Laborers' Pension Trust Fund-Detroit & Vicinity v. Rocwall Co.

357 F. App'x 638
CourtCourt of Appeals for the Sixth Circuit
DecidedDecember 16, 2009
Docket08-1574
StatusUnpublished
Cited by2 cases

This text of 357 F. App'x 638 (Laborers' Pension Trust Fund-Detroit & Vicinity v. Rocwall Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Laborers' Pension Trust Fund-Detroit & Vicinity v. Rocwall Co., 357 F. App'x 638 (6th Cir. 2009).

Opinion

ALICE M. BATCHELDER, Chief Judge.

In this action brought under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(a)(3) and 1145, the trustees of various multi-employer fringe benefits plans (“Funds” or “Plaintiffs”) seek satisfaction from Rocwall Company (“Rocwall” or “Defendant”) for its subcontractors’ alleged delinquent contributions. A provision of the collective bargaining agreement (“CBA”) between Rocwall and Locals 334 and 1076 (collectively, “the Union”) makes Rocwall surety for the contributions of its subcontractors. Another provision of the CBA sets a 90-day time limit for the Union to make claims of delinquent contributions. Roc-wall filed for summary judgment, claiming the time limit applied to the Funds as well as the Union. The district court held that the contractual time limit was not a valid defense that Rocwall could assert against the Funds. We AFFIRM.

*639 I.

The following factual summary comes from the district court’s opinion and order denying Rocwall’s motion for partial summary judgment.

Plaintiffs are trustees of various mul-ti-employer fringe benefits plans which are governed by the Employment Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq. Roc-wall is a signatory to the collective bargaining agreement (CBA) that was established between the Poured Concrete Wall Association (the Association), of which Rocwall is a member, and Locals 334 and 1076 (collectively known as “the Union”). The CBA required Roewall’s subcontractors to make contributions to the fringe benefits funds that are sponsored by the Association and the Union, with Rocwall acting as a surety if, and when, those payments are not made. As relevant, twelve Rocwall subcontractors allegedly failed to make fringe benefit contributions to Plaintiffs between 2001 and 2005. On July 17, 2006, Plaintiffs issued an audit for the period of January 2001 through September 2005, and claimed that Rocwall owed them $256,146.85 because of the failures of Rocwall’s subcontractors to make fringe benefits contributions.
On August 27, 2006, the Union filed a grievance against Rocwall seeking to hold it responsible for the delinquent fringe benefits contributions in question. Rocwall responded with a timely request for a meeting to discuss the grievance. During the exchange, Rocwall and the Union apparently agreed that the contributions were subject to Article XIV of the CBA, and that the Union had failed to comply with a 90-day notice provision. This apparently led the Union to dismiss its grievance. Plaintiffs then filed this lawsuit in May 2007 seeking the known unpaid indebtedness of $256,146.85, an order that Defendant submit itself to an audit to determine Defendant’s total indebtedness from January 2001 to the present, and permission to amend the award to account for the additional amounts that the audit would reveal, as well as costs, interest, and attorney fees.

Rocwall filed a motion for partial summary judgment, arguing that the CBA’s 90-day time period for filing claims for back contributions bound the Funds as well as the Union. The district court denied the motion on the ground that the CBA notice provision was not a valid defense that Rocwall could assert against the Funds. Rocwall filed a motion for reconsideration, which the district court denied. Rocwall then filed a motion to certify an interlocutory appeal, which the court granted. We subsequently granted permission to appeal.

II.

We review de novo the district court’s grant or denial of summary judgment. Edgar v. JAC Prods., Inc., 443 F.3d 501, 506 (6th Cir.2006). Summary judgment is proper “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Fed.R.Civ.P. 56(c).

III.

Rocwall’s sole argument on appeal is that the district court erred in holding that Rocwall could not raise the CBA’s notice provision as a defense against the Funds. In denying summary judgment for Roc-wall, the court noted that “there are severe limitations imposed on the availability of contract defenses in trust fund collection cases such as this one” and held that “there are only three defenses available to *640 Roewall: (1) the pension contributions are illegal, (2) the collective bargaining agreement is void ab initio, as where there is fraud in the execution, and (3) the employees have voted to decertify the union as their bargaining representative, thus voiding the union’s CBA.” Because Roewall had not asserted any of these defenses, the court denied Rocwall’s motion.

Section 515 of ERISA provides: “Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. We have explained that “[t]his language was added to ERISA ‘to simplify delinquency collection’ by freeing pension and welfare funds from defenses that pertain to the unions’ conduct.” Cent. States, Se. & Sw. Areas Pension Fund v. Behnke, Inc., 883 F.2d 454, 460 (6th Cir.1989) (quoting Robbins v. Lynch, 836 F.2d 330, 333-34 (7th Cir.1988)).

If employers could raise contract defenses pertaining to the union’s conduct, then ERISA-governed funds would have to get their money from other participating employers or else not be able to pay all benefits due under their plans. For example, in Behnke we held that “[a] claim that the union has promised not to collect a payment called for by the agreement is not a good answer to the trustees’ suit....” Id. Quoting the Seventh Circuit, we explained:

Multi-employer pension and welfare plans would be in a bind if ... flaws in the formation cut off third-party claims. Plans rely on documents to determine the income they can expect to receive, which governs their determination of levels of benefits. Multi-employer plans are defined-contribution in, defined-benefit out. Once they promise a level of benefits to employees, they must pay even if the contributions they expected to receive do not materialize — perhaps because employers go broke, perhaps because they are deadbeats, perhaps because they have a defense to the formation of the contract. If some employers do not pay, others must make up the difference in higher contributions, or the workers will receive less than was promised.

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357 F. App'x 638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laborers-pension-trust-fund-detroit-vicinity-v-rocwall-co-ca6-2009.