Board of Trustees of Unite Here Health v. Aguilar

[3] 4 UNITED STATES DISTRICT COURT 5 DISTRICT OF NEVADA 6 * * * 7 BOARD OF TRUSTEES OF UNITE HERE Case No. 2:16-cv-02501-RFB-GWF HEALTH, 8 ORDER Plaintiff, [9] v. [10] NORA A. AGUILAR, et al., [11] Defendants. [13] I. INTRODUCTION [14] Before the Court are five motions: Plaintiff Board of Trustees of Unite Here Health’s [15] Motion for Writ of Execution Myesha Johnson (ECF No. 537) and four Motions for Judgment by [16] Confession (ECF Nos. 538, 539, 540, 541). [17] For the reasons discussed below, the Court grants the motions. [19] II. MOTIONS FOR JUDGMENT BY CONFESSION [20] a. Legal Standard [21] As an initial matter, because the operative complaint invokes federal question jurisdiction [22] pursuant to § 502(e)(1) of the Employee Retirement Income Security Act (“ERISA”) of 1974, 29 23 U.S.C. §1132 (e)(1) the instant judgment by confessions are based on federal law and “federal law [24] controls with respect to both substance and procedure.” Retail Clerks Union Joint Pension Tr. v. [25] Freedom Food Ctr., Inc., 938 F.2d 136 , 137 (9th Cir. 1991). Generally, a judgment by confession [26] (alternatively called a confession of judgment, confessed judgment, or cognovit note) is an [27] “ancient legal device by which the debtor consents in advance to the holder's obtaining a judgment [28] 1 without notice or hearing.” D.H. Overmyer Co. v. Frick Co., 405 U.S. 174, 176 (1972). United 2 States district courts have jurisdiction to render judgments by confession. See Bowles v. J.J. 3 Schmitt & Co., 170 F.2d 617, 620-21 (2d Cir. 1948); see also 46 Am. Jur. 2d Judgments § 216. 4 Moreover, it “is a product of state law and has no counterpart in the Federal rules.” J.D. Holdings, 5 LLC v. BD Ventures, LLC, 766 F. Supp. 2d 109, 113 (D.D.C. 2011) (citing FDIC v. Deglau, 207 6 F.3d 153, 159 (3d Cir. 2000)). As such,“[f]ederal courts may follow the state law’s procedures for 7 obtaining confessed judgments.” Fed. Deposit Ins. Corp. v. Yarrington, No. 13-CV-89-S, 2013 8 WL 11866198 , at *1 (D. Wyo. June 13, 2013) see, e.g., Blue Sunsets, LLC v. Kontilai, No. 2:189 CV-90, 2020 WL 1148563 , at *1 (D. Nev. Mar. 9, 2020) (considering and granting motion for 10 judgment by confession based on Nevada law). 11 Nevada permits confessions of judgment. Nev. Rev. Stat. (“NRS”) § 17.090; see generally 12 Coast to Coast Demolition & Crushing, Inc. v. Real Equity Pursuit, LLC, 226 P.3d 605, 606 (Nev. 13 2010) (providing background on Nevada’s confessions of judgment statute). Specifically, 14 “[e]xcept as otherwise provided by law, a judgment by confession may be entered without action, 15 either for money due or to become due or to secure any person against contingent liability on 16 behalf of the defendant, or both, in the manner prescribed by this section and NRS 17.100 and 17 17.110.” NRS § 17.090. As such, when parties move for confessions by judgment, they must obtain 18 a “statement in writing,” “signed by the defendant and verified by his or her oath,” the following: [19] 1. It shall authorize the entry of judgment for a specified sum. 20 2. If it be money due, or to become due, it shall state concisely the facts out of which it arose, and shall show that the sum confessed 21 therefor is justly due, or to become due. 3. If it be for the purpose of securing the plaintiff against a [22] contingent liability, it shall state concisely the facts constituting the 23 liability, and shall show that the sum confessed therefor does not exceed the same. [24] 25 NRS § 17.100. “NRS 17.110 addresses entry of the confessed judgment on the clerk’s judgment 26 roll.” Coast to Coast Demolition & Crushing, Inc., 226 P.3d at 607 . 27 b. Discussion 28 In this action, the Board of Trustees (fiduciaries) of Unite Here Health (“UHH”), an ERISA 1 welfare plan, asserts multiple legal theories in support of its effort to recover the value of benefits 2 that certain Defendants improperly caused UHH to pay. Defendants are current or former 3 participants in UHH’s benefit plan and their ex-spouses. According to Plaintiff these Defendants, 4 either by omission, or by actively misleading UHH, often in writing, caused UHH to pay dependent 5 spouse benefits after the Defendants had divorced and lost eligibility for benefits, thereby 6 obtaining the benefits in violation of the governing terms of UHH’s ERISA Plan Documents. 7 i. First Motion for Judgment by Confession 8 After Defendants Carlos Munoz and Melanie Munoz agreed to a judgment amount and 9 settlement payment plan with Plaintiff, the parties filed a Stipulation and Order to Dismiss 10 Defendants from this case without prejudice, which the Court granted. The judgment amount was 11 $13,623.61. The Court would also retain jurisdiction to take further action in the event Defendants 12 failed to remit to Plaintiff all payments promised to it. The Parties agreed that Defendants’ failure 13 to satisfy any of the conditions set forth in the Stipulation, and particularly the payment obligations 14 it imposed, constituted an event of default. The Parties agreed that in the event of a default, the 15 judgment amount would be increased to include (1) interest accrued at the rate of seven percent 16 per annum from the date of default (as that term is defined under the Stipulation) until paid in full, 17 (2) the amount of all reasonable costs and attorney’s fees expended in collecting said judgment by 18 execution, or otherwise, as established by affidavit. The Parties also agreed that the judgment 19 amount would be reduced by any sums paid by Defendants toward the judgment amount. 20 Defendants failed to make any payments after June 29, 2021, and therefore are currently in default. 21 Plaintiff notified them, demanding they cure the default, to no avail. This instant motion for 22 judgment by confession follows. 23 The Court finds that the confession of judgment Plaintiff attaches to the instant motion 24 complies with NRS § 17.100. First, Defendants signed the confession verified by their oath. 25 Second, the confession of judgment authorizes judgment for a specified sum of money. 26 Specifically, it states that Defendants are liable for: (1) a $13,623.61 judgment amount, (2) post27 judgment interest accrual on the judgment amount balance at the rate of seven percent per annum 28 from the date of default, and (3) reasonable costs and attorney's fees expended in collecting said 1 Judgment by execution, or otherwise, as shall be established by affidavit; but which (4) shall, as 2 applicable, be reduced by any amount paid by Defendants toward the judgment amount. To this 3 end, Plaintiff’s motion attaches a declaration seeking the following specified sum of $11,927.42, 4 based on the stipulation for entry of judgment by confession: 5 • $8,991.43 as the base judgment amount, crediting $4,632.18 for Defendants’ 6 payment to Plaintiff since February 2017; plus 7 • $935.99 in interest accrued through February 2, 2023 at the rate of 7% per annum 8 (and continuing to accrue until paid in full); plus 9 • reasonable attorney’s fees in the amount of $2,000 incurred by Plaintiff to obtain 10 the Judgment required by the Stipulation, the Confession of Judgment, and the 11 related papers signed by Defendant. 12 Third, confession of judgment concisely states that this money due arose from Defendants’ 13 conduct receiving fringe benefits from Plaintiff after failing to provide Plaintiff with notice of 14 Defendants’ divorce and ineligibility. Finally, it shows the sum is justly due because Defendants 15 defaulted on their payment. Further, the confession incorporates by reference the stipulation for 16 entry of judgment by confession which states that the judgment amount, plus interest accrual, and 17 reasonable attorney’s fees would be due in the event of a default. 18 Accordingly, this judgment by confession complies with NRS § 17.100 and is entered 19 without action pursuant to NRS § 17.090. 20 ii. Second Motion for Judgment by Confession 21 On February 3, 2017, Defendants Martha Castellon and Sergio Sepulveda filed a 22 Stipulation and Order to Dismiss Defendants from this case without prejudice after they entered 23 into a written agreement to make monthly payments to satisfy a judgment amount. The Court 24 granted this stipulation. ECF No. 54. Defendants made a similar agreement as the Muñozes. Their 25 judgment amount was $14,133.59. They defaulted after failing to make any payments after 26 September 26, 2017. To date, they have only paid $1,272 toward the judgment amount. Plaintiff 27 attempted to notify Defendants of their default as late as January 18, 2023, but it has received no 28 response. 1 The Court finds that Defendants’ confession of judgment, which Plaintiff attaches to the 2 instant motion complies with NRS 17.100. ECF No. 539-2. Defendants signed it verified by their 3 oath. The confession authorizes judgment for a specified sum of money. Specifically, it states that 4 Defendants are liable for: (1) a $14,133.59 judgment amount, (2) post-judgment interest accrual 5 on the judgment amount balance at the rate of seven percent per annum from the date of default, 6 and (3) reasonable costs and attorney's fees expended in collecting said Judgment by execution, or 7 otherwise, as shall be established by affidavit; but which (4) shall, as applicable, be reduced by 8 any amount paid by Defendants toward the judgment amount. To this end, Plaintiff’s motion 9 attaches a declaration seeking the following specified sum of $19,693.68, based on the stipulation 10 for entry of judgment by confession: 11 • $12,861.60 as the base judgment amount, crediting $1,272 for Defendants’ 12 payment to Plaintiff since February 2017; plus 13 • $4,832.08 in interest accrued through January 30, 2023 at the rate of 7% per annum 14 (and continuing to accrue until paid in full); plus 15 • reasonable attorney’s fees in the amount of $2,000 incurred by Plaintiff to obtain 16 the Judgment required by the Stipulation, the Confession of Judgment, and the 17 related papers signed by Defendants. 18 Additionally, the confession of judgment concisely states that this money due arose out of 19 Defendants’ conduct receiving fringe benefits from Plaintiff after failing to provide Plaintiff with 20 notice of Defendants’ divorce and ineligibility. Finally, it shows the sum is justly due because 21 defendants defaulted on their payment. Further, the confession of judgment incorporates the 22 stipulation for entry of judgment by confession which states that the judgment amount, plus interest 23 accrual, and reasonable attorney’s fees would be due in the event of a default. 24 Therefore, this confession of judgment also complies with NRS § 17.100 and is entered 25 without action pursuant to NRS § 17.090. 26 iii. Third Motion for Judgment by Confession 27 Like the other Defendants, Defendant Roberto Flores executed a stipulation, judgment, and 28 settlement payment plan where he agreed to pay his own judgment amount of $6,150.89. To do 1 so, he filed a stipulation to dismiss this case without prejudice like the other Defendants on 2 February 24, 2017, which the Court granted on February 27, 2017. He defaulted after failing to 3 make any payments after June 1, 2020. To date, he has only paid $525 toward the judgment 4 amount. Plaintiff attempted to notify Defendant of his default as late as January 20, 2023, but it 5 has received no response. 6 Like the others, the Court finds that Defendant’s confession of judgment, which Plaintiff 7 attaches to the instant motion complies with NRS § 17.100. Defendant signed it verified by his 8 oath. The confession authorizes judgment for a specified sum of money. Specifically, it states that 9 Defendants are liable for: (1) a $6,150.89 judgment amount, (2) post-judgment interest accrual on 10 the judgment amount balance at the rate of seven percent per annum from the date of default, and 11 (3) reasonable costs and attorney’s fees expended in collecting said Judgment by execution, or 12 otherwise, as shall be established by affidavit; but which (4) shall, as applicable, be reduced by 13 any amount paid by Defendants toward the judgment amount. To this end, Plaintiff’s motion 14 attaches a declaration seeking the following specified sum of $7,946.79, based on the stipulation 15 for entry of judgment by confession: 16 • $5,010.80 as the base judgment amount, providing Defendant with proper credits 17 to which Defendant is entitled to, including payments made to Plaintiff since 18 February 2017; plus 19 • $935.99 in interest accrued through January 30, 2023 at the rate of 7% per annum 20 (and continuing to accrue until paid in full); plus 21 • reasonable attorney’s fees in the amount of $2,000 incurred by Plaintiff to obtain 22 the Judgment required by the Stipulation, the Confession of Judgment, and the 23 related papers signed by Defendant. 24 Additionally, the confession of judgment concisely states that this money due arose out of 25 Defendant’s conduct receiving fringe benefits from Plaintiff after failing to provide Plaintiff with 26 notice of Defendants’ divorce and ineligibility. Finally, it shows the sum is justly due because 27 Defendants defaulted on their payment. Further, the confession of judgment incorporates the 28 stipulation for entry of judgment by confession which states that the judgment amount, plus interest accrual, and reasonable attorney’s fees would be due in the event of a default. 2 Thus, this judgment by confession complies with NRS § 17.100 and is entered without 3 | action pursuant to NRS § 17.090. [4] 5 I. CONCLUSION 6 IT IS ORDERED that MOTION for the Writ of Execution Myesha Johnson (ECF No. 537) is DENIED without prejudice. On October 6, 2020, the Clerk of Court entered a third 8 | amended judgment in the amount of $4,018.13 against Defendants Myesha Johnson and Robert White. ECF No. 441. On June 18, 2021, Plaintiff filed a motion for writ of execution seeking 10 | satisfaction of this judgment amount against Defendant Johnson. ECF No. 501. Three days later 11 | the Clerk issued the writ. ECF No. 502. On December 2, 2022, Plaintiff filed another motion for 12 | writ of execution against Defendant Johnson —the instant motion for writ of execution. ECF No. 13 | 537. Plaintiff may file a new motion for writ of execution with the affidavit and proposed writ of execution against Defendant Johnson. Plaintiff shall file a supplement clarifying the difference 15 | between the motion already granted and the renewed motion. 16 IT IS FURTHER ORDERED that the MOTION for Judgment by Confession (ECF No. 538)is GRANTED. 18 IT IS FURTHER ORDERED that the MOTION for Judgment by Confession (ECF No. 539)is GRANTED. 20 IT IS FURTHER ORDERED that the MOTION for Judgment by Confession (ECF No. 21 | 540)1s DENIED as moot, as Plaintiff withdrew the motion. See ECF No. 542. 22 IT IS FURTHER ORDERED that MOTION for Judgment by Confession (ECF No. 541) 23) is GRANTED. 24 samen 25 DATED: September 25, 2023 [27] 28 UNITED STATES DISTRICT JUDGE -7-