Brown-Graves Co v. Central States

• Court: Court of Appeals for the Sixth Circuit
• Decided: March 20, 2000
• Docket: 99-3039
• Status: Published

Opinion

RECOMMENDED FOR FULL-TEXT PUBLICATION 8 Brown-Graves Co. v. No. 99-3039 Pursuant to Sixth Circuit Rule 206 Central States, et al. ELECTRONIC CITATION: 2000 FED App. 0097P (6th Cir.) File Name: 00a0097p.06

1298 (6th Cir. 1991). As noted, the district court determined that until the 1995 audit, Central States did not know of UNITED STATES COURT OF APPEALS Brown-Graves’s unusual definition of “casual drivers.” Furthermore, after Central States became aware of the FOR THE SIXTH CIRCUIT problem, it notified Brown-Graves of its claim for _________________ contributions. The elements of laches and estoppel are not met. As a result, these doctrines do not bar Central States’s ; claims for pension contributions on behalf of employees  classified as “casual drivers.” BROWN-GRAVES COMPANY,  Plaintiff-Appellant,  AFFIRMED.  No. 99-3039 v.  > CENTRAL STATES,  SOUTHEAST AND SOUTHWEST    AREAS PENSION FUND and  HOWARD MCDOUGALL,  Trustee, Defendants-Appellees.   1 Appeal from the United States District Court for the Northern District of Ohio at Akron. No. 96-02300—David D. Dowd, Jr., District Judge. Submitted: December 13, 1999 Decided and Filed: March 20, 2000 Before: MERRITT and SILER, Circuit Judges; BECKWITH, District Judge.*

* The Honorable Sandra S. Beckwith, United States District Judge for the Southern District of Ohio, sitting by designation.

1 2 Brown-Graves Co. v. No. 99-3039 No. 99-3039 Brown-Graves Co. v. 7 Central States, et al. Central States, et al.

_________________ employees.” As the Eighth Circuit has done, we shall apply the ordinary meaning to the term “casual employee” where no COUNSEL other definition is contained in the CBAs and Central States had no reason to know of the unusual definition used by ON BRIEF: Timothy M. Bittel, David H. Shaffer, Brown-Graves. Consequently, the district court was correct JOONDEPH, SHAFFER & BITTEL, Akron, Ohio, for in ruling that Brown-Graves was contractually obligated to Appellant. Albert M. Madden, CENTRAL STATES, make contributions on behalf of employees classified as SOUTHEAST & SOUTHWEST AREAS HEALTH & “casual drivers.” WELFARE & PENSION FUNDS, Des Plaines, Illinois, for Appellees. II. DEFENSE OF LACHES AND ESTOPPEL _________________ Laches consists of two elements: (1) unreasonable delay in asserting one’s rights; and (2) a resulting prejudice to the OPINION defending party. Meade v. Pension Appeals and Review _________________ Committee, 966 F.2d 190, 195 (6th Cir. 1992). In the present case, there was no unreasonable delay. As the district court SILER, Circuit Judge. Plaintiff, Brown-Graves Company stated, Central States did not know of the problem with (“Brown-Graves”), appeals the judgment and award of Brown-Graves’s unusual interpretation of the term “casual attorneys’ fees for defendants, Central States Southeast and drivers” prior to the 1995 audit. Immediately after the audit, Southwest Areas Pension Fund (“Central States”), in this Central States notified Brown-Graves of its claim for Employee Retirement Income Security Act (“ERISA”) case contributions. in which the district court determined that Brown-Graves was obligated to make contributions to Central States. For the There was also no resulting prejudice to Brown-Graves. reasons discussed below, we AFFIRM the district court’s Brown-Graves states that if it had been notified of Central decision. States’s claim sooner it could have “taken steps to avoid being sued for the disputed contributions.” However, the only BACKGROUND “steps” Brown-Graves could have taken would have been to make the contributions. Consequently, the laches defense Brown-Graves employed truck drivers pursuant to a series fails. of three-year contracts negotiated with Local Union 348 of the International Brotherhood of Teamsters (“Local 348"). This The elements of estoppel are: (1) conduct or language appeal concerns whether Brown-Graves was obligated by the amounting to a representation of fact; (2) the party to be terms of these contracts to pay pension contributions to estopped must be aware of the true facts; (3) the party to be Central States on behalf of eight employees who were estopped must intend that the representation be acted on such classified as “casual drivers.” that the party asserting the estoppel has the right to believe it was so intended; (4) the party asserting the estoppel must be The Collective Bargaining Agreement (“CBA”) in effect unaware of the true facts; and (5) the party asserting the from June 23, 1983, to June 23, 1986, makes no mention of estoppel must detrimentally and justifiably rely on the a “casual driver” classification. During this time frame, representation. Armistead v. Vernitron Corp., 944 F.2d 1287, Brown-Graves employed casual drivers under an informal 6 Brown-Graves Co. v. No. 99-3039 No. 99-3039 Brown-Graves Co. v. 3 Central States, et al. Central States, et al.

Given the purpose of written contracts and section 515 of arrangement with Local 348. The “casual driver” ERISA, the parties to a collective bargaining agreement classification first appeared in the parties’ CBA covering the are bound by the terms of their agreement, regardless of period between June 23, 1986, and June 23, 1989. The their undisclosed intent. By so holding, we merely agreement stated that casual drivers were to be hired “without reaffirm a basic rule of contract interpretation. “A any fringe benefits.” Successive CBAs entered into by the signatory to a contract is bound by its ordinary meaning parties in 1989 and 1992 contained nearly identical language even if he gave it an idiosyncratic one; private intent concerning the casual driver classification. counts only if it is conveyed to the other party and shared.” [citation omitted]. Section 515 of ERISA In 1995, Central States conducted an audit of Brown- emphasizes that this is especially true as to third parties Graves’s payroll records for the period of December 30, 1990, obligated to administer a pension fund according to the through December 25, 1993, to determine whether Brown- terms of written agreements. Graves was making pension fund contributions under the CBA. Following the audit, Central States demanded Brown- Id. at 1353. Graves pay more than $30,000 in contributions and interest allegedly owed on behalf of certain employees classified as Hartlage Truck Service, Inc. is distinguishable from the “casual drivers.” In 1996, Brown-Graves commenced suit present case and Independent Fruit. In Hartlage, the court seeking a declaratory judgment that there was no contractual stated: obligation to make pension contributions on behalf of the casual drivers. Central States filed a counterclaim for The CBAs in this case--unlike the collective bargaining recovery of the disputed contributions plus interest, costs and agreements at issue in Independent Fruit--clearly express attorneys’ fees. Brown-Graves’s denial of an obligation to the parties’ intent. Hartlage and the Union openly contribute to the pension fund from 1986 forward was based expressed their agreed understanding of the phrase on the provision in the CBA stating that casual drivers will be “casual employee” in the CBAs. We have no doubt that hired “without any fringe benefits.” the Funds could have easily ascertained the meaning the parties attributed to that phrase. We need not, therefore, The district court ruled that Brown-Graves owed look to a dictionary definition for guidance as the $60,251.94 in pension contributions and interest for Independent Fruit court did. Rather, as required by employees hired prior to June 23, 1986. It further ruled that section 515, we enforce the terms of the CBAs and Brown-Graves owed $47,430.27 in contributions and interest conclude that Taylor, Vorwold, and Vail were casual for the employees hired after June 23, 1986, because those employees. individuals did not qualify as “casual employees” under the ordinary dictionary definition of that term. Hartlage Truck Service, Inc., 991 F.2d at 1362. The court determined that as the parties agreed to a specific definition DISCUSSION of “casual” the ordinary definition was not appropriate. I. EMPLOYER CONTRIBUTIONS As in Independent Fruit and unlike Hartlage Truck Service, Inc., the CBAs involved in the present case do not define The contracts at issue here did not define the term “casual “casual.” Furthermore, Central States had no notice of the driver.” Therefore, this court must decide what test should be unusual meaning Brown-Graves attached to the term “casual applied to determine whether an employee is within the casual 4 Brown-Graves Co. v. No. 99-3039 No. 99-3039 Brown-Graves Co. v. 5 Central States, et al. Central States, et al.

classification. Section 515 of ERISA, 29 U.S.C. § 1145, While Central States noted that the post-1986 CBAs governs employer contributions to multi-employer pension excluded “casual employees” from participation, Central plans: States accepted the CBAs because there was no indication in the CBAs that the employer had assigned a Every employer who is obligated to make contributions meaning to the term “casual employee” other than the to a multi-employer pension plan under the terms of the standard definition of short term, temporary, sporadic plan or under the terms of a collectively bargained employees which would not violate Central States’ rules. agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms The Sixth Circuit has not addressed the issue of whether, in and conditions of such plan or such agreements. the absence of a definition in the contract, the ordinary dictionary definition or some other definition should apply to Thus, employers are required to make contributions according determine whether or not an employee is “casual.” The to the terms of their contracts. Central States, Southeast and Seventh and Eighth Circuits have addressed the issue. The Southwest Areas Pension Fund v. Hartlage Truck Service, Eighth Circuit has concluded that an employer could not Inc. 991 F.2d 1357, 1360 (7th Cir. 1993). avoid contributions to the pension fund for “casual” employees by making an agreement with the union to attach The CBA covering 1983-1986 made no mention of “casual a different meaning from its plain meaning. See Central drivers.” It provided that all new employees “shall be States, Southeast and Southwest Areas Pension Fund v. considered as probationary employees for a period of ninety Independent Fruit & Produce Co., 919 F.2d 1343 (8th Cir. (90) calendar days” and that new drivers were not to become 1990). The Seventh Circuit reached the opposite conclusion. eligible under the plan for thirty days. Brown-Graves claims It held that an employer is required to make contributions to it had an informal agreement with Local 348 pertaining to pension plans only on behalf of those employees as indicated casuals. Nevertheless, the 1983-1986 CBA was unambiguous in the CBAs, and if casual employees are excluded from and must be interpreted without any regard to parol evidence. benefits in the CBA, then any employee so designated is The subsequent CBAs did contain “casual driver” language, excluded from benefit contributions. See Central States, but did not define the term. Southeast and Southwest Areas Pension Fund v. Hartlage Truck Service, Inc., 991 F.2d 1357, 1360 (7th Cir. 1993). Since June 23, 1986, Brown-Graves classified each new driver as a “casual driver.” The language in the post-1986 In Independent Fruit, the employers had negotiated a CBA CBAs excluding casual drivers from pension benefits was which provided that casuals would not be eligible for pension unambiguous. However, it did not provide notice to Central contributions, but it did not define casuals. Central States States that Brown-Graves gave the term “casual employee” an conducted an audit and determined the employer owed unusual meaning which allowed it to call all new employees contributions for several employees because the number of “casual” for indefinite periods of time. Central States would hours they worked indicated that they were not casual not have accepted Brown-Graves’s post-1986 CBAs had it employees. The Eighth Circuit held that the CBAs involved known that Brown-Graves planned to call every newly hired were not ambiguous and there was nothing in the CBAs employee a “casual” for periods up to four years so it could suggesting anything other than the ordinary dictionary avoid pension payments. The district court stated that: definition of casual was intended. Independent Fruit, 919 F.2d at 1352. The court stated that: