Alaska Laborers Employers Retirement Trust, Alaska Laborers-Construction Industry Training Fund, and the Alaska Laborers-Construction Industry Health & Security Fund v. Olhausen Construction and Management, LLC

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF ALASKA
ALASKA LABORERS EMPLOYERS
RETIREMENT TRUST, et al.
Plaintiffs,
v.
OLHAUSEN CONSTRUCTION AND
MANAGEMENT, LLC,
Defendant.
Case No. 3:20-cv-00087-SLG
NOTICE OF INTENT TO DISMISS
Before the Court at Docket 1 is Plaintiffs’ Application for Entry of Judgment
on Confession, to which is attached an affidavit in support.1 Also attached are a
Confession of Judgment Without Action and a Settlement Agreement and
Agreement not to Execute, each signed by Defendant and dated December 6,
2019.2 No filing fee was paid to initiate this action. Plaintiffs ask the Court to enter
judgment against Defendant without filing a complaint, paying the filing fee, and
obtaining a summons and filing proof of service thereof, or filing a waiver of service.
A confession of judgment is “an ancient legal device by which the debtor
consents in advance to the holder’s obtaining a judgment without notice or hearing,
and possibly even with the appearance, on the debtor’s behalf, of an attorney
1 Docket 1-1.
2 Docket 1-2 (Confession of Judgment); 1-3 (Settlement Agreement).
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designated by the holder.”3 In effect, a confession of judgment constitutes a waiver
of the debtor’s constitutional right to procedural due process, which includes the
right “to notice and hearing prior to a civil judgment.”4 The Supreme Court has
held that a such a device is not facially invalid and may be enforced so long as
there is “‘clear and convincing evidence’ that the written waiver [of the right to
procedural due process] was ‘voluntary, knowing, and intelligently made.’”5 This
is a factual inquiry.6
However, while several states, including Alaska, provide for the entry of
judgments on confession,7 “[t]he Federal Rules of Civil Procedure . . . make no
reference to such a device.”8 Pursuant to Federal Rule of Civil Procedure 3, “[a]
civil action is commenced by filing a complaint with the court.” The advisory
committee notes explain that “[t]his rule governs the commencement of all
actions.”9 Plaintiffs in this case did not file a complaint to initiate this action,
3 D.H. Overmyer Co., Inc. v. Frick Co., 405 U.S. 174, 176 (1976).
4 Id. at 1185, 187–88 (characterizing confession of judgment entered under Ohio law to be a
waiver of 14th Amendment due process).
5 Fed. Deposit Ins. Corp. v. Aaronian, 93 F.3d 636, 640 (9th Cir. 1996) (quoting Overmyer, 405
U.S. at 185–86).
6 Id. (citing Overmyer, 405 U.S. at 188).
7 See, e.g., AS 09.30.050; Alaska R. Civ. P. 57(b)–(c).
8 Boosalis Options, LP v. Farnbacher Loles Motorsports, LLC, No. C 09-80316 WHA, 2010 WL
335651, at *1 (N.D. Cal. Jan. 22, 2010).
9 Fed. R. Civ. P. 3 advisory committee’s note to 1937 adoption (emphasis added).
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Case No. 3:20-cv-00087-SLG, Alaska Laborers Emp’rs Ret. Tr., et al. v. Olhausen Constr. &
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consistent with the Federal Rules, but rather filed the instant Application for Entry
of Judgment on Confession. Faced with a nearly identical situation, the district
court for the Northern District of California concluded:
The proper procedure in this case would have been for plaintiff to file
a complaint to enforce the settlement agreement. Then plaintiff
should have served the complaint with a summons on defendants. If
they were to appear, they would have to explain why the settlement
agreement should not be enforced.10
The Court has found no case in which a federal court has entered a judgment on
confession that was not preceded by the filing of a complaint.11 And the Court will
not enter a judgment without service of process of the complaint on the defendant
or a valid waiver of process that comports with the Supreme Court’s holding in
10 Boosalis Options, LP, 2010 WL 33561, at *2; accord J.D. Holdings, LLC v. BD Ventures, LLC,
766 F. Supp. 2d 109, 113 (D.D.C. 2011) (“The Federal Rules of Civil Procedure do not refer to
this device and courts have found that confession judgments are not authorized in Federal
courts to circumvent the filing of a complaint, summons, and service.”); Fed. Deposit Insur.
Corp. v. Yarrington, No. 13-cv-89-S, 2013 WL 11866198, at *1 (D. Wyo. June 6, 2013) (“Federal
law does not provide for judgment by confession, and therefore Federal courts have not
authorized confession judgments to circumvent the filing of a complaint, summons, and
service.”).
11 See J.D. Holdings, LLC, 766 F. Supp. 2d at 113–14 (entering judgment on confession where
“plaintiff filed a complaint and has tried to over a year to no avail to obtain judgment from the
defendants); Alland v. Consumers Credit Corp., 54 F.R.D. 252, 255 (S.D.N.Y. 1971), rev’d on
other grounds 476 F.2d 951 (2d Cir. 1973) (entering judgment by confession in action initiated
by complaint after finding waiver of due process rights was “the result of arms-length bargaining
between the parties”); Yarrington, 2013 WL 11866198, at *1–3 (exercising federal question
jurisdiction to enter confession judgment pursuant to settlement agreement where action was
initiated with complaint); cf. Retail Clerks Union Joint Pension Tr. v. Freedom Food Ctr., Inc.,
938 F.2d 136, 137, 139 (9th Cir. 1991) (affirming denial of Rule 60(b) motion to vacate entry of
stipulated judgment); cf. Genesis Fluid Sols., Ltd. v. Eagle N. Am., Inc., No. 10-MC-80231-JF,
2011 WL 1193571, at *1–2 (N.D. Cal. March 29, 2011) (granting Rule 60(b) motion for relief from
judgment entered by confession and noting that “[u]nder the Federal Rules, a party seeking to
enforce a judgment by confession must file a complaint under [FRCP] 3, and serve a summons
under [FRCP 4]”).
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Overmyer. Nor will the Court allow a plaintiff to initiate an action without payment
of the appropriate filing fee or filing an application to waive that fee pursuant to 28
U.S.C. § 1915.
In light of the foregoing, the Court gives Plaintiffs notice of its intent to
dismiss this action without prejudice unless within 21 days from the date of this
order, Plaintiffs file a response to this notice that demonstrates that the Court
should act on their Application for Entry of Judgment on Confession as filed.12 If
Plaintiffs do not respond within 21 days, the Court will dismiss this action
thereafter without further notice.
DATED this 7th day of May, 2020 at Anchorage, Alaska.
/s/ Sharon L. Gleason
UNITED STATES DISTRICT JUDGE
12 Due to the coronavirus pandemic, by Miscellaneous General Order 20-11, the District of Alaska
imposed a stay on all civil matters for 30 days, effective March 30, 2020. The District of Alaska
recently extended that stay until June 1, 2020. See Miscellaneous General Order 20-13. The
undersigned judge, presiding in this matter, hereby lifts the stay in this case. See Miscellaneous
General Order 20-13 at 5–6.
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