Carpenters Local 261 Health & Welfare Fund v. National Union Fire Insurance of Pittsburgh

686 A.2d 1373
CourtCommonwealth Court of Pennsylvania
DecidedDecember 20, 1996
StatusPublished
Cited by3 cases

This text of 686 A.2d 1373 (Carpenters Local 261 Health & Welfare Fund v. National Union Fire Insurance of Pittsburgh) is published on Counsel Stack Legal Research, covering Commonwealth Court of Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Carpenters Local 261 Health & Welfare Fund v. National Union Fire Insurance of Pittsburgh, 686 A.2d 1373 (Pa. Ct. App. 1996).

Opinion

DOYLE, Judge.

Before this Court are the consolidated appeals of the Carpenters Local 261 Health and Welfare Fund, Annuity Fund, Education Fund, and Organization Fund (collectively, the Union Fund) from an order of the Court of Common Pleas of Monroe County denying the Union Fund’s motion for summary judgment and granting the motion for summary judgment of the National Union Fire-Insurance Company (National). Further, the Union Fund appeals an order of the Court of Common Pleas of Pike County likewise denying its motion for summary judgment and granting National’s motion for summary judgment.

The relevant facts are as follows. Members of Carpenters Local 261 (Union) were hired by Lambert and Intreri, Inc. (Contractor), a construction firm, to perform labor on public works projects. In Pike County, Union workers were involved in the construction of the Pike County Jail, and, in Monroe County, they worked on the construction of [1374]*1374two schools. The Union and the Contractor entered into labor agreements which required the Contractor to, inter alia, make contributions to the several funds above listed. On the Monroe County projects, the Contractor agreed to make the following contributions to the funds for each hour of work performed by a Union member: Health and Welfare Fund, $2.40; Annuity Fund, $2.50; Education Fund, $0.15; and Organization Fund, $0.21. The Union and the Contractor entered into a similar arrangement for the Pike County construction project providing for the following contributions: Health and Welfare Fund, $2.55; Annuity Fund; $3.00, Education Fund, $0.20; and Organization Fund, $0.31.

After the Union members completed work on the construction projects, the Contractor filed for bankruptcy. As a result of Contractor’s insolvency, benefit contributions to the Union Fund for the period from November of 1993 to March of 1994 were never paid by the Contractor. It failed to pay approximately $50,000 in contributions on the two Monroe County projects and approximately $17,000 in contributions from the Pike County work.

The Contractor and National, however, had executed a payment bond for each of the three projects pursuant to the Public Works Contractors’ Bond Law of 1967 (Bond Law), Act of December 20, 1967, P.L. 869, as amended, 8 P.S. §§ 191-195. The terms of the payment bonds generally provided that the Contractor and National would be jointly and severally liable for unpaid labor and materials costs. Based on National’s obligation under the payment bonds, the Union Fund asked National to remit the unpaid benefit costs, but National refused. Thereafter, the Union Fund filed a complaint against National in the Court of Common Pleas of Pike County, as well as two complaints against National in Monroe County, all of which demanded judgment against National for the delinquent benefit contributions. National filed answers to all three complaints and asserted in new matter that the Union Fund’s cause of action under the Bond Law was preempted by the Employee Retirement and Income Security Act (ERISA), 29 U.S.C. §§ 1001-1461 (1985 & Supp.1996).1

The parties proceeded with discovery and filed cross motions for summary judgment in all of the cases. The Union Fund argued that it was entitled to recover the delinquent benefit contributions from National pursuant to Section 4(a) of the Bond Law, 8 P.S. § 194(a).2 National argued that the Bond Law was preempted pursuant to Section 514(a) of ERISA, 29 U.S.C. § 1144(a), which provides, in essence, that state laws related to employee benefit plans within the purview of ERISA are preempted. Monroe County Common Pleas and Pike County Common Pleas each issued an order denying the Union Fund’s motions for summary judgment and granted summary judgment in favor of National. Both courts concluded that the Bond Law was preempted by ERISA because the Bond Law related to an employee benefit plan. The Union Fund filed an appeal from each of those orders and those appeals were consolidated for argument before this Court.

[1375]*1375On appeal, the Union Fund contends that the trial courts (1) erred in holding that the Bond Law was preempted by ERISA, and (2) erred in denying its motions for summary judgment and in not concluding that National was liable under the payment bond.

THE PREEMPTIVE EFFECT OF ERISA

Under the Supremacy Clause of the United States Constitution, U.S. Const. art. VI, cl. 2, federal law preempts state law in the following circumstances: (1) where Congress specifically defines the extent to which its statutes preempt state law; (2) in the absence of such language, when state law regulates conduct Congress placed into the exclusive control of the federal government; and (3) when state law actually conflicts with federal law. English v. General Electric Co., 496 U.S. 72, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990); Baumgardner Oil Co. v. Commonwealth, 146 Pa.Cmwlth. 530, 606 A.2d 617, petition for allowance of appeal denied, 531 Pa. 648, 612 A.2d 986 (1992).

Regarding the federal law under consideration here, Congress has expressly defined the extent to which ERISA preempts state law. Section 514(a) of ERISA states that it preempts “any and all State laws insofar as they may now or hereafter relate to any employee benefit plan” covered by that statute. 29 U.S.C. § 1144(a) (emphasis added). A state law “relates to” an ERISA employee benefit plan in the following circumstances:

A rule of law relates to an ERISA plan if it is specifically designed to affect employee benefit plans, if it singles out such plans for special treatment, or if the rights or resti’ictions it creates are predicated on the existence of such a plan....
A state rule may be preempted even though it has no such direct nexus with ERISA plans if its effect is to dictate or restrict the choices of ERISA plans with regard to their benefits, structure, reporting and administration, or if allowing states to have such rales would impair the ability of a plan to function simultaneously in a number of states.

United Wire, Metal and Machine Health and Welfare Fund v. Morristown Memorial Hospital, 995 F.2d 1179, 1192-93 (3d Cir.) (footnotes omitted), cert. denied sub nom. NYSA-ILA Welfare Fund v. Dunston, 510 U.S. 944, 114 S.Ct. 382, 126 L.Ed.2d 332 (1993).3 In addition to the above, state laws which create causes of action that conflict with ERISA’s civil enforcement mechanisms are also preempted. Ragan v. Tri-County Excavating, Inc., 62 F.3d 501 (3d Cir.1995).

This Court recently encountered the issue of ERISA’s preemptive effect in Jay R. Reynolds, Inc. v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Kise v. Department of Military & Veterans Affairs
784 A.2d 253 (Commonwealth Court of Pennsylvania, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
686 A.2d 1373, Counsel Stack Legal Research, https://law.counselstack.com/opinion/carpenters-local-261-health-welfare-fund-v-national-union-fire-insurance-pacommwct-1996.