United States District Court, D. Nevada
TRUSTEES OF THE PLUMBERS AND PIPEFITTERS UNION LOCAL 525 HEALTH AND WELFARE TRUST AND PLAN; TRUSTEES OF THE PLUMBERS AND PIPEFITTERS UNION LOCAL 525 PENSION PLAN; and TRUSTEES OF THE PLUMBERS AND PIPEFITTERS LOCAL UNION 525 APPRENTICE AND JOURNEYMAN TRAINING TRUST FOR SOUTHERN NEVADA, Plaintiffs,
JUAN CARRILIO SOTELO dba SOTELO AIR and SOTELO AIR, INC., dba COOL AIR NOW, Defendants. TRUSTEES OF THE PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND AND INTERNATIONAL TRAINING FUND, Plaintiffs,
JUAN CARRILIO SOTELO dba SOTELO AIR; SOTELO AIR, INC. dba COOL AIR NOW, a Nevada Corporation; JUAN CARRILIO SOTELO, an individual; NOW SERVICES OF NEVADA, LLC dba COOL AIR NOW, a Nevada limited liability company; NOW SERVICES OF NEVADA, LLC dba PLUMBING REPAIR NOW, a Nevada limited liability company; WESTERN NATIONAL MUTUAL INSURANCE COMPANY, a surety company; JOHN DOES I-X and ROE CORPORATIONS I-X, inclusive, Defendants.
ORDER FINDINGS OF FACT AND CONCLUSIONS OF LAW AFTER
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE.
case involves a collective bargaining agreement, the National
Service and Maintenance Agreement (“Service
Agreement”), entered between the United Association of
Journeymen and Apprentices of Plumbing and Pipe Fitters Local
525 (“Local 525”) and Defendant Juan C. Sotelo
(“Sotelo”) doing business as Sotelo Air, Sotelo
Air, Inc., and Now Services of Nevada, LLC (collectively,
“Defendants”). Among other requirements, the
Service Agreement required Defendants to make union
contributions whenever covered work was performed by union
and nonunion employees. Plaintiffs Trustees of the Plumbers
and Pipefitters Union Local 525 Health and Welfare Trust and
Plan, Trustees of the Plumbers and Pipefitters Union Local
525 Pension Plan, and Trustees of the Plumbers and
Pipefitters Local Union 525 Apprentice and Journeyman
Training Trust for Southern Nevada (“Local
Plaintiffs” or “Trust Funds”) and Trustees
of the Plumbers and Pipefitters National Pension Fund and
International Training Fund (“National
Plaintiffs” or “National Funds”)
(collectively, “Plaintiffs”) seek unpaid
contributions pursuant to the terms of the Service Agreement
and Plaintiffs' policy documents, as well as
attorneys' fees and costs. The Court held a bench trial
in this case on September 1, 2017 and September 5, 2017. The
Court rules in favor of the Plaintiffs based on the following
findings of fact and conclusions of law.
Trust Funds' operative Amended Complaint was filed on
August 2, 2013. (ECF No. 6). The Complaint raises allegations
of delinquent contributions and attorneys' fees and
costs, in violation of 29 U.S.C. §§ 1001-1500. On
September 10, 2015, the Court ordered that the Trust Funds
file a Renewed Motion for Summary Judgment addressing a
contract defense raised by Sotelo Air in a prior
Countermotion for Summary Judgment. The Court also permitted
amendment of the National Plaintiffs' Complaint at that
National Trust Funds' Amended Complaint was filed on
September 17, 2015. (ECF No. 81). In addition to a breach of
contract claim, the National Funds asserted a breach of
fiduciary duty cause of action under ERISA, 29 U.S.C.
§§ 1002, 1104, 1109, and 1132. Defendants filed a
Motion to Dismiss that Complaint on October 5, 2015. (ECF No.
85). Renewed Motions for Summary Judgment were filed and
fully briefed. However, due to the parties'
representations regarding ongoing settlement negotiations,
the Court denied all the previously filed motions without
prejudice and directed parties to renew them if settlement
negotiations failed. (ECF No. 137). A settlement was not
reached, and the Trust Funds and National Funds refiled their
previously filed renewed Motions for Summary Judgment. (ECF
Nos. 140, 141). In its order resolving these motions (ECF No.
216), the Court found as a matter of law: a) a valid
contract(s) had formed between Sotelo (and the successor
entities) with the Plaintiffs; and b) Sotelo was not a
fiduciary and was not therefore subject to liability for a
breach of a fiduciary duty. The case proceeded to trial on
the factual issues of: a) whether there was a breach of the
contracts based on Sotelo's and related entities' not
paying contributions as required by the contracts, b) the
date of termination of the contracts, and c) the amount, if
any, of delinquent contributions and interest owed by Sotelo
pursuant to the contracts. Following the bench trial that
took place on September 1, 2017 and September 5, 2017, the
Court took the matter under submission.
JURISDICTION AND VENUE
Court has federal question jurisdiction pursuant to 28 U.S.C.
§ 1331 for claims arising under ERISA. The Court has
supplemental jurisdiction over state law claims under 28
U.S.C. § 1367. Venue is proper because the underlying
actions and corresponding damages occurred within Clark
FINDINGS OF FACT
Rule of Civil Procedure 52(a)(1) requires the Court to
“find the facts specially and state its conclusions of
law separately” in a bench trial. Fed.R.Civ.P.
52(a)(1). Factual findings must be sufficient to indicate the
basis for the Court's ultimate conclusion. Unt v.
Aerospace Corp., 765 F.2d 1440, 1444-45 (9th Cir. 1985)
(citing Kelley v. Everglades Drainage Dist., 319
U.S. 415, 422 (1943)). The findings must be “explicit
enough to give the appellate court a clear understanding of
the basis of the trial court's decision, and to enable it
to determine the ground on which the trial court reached its
decision.” United States v. Alpine Land &
Reservoir Co., 697 F.2d 851, 856 (9th Cir. 1983),
cert. denied, 464 U.S. 863 (1983) (citations and
quotation marks omitted).
receiving evidence at the bench trial, the Court makes the
following findings of fact:
1. Sotelo Air knowingly entered into a valid contract and
became a signatory to the Service Agreement with Local 525 on
May 9, 2008, after receiving the Service Agreement and having
the opportunity to ask questions of Local 525 representatives
before signing. At that time, Sotelo Air was a sole
proprietorship owned and managed by Juan Sotelo. Sotelo and
Sotelo Air executed a Standard Form of Participation
Agreement (“Participation Agreement”) whereby
Sotelo Air agreed to make contributions to the National
Pension Fund and to be bound by the terms and conditions of
the Service Agreement and any successor Agreement. Among
other requirements, the Service Agreement required Sotelo to
make union contributions whenever covered work was performed
by union and nonunion employees.
2. Sotelo Air, Inc., Now Services of Nevada, LLC d/b/a Cool
Air Now, and Now Services of Nevada, LLC d/b/a Plumbing
Repair Now were successors in interest to Sotelo Air. Sotelo
Air, Inc., incorporated in mid-2013, was the first successor
legal entity. It received the usable assets of Sotelo Air
without paying for them. At all times, Sotelo was the sole
owner and officer of these business entities.
3. The Service Agreement by its own terms did not expire
unless a written termination letter was submitted to Local
4. The Service Agreement Sotelo signed was effective from
August 1, 2005 to July 31, 2010, and renewed on August 1,
2010 for another five-year period. Sotelo was bound by the
Service Agreement until Local 525 received a termination
letter from Sotelo on April 9, 2013. The termination was not
effective until August 1, 2013. Sotelo did not actually
submit a termination letter before the April 2013 letter.
5. Richard Carrillo, a business representative for Local 525
at the time of the events in question, did not receive a
termination letter from Sotelo in May 2008.
6. Between May 9, 2008 and April 9, 2013, Sotelo received the
benefit of being a signatory to the Service Agreement in the
form of union work and union employees being referred to him.
7. Because Sotelo did not submit a written termination letter
to Local 525 until April 9, 2013, he owes $95, 013.77 in
unpaid contributions to the Local Plaintiffs and $11, 308.93
in unpaid contributions to the National Plaintiffs.