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Puget Sound Electrical Workers Health and Welfare Trust v. Lighthouse Electrical Group

United States District Court, Ninth Circuit

October 15, 2013



RICHARD A. JONES, District Judge.


This matter comes before the court on a motion for summary judgment by plaintiffs Puget Sound Electrical Workers Healthcare Trust, Puget Sound Electrical Workers Pension Trust, Puget Sound Electrical Joint Apprenticeship & Training Trust, and National Electrical Benefit Fund (the "Trust Funds" or "plaintiffs"). Dkt. # 26. Plaintiffs move for entry of summary judgment against defendant Travelers Casualty and Surety Company of America ("Travelers") and seek to foreclose upon certain bond and retainage funds under RCW 39.08 and RCW 60.28.[1] Travelers filed an opposition, and, in the same document, purported to file a cross-motion to dismiss. However, under this District's Local Civil Rules ("LCR"), a party filing a cross motion must note it in accordance with the local rules. LCR 7(k). Dispositive motions must be noted on the fourth Friday after filing. LCR 7(d)(3). Traveler's cross motion to dismiss was filed on May 20, 2013, and was noted for May 24, 2013. Dkt. # 32. Accordingly, the court DENIES Traveler's purported cross-motion to dismiss without prejudice as procedurally improper.[2] Additionally, Travelers has not challenged the merits of plaintiffs' lien claims, but, rather, has asserted defenses of res judicata and compulsory counterclaim in response to plaintiffs' motion for summary judgment. Accordingly, the court only addresses these arguments below.


This case arises out of a construction project at Seattle Central Community College ("SCCC Project"). Dkt. # 28 (Maxwell Decl.) ¶ 2. Jody Miller Construction ("JMC") was the general contractor, and Lighthouse Electrical Group Limited Partnership ("Lighthouse") was the subcontractor from April 25, 2010 through January 8, 2012. Id. Travelers, as surety, issued a Payment and Performance Bond to JMC to cover the SCCC Project. Id. ¶ 12, Ex. 13. Lighthouse was a party to labor and trust agreements that required payment of contractual contributions to the Trust Funds. See Dkt. # 27 (Kirkpatrick Decl.) ¶¶ 7-12, Exs. 1-10. However, Lighthouse failed to pay the contributions as required by contract, entitling the Trust Fund to the unpaid fringe benefit contributions, liquidated damages, and accrued prejudgment interest. Id.

In January 2012, plaintiffs filed a Notice of Claim of Lien against the State of Washington as project owner, Travelers as surety, and JMC as general contractor. Dkt. # 28 (Maxwell Decl.) ¶ 2. Plaintiffs filed this action in February 2012 against Lighthouse and Lighthouse Electrical, Inc. alleging claims under the Employee Retirement Income Security Act ("ERISA") and the Labor Management Relations Act ("LMRA"). Id. ¶ 3: Dkt. # 1. On March 2, 2012, plaintiffs filed a Second Notice of Claim of Lien, which revised the amounts claimed under by the Trust Funds for the work Lighthouse performed on the SCCC Project. Dkt. # 28 at 46 (Maxwell Decl.) ¶ 4, Ex. 15. On March 5, 2012, Columbia State Bank, which is purportedly Lighthouse's largest creditor, initiated a state court receivership in King County Superior Court against Lighthouse and its general partner. Id. ¶ 5. Plaintiffs did not participate in that action. Id.

On May 5, 2012, plaintiffs filed a separate action in this court against JMC and Travelers seeking to foreclose lien claims under RCW 39.08 and 60.28. Puget Sound Elec. Workers Health & Welfare Trust v. Travelers Cas. & Sur. Co. of Am., Case No. C12-789RAJ, Dkt. # 1. Plaintiffs alleged that the court had supplemental jurisdiction over that action based on this separate case. Id. ¶ 2.1. On January 9, 2013, this court disagreed, held that the court lacked subject matter jurisdiction, and dismissed that action. Case No. 12-789, Dkt. # 25. On January 11, 2013, Travelers filed a complaint for declaratory relief against the Trust Funds in King County Superior Court. Dkt. # 28 at 56 (Ex. 16 to Maxwell Decl.). In that case, Travelers sought a declaration that any rights of the Trust Funds to pursue claims against Travelers' RCW 39.08 and RCW 60.28 payment and retainage bonds are preempted by ERISA. Id. at 62 (Ex. 16). On January 14, 2013, in this case, the Trust Funds moved the court to amend the complaint to add its state law claims against JMC and Travelers, and the court granted the motion on March 22, 2013. Dkt. ## 15, 18. The Trust Funds filed the amended complaint on April 3, 2013 (Dkt. # 19), served JMC with the summons and complaint on April 4 (Dkt. # 24), and served Travelers with the summons and complaint on April 5 (Dkt. # 23).

Plaintiffs filed the pending motion for summary judgment against Travelers on April 26, 2013. Dkt. # 26. On May 7, 2013, the Honorable Mary I. Yu granted Travelers' motion for judgment on the pleadings in the King County case, finding that the lien claims of the Trust Funds under RCW 39.04 and 60.28 against Travelers and its payment and performance bonds are barred by 29 U.S.C. § 1144 and the Washington Supreme Court. Dkt. # 33-1 at 2-3 (Ex. A to Blischke Decl.). On June 10, 2013, Judge Yu denied the Trust Funds' motion for reconsideration. Dkt. # 41.


A. Legal Standard

Summary judgment is appropriate if there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the moving party will have the burden of proof at trial, it must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party. Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986). On an issue where the nonmoving party will bear the burden of proof at trial, the moving party can prevail by either (1) producing evidence negating an essential element of the nonmoving party's claim or defense or (2) showing that the nonmoving party does not have enough evidence of an essential element to carry its burden of persuasion at trial. Nissan Fire & Marine Ins. Co. LTD v. Fritz Cos., Inc., 210 F.3d 1099, 1102, 1104, 1106 (9th Cir. 2000); see Celotex Corp., 477 U.S. at 325 ("the burden on the moving party may be discharged by showing' that is, pointing out to the district court that there is an absence of evidence to support the nonmoving party's case."). If the moving party meets the initial burden, the opposing party must set forth specific facts showing that there is a genuine issue of fact for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). The court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Reeves v. Sanderson Plumbing Prods., 530 U.S. 133, 150-51 (2000).

As a preliminary matter, the court notes that Travelers (the nonmoving party) will bear the burden of proof on its defenses of res judicata and compulsory counterclaim. Celotex Corp., 477 U.S. at 325. Accordingly, the Trust Funds can prevail either by producing evidence negating an essential element of the defenses or by showing that there is an absence of evidence to support these defenses. Nissan Fire, 210 F.3d at 1102, 1104, 1106.

B. Res Judicata

"Whether a prior state court judgment precludes relitigation of an identical claim in federal court depends on the preclusion rules of the state." Gupta v. Thai Airways Intern., Ltd., 487 F.3d 759, 765 (9th Cir. 2007). "This principle results from the statutory command in 28 U.S.C. § 1738 that judicial proceedings... shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State from which they are taken.'" Id. "This statute has ...

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