Supervan, Inc., 1994-SCA-47 (ALJ Oct. 12, 1999)

U.S. Department of Labor

Office of Administrative Law Judges 501 West Ocean Blvd., Suite 4300 Long Beach, CA 90802 (562) 980-3594 (562) 980-3597 (FAX)

DATE: October 12, 1999
CASE NO: 1994-SCA-47

In the Matter of

SUPERVAN, INC., SPECIAL SERVICES TRANSPORTATION, INC.,
DONALD S. RULLO, and CHRISTINE RULLO
Individually and Jointly,
   Respondents.

   This matter arises under the McNamara-O'Hara Service Contract Act of 1965 ("the Service Contract Act" or "the Act"), as amended, 79 Stat. 1034, 41 U.S.C. §§ 351-58 (1998), and the regulations promulgated thereunder at 29 C.F.R. Parts 4, 6, and 18 (1998). On September 6, 1994, the Department of Labor (the "Department") filed a complaint against SuperVan, Inc., Special Services Transportation, Inc., Donald S. Rullo, and Christine Rullo, individually and jointly, alleging that Respondents failed and refused to pay their employees the minimum wages and fringe benefits required by a contract for services to be performed at Lackland Air Force Base. Default judgment was issued against Special Services Transportation, Inc. and Christine Rullo on August 14, 1998, and against SuperVan, Inc. on April 29, 1999. Default judgment was also issued against Donald S. Rullo on August 18, 1999.

   On March 11, 1998, this matter was assigned to the undersigned administrative law judge for the purpose of conducting a formal hearing and issuing a decision and order pursuant to 29 C.F.R. § 6.30. Pursuant to due notice, this matter was initially scheduled to be heard by the undersigned on September 15, 1998, in San Antonio, Texas.

   In an Order dated July 10, 1998, the undersigned granted the Department's "Motion to Compel." Therein, Respondents were ordered to file answers to the Department's First Set of Interrogatories and First Request for Production of Documents by July 27, 1998. Respondents were informed that failure to adequately respond to the Department's discovery requests would subject them to sanctions as provided by 29 C.F.R. § 18.6(d)(2). On August 14, 1998, the undersigned issued a "Decision and Order Granting Partial Default Judgment" against Respondents Special Services Transportation, Inc. and Christine Rullo for failing to respond to the Department's discovery requests in violation of the Order to Compel. In addition, the undersigned granted the Department's "Motion for Continuance," and rescheduled the hearing for October 15, 1998.

   On August 19, 1998, Respondents SuperVan, Inc. and Donald S. Rullo filed a "Motion for Summary Judgment." The Department filed a "Motion for Continuance and a Motion to Compel" Respondents to adequately answer the Department's First Set of Interrogatories and First Request for Production of Documents. The Motion for Continuance was granted on September 14, 1998. On September 28, 1998, Respondents filed an "Answer in Opposition to the Department's Motion to Compel" and renewed their "Motion for Summary Judgment." The Department filed a "Motion for Default Judgment" on October 5, 1998, and filed an "Answer in Opposition to Respondent's Motion for Summary Judgment" on October 30, 1998. Respondents filed an "Answer to the Department's Motion for Default Judgment" on November 20, 1998.

   On November 24, 1998, the undersigned issued a "Decision and Order Granting Motion to Compel, Denying Motion for Summary Judgment and Denying Motion for Default Judgment." Therein, Respondents SuperVan, Inc. and Donald S. Rullo were ordered to file amended answers to the "Department's First Set of Interrogatories and First Request for Production of Documents" by Friday, December 11, 1998. Mr. Rullo timely filed his amended answers to the Department's discovery requests.

   On January 6, 1999, the Department filed a "Renewed Motion for Default" against Respondents SuperVan, Inc. and Donald S. Rullo on the ground that they had not fully complied with the court's Order to Compel. There was no response filed by either Respondent. On February 12, 1999, the Department filed a "Motion for Extension of Time" to extend the time for ruling on the Department's "Renewed Motion for Default." Additional time was sought to depose Mario Mendiola and possibly amend said Motion. Mr. Mendiola was deposed on March 11, 1999.

   On April 12, 1999, the undersigned issued an Order requiring the Department to file a status report. On April 23, 1999, the Department filed a "Status Report" stating that it did not intend to amend the "Renewed Motion for Default" and requesting a ruling on said motion. In addition, the Department indicated that:

The department is seeking to reach a settlement with Respondent, Donald Rullo, and has sent a Consent Judgment for him to review and sign. Mr. Rullo left a voice message with the attorney for the department stating he would be out of the country during the month of May.

On April 29, 1999, the undersigned issued a Decision and Order Granting Partial Default Judgment against SuperVan, Inc.

   On May 14, 1999, the Department filed a "Motion to Reconsider Default" as to Respondent Donald S. Rullo, which was supported by two exhibits. Therein, the Department argued that it was entitled to default judgment on the ground that Mr. Rullo had failed to adequately respond to the Department's First Request for Production of Documents in violation of the undersigned's Orders issued on July 10, 1998, and November 24, 1998. On July 26, 1999, the Department filed a "Motion to Supplement Motion to Reconsider Default," which was supported by one exhibit. Mr. Rullo failed to respond to the Department's "Motion to Reconsider Default" and "Motion to Supplement Motion to Reconsider Default." On August 18, 1999, the undersigned issued a Decision and Order Granting Default Judgment against Respondent Donald S. Rullo.

   On September 1, 1999, Mr. Rullo submitted correspondence and a "Motion to Reconsider Default Judgment Against SuperVan, Inc. and Donald Rullo," which was supported by fourteen exhibits. The Department timely filed a "Response to Respondent's Motion to Reconsider Default."

   In his Motion for Reconsideration, Mr. Rullo presents several arguments which he asserts will require the reversal of the undersigned's Decision and Order Granting Partial Default Judgment dated April 29, 1999, and Decision and Order Granting Default Judgment dated August 18, 1999. The Department submits that Mr. Rullo's arguments are not relevant to the default judgment issue, and that he has failed to provide any new evidence that contradicts the findings of the Decisions and Orders. Each argument will be addressed separately herein.

   Mr. Rullo initially argues that he was prejudiced by the filing of the Department's "Motion to Reconsider Default" on May 14, 1999, because he was out of town during the months of May and June 1999. However, the undersigned notes that Mr. Rullo also failed to answer the Department's "Motion to Supplement Motion to Reconsider Default" filed on July 26, 1999, and that the rulings on said motions were not issued until August 18, 1999. Mr. Rullo was afforded ample opportunity to respond to the Department's motions and/or to file a request for an extension of time. Therefore, Mr. Rullo has not presented a valid reason for reconsideration as to this issue.

   Secondly, Mr. Rullo asserts that he never received the proposed consent findings that the Department indicated that it had sent in its Status Report dated April 23, 1999. According to the Department, the proposed consent findings were sent to Mr. Rullo on or about May 5, 1999. Nevertheless, this argument is not relevant to the default judgment issue. In its Status Report, the Department clearly requested a ruling on the "Renewed Motion for Default." The record further indicates that Respondents were afforded adequate time to respond to this motion. Therefore, reconsideration is not warranted as to this issue.

   Finally, Mr. Rullo argues that the Department is already in possession of the documents at issue in the default order. The Department concedes that certain documents were obtained during the Department's investigation and that said documents were subsequently used during Mr. Mendiola's deposition. Nevertheless, the Department maintains that the documents responsive to the Department's request for production of documents, as referenced in the July 10, 1998, and November 28, 1998, Orders are not in possession of the Department.

   Although the Department has obtained some of the requested documents, the record indicates that Respondents Mr. Rullo and SuperVan, Inc. have failed to produce all of the requested documents pursuant to the July 10, 1998, and November 28, 1998, Orders to Compel. The record further reveals that Respondents had a duty to comply with the record keeping requirements of the Service Contract Act. Therefore, Respondents have failed to present a valid reason for reconsideration as to this issue.

   Accordingly, and based on the foregoing, IT IS HEREBY ORDERED that the "Decision and Order Granting Partial Default Judgment" dated April 29, 1999, and "Decision and Order Granting Default Judgment" dated August 18, 1999, shall remain unaltered.

   Entered this 12th day of October 1999, at Long Beach, California.

      DANIEL L. STEWART
      Administrative Law Judge

DLS:cdk

NOTICE: Within 40 days after the date of this Decision and Order, any aggrieved party may file a petition for review with the Administrative Review Board, U.S. Department of Labor, Room S-4309, 200 Constitution Avenue, N.W., Washington, D.C. 20210. See 29 C.F.R. § 6.20. A copy of any such petition must also be provided to the Chief Administrative Law Judge, Office of Administrative Law Judges, 800 K Street, N.W., Washington, D.C. 20001-8002.