Balboa v. Hawaii Care & Cleaning, Inc.
105 F. Supp. 3d 1165
D. Haw.2015Background
- Hawaii Care and Cleaning, Inc. (HCC) contracted with Hilton under multiple written Services Agreements (2004, 2009) to provide cleaning services; agreements contained express "no third‑party beneficiary" clauses.
- In December 2006 Hilton and HCC executed a 2006 Addendum requiring HCC to follow certain CBA subcontracting/wage provisions and to indemnify Hilton for union claims; the Addendum expired May 31, 2007.
- Plaintiffs are HCC employees (non‑union) who allege HCC failed to pay bargaining‑unit (Local 5) wage rates from Dec. 7, 2007 to June 30, 2013, as required by the Addendum/Services Agreements.
- Plaintiffs sued HCC in state court asserting (1) breach of contract as intended third‑party beneficiaries, (2) statutory withheld wages under Haw. Rev. Stat. ch. 388, and (3) unjust enrichment; HCC removed and moved for summary judgment.
- Court found (a) the Services Agreements and 2009 agreement language unambiguously disclaimed creation of third‑party beneficiaries, (b) the 2006 Addendum’s indemnity was to protect Hilton from union claims (not to create employee enforcement rights), and (c) plaintiffs presented no evidence that Hilton paid HCC additional sums that HCC withheld from employees after 2007.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiffs are intended third‑party beneficiaries of the Services Agreements or 2006 Addendum | Plaintiffs contend the Addendum and later negotiations show intent to benefit employees and permit enforcement | HCC points to express "no third‑party beneficiary" clauses and argues Addendum/indemnity only protects Hilton from union claims | Court: Plaintiffs are not intended third‑party beneficiaries; summary judgment for HCC on breach claim |
| Whether plaintiffs can recover under Hawaii wage law (Haw. Rev. Stat. ch. 388) for withheld union wages | Plaintiffs seek statutory recovery of wages allegedly due under the Addendum/Services Agreements | HCC argues plaintiffs have no contractual right to those higher wages and were paid agreed wages; statutory recovery requires wages legally due | Court: Plaintiffs cannot recover under Chapter 388 because they lack a legal entitlement to the union wage amounts; summary judgment for HCC |
| Whether unjust enrichment applies for alleged failure to pay bargaining‑unit wages | Plaintiffs claim HCC was unjustly enriched by retaining amounts tied to union wage increases paid by Hilton | HCC argues an express agreement governed wages between HCC and employees and there is no evidence Hilton actually paid HCC additional sums after 2007 | Court: Unjust enrichment barred by existing express wage agreement and no evidentiary support; summary judgment for HCC |
| Whether indemnity language in 2006 Addendum created enforceable employee rights | Plaintiffs argue indemnity and related language indicate parties anticipated third‑party enforcement | HCC and court view indemnity as protection for Hilton against union claims, not a grant of rights to non‑union employees | Court: Indemnity did not create enforceable rights for plaintiffs; supports dismissal of third‑party beneficiary claim |
Key Cases Cited
- Anderson v. Liberty Lobby, 477 U.S. 242 (summary judgment standard and genuine dispute analysis)
- Celotex Corp. v. Catrett, 477 U.S. 317 (movant’s initial burden on summary judgment)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (nonmoving party must show specific facts creating genuine issue)
- McKesson HBOC, Inc. v. N.Y. State Common Retirement Fund, Inc., 339 F.3d 1087 ("no third‑party beneficiary" clause defeats third‑party beneficiary claim)
- GECCMC 2005‑C1 Plummer St. Office Ltd. P’ship v. JPMorgan Chase Bank, N.A., 671 F.3d 1027 (effect of "no third‑party beneficiary" clause)
- Pancakes of Hawaii, Inc. v. Pomare Props. Corp., 944 P.2d 97 (definition and requirements for third‑party beneficiary under Hawaii law)