Construction Ind. v. Hartford Accident ( 2009 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRUSTEES OF THE CONSTRUCTION 
INDUSTRY AND LABORERS
HEALTH AND WELFARE TRUST;
TRUSTEES OF THE CONSTRUCTION
INDUSTRY AND LABORERS JOINT
PENSION TRUST; TRUSTEES OF THE No. 04-16546
CONSTRUCTION INDUSTRY AND D.C. No.
LABORERS VACATION TRUST,
Plaintiffs-Appellees,
 CV-98-1246-PMP
v. OPINION
HARTFORD FIRE INSURANCE
COMPANY; HARTFORD ACCIDENT
AND INDEMNITY COMPANY;
RICHARDSON CONSTRUCTION, INC.,
Defendants-Appellants.

Appeal from the United States District Court
for the District of Nevada
Philip M. Pro, District Judge, Presiding
Argued and Submitted May 15, 2006
Submission Withdrawn, May 8, 2007
Resubmitted July 10, 2009
San Francisco, California
Filed August 24, 2009
Before: Alex Kozinski, Chief Judge, Raymond C. Fisher,
Circuit Judge, and Frederic Block,* District Judge.
*The Honorable Frederic Block, Senior United States District Judge for
the Eastern District of New York, sitting by designation.
11657
11658 CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS.
Per Curiam Opinion
11660 CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS.
COUNSEL
Theodore Parker, III, Parker, Nelson & Arin, Chtd., Las
Vegas, Nevada, for the defendants-appellants.
Andrew S. Brignone, Adam P. Segal, Brownstein Hyatt Far-
ber Schreck, LLP, Las Vegas, Nevada, for the plaintiffs-
appellees.
OPINION
PER CURIAM:
Richardson Construction, Inc. served as general contractor
for a number of Nevada public works projects. Hartford Fire
Insurance Company and its related entities agreed with Rich-
ardson to serve as a surety on a number of statutorily required
payment bonds. Richardson subcontracted some of the work
to Desert Valley Landscape and Maintenance, Inc. (DVL).
Pursuant to a collective bargaining agreement with Local 872,
CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS. 11661
DVL was supposed to make payments to certain trusts admin-
istered on behalf the union members. DVL never made the
payments.
The trustees of the union’s trust sued DVL under ERISA in
federal district court. When DVL filed for bankruptcy, the
trustees amended their complaint to add Richardson and Hart-
ford as defendants. The trustees then obtained a default judg-
ment against DVL. The district court granted summary
judgment against Hartford and Richardson, holding them lia-
ble for DVL’s default judgment, including the liquidated
damages and attorneys’ fees DVL owed under the collective
bargaining agreement. Richardson and Hartford appealed.
The trustees sued Richardson under Nev. Rev. Stat.
§ 608.150, which makes general contractors liable for their
subcontractors’ nonpayment of labor and materials. They sued
Hartford under Nev. Rev. Stat. § 339.035(1), which allows
“any claimant who has performed labor or furnished material”
under a bonded public works contract to bring an action on
the bond to recover the amount due. Section 339.035(2)
requires “[a]ny claimant who has a direct contractual relation-
ship with any subcontractor of the contractor who gave such
payment bond” to give the general contractor written notice
of his claim before suing on the bond. Defendants argue the
trustees failed to give Richardson notice.
The trustees admit they didn’t provide notice, but argue that
the notice requirement doesn’t apply to them because they
weren’t in a “direct” contractual relationship with DVL.
Because there was no Nevada caselaw on point, we certified
two questions to the Nevada Supreme Court:
1. In order to recover against a defendant surety
under Nev. Rev. Stat. § 339.035(1), must plaintiff
trustees, who are not in a direct contractual relation-
ship with the subcontractor, comply with the notice
requirements of Nev. Rev. Stat. § 339.035(2)?
11662 CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS.
2. In order to recover against a defendant contrac-
tor under Nev. Rev. Stat. § 608.150 in a case where
unpaid trust fund contributions are covered by a stat-
utory payment bond, see Nev. Rev. Stat. § 339.025,
must plaintiff trustees, who are not in a direct con-
tractual relationship with the subcontractor, comply
with the notice requirements of Nev. Rev. Stat.
§ 339.035(2)?
Trs. of Constr. Indus. & Laborers Health & Welfare Trust v.
Hartford Fire Ins. Co., 482 F.3d 1064, 1066 (9th Cir. 2007).
The Nevada Supreme Court graciously accepted the referral
and has now rendered an opinion, Hartford Fire Ins. Co. v.
Trs. of Constr. Ind., 208 P.3d. 884 (Nev. 2009). We thank the
Nevada Supreme Court for answering our certified questions
and proceed to resolve the case in accordance with its opin-
ion.
[1] The Nevada Supreme Court decided that claimants must
provide notice for claims against sureties under section
339.035(2), but that notice isn’t required for claims against
general contractors under section 608.150. Id. at 895. Thus,
the trustees’ claims against Richardson under section 608.150
didn’t require notice, but their claims against Hartford under
section 339.035 did and therefore fail for lack of notice.
[2] There are a few issues left in this appeal. First, the trust-
ees contest our jurisdiction because defendants filed their
notice of appeal under the wrong docket number. The district
court mistakenly entered two identical judgments, one in this
1998 case and another in an inactive 2000 case. Defendants
filed their notice of appeal listing the 2000 case’s docket num-
ber. Federal Rule of Appellate Procedure 3(c)(1) requires a
notice of appeal to specify the parties taking the appeal, the
judgment being appealed from and the name of the court to
which the appeal is taken. But Rule 3(c)(4) states that “[a]n
appeal must not be dismissed for informality of form or title
of the notice of appeal.” Defendants’ mistake may not be the
CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS. 11663
sort of “informality of form or title” the rule envisions, but
including the correct docket number isn’t one of the express
requirements of a notice of appeal either. The mistake likely
stems from the district court’s error in issuing the judgment
under an incorrect docket number. And defendants attached a
copy of the judgment with the correct docket number to their
notice of appeal, so it’s unlikely the trustees were confused or
otherwise prejudiced. We construe the notice of appeal as
having been filed under the correct docket number. See Le v.
Astrue, 558 F.3d 1019, 1024-25 (9th Cir. 2009).
[3] Second, defendants claim the district court didn’t have
supplemental jurisdiction over the trustees’ state-law claims
because the trustees’ federal claim against DVL was never lit-
igated. We review de novo whether the district court had sup-
plemental jurisdiction. See Hoeck v. City of Portland, 57 F.3d
781, 784 (9th Cir. 1995). In a prior appeal in this case, we
held the district court did have supplemental jurisdiction. Trs.
of Constr. Indus. & Laborers Health & Welfare Trust v.
Desert Valley Landscape & Maint., Inc., 333 F.3d 923,
925-26 (9th Cir. 2003). We explained that “[t]he state law
claims here are part of the same constitutional case as Trust-
ees’ federal claims” against DVL. Id. at 925. And we rea-
soned that, contrary to the defendants’ assertions, “[t]he
district court did not dismiss the federal claim in this case
. . . . [I]t granted a default judgment in favor of the plaintiff.
Far from determining that the federal claim was unfounded,
the court’s default judgment represents its determination that
the federal claim was well-founded.” Id. at 926. Our prior
decision in this case is law of the case on defendants’ chal-
lenge to the district court’s supplemental jurisdiction.
[4] Third, the district court didn’t err in holding Richardson
liable for DVL’s default judgment, as well as the liquidated
damages and attorneys’ fees due under the collective bargain-
ing agreement. Whether Richardson is liable for the default
judgment, liquidated damages and attorneys’ fees is a ques-
tion of law, which we review de novo. Assoc. of Flight Atten-
11664 CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS.
dants v. Mesa Air Group, Inc., 567 F.3d 1043, 1046 (9th Cir.
2009). Under Nevada law, Richardson was liable for “the
indebtedness for labor” incurred by its subcontractor. Nev.
Rev. Stat. 608.150(1). Nothing in section 608.150 suggests
that labor indebtedness doesn’t include liquidated damages
and attorneys’ fees arising from a collective bargaining agree-
ment. Richardson is therefore liable for the labor debts of its
subcontractor, including liquidated damages and attorneys’
fees. See Tobler & Oliver Constr. Co. v. Bd. of Trs. of Health
& Ins. Fund for Carpenters Local Union No. 971, 442 P.2d
904, 907 (Nev. 1968) (“The legislature intended to protect the
laborer as to every element of his compensation, whether that
compensation be an hourly wage, or whether it be an hourly
wage plus other benefits, and the novelty of the health and
welfare provisions of the contracts does not in any wise pre-
vent the contributions therefore from being considered as pay-
ments for any work or labor on the bonded project.”) (internal
quotation marks omitted). Moreover, Richardson should have
been aware, based on section 608.150 and Tobler, that it
would be liable for the labor indebtedness of its subcontractor.
Although appellants could have challenged the default judg-
ment against DVL at the time it was entered, they chose not
to. Any objection to the amount of that judgment has there-
fore been waived.
[5] Fourth, the district court didn’t err in rejecting defen-
dants’ equitable estoppel defense at the summary judgment
stage. We review de novo the district court’s grant of sum-
mary judgment, viewing the evidence in the light most favor-
able to the nonmoving party to determine whether any
genuine issues of material fact exist and whether the district
court correctly applied the relevant substantive law. Hoeck, 57
F.3d at 784. At a minimum, the defense of equitable estoppel
requires “(1) the party to be estopped must be apprised of the
true facts . . .; (3) the party asserting the estoppel must be
ignorant of the true state of facts; [and] (4) he must have
relied to his detriment on the conduct of the party to be estop-
ped.” Cheqer, Inc. v. Painters & Decorators Joint Comm.,
CONSTRUCTION INDUSTRY v. HARTFORD FIRE INS. 11665
Inc, 655 P.2d 996, 998-99 (Nev. 1982). Defendants haven’t
alleged sufficient facts to support a rational inference that the
trustees knew or should have known of DVL’s failure to pay
the trusts or that Richardson’s alleged ignorance of DVL’s
delinquency was excused. Defendants assert that DVL’s vio-
lations of the collective bargaining agreement were flagrant
and obvious, so that the trustees knew or should have known
about them. But if this is true, then defendants’ alleged reli-
ance on the trustees’ silence was unreasonable, since defen-
dants should also have been aware of such obvious
delinquency. Defendants’ equitable estoppel claim therefore
fails as a matter of law.
[6] Finally, the district court didn’t err in refusing to offset
the judgment against Richardson. Whether Richardson is enti-
tled to an offset is a question of law, which we review de
novo. See Schacter v. C.I.R., 255 F.3d 1031, 1033 (9th Cir.
2001). Richardson argued it settled an action brought by the
Nevada Labor Commissioner over DVL’s failure to make
payments to the trust, so it is entitled to an offset based upon
the amount of the settlement. But Richardson isn’t entitled to
an offset based upon its payment to an entity other than the
trusts. See Brogan v. Swanson Painting Co., 682 F.2d 807,
809 (9th Cir. 1982) (“[T]he employer’s obligation to pay into
the trusts is exactly what it contracted to do.”) (internal quota-
tion marks omitted).
The district court’s judgment against Richardson is
AFFIRMED and its judgment against Hartford is
REVERSED. Each party shall bear their own cost.