United States District Court, M.D. Louisiana
ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, U.A., AFL-CIO
CCR FIRE PROTECTION, LLC, ET AL
FINDINGS OF FACT AND CONCLUSIONS OF LAW
W. deGRAVELLES, UNITED STATES DISTRICT JUDGE
this suit, Plaintiff Road Sprinkler Fitters, Local Union No.
669, U.A., AFL-CIO demands specific performance of what it
contends to be a binding contract settling a labor dispute
between it and CCR Fire Protection, LLC.
matter was tried to the Court on May 14-15, 2019. The parties
submitted post-trial Proposed Findings of Fact and
Conclusions of Law on August 5, 2019. On August 12, 2019, each
party submitted reply briefs in response to the other’s
proposed findings and conclusions. The matter was then
making the following findings of fact and conclusions of law,
the Court has considered the record as a whole. The Court
observed the demeanor of the witnesses who gave live
testimony and has carefully weighed their testimony and
credibility in determining the facts of this case and in
drawing conclusions from those facts. The Court has also
carefully reviewed the deposition testimony and exhibits
introduced into evidence. The Court has reviewed and
considered the briefs and arguments of counsel.
findings of fact contained herein that are more appropriately
considered conclusions of law are to be so deemed. Likewise,
any conclusion of law more appropriately considered a finding
of fact is to be so classified.
the reasons which follow, the Court finds that Plaintiff has
failed to prove its entitlement to the relief sought.
Therefore, judgment is rendered in favor of defendants CCR
Fire Protection, LLC and Quick Response Fire Protection, LLC
and against Plaintiff Road Sprinkler Fitters, Local Union No.
669, U.A., AFL-CIO, dismissing its claims with prejudice.
Plaintiff, Road Sprinkler Fitters, Local Union No. 669, U.A.,
AFL-CIO (the “Union” or “Plaintiff”),
is a national labor organization.
Defendant CCR Fire Protection, LLC (“CCR”) is a
limited liability company organized under the laws of
Defendant Quick Response Fire Protection, LLC (“Quick
Response”), is a limited liability company organized
under the laws of Louisiana.
Defendant Earl Barnett was dismissed for Plaintiff’s
failure to state a claim against him for which relief could
be granted. Defendants Nilesh Patel, Rajendra Bhakta,
Roseal Rodriguez, J.R. and Theresa Rodriguez were dismissed
on summary judgment.
Defendant CCR was formed by Nilesh Patel
(“Patel”), Rajendra Bhakta
(“Bhakta”), and Roseal “J.R.”
Rodriguez (“Mr. Rodriguez”) in 2009 to engage in
the business of installing and maintaining fire protection
membership interests of CCR were owned by Mr. Rodriguez,
Patel, Bhakta and Kennon Bridges
Rodriguez owned a 40% share in CCR. Patel and Bhakta each
owned a 26% share, and Bridges owned 8%.
the President of CCR, Mr. Rodriguez was in charge of managing
CCR from its inception until it closed. He had
authority over the day-to-day operations of CCR, which
included the authority to hire and fire CCR’s
employees. Sometimes, however, he had to answer to
Patel and Bhakta in connection with the operation of
Rodriguez’s wife, Theresa Rodriguez (“Mrs.
Rodriguez”), was, at all material times, the Office
Manager for CCR. Her responsibilities included clerical
work, such as billing, contracts, and payroll. She was not
an owner or officer of CCR.
May 2013, CCR entered into a collective bargaining agreement
(“CBA”) with the Union, pursuant to which CCR
agreed, inter alia, to be bound by the terms of the
2013-2016 National Agreement between the Union and the
National Fire Sprinkler Association, Inc.
(“NFSA”). The CBA covered CCR’s sprinkler
BEFORE THE NLRB
June 2014, CCR attempted to repudiate the CBA by sending a
letter to the Union, claiming that the CBA was “null
Union objected, and on August 8, 2014, filed unfair labor
practice (“ULP”) charges against CCR with the
National Labor Relations Board, Region 15 (“NLRB”
or “Board”), alleging multiple violations of the
National Labor Relations Act (the “NLRA”),
including CCR’s failure to make payments to various
union benefit funds as required by the CBA, as well as its
failure to remit work assessment dues to the Union as
required by the CBA.
NLRB issued a Complaint against CCR on September 30, 2015
alleging multiple violations of the NLRA. The Complaint
alleged, inter alia, that CCR had unlawfully
solicited and assisted employees in quitting the Union,
unilaterally reduced wages to less than what was required by
the CBA, and discontinued contributions to the benefit
funds. This Complaint was accompanied by a
hearing was originally scheduled for a date in January 2016,
in New Orleans, Louisiana.
NEGOTIATIONS AND PUTATIVE SETTLEMENT
January 19, 2016, Mrs. Rodriguez sent an email to Union
attorney Natalie Moffett (“Moffett”) requesting a
continuance of the Board hearing. Moffett, on behalf of the
Union, agreed to continue the hearing by three weeks to
February 16, 2016, as long as Mrs. Rodriguez agreed to
meet with another Union attorney, William Osborne
(“Osborne”) and Union Business Agent Anthony
“Tony” Mr. Cacioppo (“Cacioppo”) for
an off-the-record settlement discussion on Sunday, January
January 24, 2016, Mrs. Rodriguez met with Osborne and
Cacioppo to discuss settlement of the NLRB case against
CCR. Mrs. Rodriguez testified that in that
meeting, Osborne “was told about the IRS
lien[.]” She further testified that Osborne
proposed terms of settlement, which included payment by CCR
of $450, 000 for unpaid Union benefit
January 26, 2016, Mrs. Rodriguez sent an email to Osborne and
Moffett requesting more information about the
February 15, 2016, Osborne responded by email to Mrs.
Rodriguez; Moffett was copied. In the email, Osborne proposed
terms of settlement, which included an agreement by CCR to
pay “$450, 000 payable in monthly installments over 8
years” and to “remain bound to the current and
any successor agreements with Local 669 for the same
That same day, Mrs. Rodriguez responded by email to Osborne
and Moffett and posed “[q]uestions from the
owners” of CCR, which included the following:
“What if the IRS decides that we are not a viable
company and decides we need to close?”
Moffett testified that, as of the date of this email, she was
aware that CCR had an IRS debt of over $1, 000,
000. She also understood Mrs. Rodriguez to be
asking on behalf of CCR’s owners “what would
happen if the IRS decided they [CCR] were not a viable
company.” Moffett further testified that, at this
point in time, she was aware that if someone was in trouble
with the IRS, the IRS was probably going to get its money
first,  that if the IRS had a tax lien against
someone, the IRS was going to recover its money,
and that an IRS tax lien takes precedence
over all other encumbrances.
Likewise, Cacioppo testified that he was aware, a few days
before February 17, that CCR “owed . . . money to the
NLRB trial began on February 17, 2016 in New Orleans,
the trial, CCR was represented by Mr. and Mrs. Rodriguez in
person and by Patel who was participating by
telephone. CCR was not represented by legal counsel
as Mr. and Mrs. Rodriguez were not attorneys.
Moffett and Cacioppo were present for the
Union. Ms. Caitlin Bergo and Mr. Beauford Pines
were present for the Board.
the beginning of the hearing, the Union and CCR resumed
settlement negotiations.These negotiations lasted for a couple
of hours. The NLRB Administrative Law Judge
(“ALJ”) did not participate in and was not
present for these negotiations.
Much of what was discussed during these negotiations is not
disputed. The issue of CCR’s existing tax debt to the
IRS was discussed. Moffett testified that Mr. and Mrs.
Rodriguez “mentioned an IRS debt” and discussed
the fact that “the IRS lien [had] an effect on the
Company’s cash on hand.” Likewise, Cacioppo
testified that both Mr. and Mrs. Rodriguez informed him that
CCR owed the IRS some money.
What is hotly disputed is whether, during these negotiations,
Mr. and Mrs. Rodriguez told the Union’s representatives
that a condition of the settlement was that the IRS would
have to approve the settlement before it would become
binding, and whether the Union agreed to this condition. This
issue is taken up in another section of the ruling.
Following these negotiations, CCR entered into a settlement
of the NLRB Complaint against it. For sake of convenience,
the Court will refer to this as the “Settlement
Agreement” although the main issue in this case is
whether this agreement is binding and enforceable.
terms of the Settlement Agreement were put on the record
before the NLRB ALJ by Moffett and were specifically approved
on the record by CCR before the NLRB ALJ.There is a
dispute as to whether the terms had been presented to and
reviewed by CCR’s co-owners, Patel and Bhakta, two days
earlier. The Court finds it unnecessary to
resolve this dispute.
Specifically, Moffett read into the record the following
“CCR Fire Protection will pay $450, 000 in monthly
installments over eight years to the Union and Union benefit
funds with a down payment in an amount to be agreed upon by
the parties at a later date.
There will be a confession of judgment in the federal court
case related to the unpaid benefit funds.
CCR will mail a notice to employees that I understand will be
attached here and read into the record.
CCR will continue to recognize and bargain with the Union as
its Section 9(a) bargaining representative of the CCR
And CCR will continue to be bound to and comply with its
current and any subsequent collective bargaining agreement
with Local 669.”
Mrs. Rodriguez agreed to these terms on the record on
CCR’s behalf: “CCR is agreeable to
that.” There was no mention of the IRS approval
During the hearing and in compliance with the terms of the
Settlement Agreement, the Union withdrew its ULP charges
and the Union also drafted the formal Notice to be posted by
CCR. The Notice restated the terms of the Settlement
Agreement, was initialed by Mr. Rodriguez on behalf of CCR,
and was received into the NLRB record.
Settlement Agreement was amended later that day to provide
that $3300 of the $450, 000 would be paid as back wages to a
terminated CCR employee. That part of the agreement was
ultimately performed by CCR’s payment of the
Despite the agreement reached on the record, it is clear and
undisputed that certain terms were left unresolved at that
time. These included the amount of the down payment and,
therefore necessarily, the amount of the monthly installments
as it related to the $450, 000 settlement
payment. Indeed, the agreement specifically
stated that this would be “agreed upon by the parties
at a later date.” Other terms not included on the
record were the amounts related to the confession of
judgment, how long CCR would continue to be bound to and
comply with the current and any subsequent collective
bargaining agreements, and CCR’s agreement to pay a
former employee $3300 in back wages.
There are two main areas of contention at the center of
whether the contract is binding and enforceable. First, was
IRS approval a condition of the settlement. Second, were any
of the unresolved terms of the settlement “material or
essential” such that, despite the on the record
Settlement Agreement, there was no binding contract formed on
February 17, 2016.
ALLEGED IRS CONDITION
According to Mr. and Mrs. Rodriguez, during the February 17,
2016 negotiations, they explained to Moffett and Cacioppo
that, given CCR’s sizable debt to the IRS, the
settlement was conditioned on the IRS approving the
settlement. This is disputed by Moffett who
testified that, while she understood CCR owed money to the
IRS, the Settlement Agreement was not conditioned on IRS
According to Mrs. Rodriguez, before going back on the record
at the NLRB hearing, the Union acknowledged that IRS approval
would be part of the terms of settlement. More specifically,
Moffett had drafted notes that the parties were using to
negotiate the terms of settlement. Mr. Rodriguez testified
that, after reviewing these notes, he pointed out to Moffett
that the IRS condition was not in the notes, and, in
response, Moffett represented to Mr. Rodriguez that the IRS
condition would be included in the final, written agreement
that would be mailed to CCR. According to Mrs. Rodriguez,
based on this representation, CCR believed that the Union had
agreed that the settlement was subject to IRS
approval and knew that CCR could not formally
agree to the settlement without this approval.
Settlement Agreement terms memorialized in the NLRB record
did not include any terms conditioning the settlement on IRS
approval. Indeed, there was no reference whatsoever to the
IRS. Nor did the Notice or amendment to the Settlement
Agreement, both prepared that day, include any terms
conditioning the agreement on IRS approval or make reference
to the IRS.
Quick Response admits that, in pre-settlement correspondence
between CCR and the Union, the parties did discuss an IRS
problem, but only as a separate issue from the proposed
settlement terms. On February 15, 2016, two days prior to the
NLRB hearing and settlement, Mrs. Rodriguez, emailed the
Union and asked: “What if the IRS decides that we [CCR]
need to close?” The Union replied the following day
that if, at some later date, the IRS ordered CCR to close,
“the company would be required to negotiate [with the
Union] over the closing….”
According to Quick Response, before and during the settlement
negotiations of February 17, the Union understood that CCR
owed over $1million dollars to the IRS,  that CCR was
subject to a federal tax lien,  that the lien
“ha[d] an effect on the Company’s cash on hand,
” that an IRS tax lien takes precedence
over all other encumbrances,  and that CCR’s very
existence was in jeopardy by virtue of its debt to the
Specifically, during the February 17 negotiations, CCR raised
with the Union the issue of CCR’s existing tax debt to
the IRS. Moffett admitted that Mr. and Mrs.
Rodriguez “mentioned an IRS debt” and that they
discussed the fact that “the IRS lien [had] an effect
on the Company’s cash on hand.” Likewise,
Cacioppo admitted that both Mr. and Mrs. Rodriguez informed
him that CCR owed the IRS some money.
Quick Response attempts to explain and justify the failure of
Mr. and Mrs. Rodriguez to insist that the IRS approval
condition be made a part of the Settlement Agreement read
into the record by pointing to the fact that Mr. and Mrs.
Rodriguez were not lawyers and that they were assured by
Moffett that this condition would be put in the final written
Mrs. Rodriguez testified that, after the February 17 hearing,
she contacted the IRS about the settlement with the Union,
specifically to discuss the proposed amounts that the Union
would be requiring of CCR as additional monthly payments,
which included the yet-to-be determined monthly payments for
the $450, 000 settlement payment, as well as the additional
$19, 000 to $30, 000 per month estimate that would have been
required under the existing CBA and any subsequent
CBA. Mrs. Rodriguez learned that the IRS was
not going to allow these additional payments.
Rodriguez testified that he then called the IRS “to see
if [he] could work out something because [he] wanted to stay
in business.” Mr. Rodriguez spoke with the same IRS
agent that CCR had been making payments to as part of the
payment plan it had with the IRS. He received the same
information as Mrs. Rodriguez. Based on his conversation with
the IRS agent, Mr. Rodriguez came away with an understanding
that CCR could not incur any additional debt as proposed by
the Settlement Agreement until the IRS was paid
first. Consequently, he concluded that CCR
could not effectuate the settlement with the
Plaintiff points to a July 20, 2016 affidavit given by Mrs.
Rodriguez to the NLRB, where she states that the “only
conversation I had with the IRS about the settlement with the
Union” took place after the February 17 hearing and
that she “never submitted anything in writing to the
IRS about the settlement.” The IRS never ordered CCR
to close or to reject the NLRB Settlement.
UNRESOLVED TERMS OF THE AGREEMENT
Quick Response argues that the purported settlement on the
record was not complete, as the parties agreed that
additional terms and conditions were to be worked out between
the Union and CCR. These additional terms included, among
other things, the amount of the down payment and the amount
of the monthly installments as it related to the $450, 000
settlement payment. Other terms not included on the record
were the amounts related to the confession of judgment, how
long CCR would continue to be bound to and comply with the
current and any subsequent collective bargaining agreements,
and CCR’s agreement to pay a former employee $3300 in
back wages. Therefore, the recitation of the
Settlement Agreement into the record before the ALJ was not,
argues Quick Response, a final, complete and enforceable
settlement, as there were additional material terms to be
Plaintiff counters that Mrs. Rodriguez’s NLRB affidavit
refutes Quick Response’s claim that the Settlement
Agreement was only preliminary, incomplete, and/or missing
material terms. In her sworn affidavit, she described it as
“the settlement CCR agreed to at the hearing” and
as pending only IRS approval.
Quick Response argues that even Moffett admitted that the
record was not complete. She testified that when the ALJ said
“that’s it, ” this was inaccurate as they
forgot to put on the record that CCR would agree to pay its
former employee $3300 in back wages.
Following the February 17 hearing, Moffett forwarded to Mrs.
Rodriguez what Moffett described as “a draft settlement
that captures the parties’ verbal
agreement.” The Court will refer to this as the
“Draft Settlement.” Quick Response points out
that, in paragraph 1 of the Draft Settlement, Moffitt changed
the payment term from eight to nine years, which the parties
had “not negotiated.” She explained that she
“was making a proposal, including a very low down
payment and lower monthly payments, ” in order to
“spread it out over a longer period of time in order to
make those monthly down payments lower.”
Moffett also testified that CCR had not agreed to this
proposed extension of the payment term, nor had CCR agreed to
the proposed $25, 000 down payment or the $4400 monthly note
as set forth in the Draft Settlement. She
reiterated that she “was making an initial proposal as
to the down payment and the monthly installments with the
hopes of getting [CCR] started on their payments as soon as
Quick Response maintains that the Draft Settlement differed
in other substantive respects from the terms read into the
record. For example, it required that all settlement payments
be automatically withdrawn from CCR’s bank account, it
outlined the amount the Union benefit funds would receive
versus the amount the Union would receive from the monthly
installments, it included an agreement by CCR to be bound to
and comply with the existing CBA and any subsequent CBAs for
a specified duration, specifically, the 9-year term of the
settlement payments, and it included an agreement by CCR
that, even if it were to pay off the settlement obligation
early, it would still be bound to the 9-year term of the
Draft Settlement also included a statement by the parties
that the agreement represented “the full and final
Agreement between them.” This, argues Quick Response,
indicates that the Draft Settlement was the proposed final
expression, as set forth by the Union, of the parties’
Draft Settlement also did not include a term concerning IRS
Draft Settlement was never signed by CCR or the
REPUDIATION OF NLRB SETTLEMENT
Although CCR made the required back wages payment to the
wrongfully terminated CCR employee, CCR failed to make any of
the other payments required by, or to otherwise comply with
the Settlement Agreement.
Counsel for the Union sent a series of e-mails to CCR after
the NLRB hearing and Settlement Agreement attempting to get
CCR to sign the Draft Agreement. CCR did not respond to these
about March 11, 2016, after Mr. Rodriguez had talked to the
IRS, he and Patel made the decision to close
CCR. The decision was made to close CCR
because of its financial burdens.
about March 11, 2016, Mrs. Rodriguez announced to CCR’s
employees that CCR was closing.
about March 14, 2016, Mrs. Rodriguez informed Cacioppo that
CCR was closing because the IRS allegedly told her that
CCR’s first obligation was to the IRS.
According to the Rodriguez’s testimony, CCR closed and
ceased providing fire protection services on about March 18,
2016 and has not provided those services since.CCR still
exists as a legal entity.
After CCR failed to respond to the Union’s requests to
complete the settlement, the Union’s counsel wrote to
the NLRB on March 24, 2016 in protest.
March 25, 2016, Mrs. Rodriguez, on behalf of CCR, responded
by e-mail, claiming for the first time that the NLRB
Settlement was void because the IRS had not approved
it. The email was sent to Moffett and
Cacioppo, among others, and reiterated her belief that the
settlement agreement was subject to IRS approval and that
this had been communicated to them on multiple occasions
during settlement negotiations: “The agreement was
entered into with good intentions and faith. But what was not
written and signed, is the fact that this was all pending
what the IRS said we could do about this agreement. This
comment was stated many times by Rosael and myself to Tony
and Ms. Moffett.”
July 1, 2016, the Union filed suit against CCR, Quick
Response and others.
AND SUMMARY OF PARTIES’ CONTENTIONS
central issue in the case is whether the February 17, 2016
Settlement Agreement between CCR and Union, put on the record
during the NLRB hearing, is a binding contract. Plaintiff
contends that it is. Quick Response maintains it isn’t.
mentioned earlier, both sides agree that there were terms of
the contract left unresolved at the time the agreement was
put on the record. These included:
a. the amount of the down payment;
b. the amount of monthly installments;
c. how long CCR would continue to be bound by the current and
d. the amount to be paid to a former CCR employee.
Whether the agreement was a binding contract depends first,
on whether the settlement was contingent on IRS approval. If
it was, as Quick Response contends, then there was no binding
contract since the IRS never “approved” the
Second, were any of the matters left unresolved at the time
the agreement was put on the record (most prominently, the
amounts to be paid by CCR as the down payment and monthly
installments), “material or essential terms.” If
they were, as Defendant contends, there was no binding
contract. If they weren’t material or essential but
rather, merely incidental, then the contract could be binding
despite the unresolved terms.
the Settlement Agreement was a binding contract, then CCR is
clearly liable. But whether Quick Response would also be
liable to the Union depends on whether it is the alter ego or
Golden State successor to CCR. Plaintiff argues it
is both. Quick Response insists that it is neither.
OF FACT RE IRS APPROVAL
While Quick Response argues that the Settlement Agreement was
conditioned on IRS approval, the great weight of the evidence
establishes it was not. While the Union was aware of the
large amount owed by CCR to the IRS, approval by the IRS was
never a condition of the settlement.
First and foremost, the Court notes that the Settlement
Agreement itself says nothing about this alleged
condition. And after the terms were read into the
record, Mrs. Rodriguez expressly stated that “CCR is
agreeable to that.” Neither she nor Mr.
Rodriguez said anything to the ALJ suggesting that
CCR’s agreement to the terms stated on the record was
somehow “conditioned” on any other, unstated
only evidence Quick Response points to in support of its
position that the Settlement Agreement was conditioned upon
IRS approval is the testimony of Mr. and Mrs. Rodriguez.
However, the Court finds the testimony of both these
witnesses lacks credibility, especially as it pertains to
this critical issue.
testimony of Mrs. Rodriguez was internally inconsistent. When
questioned by Plaintiff’s counsel about the settlement
negotiations, Mrs. Rodriguez testified that she was not
directly involved in the February 17 negotiations:
Q: During the day when you were at the – this was
– was the hearing at the NLRB offices?
Q: And Natalie Moffett was there?
Q: And you and she and JR and Mr. Patel by phone discussed
settling the NLRB case?
A: No, I never discussed it. I can’t make the decisions
Q: I’m not ---A: I heard the conversation but I did not
--- I was not involved in the discussion of it.
Yet, when questioned by counsel for Quick Response, Mrs.
Rodriguez reversed herself and testified she told Moffett and
Cacioppo “at the end of every sentence” that ...