Trustees of The Plumbers And Pipefitters Union Local 525 Health And Welfare Trust And Plan et al v. Sotelo Air, Inc.

MOTION for Summary Judgment Renewed

D. Neb.September 26, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 CHRISTENSEN JAMES & MARTIN KEVIN B. CHRISTENSEN, ESQ. (175) LAURA J. WOLFF, ESQ. (6869) DARYL E. MARTIN, ESQ. (6735) Email: kbc@cjmlv.com, ljw@cjmlv.com, dem@cjmlv.com 7440 W. Sahara Avenue Las Vegas, Nevada 89117 Tel.: (702) 255-1718 Attorneys for National Funds UNITED STATES DISTRICT COURT DISTRICT OF 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 the Trustees of the Plumbers and Pipefitters Local Union 525 Apprentice and Journeyman Training Trust for Southern Nevada, Plaintiffs, vs. Juan Carrilio Sotelo dba Sotelo Air; Sotelo Air, Inc., dba Cool Air Now; Aegis Security Insurance Company, a Pennsylvania corporation; American Safety Casualty Insurance Company, a Georgia corporation, Defendants. Case No.: 2:13-CV-00657-RFB-NJK CONSOLIDATED WITH: Case No.: 2:14-cv-01609-JAD-CWH TRUSTEES OF THE PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND AND INTERNATIONAL TRAINING FUNDS’ RENEWED MOTION FOR SUMMARY JUDGMENT Trustees of the Plumbers and Pipefitters National Pension Fund and International Training Fund, Plaintiffs, vs. Juan Carrilio Sotelo dba Sotelo Air; Sotelo Air, Inc. dba Cool Air Now; 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. Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 1 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 The Trustees of the Plumbers and Pipefitters National Pension Fund and International Training Fund (“National Funds”), acting by and through their counsel, Christensen James & Martin, hereby move this honorable Court pursuant to Fed. R. Civ. P. 56 for entry of summary judgment against Defendants Juan Carrilio Sotelo dba Sotelo Air (“Sotelo Air”), Sotelo Air, Inc. dba Cool Air Now (“Cool Air”), Juan Carrilio Sotelo (“J. Sotelo”), Now Services of Nevada, LLC dba Cool Air Now (“Now Services”), Now Services of Nevada dba Plumbing Repair Now (“Plumbing Repair”) and Western National Mutual Insurance Company (“Western”). This Renewed Motion is submitted pursuant to this Court’s Minute Order entered August 3, 2016 [Doc. 24] and based upon the attached Points and Authorities and Exhibits filed herewith, the pleadings and papers on file herein and upon any oral argument to be presented at the time of hearing. DATED this 26th day of September, 2016. CHRISTENSEN JAMES & MARTIN By: /s/ Laura J. Wolff Laura J. Wolff, Esq. Attorneys for National Funds INTRODUCTION This is an action brought by the National Funds, multi-employer employee benefit trust funds, to recover unpaid fringe benefit contributions and statutory damages owed by Sotelo Air and Cool Air, their alter-egos Now Services (and their bonding company Western) and Plumbing Repair, and J. Sotelo. These contributions are owed pursuant to the terms of two sequential labor agreements between Sotelo Air and the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada, AFL-CIO (“Union”). The National Funds’ claims arise from a payroll audit (“Audit”) of Sotelo Air’s payroll and business records to determine the completeness of Sotelo Air’s monthly contribution reporting for the period of January 1, 2011 through April 9, 2013 (“Audit Period”). The National Funds Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 2 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 3 allege that during the Audit Period Sotelo Air failed to pay contributions to the National Funds as required by its labor agreements. In this Motion the National Funds present facts relating to three (3) separate issues, none of which are disputed, and all of which may be decided as a matter of law. The first is whether Sotelo Air was bound to the labor agreements during the Audit Period and thus liable to pay damages to the National Funds. The second regards whether J. Sotelo is personally bound to pay damages as a fiduciary. The third is whether the alleged alter egos are also liable. Consistent with principles of judicial economy and efficiency, the National Funds urge this Court to decide this Motion in conjunction with the 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 the Trustees of the Plumbers and Pipefitters Local Union 525 Apprentice and Journeyman Training Trust for Southern Nevada’s (hereafter collectively “Local Funds”) Renewed Motion for Summary Judgment (“Renewed Motion”) [Doc. 84]. I. SUMMARY JUDGMENT STANDARD Fed. R. Civ. P. 56(a) states that the “Court shall grant summary judgment if the 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.” A party asserting that there is no dispute must support the assertion though admissible evidence. Fed. R. Civ. P. 56(c). A party seeking summary judgment has the initial burden of showing there is no genuine issue of material fact. See Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970); Zozlow v. MCA Distrib. Corp., 693 F.2d 870, 883 (9th Cir. 1982). Once the moving party presents adequate evidence in support of its motion, the burden shifts to the other party to go beyond the pleadings and set forth specific facts demonstrating there is a genuine issue of material fact for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-51 (1986); Far Out Prods., Inc. v. Oskar, 247 F.3d 986, 997 (9th Cir. 2001). The substantive law defines which facts are material. Anderson, 477 U.S. at 248. A material fact is one that is capable of affecting the outcome of the litigation and requires a trial to Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 3 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 resolve differing versions of the truth. Id. at 248-49; see SEC v. Seaboard Corp., 677 F.2d 1301, 1305-06 (9th Cir. 1982). In other words, where the record could not lead a rational trier of fact to find for the nonmoving party, there is no “genuine issue for trial” and judgment must be entered. Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587 (1986) (quoting First Nat’l Bank of Ariz. v. Cities Serv. Co., 391 U.S. 253, 289 (1968)). “One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses, and we think it should be interpreted in a way that allows it to accomplish this purpose.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Summary judgments concerning damages are proper “once the moving party sets out a detailed statement of account and the opposing party fails to adduce specific, legally cognizable items of debit or credit not included in the movant’s statement, demonstrating that the amount claimed is inaccurate.” Trs. of the Op’g Eng’rs Pension Trust v. O’Dell, 682 F.Supp. 1506, 1512 (D. Nev. 1988) (quoting Golden Oil, Inc. v. Exxon Co., 543 F.2d 548, 551 (5th Cir. 1976)). The O’Dell Court went on to clarify that an affidavit that merely questions or disputes in a general way the amounts alleged to be owed is insufficient to create a genuine issue of material fact. II. STATEMENT OF UNDISPUTED FACTS A. Labor/Service Agreements and Trust Agreements 1. Juan Carrilio Sotelo dba Sotelo Air is a sole proprietorship under Nevada Contractor’s License No. 0060865 that later became Sotelo Air, Inc. dba Cool Air Now under Nevada Contractor’s License No. 0060865A. (See Doc. 84, Ex. 5 (excerpts from Juan Sotelo’s depo., taken on May 8, 2014), at 16:6-20:21; License Search Details for Sotelo Air and Cool Air, Exhibit 1, attached hereto.) 2. Juan Carrilio Sotelo dba Sotelo Air and Sotelo Air, Inc., dba Cool Air Now are the same company. (See Doc. 84, Ex. 5 (excerpts from Juan Sotelo’s depo., taken on May 8, 2014), at 16:6-20:21.) J. Sotelo transferred everything from his sole proprietorship, Sotelo Air, to Cool Air, including the assets, employees and customer lists. (Excerpts from J. Sotelo Dep. Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 4 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 5 taken on May 8, 2014 (hereafter “First Sotelo Dep.”), 18:18-25, 19:1-7, Ex. 2, attached hereto.) Hereafter both Sotelo Air and Sotelo Air, Inc. will be referred to collectively as “Sotelo Air”. 3. On May 9, 2008, Sotelo Air agreed to become signatory to and bound by the National Service and Maintenance Agreement (“Service Agreement”, “Labor Agreement” or “NSMA”), a collective bargaining agreement between the Mechanical Service Contractors of America (“MSCA”) and the Union. (See Doc. 84, Ex. 6 (Stowell Aff’d) ¶ 2; Ex. 7 (2005- 2010 Service Agreement); Ex. 8 (Trust Funds’ Request for Admissions to Sotelo Air, Inc.), at 2:11-15, and at Tab 2, thereto (PLUM000144); Ex. 9 (Sotelo Air, Inc.’s Response to Trust Funds’ Requests for Admissions), at 4:1-7 (authenticating signature page of Service Agreement).) 4. The Service Agreement was countersigned by William P. Hite, General President of the Union, on June 4, 2008. (See Doc. 84, Ex. 22 (Sotelo Air’s signature page to the Service Agreement countersigned by Mr. Hite).) 5. The Service Agreement was effective from August 1, 2005, through July 31, 2010 but Sotelo Air also agreed to be bound to all amendments, modifications, changes, extensions or renewals of the Service Agreement. (See Doc 84, Ex. 7, at PLUM000127 (Art. XXIII ¶ 86).) 6. The MSCA and the Union renewed the Service Agreement on July 1, 2010, effective August 1, 2010, through July 31, 2015. (See Doc. 84, Ex. 6 ¶¶ 3-4; Ex. 10 (2010-2015 Service Agreement).) 7. The 2005-2010 Service Agreement and the 2010-2015 Service Agreement (collectively the “Service Agreements”) each require Sotelo Air to remit payment of contributions to various multi-employer employee benefit trust funds at contractually specified rates for each hour worked by or paid to its employees. (See Doc. 84, Ex. 7 at PLUM000119 (Art. XII ¶¶ 36-37); Ex. 10, at PLUM000273 (Art. XII ¶¶ 36-37).) 8. Sotelo Air executed a Standard Form of Participation Agreement (“Participation Agreement”) for the National Pension Fund whereby Sotelo Air agreed to make contributions to the Pension Fund and to be bound by the terms and conditions of the Service Agreements and Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 5 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 any successor Agreement. (See Supplement to the National Funds’ Joinder in Motion for Summary Judgment (“Supplement”) [Doc. 64], Ex. 4; Affidavit of William T. Sweeney, Jr. (“Sweeney Aff.”) attached to the Supplement at ¶ 8; Sotelo Air’s Response to Request for Admissions (“Admissions’ Response”)(verifying J. Sotelo’s signature on the Participation Agreement), Ex. 3, attached hereto, at 4:1-7.) 9. The National Funds are express trusts created pursuant to written declarations of trust (“Trust Agreements”) between the Union for and on behalf of itself and affiliated Local Unions, District Councils, State and Provincial Associations and various construction industry employers and employer associations. (See Doc. 64, Exs. 2 and 3 (the Trust Agreements); Sweeney Aff. ¶¶ 5-6 (authenticating the Trust Agreements).) 10. The Service Agreements and Participation Agreement require payment of contributions to the National Funds, which are intended beneficiaries of those Agreements. Id. 11. 11 U.S.C. § 1132(g)(2) and the Trust Agreements require that any employer found to be delinquent in paying contributions shall also pay the Trusts’ reasonable attorney’s fees, court costs, and audit costs incurred in connection with the delinquency, together with prejudgment interest calculated at the rate of twelve percent (12%) per annum and liquidated damages calculated at the rate of ten percent (10%) of the total delinquency for the National Pension Fund and at the rate of twenty percent (20%) of the total delinquency for the Training Fund. (See Doc. 64, Sweeney Aff. ¶ 12 and Exs. 2, 3 and 4.) 12. Sotelo Air submitted monthly contribution remittance reports to the Trust Funds for the work months of May 2008 through March 2013. (See Doc. 84, Ex. 8, at 2:21-3:12 and at Tabs 3-8 thereto (PLUM000297-PLUM000361) (Sotelo Air reports with “Certification and Assent to Labor Agreement”); Ex. 9, at 4:14-5:9 (Sotelo Air, Inc.’s authentication of same). Almost all of the reports included a signed certification that states: CERTIFICATION AND ASSENT TO LABOR AGREEMENT: The undersigned hereby certifies that he or she has been authorized by the employer to prepare and submit this report on behalf of the employer and hereby certifies that the information provided is correct. It is further certified that the employer acknowledges that it is, and by signing Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 6 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7 below shall be signatory and bound to the applicable labor agreement and any modifications or renewals thereof that all compensable hours paid to covered employees by such employer during the period covered are reported herein; and that such employer is bound by, and all payments reported herein are made pursuant to, the applicable labor agreement and trust agreements as required by Section 302(c)(5)(B) of the Labor Management Relations Act. (See Doc. 84, generally Ex. 8, at Tabs 3-8 thereto (PLUM000297-PLUM000361).) 13. Beginning in March of 2010, Sotelo Air’s remittance reports to the Trust Funds also specifically identified the report was provided pursuant to the Service Agreements. (See Id.,, Ex. 8, at Tabs 5-8 thereto, starting at Report for Work Month 03/2010 (top left corner) (PLUM000322-PLUM000361).) B. Termination of Service Agreements 14. The method for termination of the Services Agreements is explained in the Service Agreements, as follows: . . . This Agreement may, however, be terminated by either the Union or a signatory Employer by giving to the other written notice of termination by June 1st of each year (60 days notice), with such termination to be effective August 1st of the year in which such notice is given. (See Id., Ex. 7, at PLUM000127 (Art. XXIII ¶ 84); Ex. 10, at PLUM000281 (Art. XXIII ¶ 84).) 15. In 2010, 2011 and 2012, J. Sotelo met with Union Official Derick Stowell and his staff to discuss the Service Agreement both in person and over the phone. J. Sotelo never asked for clarification or information about terminating the Agreement. (See Id., Ex. 6 ¶ 5.) 16. In early 2013 an employee of Sotelo Air asked the Union how to terminate the Service Agreement. The Union complied. Sotelo Air then sent a written termination letter to the Union dated April 4, 2013. (See Id., Ex. 13 (April 4, 2013, letter); Ex. 6 ¶ 6.) 17. Pursuant to the terms of the Service Agreements, Sotelo Air’s termination became effective on August 1, 2013. (See Id., Compare Ex. 13, with Ex. 10, at PLUM000281 (Art. XXIII ¶ 84).) Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 7 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 8 18. On February 10, 2014, Sotelo Air responded to the Local Trust Funds’ requests for production with a never-before-seen termination letter, allegedly dated May 28, 2008. (See Id., Ex. 18 (Sotelo Air’s Responses to the Trust Funds’ Requests for Production), at the last page; Ex. 12, at 1 ¶ 6.) 19. J. Sotelo claims he delivered the 2008 letter to Richard Carrillo on May 29, 008, but Mr. Carrillo denies this. (See Id., Ex. 19 (Sotelo Air’s responses to second set of request for production), at 2:7-11; Ex. 20 (Carrillo Declaration) ¶ 3; Ex. 12, at 1 ¶ 7. 20. No one at the Union, the Local Trust Funds’ office, the auditor’s office or the Local Trust Funds’ counsel’s office had ever seen the alleged 2008 letter until it was produced for the first time in response to the Local Trust Funds’ written discovery in February 2014. (See Id., Ex. 1 ¶ 6; Ex. 6 ¶ 7; Ex. 12, at 2 ¶ 8; Ex. 14 ¶ 6; Ex. 20 ¶ 3.) 21. Lou Salazar, a former Union employee, testified he never saw the May 28, 2008, termination letter, nor did he know if J. Sotelo ever delivered it to the Union. (Excerpts from Dep. of Guadalupe Salazar dated Dec. 15, 2015, Ex. 4, at 32:10-18, 63:13-22, 65:19-25, 66:1-3.) 22. After Sotelo Air signed the NSMA, the Union referred work to Sotelo Air because it was a signatory contractor. (Ex. 4 (Salazar Dep.), 13:17-25, 14:1-11.) The Union also prepared and distributed different types of advertising for Sotelo Air. (Id. at 16:13-25, 17:1-13.) 23. J. Sotelo called the Union and met with Union officials after Sotelo Air became signatory. (Id. at 19:24-25, 20:1-7, 29:2-8.) J. Sotelo, at times with his wife, had several lunches with Union officials between the years 2008-2011. (Id. at 41:21-25, 42:1-8, 48:4-19.) During these lunches, J. Sotelo never mentioned trying to terminate or abrogate the NSMA. (Id. at 49:20-25, 50:1-12.) C. Audit 24. Stewart Archibald & Barney, CPAs (“SAB”) is an accounting firm engaged by the National Funds to perform “payroll audits” of contributing employers. (Aff. of Glenn Goodnough, attached to the Supplement (Doc. 64) as Ex.1 at ¶ 2.) SAB conducted an audit of Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 8 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 9 Sotelo Air’s payroll records for the period of January 1, 2011 through April 9, 2013 “to determine whether Sotelo Air properly reported and paid employee benefit contributions to the National Funds.” (Id. ¶ 6.) 25. The Audit shows the following delinquencies due and owing to the National Funds: 1. Delinquent contributions for the time period from January 1, 2011-April 9, 2013 - $11,308.93; 2. Interest accrued through August 31, 2013 - $1,227.04; 3. Liquidated Damages -$1,203.44; 4. Audit Fees $1,174.55; 5. Total $14,913.96 (Id. ¶ 8.) Additional interest and audit costs have since accrued from September 1, 2013 through January 14, 2016 in the amount of $3,697.80. (Affidavit of Glenn Goodnough dated January 14, 2016 (“Additional Goodnough Aff.”), attached hereto as Ex. 5, at ¶ 6.) 26. The National Funds’ Trust Agreements provide that, in addition to unpaid contributions, any employer who is found to be delinquent shall pay the National Funds’ reasonable attorney’s fees, court costs, and audit costs incurred in connection with the delinquency, together with prejudgment interest calculated at the rate of twelve percent (12%) per annum and liquidated damages calculated at the rate of ten percent (10%) of the total delinquency for the National Pension Fund and at the rate of twenty percent (20%) of the total delinquency for the Training Fund. (Doc. 64, Ex.1. at ¶ 9.) 27. SAB calculated the interest due on the unpaid contributions to be $1,227.04 through August 31, 2013. (Id. ¶ 9.) Interest has continued to accrue at the rate of twelve percent (12%) per annum so the total amount of interest due and owing through January 14, 2016 is $4,446.84. (Ex. 5, ¶ 7; Revised Audit Findings with updated interest and audit fees is attached hereto as Ex. 6.) 28. SAB calculated the liquidated damages due on the unpaid contributions to be $1,203.44. (Doc. 64, Ex. 1 ¶ 11.) 29. The National Funds have incurred updated audit costs in the amount of $1,652.55. (Ex. 5, ¶ 8; Ex. 6.) Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 9 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 30. In Sotelo Air’s Response to Request for Production of Documents (“Doc. Response”) the only document they cited to contest the audit findings is the alleged May 28, 2008 termination letter. (Doc. Responses attached hereto as Ex. 7, at 2:11-17.) 31. Sotelo Air agrees with the work hours identified in the Local Funds’ Audit and did not dispute the amount of work identified in the Local Funds’ Audit. (See Doc. 84, Ex. 8, at 2:5-7 and at Tab 1 thereto (PLUM000253-PLUM000262) (the Audit); Ex. 9, at 3:20-23 (Sotelo Air, Inc.’s authentication of the amount of work hours identified in the Audit); Ex. 14 ¶ 4.) 32. The number of work hours is the same in the Local Funds’ Audit and the National Funds’ audit. The only difference between the audits is the contribution rates. (Compare Doc. 84, Ex. 8 (Local Funds’ Audit) and Doc. 53, Ex. 1 (National Funds’ Audit); Ex. 5 at ¶ 9.) D. Decisions Regarding Payment of Trust Fund Contributions 33. J. Sotelo is the sole owner, officer and manager of Sotelo Air. (Defendants’ Supplemental Verified Responses to Plaintiffs’ First Set of Interrogatories (“Int. Responses”), attached hereto as Ex. 8, at 3:3-12; J. Sotelo Deposition dated Sept. 3, 2015 (“Second Sotelo Dep.”), Ex. 9, at 53:4-11.) 34. Of key importance, J. Sotelo exercised control and made decisions regarding the preparation and remittance of reports and contributions, or lack thereof, to the National Funds, including the decision not to remit contributions that resulted in the Audit delinquency. (Ex. 8 (Int. Responses) at 8:7-23; Ex. 7 (Doc. Responses) at 7:1-11; Ex. 3 (Adm. Response) at 8:14-19.) 35. J. Sotelo directed his office employees how to fill out the monthly employer report form that was mailed to the Union. (Ex. 2, (First Sotelo Dep.), at 45:10-25, 46 and 47.) J. Sotelo decided on a regular basis to put zero hours on employer report forms to the Trusts. (Id.) 36. J. Sotelo was the officer, owner, member, manager, agent or individual whose duties with Sotelo Air required decision making regarding finances, entering contracts, operations, hiring and firing of work force, controlling wages, calling and holding meetings, directing labor relations, management and preparing work schedules and processing payroll. Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 10 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 11 (Ex. 8 (Int. Responses), at pg. 3-8, Question Nos. 5, 6, 9-13, 18 and 20; Ex. 7 (Doc. Responses) at 7:1-11; Ex. 3 (Adm. Responses) at 4:13-26, 5, 6 and 8:3-13.) 37. J. Sotelo had the authority for Sotelo Air to decide which creditors to pay and when to pay them. (Ex. 8 (Int. Responses), at 4:3-9.) 38. J. Sotelo guaranteed business debts for Sotelo Air and loaned money to Now Services without any type of formal loan documentation. (Ex. 9 (Second Sotelo Dep.), at 32:17- 24, 36:19-25, 37:1-4.) E. Alter Ego 39. Now Services of Nevada LLC, doing business as Plumbing Repair Now and Now Services of Nevada LLC, doing business as Cool Air are the same company. (Ex. 9 (Second Sotelo Dep.), at 9:15-19.) Thus, both companies will be hereafter referred to as Now Services. 40. Now Services and Sotelo Air are both owned and managed by J. Sotelo as the sole officer, owner and manager. (Ex. 2 (First Sotelo Dep.), at 20:7-25, 21:1-10; Ex. 9 (Second Sotelo Dep.), at 40:9-22, 41:1-25, 53:4-11.) 41. J. Sotelo is the Qualified Individual for the Nevada state licensing requirements for Sotelo Air, Cool Air, and Now Services. (Ex. 1; Ex. 9, at Ex. A.) 42. J. Sotelo oversaw the day to day business dealings of Sotelo Air and was the person other employees reported to. (Ex. 3 (Admission Responses), at 7:6-10, 8:25-27, 9:1-3.) 43. J. Sotelo supervised and trained employees and dealt with customers for Sotelo Air and Now Services. (Ex. 2, at 29:8-25; Ex. 9, at 13:9-11.) 44. J. Sotelo and his wife were the only parties with signatory and check writing privileges on bank accounts for Now Services and Sotelo Air. (Ex. 9, at 57:16-25, 58:1-2.) 45. J. Sotelo replaced Sotelo Air with Now Services. (Id. at 9:25, 10:1-4.) Now Services started doing business sometime between February and May of 2014 and that is the same time period that Sotelo Air closed its doors. (Id. at 49:11-25.) Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 11 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 46. Most of the work equipment and office equipment that was owned by Sotelo Air was transferred to Now Services. (Id. at 14:12-24, 25:5-25.) 47. Now Services took over any work that Sotelo Air had when it shut down. (Id. at 22:15-18.) 48. Now Services uses the same bank, business address, shop, yard, phone number, bookkeeper and accountant that Sotelo Air previously used. (Id. at 22:19-25, 23: 1-20, 50:7-23, 52:2-9, 59:10-19.) 49. Tim Naas worked for both Sotelo Air and Now Services as a consultant. (Ex. 2, at 22:5-10; Ex. 9, at 10:21-24.) 50. Sotelo Air did air conditioning and service repairs. Now Services does air conditioning, plumbing and service repairs. (Ex. 2, at 19:15-25, 20:1-6; Ex. 9, at 10:15-17.) F. Western Surety Bonds 51. On May 20, 2014, Western issued License Bond No. 19998 to Now Services of Nevada, LLC dba Cool Air Now in the amount of $15,000.00 for Cool Air’s Nevada contractor license (the “First Bond”). (A copy of the Nevada State Contractor’s Board license information is attached to Sotelo’s Second Dep. as Ex. A.1) 52. On June 27, 2014, Western issued License Bond No. 20479 to Now Services of Nevada, LLC dba Plumbing Repair Now in the amount of $15,000.00 for Plumbing Repair’s Nevada contractor license (“Second Bond”) (hereafter collectively “Bonds”). (A copy of the Nevada State Contractor’s Board license information is attached to Sotelo’s Second Dep. as Ex. B.) 1 The National Funds request that the Court take judicial notice of matters of public record, such as information available on government websites. U.S. ex rel Dingle v. BioPort Corp. 270 F.Supp.2d 968, 972 (W.D. Mich. 2003) aff’d sub nom. Dingle v. Bioport Corp., 388 F.3d 209 (6th Cir. 2004). Public records and government documents are generally considered “not to be subject to reasonable dispute.” Jackson v. City of Columbus, 194 F.3d 737, 745 (6th Cir. 1999). This includes public records and government documents available from reliable sources on the Internet. See, e.g., Cali v. E. Coast Aviation Servs., Ltd., 178 F.Supp.2d 276, 287 (E.D.N.Y. 2001) (taking judicial notice of documents from Pennsylvania state agencies and Federal Aviation Administration). Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 12 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13 32. The Bonds are effective from May 20, 2014 and June 27, 2014 through the current date. (Id.) III. ARGUMENT A. Sotelo Air Acted in Conformity With the Terms of Written Agreements On May 9, 2008, Sotelo Air agreed to become signatory to and bound by the NSMA and the Participation Agreement. These documents satisfy the LMRA requirement that provides before an employer may contribute money to a fund on behalf and for the benefit of an employee, the detailed basis of that contribution must be reduced to a written agreement. 29 U.S.C. § 186(c). The purpose of the writing requirement is to ensure the contributions are for a proper purpose. Nat’l Leadburners Health & Welfare Fund v. O.G. Kelley & Co., 129 F.3d 372, 375 (6th Cir. 1997). The date that the Union General President countersigned the NSMA is immaterial to a factual finding that Sotelo Air was bound to the NSMA, because a countersignature was never required to make the NSMA legally binding. While the LMRA requires a written agreement, it does not require that the agreement be signed. Id.; Bricklayers Local 21 of Ill. Apprenticeship & Training Program v. Banner Restoration, Inc., 385 F.3d 761, 767 (7th Cir. 2004) (“a signature to a collective bargaining agreement is not a prerequisite to finding an employer bound to that agreement”); Moriarty v. Larry G. Lewis Funeral Directors Ltd., 150 F.3d 773, 777 (7th Cir. 1998) (“a signature at the bottom of the collective bargaining agreement itself is unnecessary”). Further, the Participation Agreement was signed by both J. Sotelo and the International Representative on May 9, 2008. (See Doc. 64, Ex. 4.) Sotelo Air’s assertion that J. Sotelo hand-delivered a termination letter to the Union on May 29, 2008 is inconsistent with his own behavior in submitting monthly employer reports forms for parts of five later years, meeting with, calling and going to lunch with Union officials, allowing a payroll audit, receiving work referrals and advertising from the Union and sending a termination notice in 2013. Legally, Sotelo Air’s actions speak louder than its words. A party Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 13 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 may adopt a contract by conduct that shows an intention to abide and be bound by the terms of the agreement. S. Cal. Painters & Allied Trade Dist. Council No. 36 v. Best Interiors, Inc., 359 F.3d 1127, 1133 (9th Cir. 2004); Banner Restoration, 385 F.3d at 767. The existence of other agreements evidencing assent, the submission of the employer to union jurisdiction, submission to an audit by the union or to grievance procedures, representing oneself as a Union business are all relevant indicia of assent to be bound. Id.; Banner Restoration, 385 F.3d at 766 (citing cases). Regular interaction with a Union and compliance with a CBA show an intent to be bound by a CBA. Banner Restoration, 385 F.3d at 767. Additionally, Sotelo Air became bound to the Trust Agreements by being a member of the Association. See, e.g. Doc. 84, Ex. 7 at Article 1 (“The parties recognize the MSCA as the exclusive bargaining agent for all Employers signatory to this Agreement.”) The MSCA is the Mechanical Contractors Association of America, Inc., and its department, the Mechanical Service Contractors of America. See N. Cal. Dist. Council of Hod Carriers v. Penn. Pipeline, Inc., 103 Cal. App. 3d 163, 170-71, 162 Cal. Rptr. 851, 855-56, 108 L.R.R.M. (BNA) 2550 (Ct. App. 1980) (citing Authorized Air Conditioning Co. v. NLRB, 606 F.2d 899 (9th Cir. 1979) & NLRB v. R.O. Pyle Roofing Co., 560 F.2d 1370 (9th Cir. 1977)) (“Once an employer delegates authority to a multi-employer association…the employer will be held bound to the existing agreement, despite efforts to withdraw from negotiations or from the association…An employer is bound to a contract when, on a theory of apparent authority conveyed to a union, the union understands the multi-employer association to effectively operate for the employer”). Sotelo Air also submitted to an audit required by the provisions of the Trust Agreements. See, e.g. Doc. 64, Ex. 2 at 13, Article VI, Section 4 (“The Trustees may, at any time, designate a qualified representative to conduct an audit of the payroll and wage records of any Employer to permit the Trustees to determine whether such Employer is making full payment to the Trustees in the amounts required by a Collective Bargaining Agreement or signed stipulation.”); Ex. 3 at 25, Article IV, Section 4 (“The Trustees may, at any time, designate a qualified representative to Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 14 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 conduct an audit of the payroll, wage and other records of any Employer to permit the Trustees to determine whether such Employer is making full payment to the Trust Fund in the amounts required by the Collective Bargaining Agreements.”) Sotelo Air’s argument that it terminated its agreements with the Union by hand- delivering a letter to the Union on May 29, 2008 must be rejected. The Union is not a party to this lawsuit. Any statement attributed to a Union representative espousing Sotelo Air’s point of view is no more than inadmissible hearsay. The Union does not speak for the National Funds. They are legally distinct, and nothing the Union said, or did not say, did anything to diminish Sotelo Air’s obligation to remit benefit contributions to the Trusts. Waggoner v. Dallaire, 649 F.2d 1362, 1366, 1368 (9th Cir. 1981) (An employer and Union may only modify the terms of employee trust provisions stated in a collective bargaining agreement in strict compliance with the modification requirements found in such an agreement; benefit trusts and union are separate entities); Trs. For Mich. BAC Health Care Fund v. C.S.S. Contracting Co., Inc., 07-12331, 2008 WL 1820879 (E.D. Mich. Apr. 22, 2008) (citing Operating Eng’rs Pension Trust v. Moine Bros. Excavators, CV 85-4492-DWW, 1986 WL 15442 (C.D. Cal. Sept. 25, 1986)) (“The court noted that since the union and the trusts are separate entities ‘the employer could not reasonably rely on the statements of Local 12’s agent concerning the employers obligation to make fringe benefit contributions to the trust.’); see also N.L.R.B. v. Amax Coal Co., a Div. of Amax, 453 U.S. 322, 330-34 (1981) (trustees cannot act in the interests of those that appointed them, but only in the interests of the trust). More to the point, the delivery of a letter to the Union by Sotelo Air was, as a matter of law, plainly insufficient to terminate the CBA. Any party purporting to terminate a labor agreement must comply with Section 8(d) of the National Labor Relations Act (“NLRA”) [29 U.S.C. § 158(d)], which requires: 1) written notice upon the other party to the contract of the proposed termination 60 days prior to the expiration date thereof; 2) an offer to meet and confer for the purpose of negotiating a new contract or a contract containing proposed modifications; 3) Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 15 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 written notice to the Federal Mediation and Conciliation Service; and 4) that all terms and conditions of the existing CBA continue in full force and effect for at least 60 days after the termination notice is served. Defendants have offered literally no evidence, let alone true proof, of compliance with these statutory requirements for termination of a collective bargaining agreement. Without such proof, the Court lacks an adequate factual basis on which to conclude that the alleged rescission of Sotelo Air’s contract with the Union ever occurred. In fact, in the absence of such proof, the Court must conclude that the Service Agreements and Participation Agreement remained in effect. Sotelo Air has demonstrated intent to be bound by the NSMA, Participation Agreement and Trust Agreements by submitting regular monthly remittance reports to the National Trusts, meeting with Union officials, submitting to an audit, and by being a member of the MSCA. The Court should construe these actions as a manifestation of consent to be bound by the NSMA until such was terminated in August 2013. These facts are undisputed. B. The Auditors’ Detailed Statements of Account Establish the Amounts Owed to the National Funds - the Burden Shifts to Sotelo Air “[S]ummary judgment, in a case such as this where the contractual obligation is admitted and only the extent of the debt is at issue, is proper once the moving party sets out a detailed statement of account and the opposing party fails to adduce specific, legally cognizable items of debit or credit not included in the movant’s statement, demonstrating that the amount claimed is inaccurate.” Huge v. Reid, 468 F. Supp. 1024, 1027-28 (N.D. Ala. 1979) (quoting Golden Oil, Inc. v. Exxon Co., 543 F.2d 548, 551 (5th Cir. 1976)); Trs. of the Op’g Eng’rs Pension Trust v. O’Dell, 682 F.Supp. 1506, 1512 (D. Nev. 1988) (same); see also Mcdonald v. Beko Assocs., Inc., 2009 WL 1456754, at *3 (“…in the absence of evidence from defendant demonstrating the actual hours union employees worked, the auditor’s report was sufficient proof of the contributions owed to warrant summary judgment in these amounts”). In deciding the O’Dell case Judge Pro explained that an affidavit from a defendant employer that merely questions or disputes in a general way the amounts alleged to be owed in a Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 16 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17 “detailed statement of account” like an audit report, is insufficient to create a genuine issue of material fact. The Judge ruled: “Although O’Dell has had discovery of the auditor’s report, he does not submit any evidence to substantiate his claim of improper accounting. Instead, without adducing any facts to support his bare contention, O’Dell merely concludes that the auditor reached the wrong result.” Id. Such bare conclusions are not enough to defeat a motion for summary judgment. Id. The National Funds have submitted the Auditor’s Declarations and detailed accountings for the Audit Period (Doc. 64, Ex. 1; Doc. 53, Ex. 1; Exs. 5 and 6 attached hereto.) The detailed accountings set forth the amounts that should have been paid to the National Funds for unreported hours of work. As in O’Dell, summary judgment must be entered in favor of the National Funds in the amounts stated unless “the opposing party” adduces “specific, legally cognizable items of debit or credit not included in the movant’s statement, demonstrating that the amount claimed is inaccurate.” The burden has now shifted to Sotelo Air to contest this evidence, if it can, by submitting evidence of an improper accounting. It is highly doubtful that Sotelo Air can do so. In its Responses to the Local Funds, Sotelo Air authenticated the amount of work hours identified in the Audit. (See Doc. 84, Ex. 9 at 3:2-23; Ex. 14 ¶ 4.) The number of work hours is the same in the Local Funds’ Audit and the National Funds’ audit. The only difference between the audits is the contribution rates. When the National Funds requested specific documents to contend the Audit findings, the only document Sotelo Air produced was the alleged May 2008 termination letter. If the Court agrees that contributions are due and owing such that a judgment in favor of the National Funds must be entered, then the Court must also award the National Funds interest, liquidated damages, reasonable attorney’s fees and costs. See 29 U.S.C. § 1132(g)(2); Trs. of the Constr. Indus. & Laborers Health & Welfare Trust v. Summit Landscape Co., Inc., 309 F.Supp.2d 1228, 1239-1241 (D. Nev. 2004); see also Op’g Eng’rs Pension Trusts v. B & E Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 17 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 18 Backhoe, Inc., 911 F.2d 1347, 1355-56 (9th Cir. 1990) (no de minimis contributions rule for purposes of assessing mandatory damages under 29 U.S.C. § 1132(g)(2), including attorney’s fees). Exhibit 6 establishes the precise amounts owing to the National Funds for all the various forms of damages addressed in the statute, excluding attorney’s fees and costs. The National Funds also request an award of reasonable attorney’s fees and costs.2 Rule 56 requires the entry of summary judgment against a party who fails to establish the existence of an element essential to that party’s case or defense, if that party will bear the burden of proof on that element at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265, 273 (1986). The National Funds respectfully submit that the Defendants cannot meet this burden, and that as a result, the Court must enter summary judgment against them. The Court should adopt the calculations submitted by the National Funds as adequate evidence of the amounts owed. C. Due but Unpaid Contributions Are Plan Assets Typically, employer contributions do not become plan assets until the employer pays the contributions to the plan. Cline v. Indus. Maint. Eng’r & Contracting Co., 200 F.3d 1223, 1234 (9th Cir. 2000). However, many courts in the Ninth Circuit, recognize that Cline does not apply when the agreement governing the plan clearly identifies unpaid employer contributions as plan assets. See e.g., Trs. of the Bricklayers & Allied Craftworkers Local 13 Defined Contribution Pension Trust for S. Nev. v. Marbella Flooring, Inc., 2012 WL 1354070, *12 (D. Nev. 2012); Trs. of the Constr. Indus. & Laborers Health & Welfare Trust v. Vasquez, 2011 WL 4549228, *5 (D. Nev. 2011); Bd. of Trs. of Laborers Health & Welfare Trust Fund for N. Cal. v. Atoll Topui Island, Inc., C 06-3059, 2007 WL 174409, *4-5 (N.D. Cal. Jan. 22, 2007); Trs. of the Bricklayers & Allied Craftworkers Local 13 Defined Contribution Pension Trust for S. Nev. v. Granite Works, Inc., 2:10-CV-00767-HDM, 2011 WL 3159099, *3-4 (D. Nev. July 26, 2011); Bd. of Trs 2 If the Court grants summary judgment for the National Funds, the National Funds will submit evidence to determine reasonable attorney’s fees. Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 18 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 19 of Pipe Trades Dist. Council No. 36 Health & Welfare Trust Fund v. Clifton Enters., Inc., 11- 05447-JST-JSC, 2013 WL 2403573, *6 (N.D. Cal. May 31, 2013).3 This deference to the trust agreement is clear Supreme Court directives. “The statutory scheme, we have often noted, ‘is built around reliance on the face of written plan documents.’” US Airways, Inc. v. McCutchen, ––– U.S. ––––, 133 S. Ct. 1537, 1548, 185 L. Ed. 2d 654 (2013) (quoting Curtiss–Wright Corp. v. Schoonejongen, 514 U.S. 73, 83, 115 S.Ct. 1223, 131 L.Ed.2d 94 (1995)). The courts must enforce the terms of the ERISA plans documents and instruments as written. Heimeshoff v. Hartford Life & Acc. Ins. Co., ––– U.S. ––––, 134 S. Ct. 604, 612, 187 L. Ed. 2d 529 (2013). The question then, is whether the language from the National Funds’ governing documents clearly identifies unpaid contributions as plan assets. Article II, Section 2 of the National Pension Fund’s Trust Agreement (amended March 2, 2010) states, “This Trust Fund consists of (1) such sums of money as have been or shall be paid to the Pension Fund by the Employers as contributions required by Collective Bargaining Agreements or signed stipulations.” (Doc. 64, Ex. 2, p. 5.) Article II, Section 2 of the International Training Fund’s Trust Agreement states, “The assets of this Trust Fund consists of (1) the sums of money that have been or will be paid or which are due and owing to the Fund ... [and] (5) all other contributions and payments to or due and owing to the Trustees from any source to the extent permitted by law” (Id., Ex. 3, p. 6.) The exact language just quoted in both of these Trust Agreements has been found by several courts to clearly define unpaid contributions as plan assets. For example, in Connecticut Pipe Trades Health Fund v. Nettleton, 478 F.Supp.2d 279, 283 (D. Conn. 2007), the Court found that: [T]he Trust Agreements here are clear in defining unpaid contributions to the plan as plan assets. See National Pension Fund Trust Agreement at 15 (defining plan assets as “such sums of money as have been or shall be paid to the Pension Fund 3 But see Bos v. Bd. of Trustees, 795 F.3d 1006, 1011-12 (9th Cir. 2015) (holding that in a bankruptcy case, unpaid contributions do not fall under the 11 U.S.C. § 523(a)(4) exception to discharge, even if the trust agreement defines the unpaid contributions as plan assets). Whereas this is not a bankruptcy case, the concerns in Bos are not applicable here. Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 19 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 20 by the Employers”) (emphasis added) and Int'l Training Fund Trust Agreement at 6 (defining plan assets as “sums of money that have or will be paid or which are due and owing to the Fund by the Employers”) (emphasis added). All contributions required under the Service Agreements, are defined as plan assets by the governing documents of the National Funds. D. J. Sotelo is a Fiduciary J. Sotelo owed a fiduciary duty to the beneficiaries of the National Funds, and he breached that duty. J. Sotelo had total control over payment of benefits and made a conscious decision not to pay any benefits at all. ERISA was enacted to protect the participants of employee benefit plans by establishing standards of conduct for fiduciaries of employee benefit plans. Yeseta v. Baima, 837 F.2d 380, 383 (9th Cir. 1988). A fiduciary under ERISA must ensure that “assets of the plan never inure to the benefit of the employer and shall be held for the exclusive purposes of providing benefits to participants in the plan,” 29 U.S.C. § 1103(c)(1); “discharge his duties with respect to a plan solely in the interests of the participants,” 29 U.S.C. § 1104(a)(1); and shall not use plan assets in any transaction with “a party in interest,” 29 U.S.C. § 1106(a)(1), nor “in his own interest or for his own account,” 29 U.S.C. § 1106(b)(1). A person who breaches these obligations “shall be personally liable to make good to such plan any losses to the plan,” 29 U.S.C. § 1109(a). A person or entity does not need to be named as a trustee to be held liable as a fiduciary under ERISA. A “person is a fiduciary with respect to a plan to the extent” that he or she “…exercises any authority or control respecting management or disposition of [plan] assets.” 29 U.S.C. § 1002(21)(A)(i). For purposes of ERISA, the term Fiduciary is broadly defined. 29 U.S.C. § 1002(21); Ariz. State Carpenters Pension Trust Fund v. Citibank (Ariz.), 125 F.3d 715, 720 (9th Cir. 1997); CSA 401(K) Plan v. Pension Prof’ls, Inc., 195 F.3d 1135, 1140 (9th Cir. 1999); Wright v. Or. Metallurgical Corp., 360 F.3d 1090, 1101 (9th Cir. 2004). Unlike the traditional concept in which a fiduciary is determined by the position a person holds, ERISA broadly construes “fiduciary” in functional terms of authority and control. Mertens v. Hewitt Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 20 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 Assocs, 508 U.S. 248, 251 (1993). The term “fiduciary” under ERISA requires 1) a showing that the plan assets are at issue and 2) that the individual defendants exercised authority or control relating to the management or disposition of such assets. Id. In other words, any person who has control of the management of a plan or its assets is a fiduciary. Ariz. State Carpenters, 125 F.3d at 722. The Ninth Circuit has held that “[t]he words of the ERISA statute, and its purpose of assuring that people who have practical control over an ERISA plan’s money have fiduciary responsibility to the plan’s beneficiaries, require that a person with authority to direct payment of a plan’s money be deemed a fiduciary.” IT Corp. v. Gen. Am. Life Ins., 107 F.3d 1415, 1421 (9th Cir. 1997); Trs. of Constr. Indus. & Laborers Health & Welfare Trust v. Archie, 2:12-CV-225- JCM-VCF, 2014 WL 846498, *5 (D. Nev. Mar. 3, 2014). As discussed above, many courts have adopted the rule that ERISA plan documents are controlling, to the extent that they specifically identify unpaid contributions as plan assets. The National Funds have set forth the provisions of their Trust Agreements, each of which clearly identifies unpaid employer contributions as plan assets. Thus, J. Sotelo will be liable as a fiduciary if he exercised discretionary control over unpaid contributions. Control over unpaid contributions was recently considered in Bello, 2015 WL 880587, at *5. In that case, the company president argued that although he was the company president, he did not make day to day financial decisions regarding payment of creditors and that he could not be held liable as a fiduciary. Judge Gordon disagreed: He may have delegated responsibility over contributions actually made. But as Walldesign’s president, Bello had discretionary authority over Walldesign’s owed debts and general business assets. And Bello decided which Walldesign creditors would be paid and in what order. Other courts faced with this situation have similarly held officers like Bello liable as ERISA fiduciaries of unpaid contributions. I find Bello is liable as an ERISA fiduciary as to unpaid contributions owed, if any….” Id. In this case, the evidence of authority and control is much more straightforward. J. Sotelo’s own sworn testimony was that on a monthly basis, he would direct someone in his Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 21 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 22 office to prepare the contribution remittance reports and to report that zero was due and owing. According to his Responses to Interrogatories and Admissions J. Sotelo had authority to determine how and when to pay creditors, hire and fire employees, control wages and salary, and to pay and assume debt on behalf of Sotelo Air and Now Services. J. Sotelo also admitted that he had control of day to day activities of Sotelo Air and Now Services. The facts are undisputed as to fiduciary liability. J. Sotelo has freely admitted to having exactly the kind of authority and discretion with respect to remittance of benefit contributions that is required to impose fiduciary liability. He breached his fiduciary duty each and every time he decided not to pay the National Funds and he exercised it in a way that can in no way be construed as acting in the best interests of the beneficiaries. Thus, summary judgment is appropriate on this issue. E. Sotelo Air and Now Services are Alter Egos Courts evaluate whether one business may be liable as the alter ego of another through consideration of 1) common ownership, 2) common management, 3) interrelations of operations, and 4) centralized control of labor relations. UA Local 343 United Ass’n of Journeymen & Apprentices of Plumbing & Pipefitting Indus. of U.S. & Canada, AFL-CIO v. Nor-Cal Plumbing, Inc., 48 F.3d 1465, 1470 (9th Cir. 1994). However, “[n]o factor is controlling and all need not be present” (J.M. Tanaka Const., Inc. v. N.L.R.B., 675 F. 2d 1029, 1033 (9th Cir. 1982)), because the alter-ego doctrine is essentially one of equity to be determined by an evaluation of case facts. McLaughlin v. L. Bloom Sons Co., 206 Cal.App.2d 848, 853 (Cal. App. First. Dist. Div. 2, Cal. 1962). Some relevant facts to consider in the alter ego analysis include “‘substantially identical’ management, business purpose, operations, equipment, customers, and supervision, as well as ownership.”’ Haley & Haley v. N.L.R.B., 880 F.2d 1147, 1150 (9th Cir. 1989) and Dariano & Sons, Inc. v. District Counsel of Painters No. 33, 869 F.2d 514, 518 (9th Cir. 1989). However, the foregoing elements and factors are general rules in which no one element or fact will be Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 22 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 23 dispositive because “[t]he focus of the alter ego test . . . is on the existence of a disguised continuance of the same or an attempt to avoid the obligations of a collective bargaining agreement through a sham transaction or a technical change in operations.’” N.L.R.B. v. O’Neill, 965 F.2d 1522, 1529 (9th Cir. 1992)(quoting Haley, 880 F.2d 1147, 49-50 (9th Cir. 1989)). 1. J. Sotelo is the Owner and Manager of both Sotelo Air and Now Services Ownership interests of family members in different companies are treated as common ownership for single employer or alter ego purposes. J.M. Tanaka Const., Inc., at 1034; See Also Southern California Painters & Allied Trades, Dist. Council No. 36 v. Rodin & Co., 558 F.3d 1028, 1032 (9th Cir. 2009) (reiterating that the alter ego determination is not strictly limited to actual common ownership by one individual.) In J.M. Tanaka, the court found, “[A]ll the J.M. Tanaka owners are members of the same family, and Tanaka clearly dominated both corporations.” Common management between entities occurs where the same or substantially the same individuals manage both entities. For at least one court, it is “compelling evidence of alter ego status” where the “members of the same family managed both entities.” Pugent Sound Elec. Workers Health and Welfare Trust v. Deno, 94 Wash. App. 1053 (Wash.App. Div. 1, 1999), 1999 WL 169513 ((Wash.App. Div. 1, 1999). In the instant case, all relevant evidence shows that Sotelo Air and Now Services are actually owned and managed by J. Sotelo. 2. There is an Interrelation of Operations One court found “strong evidence of interrelations of operations” where two companies share (or assumed) office space, staff, production facilities, supply sources, supervisors, employees and attorneys. See J.M. Tanaka Const., Inc., 675 F.2d 1029, 1035. Now Services assumed the same office space, telephone number, staff employees, yard, shop and equipment of Sotelo Air. In addition, Now Services took over any work that was being performed by Sotelo Air. Now Services and Sotelo Air also used the same accountant and consultant. Finally, both used the same air conditioning license classification with the NSCB and J. Sotelo was the Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 23 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 24 Qualified Employee on three (3) out of the four (4) licenses. A strong interrelation of operations exists. 3. Centralized Control of Labor Relations There is no bright line rule regarding labor control and relations. However, some courts have found that joint ownership and substantial control is enough. See Westphal v. Catch Ball Prods. Corp., 953 F.Supp. 475, 479 (S.D.N.Y.1997). There is ample evidence that J. Sotelo was the sole owner and had substantial control of both Sotelo Air and Now Services. He was also the person who made the decisions regarding the hiring and firing of the workforce, scheduling and the reporting and payment (or non-payment) of contributions to the National Funds. He gave directives to his staff to put zero on the employer report forms. J. Sotelo was the person controlling labor relations. 4. Sham and Technical Change is Apparent In J.M. Tanaka, the union threatened in August of 1978 to pull its workers off of J.M. Tanaka, Inc.’s jobs because the contractor owed fringe benefit contributions to its trust funds. That same month, R.M. Tanaka, a construction company, was incorporated with owners and family members of J.M. Tanaka taking primary ownership and control of the company. Like J.M. Tanaka, Now Services was formed after Sotelo Air incurred labor relation problems. Sotelo Air sent its termination letter to the Union in April of 2013. Immediately thereafter, the Trust Funds requested that an audit be performed. While the Trust Funds were trying to perform an audit, J. Sotelo formed his new company Now Services dba Cool Air Now on May 30, 2014. The Local Funds filed their complaint in August 2013. It was around this time that J. Sotelo transferred all of Sotelo Air’s contracts, equipment, office staff, etc. to Now Services. This evidence establishes that J. Sotelo formed Now Services and transferred everything to the new company to avoid his obligation to pay fringe benefit contributions to the National Funds. J. Sotelo decided to utilize Now Services for the sole purpose of avoiding the union once Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 24 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 25 the Trust Funds took actions to recover delinquencies. The undisputed facts show that Sotelo Air and Now Services are alter egos. F. Western is Liable to the Same Extent as Now Services If the Court agrees that contributions are owed, such that a judgment in favor of the National Funds will be entered against Now Services, then the Court must enter judgment against Defendant Western because it is Now Service’s surety. Licensing bonds like those issued by Western are required by law and they are intended to compensate persons harmed as a result of the wrongful conduct of licensed contractors. See N.R.S. 624.273(1)(d) (“Each bond…required by NRS 624.270 must be…for the benefit of any person who…Is injured by any unlawful act or omission of the contractor in the performance of a contract”). The failure to pay fringe benefit contributions is either an unlawful act or an omission contemplated by the statute, and it gives rise to an action on bonds to employee benefit trust funds, as persons injured by unlawful acts or omissions of contractors. Genix Supply Co. v. Bd. of Trs., 84 Nev. 246 (Nev. 1968). This rule holds in ERISA trust fund collection cases even if the surety does not foresee the particular scenario in which liability under a bond arises. See Summit Landscape Co., Inc., 309 F.Supp.2d at 1244. In Trs. of Cement Masons & Plasterers Health & Welfare Trust v. Fabel Concrete, Inc., 159 F.Supp.2d 1249, 1252-53 (D. Nev. 2001), the Court held that: Old Republic issued a bond to Enterprise to cover labor performed regardless of whether Enterprise was in or would enter into any labor agreement…Even if Old Republic was not aware of Enterprise’s connections to Concrete upon issuance of the Enterprise Bond, Old Republic took on any future liabilities incurred by Enterprise. Those liabilities include any resulting from a labor agreement or an attempt by Enterprise to escape liabilities owed by its alter-ego, Concrete…under Nev. Rev. Stat. 624.273(1), Old Republic is liable to Trust Funds for the amount of the Enterprise Bond. Id. at 1252-53 (emphasis added). The facts here are the same. The National Funds must be awarded the Western Surety Bonds’ proceeds if Now Services is the alter-ego of Sotelo Air. Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 25 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 26 Summary judgment has been granted to employee benefit trust funds and against sureties in the past by this Court. See Trs. of Constr. Indus. & Laborers Health & Welfare Trust v. B. Witt Concrete Cutting, Inc., 685 F. Supp. 2d 1158, 1164 (D. Nev. 2010) (granting summary judgment against a surety, including an award of audit fees); see also Summit Landscape, 309 F. Supp. 2d at 1244 (entering judgment against bonding companies, including sums for unpaid contributions, interest, liquidated damages and reasonable attorneys’ fees, all as required by 29 U.S.C. § 1132). The State Courts of Nevada have also granted summary judgment in similar cases. Genix Supply, 84 Nev. at 247; Trs. of the Plumbers & Pipefitters Union Local 525 Health & Welfare Trust Plan v. Developers Sur. & Indem. Co., 120 Nev. 56, 84 P.3d 59 (2004) (reversing trial court’s decision not to award attorney’s fees to trusts funds, after properly granting summary judgment in a case brought against a surety). Summary judgment against Western is appropriate here. The Bonds are effective from May 2014 and June 2014 to the present time. Sotelo Air and its alter ego Now Services incurred liabilities to the National Funds in excess of the penal sum of the Bond when attorney’s fees and costs are added. See Ex. 6. Judgment against Western must be entered in the total amount due. F. Defendants’ Possible Defenses Are Extremely Limited Even if Sotelo Air had a defense to assert, such defenses are extremely limited in this type of case. The National Funds are third-party beneficiaries of Sotelo Air’s Service Agreements. There is no contract between the parties to this litigation, and thus all contract defenses are inapplicable. The National Funds are not a party to the Service Agreement and played no role in its negotiation. The National Funds simply rely, as they must, on the written documents they receive (including labor agreements). See Cent. States, Se. and Sw. Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1151 (7th Cir. 1989). Six years after passing ERISA, Congress enacted the Multiemployer Pension Plan Amendments Act of 1980 (“MPPAA”) to address the concern that otherwise “simple collection actions brought by plan trustees have been converted into lengthy, costly and complex litigation Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 26 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 27 concerning claims and defenses unrelated to the employer’s promise and the plans’ entitlement to the contributions.” See Senate Committee on Labor and Human Resources, S. 1076-The Multiemployer Pension Plan Amendments Act of 1980: Summary & Analysis of Consideration, 96th Cong., 2d Sess., 44 (Comm. Print, Apr. 1980); see also Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 87 (1982). Section 306(a) of the MPPAA (also known as ERISA § 515, codified at 29 U.S.C. § 1145) provides as follows: Every employer who is obligated to make contributions to a multi-employer 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. Cases decided under the MPPAA confirm that defenses available to employers, including equitable defenses and contract avoidance defenses, in actions under Section 1145 (quoted above) are extremely limited. See, e.g. MacKillop v. Lowe’s Market, Inc., 58 F.3d 1441, 1443-44 (9th Cir. 1995); S. Cal. Retail Clerks Union v. Bjorklund, 728 F.2d 1262, 1265 (9th Cir. 1984). Because Trust Fund fiduciaries have an affirmative obligation to pay benefits to eligible employees, regardless of the levels of contributions received, and because the Trust Funds themselves are not parties to labor agreements, federal law has been drafted by Congress and interpreted by the Courts in such a way as to maximize a Trust Fund’s ability to collect contributions from employers, while at the same time insulating Trust Funds from nearly all defenses, including, and perhaps most especially, labor agreement formation and avoidance defenses. Given the ways in which Congress has repeatedly sought to protect employees’ earned benefits, one court famously noted that “Multiemployer employee benefit plans are something of the darlings of Congress” (Benson v. Brower's Moving & Storage, Inc., 726 F.Supp.31 (E.D.N.Y. 1989)) most likely because “‘millions of workers depend upon the employee benefit trust funds for their retirement security.’” Carpenters Health & Welfare Trust Fund for California v. Bla- Delco Const., Inc., 8 F.3d 1365, 1369 (9th Cir. 1993) (citing Southwest Administrators, Inc. v. Rozay’s Transfer, 791 F.2d 769, 773 (9th Cir.1986)). Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 27 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 28 The courts have long rejected employer attempts to avoid paying fringe benefit contributions based not on the conduct of benefit plans, but on the alleged conduct of unions. In 1960 the United States Supreme Court held that contract breaches attributable to a union, and contract defenses that might work in a suit brought by a union, are not valid defenses in suits brought by Trust Funds to collect unpaid employee benefit contributions. Lewis v. Benedict Coal Corp., 361 U.S. 459. For a defense to be viable under the applicable standard, in the context of an ERISA Trust Fund collection action, the defense must, of necessity, prove that the labor agreement was not merely voidable, but was in fact void ab initio (i.e., it was an illegal contract–a contract that could not lawfully come into existence). In Bjorklund, the Ninth Circuit explained that under applicable precedent interpreting the MPPAA (Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982)) “an employer can successfully defend a suit for delinquent contributions by showing that the promise to make contributions was itself illegal.” Thus, contract termination defenses are impermissible in this case (See Carpenters Health and Welfare Trust Fund for California v. Bla- Delco Construction, Inc., 8 F.3d 1365, 1369 (9th Cir. 1993)), and Defendants can be held responsible for paying ERISA plan contributions regardless of alleged defects in the labor agreement. See MacKillop v. Lowe’s Market, Inc., 58 F.3d 1441, 1443 (9th Cir. 1995) (citing ERISA § 515, 29 U.S.C. § 1145. IV. CONCLUSION The National Funds have demonstrated that there is no dispute of material fact and that they are entitled to judgment as a matter of law – that there was an manifestation of an intent to be bound by the Service Agreements, fringe benefit contributions were required for work performed by Sotelo Air employees, and J. Sotelo breached his fiduciary duty to the National Funds by failing to ensure those contributions were properly remitted. The National Funds have carried their burden under Celotex and under O’Dell, and judgment must be entered in the Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 28 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 amounts found in the detailed account statements attached as exhibits, unless the opposing parties prove that the accounting practices that resulted in the statements were improper. Further, J. Sotelo transferred all of Sotelo Air’s assets to a new company Now Services in order to avoid the Audit obligations. Therefore, Now Services in liable to the same extent as Sotelo Air. Western, as Now Service’s surety, is liable to the same extent as Sotelo Air, in the full amount of the Bonds, plus attorney’s fees and costs pursuant to NRS 18.010(2)(a). In the event that the Court grants Summary Judgment in favor of their favor, the National Funds request the right to submit additional briefing regarding the amount of damages. Congress chose to impose on the Trustees the duty to take all reasonable steps to collect debts owed to employee benefit trusts. Chao v. Merino, 452 F.3d 174 (2d. Cir. 2006). ERISA was designed to ensure that employee benefit trusts are not only reimbursed for delinquent contributions but also that they will receive significant extra funding in delinquency cases. N.Y. State Teamsters Conf. Pension & Retirement Fund v. Fratto Curbing Co., 875 F. Supp 129 (N.D.N.Y. 1995). Congress expressly invited the National Funds to seek the types of relief requested in this motion. The facts and the law are clear and undisputed. The National Funds’ Motion for Summary Judgment should be granted in its entirety. DATED this 26th day of September, 2016. CHRISTENSEN JAMES & MARTIN By: /s/ Laura J. Wolff Laura J. Wolff, Esq. Attorneys for National Funds Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 29 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 30 CERTIFICATE OF SERVICE I am an employee of Christensen James & Martin. On September 26, 2016, I caused a true and correct copy of the foregoing papers to be served in the following manner: ☒ ELECTRONIC SERVICE: Pursuant to Local Rule LR 5-4 of the United States District Court for the District of Nevada, the above-referenced document was electronically filed and served on all appearing parties through the Notice of Electronic Filing automatically generated by the Court. ☐ UNITED STATES MAIL: By depositing a true and correct copy of the above- referenced document into the United States Mail with prepaid first-class postage, addressed to the parties at their last-known mailing address(es): ☐ OVERNIGHT COURIER: By depositing a true and correct copy of the above- referenced document for overnight delivery via a nationally-recognized courier, addressed to the parties listed below at their last-known mailing address. ☐ FACSIMILE: By sending the above-referenced document via facsimile to those persons listed on the attached service list at the facsimile numbers set forth thereon By: /s/ Natalie Saville Case 2:13-cv-00657-RFB-NJK Document 141 Filed 09/26/16 Page 30 of 30 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C H R IS T E N SE N J A M E S & M A R T IN 74 40 W ES T SA H A R A A V E. , L A S V EG A S, N EV A D A 8 91 17 P H : ( 70 2) 2 55 -1 71 8 § F A X : ( 70 2) 2 55 -0 87 1 CHRISTENSEN JAMES & MARTIN KEVIN B. CHRISTENSEN, ESQ. (175) LAURA J. WOLFF, ESQ. (6869) DARYL E. MARTIN, ESQ. (6735) Email: kbc@cjmlv.com, ljw@cjmlv.com, dem@cjmlv.com 7440 W. Sahara Avenue Las Vegas, Nevada 89117 Tel.: (702) 255-1718 Attorneys for National Funds UNITED STATES DISTRICT COURT DISTRICT OF 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 the Trustees of the Plumbers and Pipefitters Local Union 525 Apprentice and Journeyman Training Trust for Southern Nevada, Plaintiffs, vs. Juan Carrilio Sotelo dba Sotelo Air; Sotelo Air, Inc., dba Cool Air Now; Aegis Security Insurance Company, a Pennsylvania corporation; American Safety Casualty Insurance Company, a Georgia corporation, Defendants. Case No.: 2:13-CV-00657-RFB-NJK CONSOLIDATED WITH: Case No.: 2:14-cv-01609-JAD-CWH DECLARATION OF COUNSEL IN SUPPORT OF THE PLUMBERS AND PIPEFITTERS NATIONAL PENSION FUND AND THE INTERNATIONAL TRAINING FUNDS’ MOTION FOR SUMMARY JUDGMENT Date: N/A Time: N/A Trustees of the Plumbers and Pipefitters National Pension Fund and International Training Fund, Plaintiffs, vs. Juan Carrilio Sotelo dba Sotelo Air; Sotelo Air, Inc. dba Cool Air Now; 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. Case 2:13-cv-00657-RFB-NJK Document 141-1 Filed 09/26/16 Page 1 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- DECLARATION OF LAURA J. WOLFF, ESQ. STATE OF NEVADA) :ss. COUNTY OF CLARK) Laura J. Wolff, Esq., being first duly sworn and under penalty of perjury of the laws of the United States of America and the State of Nevada, now deposes and says that: 1. I am at least 18 years of age and of sound mind. I personally prepared this Declaration and I am familiar with all factual statements it contains, which I know to be true and correct, except for any statements made on information and belief, which statements I believe to be true. I am competent to testify to the same and would so testify if called upon as a witness. 2. I am an attorney licensed to practice before all state and federal courts of the State of Nevada. 3. I am employed by Christensen James & Martin, collection counsel for Plumbers and Pipefitters National Pension Fund and International Training Fund (“National Funds”). 4. I make this Declaration in support of the National Funds’ Motion for Summary Judgment (“Motion”). 5. Attached to the Motion as Exhibit 1 is a true and correct copy of the records I accessed and obtained from the Nevada State Contractor’s Board license search for Juan Carrilio Sotelo dba Sotelo Air and Sotelo Air, Inc. dba Cool Air Now. 6. Attached to the Motion as Exhibit 2 is a true and correct copy of excerpts from the deposition transcript that I obtained from Bryce Loveland, Esq.’s office for the Deposition of Juan Sotelo taken on May 8, 2014. 7. Attached to the Motion as Exhibit 3 is a true and correct copy of the Defendants’ Response to Request for Admissions that I received from Defendants’ counsel. Case 2:13-cv-00657-RFB-NJK Document 141-1 Filed 09/26/16 Page 2 of 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- 8. Attached to the Motion as Exhibit 4 is a true and correct copy of the deposition transcript that I obtained from the Court Reporter for the Deposition of Guadalupe Salazar taken on Dec. 15, 2015. 9. Attached to the Motion as Exhibit 7 is a true and correct copy of the Defendants’ Response to Requests for Production that I received from Defendants’ counsel. 10. Attached to the Motion as Exhibit 8 is a true and correct copy of the Supplemental Verified Responses to Plaintiff’s First Set of Interrogatories to Defendants that I received from Defendants’ counsel. 11. Attached to the Motion as Exhibit 9 is a true and correct copy of the deposition transcript that I obtained from the Court Reporter for the Deposition of Juan Carrilio Sotelo taken on September 3, 2015. Further your affiant sayeth naught. DATED this 14th day of January, 2016. /s/ Laura J.Wolff_______ Laura J. Wolff, Esq. Case 2:13-cv-00657-RFB-NJK Document 141-1 Filed 09/26/16 Page 3 of 3