LUI LANDSCAPING, INC., WAB No. 94-05 (WAB May 20, 1994)
CCASE:
LUI LANDSCAPING INC.
DDATE:
19940520
TTEXT:
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[1] WAGE APPEALS BOARD
UNITED STATES DEPARTMENT OF LABOR
WASHINGTON, D. C.
In the Matter of:
LUI LANDSCAPING, INC. WAB Case No. 94-05
and SIONE K. LUI
Subcontractors
BEFORE: David A. O'Brien, Chair
Ruth E. Peters, Member
DATED: May 20, 1994
DECISION OF THE WAGE APPEALS BOARD
This matter is before the Wage Appeals Board on the petition
of Lui Landscaping, Inc. and Sione K. Lui (collectively,
"Petitioners" or "Lui"), for review of a January 7, 1994 Decision
and Order of Deputy Chief Administrative Law Judge ("ALJ") John
M. Vittone. That ruling entered a default judgment against Lui
for failing to respond to a Pre-Hearing Order and failing to
respond to an Order To Show Cause. The ruling also placed the
petitioners' names on the ineligibility list for a period not to
exceed three years. For the reasons stated below, the petition
is denied and the ruling of the ALJ is affirmed.
I. BACKGROUND
In this case the Department of Labor sought only debarment.
In two previous contracts -- Nos. I-15-8(61)387 and I-15-8(62)392
-- Lui failed to pay their employees the required wages and
misclassified some employees. Lui did not request a hearing to
dispute these prior violations. Petitioners were subsequently
debarred from entering into any government contracts from
February 26, 1990 through February 26, 1993. Mr. Sione K. Lui
signed the return receipt indicating that he received notice of
the debarment on May 15, 1990. Petitioners allege that they
misunderstood the meaning of the original [1]
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[2] debarment and believed that an agreement to pay the back wages owed
resolved the entire matter. Despite being debarred, Lui bid on and
obtained fourteen government contracts. All fourteen contracts
contained form FHWA 1273 which states that the subcontractor is, by
submitting its proposal, certifying that neither it nor its principals
are debarred.
A letter from the Department of Labor ("DOL") was hand
delivered to Lui on March 11, 1992 (although the letter was
actually dated March 11, "1982," petitioners have not disputed
the fact that the correct date is March 11, 1992) alleging that
Lui had violated the Davis-Bacon Act and the Contract Work Hours
and Safety Act by bidding on government contracts while debarred.
On March 31, 1992 the petitioners acting through their duly
authorized agent, attorney Donald E. Elkins, mailed a reply to
the DOL requesting a hearing before an ALJ. The matter was
referred to the Office of Administrative Law Judges for a hearing
pursuant to 29 C.F.R. 5.11(b) and/or 5.12(a).
On April 15, 1993 Deputy Chief ALJ John M. Vittone issued a
Pre-Hearing Order which required the DOL to furnish Lui with
certain identified information regarding the allegations set
forth in the DOL's letter of March 11, 1992. The order
specifically stated that "no later than 20 days after service of
the aforementioned information, the [petitioners] shall serve and
file an Answer admitting or denying the information
furnished...." DOL filed its response to the Pre-Hearing Order
on May 18, 1993. The petitioners' Answer was therefore, due by
June 8, 1993. On July 13, 1993 the attorney originally
representing the petitioners in this matter, Donald E. Elkins,
filed a withdrawal as counsel effective immediately. No answer
was filed, and on August 27, 1993 an order to Lui to show cause
why a default judgment should not be entered in this case was
issued. Copies of the Pre-Hearing Order, the DOL's response to
the Pre-Hearing Order, the withdrawal as counsel and the Order to
Show Cause were all certified as being served personally on Mr.
Sione Lui.
Pursuant to the Order To Show Cause the petitioners were
given 20 days to respond and show why a default judgment should
not be entered. On September 14, 1993 DOL filed a response to
the Show Cause Order. As of January 7, 1994 Lui had not filed a
response to the Show Cause Order. On that date Deputy Chief ALJ
Vittone issued his Decision and Order that Lui's request for a
hearing be dismissed, that certain facts set forth in this case
by the DOL be adopted and that the petitioners' names be placed
on the ineligibility list for a period not to exceed three
years.[2]
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[3] II. DISCUSSION
Petitioners have set out five basic arguments in support of
the Petition for review, as follows:
1. That the March 31, 1992 letter with attachments
constituted a sufficient Answer to the DOL's response
to the Pre-Hearing Order pursuant to 29 C.F.R. 6.30(b);
2. That petitioners' attorney was responsible for the
failure to respond to the Orders of the ALJ;
3. That Mr. Lui never personally received the Order to
Show Cause;
4. That Mr. Lui's difficulty with the English language
and his unfamiliarity with the justice system in this
country should excuse his inaction; and,
5. That Lui Landscaping, Inc., should not be included
in the default judgment since the Order to Show Cause
was not directed at the corporation.
The regulations governing ALJ proceedings provide (at 29
C.F.R. 18.6(d)(2)(v)) that if a party fails to comply with an
order, the ALJ may rule that "a decision of the proceeding be
rendered against the non-complying party...." The Wage Appeals
Board has held under the Davis-Bacon and Related Acts that an ALJ
was within her/his discretion in entering a default judgment
against a party for failure to comply with a court order. See
United Cooling and Contracting Co., WAB Case 91-04 (February 22,
1991) and Prime Roofing Inc., WAB Case No. 92-15 (July 16, 1993).
The Prime Roofing case was also affirmed, in part, based upon the
failure of the contractors therein to comply with a Pre-Hearing
Order. In addition, the Board of Service Contract Appeals has
held in two cases that an ALJ was within her/his discretion in
entering a default judgment against a party for failure to
respond to a Pre-Hearing Order. See Cynthia E. Aiken, BSCA Case
No. 92-06 (July 31, 1992) and Tri-Way Security and Escort
Services, Inc., BSCA Case No. 92-05 (July 31, 1992). The Wage
Appeals Board may set aside the entry of a default judgment based
upon the failure to comply with a Pre-Hearing Order only upon a
finding of abuse of discretion by the ALJ. See Prime Roofing,
supra. The petitioners have clearly not met the burden of
showing that the ALJ abused his discretion in dismissing the
request for a hearing.
Petitioners' first argument is based upon 29 C.F.R. 6.30(b),
which states that the response to a notification letter from the
Administrator shall be given the [3]
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[4] effect of an answer. Certainly, if the DOL had ignored the March
31, 1992 letter from attorney Elkins and proceeded without a hearing the
resulting decision would have to be set aside. However, the DOL did not
ignore the request for a hearing. The DOL referred the matter to an ALJ
for hearing. Therefore, the letter of March 31, 1992 was given the
effect of an answer pursuant to 29 C.F.R. 6.30(b).
The petitioners' delinquency came, not as a result of
failing to file an answer, but in failing to comply with
Pre-Hearing Order of the ALJ. Although the Pre-Hearing order
states that an "Answer" is to be filed admitting or denying the
information required to be disclosed by the DOL, the more
appropriate description of what is required is a response to the
specific allegations of the DOL. It should be noted that the
disclosure of the information required by the Pre-Hearing Order
is to the benefit of the petitioners. The response is required
in order to join the issues for hearing. Failure to respond to a
Pre-Hearing order coupled with the failure to respond to an Order
to Show Cause dictate the result entered here -- a default
judgment.
The Board rejects petitioners' argument that they should be
relieved from the effect of the default judgment, based on the
purported negligence or misfeasance of their counsel. Mr. Lui --
personally -- was on the certificate of service list for all of
the pertinent documents filed in this case. He had notice of all
relevant matters, not only through his attorney of record, but
also through direct receipt of the documents. Also, Mr. Lui
received notice of Mr. Elkins' withdrawal as counsel on or about
July 13, 1993, well before the entry of the Show Cause Order on
August 27, 1993. Petitioners had plenty of time after the
withdrawal of their original counsel to retain other counsel
prior to the entry of the Default Judgment on January 7, 1994.
Therefore, despite any shortcomings in the legal representation
received by the petitioners they had sufficient notice of all the
proceedings in order to respond appropriately on their own, or to
secure competent counsel to respond on their behalf. In
addition, this analysis applies to the argument of respondents
that Mr. Lui's lack of understanding of the English language
should excuse his inaction. Mr. Lui, not the ALJ or DOL, is
responsible for recognizing his own lack of understanding and
taking steps to rectify this problem.
Petitioners also allege that Mr. Lui "never received the
Order to Show Cause.'' In the factual background portion of
their brief, petitioners only aver that "Mr. Lui does not believe
that he received [the Show Cause Order].'' Petitioners admit
that Mr Elkins' client file indicates that Mr. Lui received a
copy of the order. The order itself certifies that a copy was
sent directly to Mr. Lui. The meek allegation that Mr. Lui does
not remember receiving a copy of the order is far outweighed by
the evidence to the contrary.[4]
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As for the allegation that the Show Cause Order only applies
to Mr. Lui, the Board notes that the heading of the order is
specifically addressed to both Lui Landscaping, Inc. and Sione K.
Lui. Both parties were listed as respondents to this action and
thus, appropriately subject to the Decision and Order of the ALJ.
The Board also notes that it would appear petitioners have a
clear history of uncontested wage violations and have totally
disregarded a prior valid debarment order. More importantly, we
have concluded that petitioners have ignored the requirements of
the Department's administrative hearing procedures at their own
peril. The petitioners were apparently capable of understanding
the detailed processes necessary to obtain government contracts,
but allegedly are incapable of comprehending the process and
procedure by which those contracts are interpreted and enforced.
Petitioners cannot be found to understand and thereby obtain the
benefit of a contract, without also being held to understand and
thereby be accountable for breach of the duties and enforcement
procedures pursuant to that same contract.
For the foregoing reasons the decision of the ALJ is
affirmed and the petition for review is dismissed.
BY ORDER OF THE BOARD:
David A. O'Brien, Chair
Ruth E. Peters, Member
Gerald F. Krizan, Esq.
Executive Secretary [5]
