conclusion
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For the foregoing reasons, the Court ORDERS:

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(1)

Wesco’s motion for attorney fees and costs, docket no. 37, is DENIED;

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(2)

Plaintiffs’ motion for default judgment, docket no. 42, is GRANTED in

7 part and DENIED in part;
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(3)

Defendants Donnie Shane and Jane Donnie Sherman, doing business as

9 Sherman Flooring, and Don Duane and Jane Don Sherman, doing business as Sherman &
10 Sons Flooring Co., are DIRECTED to submit their payroll and related records to
11 plaintiffs and their auditor within twenty-eight (28) days of the date of this Order;
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(4)

Within four (4) months of the date of this Order, plaintiffs shall submit a

13 status report, indicating whether any additional contributions are owed by defendants
14 Donnie Shane (Sherman Flooring) and/or Don Duane (Father’s Co.) or whether this
15 matter may be dismissed.
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IT IS SO ORDERED.

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Dated this 24th day of June, 2014.

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A

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Thomas S. Zilly
United States District Judge

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