Unite Here Retirement Fund et al v. City Of San Jose, No. 5:2020cv06069 - Document 115 (N.D. Cal. 2023)
Court Description: ORDER Denying 95 Motion for Summary Judgment; Denying 97 Motion for Summary Judgment; Granting in Part and Denying in Part 100 Motion for Summary Judgment. Signed by Judge Edward J. Davila on 8/11/2023. (ejdlc3, COURT STAFF) (Filed on 8/11/2023)
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Unite Here Retirement Fund et al v. City Of San Jose Doc. 115 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 1 of 13 1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 8 UNITE HERE RETIREMENT FUND, et al., 9 10 United States District Court Northern District of California 11 12 Plaintiffs, Case No. 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT v. Re: ECF Nos. 95, 97, 100 CITY OF SAN JOSE, et al., Defendants. 13 14 This matter comes before the Court on a dispute regarding a withdrawal liability imposed 15 by the Employee Retirement Income Security Act (“ERISA”), as amended by the Multiemployer 16 Pension Plan Amendments Act of 1980 (“MPPAA”). The MPPAA requires an employer 17 withdrawing from a multiemployer pension plan to pay the unfunded vested benefits attributable 18 to the withdrawing employer’s participation in the plan. Resilient Floor Covering Pension Fund 19 v. M&M Installation, Inc., 630 F.3d 848, 851 (9th Cir. 2010). At least one of Defendants City of 20 San Jose (the “City”) and Dolce International/San Jose, LLC (“Dolce International”) incurred such 21 a liability when withdrawing from a multiemployer plan maintained by Plaintiffs Unite Here 22 Retirement Fund and Trustees of the Unite Here Retirement Fund (collectively, “Unite Here”), but 23 the parties disagree over who is responsible for paying that liability. 24 25 Now before the Court are three separate cross-motions for summary judgment. The City moved for summary judgment that Dolce International is the employer responsible for paying the 26 27 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 1 Dockets.Justia.com United States District Court Northern District of California Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 2 of 13 1 withdrawal liability.1 Dolce International moved for summary judgment that it is not responsible 2 for the withdrawal liability. And Unite Here moved for summary judgment that Dolce 3 International is responsible or, in the alternative, that the City is responsible. After careful 4 consideration of the parties’ briefs and the record in this matter, the Court determined that these 5 motions were suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b). For 6 the reasons that follow, the Court DENIES the City’s motion, DENIES Dolce International’s 7 motion, and GRANTS IN PART and DENIES IN PART Unite Here’s motion. 8 I. BACKGROUND 9 From at least 2003 through early 2019, the City owned a hotel and conference center 10 known as the Hayes Mansion. Stipulation, Ex. A (“Amended Joint Statement of Undisputed 11 Facts” or “JSUF”) ¶¶ 4, 6, ECF No. 98. The City contracted with Dolce International to manage 12 and operate the facility, and the two memorialized this arrangement in a Management Agreement 13 that they executed in December 2003. Id. ¶ 7; Joint App., ECF No. 93, Ex. A (“Management 14 Agreement”). Under the terms of the Agreement, Dolce International was required to carry out 15 certain responsibilities “on the [City’s] behalf,” including the responsibilities to: 16 2.4(i) unless otherwise directed by [the City], pay all Operating Expenses when due[, including pension contributions (see JSUF ¶¶ 52–54; Management Agreement ¶ 1.35(a))]; *** 2.4(p) negotiate for the best interest of the [City] with any labor unions representing employees of the [Hayes Mansion], and . . . consult with the [City] in advance of, and, to the extent practicable, during the course of, negotiations with any labor union; [and] *** 2.4(v) comply with all provisions of any collective bargaining (or similar) agreement [(see also JSUF ¶ 51)]. 17 18 19 20 21 22 23 Management Agreement ¶¶ 2.4(i), (p), (v). 24 25 26 27 28 1 The City raises for the first time in its opposition that the pension plan is a government plan exempt from ERISA. City Opp’n at 13–14, ECF No. 102. Because the City presents that argument as an affirmative basis for shielding itself from withdrawal liability, it should have raised the defense in its motion. Therefore, it is procedurally improper for the Court to consider that defense in this Order. Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 2 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 3 of 13 During the period when Dolce International managed the Hayes Mansion, certain United States District Court Northern District of California 1 2 employees at the Hayes Mansion were subject to a series of collective bargaining agreements 3 (“CBAs”) between their local union and “Dolce Hayes Mansion,” which is a fictitious business 4 name first registered by the City but later refiled by Dolce International. JSUF ¶ 15–16; Req. for 5 Judicial Not., Ex. A, ECF No. 97-62; Decl. of Matthew J. Goodman, Ex. 1, ECF No. 101-2. As 6 relevant here, the CBA covering the period from July 2012 to December 2016, and a letter 7 agreement extending that CBA, were both signed by Yves Hansel, an employee of Dolce 8 International who worked at the Hayes Mansion. Id. ¶¶ 56–57; Decl. of Yves Hansel in Support 9 of Dolce International’s Mot. ¶ 1, ECF No. 97-4. These two agreements obligated “Dolce Hayes 10 Mansion” to contribute to the Unite Here multiemployer pension plan as well as Unite Here’s 11 predecessor fund. JSUF ¶¶ 1, 18. When the City sold the Hayes Mansion in early 2019, the 12 obligation to contribute to the Unite Here multiemployer pension plan was terminated, thereby 13 triggering a withdrawal liability. Id. ¶¶ 24–25. 14 II. LEGAL STANDARD A court may grant summary judgment only “if the movant shows that there is no genuine 15 16 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 17 Civ. P. 56(a). A genuine dispute exists if there is sufficient evidence for a reasonable fact finder to 18 decide in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 19 (1986). And that dispute is material if it might affect the outcome of the suit. Id. When analyzing 20 whether a genuine dispute of material fact exists, a court must “tak[e] the evidence and all 21 reasonable inferences drawn therefrom in the light most favorable to the non-moving party.” 22 2 23 24 25 26 27 28 Dolce International requests judicial notice of three documents: a fictitious business name statement filed by the City with the county recorder (Exhibit A); a glossary of budgetary terms from the City’s website (Exhibit B); and an advisory opinion by the Pension Benefit Guaranty Corporation (Exhibit C). ECF No. 97-6. The Court GRANTS Dolce International’s request but notes that it does not rely on Exhibits B or C because it does not find them relevant to this Order. See Mulhall v. Wells Fargo Bank, N.A., 241 F. Supp. 3d 1046, 1050 (N.D. Cal. 2017) (finding documents filed with county recorder were properly subject to notice); Johnson v. DTBA, LLC, 424 F. Supp. 3d 657, 662 (N.D. Cal. 2019) (noticing public records on government websites); Cork v. CC-Palo Alto, Inc., 534 F. Supp. 3d 1156, 1171–72 (N.D. Cal. 2021) (taking notice of opinion letter from government agency). Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 3 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 4 of 13 1 Torres v. City of Madera, 648 F.3d 1119, 1123 (9th Cir. 2011). If, however, “divergent ultimate 2 inferences may reasonably be drawn from the undisputed facts,” summary judgment is improper. 3 Fresno Motors, LLC v. Mercedes Benz USA, LLC, 771 F.3d 1119, 1125 (9th Cir. 2014) (citation 4 omitted). 5 III. The MPPAA imposes a withdrawal liability on any “employer” that withdraws from a 6 United States District Court Northern District of California DISCUSSION 7 multiemployer pension plan. Resilient Floor, 630 F.3d at 851 (citing 29 U.S.C. § 1381). 8 Although the statute does not define “employer,” the Ninth Circuit has held that, for purposes of 9 withdrawal liability under the MPPAA, an “employer” is “a person who is obligated to contribute 10 to a plan either as a direct employer or in the interest of an employer of the plan's participants.” 11 Id. (collecting cases). In turn, the MPPAA defines “obligation to contribute” as an obligation 12 arising either “(1) under one or more collective bargaining (or related) agreements, or (2) as a 13 result of a duty under applicable labor-management relations law,” but excluding obligations to 14 pay withdrawal liabilities or delinquent contributions. 29 U.S.C. § 1392(a). In this case, where 15 the parties have identified no applicable labor-management relations law, the dispositive issue is 16 whether the City or Dolce International is bound to contribute to the Unite Here plan under the 17 CBA. 18 In many cases, that question may be easy to answer—the signatory to any collective 19 bargaining agreement is bound by the agreement and is therefore the “employer.” See Resilient 20 Floor, 630 F.3d at 852 (observing that the signatory entity was the “employer”). But the facts 21 here are not so straightforward because, even though an employee of Dolce International signed 22 the CBA, Dolce International argues that it was acting as the City’s agent. Dolce Int’l’s Mot. for 23 Summary J. (“Dolce MSJ”) at 15–16, ECF No. 97-1. According to Dolce International, this 24 means that the City held the contractual obligation to make pension contributions such that the 25 City is responsible for the withdrawal liability in this case. Id. 26 The issues of agency identified by Dolce International raise several questions relevant to 27 the Court’s analysis. First, does ERISA permit an agent to bind its principal to a withdrawal 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 4 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 5 of 13 1 liability? Second, was there a principal-agent relationship between the City and Dolce 2 International? Third, if an agency relationship existed, was Dolce International acting within its 3 authority? And finally, if Dolce International was acting within the scope of its authority when it 4 signed the CBA, who was obligated under the CBA? The Court addresses each in turn. 5 A. 6 The City asserts that, even if Dolce International was acting as its agent, it could not be 7 bound by Dolce International’s actions for purposes of withdrawal liability. It makes two 8 arguments to that effect, but neither is availing. 9 United States District Court Northern District of California Effect of an Agency Relationship on ERISA Withdrawal Liability First, the City argues that “[t]he Ninth Circuit has declined to expand the liability for 10 ERISA pension contributions to a party who was not the signatory to the collective bargaining 11 agreement.” City’s Opp’n to Dolce MSJ at 9, ECF No. 102. In so arguing, the City seems to 12 suggest that the definition of “employer” requires a party to directly sign the collective bargaining 13 agreement. But that is not in line with the Ninth Circuit’s definition of “employer” as one who is 14 “obligated to contribute to a plan.” Resilient Floor, 630 F.3d at 851 (emphasis added). Although 15 the Ninth Circuit also recognized that a signatory to the agreement would be an employer, it never 16 stated that only signatories can be employers. See id. at 852. 17 The City’s cited authorities do not aid it in overcoming Resilient Floor. For example, the 18 City cites to Carpenters Southern California Administrative Corp. v. Majestic Housing, 743 F.2d 19 1342 (9th Cir. 1984), for the proposition that only signatories can be liable for ERISA pension 20 contributions. City’s Opp’n to Dolce MSJ at 9. Majestic Housing, though, relies on the definition 21 of “employer” under Title I of ERISA. Id. at 1345–46 (citing definition at 29 U.S.C. § 1002(5)). 22 The Ninth Circuit has explained that the Title I definition “does not apply directly to Title IV [of 23 ERISA], which contains [the] MPPAA” and withdrawal liability provisions. Resilient Floor, 630 24 F.3d at 851. Indeed, the definition of “employer” under Section 1002(5)—“any person acting 25 directly as an employer, or indirectly in the interest of an employer, in relation to an employee 26 benefit plan”—is very different than the definition of “employer” that the Ninth Circuit adopted 27 for purposes of withdrawal liability, which focuses on obligations to contribute. Compare 29 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 5 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 6 of 13 1 U.S.C. § 1002(5), with Resilient Floor, 630 F.3d at 851. As such, Majestic Housing is inapposite. 2 Nor does H.C. Elliott, Inc. v. Carpenters Pension Trust Fund for Northern California, 859 3 F.2d 808 (9th Cir. 1988), help the City’s cause. While the court there stated that, with regards to 4 withdrawal liability, “[t]he word ‘employer’ describes one who was a signatory employer with 5 respect to the plan,” id. at 813, Resilient Floor makes clear that the H.C. Elliott definition applied 6 “in the different context of whether a company remained an employer after it stopped employing 7 people.” Resilient Floor, 630 F.3d at 852 n.4. H.C. Elliott is therefore also inapposite in this case, 8 where the question is whether the City or Dolce International was the employer in the first 9 instance. United States District Court Northern District of California 10 The City’s remaining cases fare no better. See Trs. of Screen Actors Guild-Producers 11 Pension & Health Plans v. NYCA, Inc., 572 F.3d 771, 773 (9th Cir. 2009) (not addressing whether 12 an agent could bind principal to make contributions); Carpenters Health & Welfare Tr. Fund for 13 N. Cal. v. Shirley Constr., Inc., 972 F.2d 1337 (9th Cir. 1992) (unpublished decision that is not 14 citable under Ninth Circuit Rule 36-3). And in fact, one of its cases recognizes that a non- 15 signatory can be bound “by the [CBA] negotiated [o]n its behalf” such that it would be “an 16 employer subject to withdrawal liability.” Div. 1181 A.T.U.-N.Y. Emps. Pension Fund by 17 Cordiello v. City of N.Y. Dep't of Educ., 910 F.3d 608, 615 (2d Cir. 2018) (second alteration in 18 original) (quoting Bowers v. Transportacion Maritima Mexicana, S.A., 901 F.2d 258, 262 (2d Cir. 19 1990)). Consequently, the Court finds that an agent can obligate its principal to a CBA such that 20 the principal is responsible for a withdrawal liability. 21 Second, the City suggests that, even if the definition is focused on obligations rather than 22 signatory status, ERISA does not permit an agent to obligate its principal to pay a withdrawal 23 liability. City’s Reply at 7–9, ECF No. 110. For this argument, it relies on the Eighth Circuit’s 24 decision in Seaway Port Authority of Duluth v. Duluth-Superior ILA Marine Association Restated 25 Pension Plan, 920 F.2d 503 (8th Cir. 1990). In Seaway, the Port Authority argued that it was not 26 an employer under MPPAA, but rather its managing agent was the employer responsible for a 27 withdrawal liability. Id. at 510. The court agreed, but it did so based on a Minnesota state law 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 6 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 7 of 13 1 that explicitly delimited the Port Authority’s relationship with its managing agents. Id. 2 Specifically, the law provided that “the agent is responsible to pay the employees and to comply 3 with . . . federal laws affecting the employees,” expressly placing the obligation for complying 4 with laws such as the MPPAA in the hands of the Port Authority’s managing agent. Id. (quoting 5 Minn. Stat. § 469.055(11) (1990)). So, far from presenting a sweeping holding that agents can 6 never bind their principals to pay a withdrawal liability, Seaway stands only for the notion that 7 state agency law may remove the power to obligate a principal under ERISA from the scope of an 8 agent’s authority. Because the parties have not identified a comparable state law in this case, the 9 Court finds that it is possible for an agent of the City to obligate the City to pay the withdrawal United States District Court Northern District of California 10 liability. 11 B. Existence of a Principal-Agent Relationship 12 Having concluded that the City can be bound by its agent, the Court turns to whether 13 Dolce International was the City’s agent. The basic notion of an agency relationship is that one 14 entity, called the agent, represents another, called the principal, in dealings with third parties. 15 Rogers v. Roseville SH, LLC, 75 Cal. App. 5th 1065, 1074 (2022) (citation omitted). The agent 16 has “the authority to act for and in the place of the principal for the purpose of bringing him or her 17 into legal relations with third parties.” McCollum v. Friendly Hills Travel Ctr., 172 Cal. App. 3d 18 83, 91 (1985). 19 One type of agency is known as “actual agency,” and such a relationship is formed “when 20 the principal's conduct causes the agent reasonably to believe that the principal consents to the 21 agent's act on behalf of the principal.” Rogers, 75 Cal. App. 5th at 1074 (citing Tomerlin v. 22 Canadian Indem. Co., 61 Cal. 2d 638, 643 (1964)). To form an actual agency, the “principal must 23 in some manner indicate that the agent is to act for [the principal], and the agent must act or agree 24 to act on [the principal's] behalf and subject to [the principal's] control.” Id. (alterations in 25 original) (quoting Flores v. Evergreen at San Diego, LLC, 148 Cal. App. 4th 581, 588 (2007)). 26 Put another way, “[w]ords or conduct by both principal and agent are necessary to create the 27 relationship.” Id. (quoting Flores, 148 Cal. App. 4th at 588). 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 7 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 8 of 13 Applying these principles, courts have regularly recognized that property management United States District Court Northern District of California 1 2 agreements of the type between the City and Dolce International create an agency relationship. 3 See, e.g., Burton Way Hotels, Ltd. v. Four Seasons Hotels Ltd., 663 F. App’x 567, 569 (9th Cir. 4 2016) (hotel management agreement); Tehrani v. Joie De Vivre Hosp., LLC, 2020 WL 5408120, at 5 *1 (N.D. Cal. Sept. 9, 2020) (hotel management agreement); Monterey Bay Military Housing, LLC 6 v. Pinnacle Monterey LLC, 116 F. Supp. 3d 1010, 1025–26 (N.D. Cal. 2015) (property 7 management agreement), vacated in part on other grounds, 2015 WL 4624678 (N.D. Cal. Aug. 3, 8 2015); Woolley v. Embassy Suites, Inc., 227 Cal. App. 3d 1520, 1525, 1529–33 (1991) (hotel 9 management agreement). The reason for this is because the role of an agent is to “manage some 10 affair, for another, by authority of and on account of the latter,” meaning that “the very nature of a 11 managerial relation is to delegate authority from principal to agent.” Woolley, 227 Cal. App. 3d at 12 1531. 13 Here, while the City disputes whether Dolce International’s agency theory binds it to the 14 CBA, it never truly contests the existence of an agency relationship between the two of them. Nor 15 could it, as on the factual record before the Court, there can be no genuine dispute that Dolce 16 International was an agent of the City. Although the Management Agreement does not expressly 17 refer to Dolce International as an agent of the City, it makes clear that Dolce International was to 18 act “on the [City’s] behalf.” Management Agreement ¶ 2.4. Moreover, it delegates broad 19 authority to Dolce International to carry out various tasks—including managing and advertising 20 the Hayes Mansion, procuring necessary licenses, and entering into contracts for services and 21 supplies—integral to operating the Hayes Mansion for the City’s benefit. Id. ¶¶ 2.4(a)–(bb). 22 Courts in this district have found similar delegations to form an agency. See Monterey Bay, 116 F. 23 Supp. 3d at 1026 (finding that an agency was established when property owners delegated 24 authority to, inter alia, advertise, lease, operate, select vendors, and obtain insurance). And the 25 Court agrees that the facts in this case lead to the same conclusion. In executing the Management 26 Agreement, the City indicated that Dolce International was required to act for the City, and Dolce 27 International agreed to do so. That is sufficient to form a principal-agent relationship between the 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 8 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 9 of 13 1 2 Consequently, the Court finds that Dolce International was an agent of the City. 3 C. 4 Next, the Court determines the scope Dolce International’s authority and whether it was 5 6 United States District Court Northern District of California two. See Rogers, 75 Cal. App. 5th at 1074. Scope of Dolce International’s Authority acting within the scope of that authority when it signed the CBA. Dolce International plainly had the authority to carry out the tasks that were specifically 7 enumerated in Paragraph 2.4 of the Management Agreement. But actual authority is not limited to 8 express grants of authority—it “may be implied as well as express.” Transport Clearings-Bay 9 Area v. Simmonds, 226 Cal. App. 2d 405, 425 (1964) (citing Hobart v. Hobart Est. Co., 26 Cal. 2d 10 412, 450 (1945)). There are two sources of actual implied authority. First is the “very broad” 11 authority of a general agent or manager that “embrac[es] . . . all acts customarily connected with 12 the business in which he is engaged.” Id. (quoting Hobart, 26 Cal. 2d at 450). Second, “[a]n 13 agent has implied authority to use any means that are incidental to and reasonably proper in the 14 performance of an assigned task.” Garber v. Prudential Ins. Co. of Am., 203 Cal. App. 2d 693, 15 701 (1962) (citations omitted). Even if an action is “an entirely different kind of act” than an 16 expressly authorized one, it still falls within the scope of this category of implied authority if it (a) 17 “is subordinate to or pertinent to an [expressly authorized] act” and (b) is “within the ultimate 18 objective of the principal.” Id. at 702 (quoting Restatement (Second) of Agency § 229 cmt. b). It 19 does not matter that a principal “has no reason to expect the particular [agent] to perform the act” 20 as long as the act is one which “is not unlikely that such [an agent] might do.” Id. (quoting 21 Restatement (Second) of Agency § 229 cmt. b). 22 There is nothing in the Management Agreement that expressly authorizes Dolce 23 International to sign the CBA on behalf of the City, so the only potential source of authority for 24 that action is implied. The record is devoid of evidence regarding how the hotel industry 25 customarily interacts with unions, so the Court cannot conclude on summary judgment that Dolce 26 International was acting within the first category of actual implied authority. However, the Court 27 can conclude that signing the CBA on behalf of the City falls within the second category of actual 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 9 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 10 of 13 1 United States District Court Northern District of California 2 implied authority: acts incidental to expressly assigned tasks. Many of the tasks that the City expressly delegated to Dolce International relate to issues 3 of collective bargaining. Under the Management Agreement, Dolce International was required to 4 comply with any collective bargaining agreements and pay operating expenses, including expenses 5 owed under the CBA, on behalf of the City. Management Agreement ¶¶ 1.35(a); 2.4(i), 2.4(v); 6 JSUF ¶¶ 52–54. And significantly, Dolce International had the express authority to “negotiate for 7 the best interest of the [City] with any labor unions representing employees of the [Hayes 8 Mansion].” Management Agreement ¶ 2.4(p). The authority to sign the CBA on behalf of the 9 City is undoubtedly incidental to the authority to negotiate the CBA on behalf of the City, 10 especially in the context of the other express authorities relating to the CBA. There is no doubt 11 that signing the CBA is at least “pertinent” to negotiating the CBA. And when considering the 12 City’s express delegations as a whole, the only reasonable inference is that the City’s “ultimate 13 objective” was to ensure that a collective bargaining agreement was in place for employees 14 working at the Hayes Mansion. Signing the CBA on the City’s behalf falls “within” that 15 objective; indeed, given that Dolce International already had the express authority to negotiate the 16 CBA on the City’s behalf, authorizing Dolce International to also sign the CBA on the City’s 17 behalf—a relatively ministerial task entailing much less discretion than negotiations—is a natural, 18 implied extension of the authority to negotiate. 19 20 Accordingly, the Court finds that there is no genuine dispute that it was within the scope of Dolce International’s authority sign the CBA on behalf of the City. Determining the “Employer” 21 D. 22 Since the Court has found that Dolce International was acting as the City’s agent within the 23 scope of its authority when signing the CBA, all that remains is to determine who was bound by 24 the CBA. 25 The general rule is that, when an agent signs a contract with a third party on behalf of a 26 principal that is disclosed, that principal is liable on the contract, but the agent is not. Sulimani v. 27 Liberty Ins. Corp., 2021 WL 9057596, at *7 (N.D. Cal. July 20, 2021) (first citing Cline v. 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 10 United States District Court Northern District of California Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 11 of 13 1 Atwood, 241 Cal. App. 2d 108, 113 (1966); and then citing Lippert v. Bailey, 214 Cal. App. 2d 2 376, 382 (1966)). But, if the identity of the principal is undisclosed, the calculus changes. 3 Although “a contract made by an agent for an undisclosed principal is . . . the contract of the 4 principal, it also may be considered the contract of the agent.” Stephan v. Maloof, 274 Cal. App. 5 2d 843, 850 (1969). As such, “either the principal or the agent may be held liable on [the 6 contract].” Aluma Sys. Concrete Constr. of Cal. v. Nibbi Bros. Inc., 2 Cal. App. 5th 620, 628 7 (2016) (citation omitted) (emphasis added). 8 At the outset, the Court observes that a principal is considered a party to the contract 9 regardless of whether it was disclosed to the third party. There is therefore no genuine dispute that 10 the City is obligated under the CBA, so the Court finds that the City is an employer responsible for 11 the withdrawal liability in this case. By contrast, the question of whether Dolce International is 12 also an employer (and thus jointly responsible for the withdrawal liability) turns on the issue of 13 disclosure. 14 Where the name of the principal appears on the face of a contract, the principal is 15 disclosed, and the agent is not bound by the contract. G.W. Anderson Constr. Co. v. Mars Sales, 16 164 Cal. App. 3d 326, 333 (1985); see also Lippert v. Bailey, 241 Cal. App. 2d 376, 382 (1966) 17 (“Where the signature as agent and not as a principal appears on the face of the contract, the 18 principal is liable and not the agent.”). Here, there is no question that the City’s name does not 19 appear on the CBA. Both relevant CBA agreements disclose only that they were signed by or on 20 behalf of “Dolce Hayes Mansion,” which is a fictitious business name. Joint App., Exs. B, L; 21 JSUF ¶ 10. The parties dispute whether that name referred to the City or Dolce International, but 22 that dispute is not material to the outcome of this case. Disclosing only a fictitious business name 23 is insufficient as a matter of law to disclose the identity of the principal. W.W. Leasing Unlimited 24 v. Com. Standard Title Ins. Co., 149 Cal. App. 3d 792, 795–96 (1983); see also Laatz v. Zazzle, 25 Inc., __ F. Supp. 3d __, 2023 WL 4600432, at *11 (N.D. Cal. July 17, 2023) (“[T]he use of a trade 26 name is not sufficient disclosure of the identity of the principal to protect the agent from personal 27 liability . . . .”) (quoting G.W. Andersen Construction Co. v. Mars Sales, 164 Cal. App. 3d 326, 28 Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 11 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 12 of 13 1 332–33 (1985)). So regardless of whether “Dolce Hayes Mansion” referred to the City or to Dolce 2 International, it would not have disclosed the identity of the City as principal. That said, California courts have suggested that disclosing the identity of the principal United States District Court Northern District of California 3 4 other than on the face of the contract (e.g., by informing a third party of the principal’s identity 5 during negotiations) also serves to insulate the agent from liability. See G.W. Anderson, 164 Cal. 6 App. 3d at 333. But there is nothing in the record—at least that the Court can consider on these 7 motions—showing whether or not that occurred here. While Dolce International offers a 8 declaration by Yves Hansel stating that he explicitly informed the union of the agency relationship 9 between the City and Dolce International, that declaration is evidence introduced for the first time 10 in reply. Decl. of Yves Hansel in Support of Dolce International’s Reply ¶ 6, ECF No. 107-1. As 11 neither Unite Here nor the City had an opportunity to substantively respond to that declaration, the 12 Court does not consider it.3 See Provenz v. Miller, 102 F.3d 1478, 1483 (9th Cir. 1996) (“[W]here 13 new evidence is presented in a reply to a motion for summary judgment, the district court should 14 not consider the new evidence without giving the [non-]movant an opportunity to respond.”) 15 (alteration in original). Without such evidence, the Court cannot determine if the City was 16 disclosed as the principal and cannot grant any summary judgment either for or against Dolce 17 International. In sum, the Court concludes that there is no genuine dispute of material fact that the City 18 19 was bound by the CBA, so it is an employer under the MPPAA and responsible for the withdrawal 20 liability here. As to Dolce International, though, there are disputes of fact as to whether it was 21 also bound, so the Court cannot grant summary judgment on the claim against Dolce International. 22 IV. For the reasons given above, the Court DENIES the City’s motion, DENIES Dolce 23 24 CONCLUSION International’s motion, and GRANTS IN PART and DENIES IN PART Unite Here’s motion. 25 26 27 28 3 The City also raised various evidentiary objections against this declaration. Objections, ECF No. 112. The Court does not address those objections because it already declined to consider the declaration on other grounds. Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 12 Case 5:20-cv-06069-EJD Document 115 Filed 08/11/23 Page 13 of 13 1 The effect is that the Court grants summary judgment in favor of Unite Here on its first claim 2 against the City but cannot resolve Unite Here’s second claim against Dolce International on 3 summary judgment. Although Unite Here styled its claims in the alternative, the Court sees no 4 reason—and the parties provide none—why the City and Unite Here may not be joint employers 5 under ERISA.4 This action will therefore proceed to determine if Dolce International was also 6 obligated under the CBA such that it is a joint employer with the City for purposes of withdrawal 7 liability. IT IS SO ORDERED. 8 9 Dated: August 11, 2023 10 United States District Court Northern District of California 11 EDWARD J. DAVILA United States District Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 Under California agency law, a plaintiff suing on a contract where the principal was undisclosed can ultimately only have judgment against one of the agent and principal, and at some time it must make an election of which party to hold liable. 3 Witkin, Summary 11th Agency § 170 (2023). The Court leaves open the question, which the parties have not addressed, of whether this state rule also compels Unite Here to make an election of which defendant to hold responsible for the withdrawal liability here, in the event that Dolce International is also held to be an employer under the MPPAA in later proceedings. Case No.: 5:20-cv-06069-EJD ORDER RE MOTIONS FOR SUMMARY JUDGMENT 13
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