1:14-cv-00009
D. Haw.Apr 28, 2015Background
- Hawaii Care and Cleaning, Inc. (HCC) contracted with Hilton to provide cleaning services beginning in 2004 under written Services Agreements; those agreements expressly stated there were no third‑party beneficiaries (the 2009 agreement excepted Hilton affiliates).
- HCC employees (Plaintiffs) worked at Hilton through HCC and were not members of Unite Here Local 5 and thus were not covered by Hilton’s CBA.
- In 2006 Hilton and HCC executed a short‑lived 2006 Addendum (expired May 31, 2007) adopting CBA wage provisions for subcontracted bargaining‑unit work and an indemnity protecting Hilton from union claims.
- Plaintiffs allege HCC failed to pay CBA (bargaining‑unit) wage rates from December 7, 2007 through June 30, 2013 and bring: (1) breach of contract as intended third‑party beneficiaries of the Services Agreements, (2) statutory wage claims under Haw. Rev. Stat. ch. 388, and (3) unjust enrichment.
- HCC moved for summary judgment; the court held there was no genuine issue of material fact that would permit Plaintiffs to recover on any claim and granted summary judgment for HCC.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs are intended third‑party beneficiaries of the Services Agreements (breach of contract) | Plaintiffs contend the Agreements (and the 2006 Addendum) were intended to benefit them and therefore they can enforce the wage provisions | HCC points to explicit "no third‑party beneficiary" clauses in the Services Agreements and argues Plaintiffs are only incidental beneficiaries | Court: Plaintiffs are not intended third‑party beneficiaries; express contractual language controls — breach‑of‑contract claim dismissed |
| Whether Plaintiffs can recover unpaid wages under Hawaii Wage & Hour law (Haw. Rev. Stat. ch. 388) | Plaintiffs assert HCC withheld wages mandated by the 2006 Addendum/CBA and seek statutory relief | HCC argues Plaintiffs have no legal entitlement to CBA wages (not parties/beneficiaries) and were paid the wages agreed with HCC | Court: Statutory wage claim fails because Plaintiffs cannot show a legal right to the alleged withheld amounts; claim dismissed |
| Whether unjust enrichment recovery is available for unpaid CBA wages | Plaintiffs argue HCC was unjustly enriched by keeping amounts intended to cover union wage increases (and/or by receiving higher payments from Hilton) | HCC contends (and offers evidence) Hilton did not pay increased amounts after 2007; Plaintiffs were paid the wages agreed with HCC; an express agreement governs wages | Court: Unjust enrichment barred by existing agreement on wages; also no evidence Hilton paid HCC increases that were retained — claim dismissed |
| Whether factual disputes about pricing/compensation to HCC preclude summary judgment | Plaintiffs rely on bids/emails suggesting Hilton pricing would reflect union increases | HCC notes those were proposals/bids, not accepted contracts, and HCC’s president testified Hilton did not compensate HCC after 2007 | Court: No admissible evidence raises a genuine dispute that Hilton paid HCC amounts that HCC then retained for itself; summary judgment appropriate |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary judgment standard and assessment of genuine disputes)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (movant’s initial burden on summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986) (nonmoving party must show probative evidence to defeat summary judgment)
- Pancakes of Hawaii, Inc. v. Pomare Props. Corp., 944 P.2d 97 (Haw. App. 1997) (third‑party beneficiary doctrine)
- Laeroc Waikiki Parkside, LLC v. K.S.K. (Oahu) Ltd. P’ship, 166 P.3d 961 (Haw. 2007) (contract language controlling on third‑party beneficiary questions)
- GECCMC 2005‑C1 Plummer St. Office Ltd. P’ship v. JPMorgan Chase Bank, N.A., 671 F.3d 1027 (9th Cir. 2012) ("no third‑party beneficiary" clauses defeat such claims)
- McKesson HBOC, Inc. v. N.Y. State Common Ret. Fund, Inc., 339 F.3d 1087 (9th Cir. 2003) (contract language limiting beneficiaries forecloses third‑party claims)
- Blair v. Ing, 21 P.3d 452 (Haw. 2001) (defining intended vs. incidental beneficiaries)