Schoemehl v. Renaissance Electric Co.

334 F. App'x 772
CourtCourt of Appeals for the Eighth Circuit
DecidedJune 9, 2009
DocketNo. 08-1951
StatusPublished

This text of 334 F. App'x 772 (Schoemehl v. Renaissance Electric Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Schoemehl v. Renaissance Electric Co., 334 F. App'x 772 (8th Cir. 2009).

Opinion

MAGNUSON, District Judge.

Appellants appeal the District Court’s dismissal for failure to state a claim of two counts of Appellants’ Amended Complaint against Appellees Hunt Construction Group, Inc. (“Hunt”) and Daktronics Inc. (“Daktronics”). For the reasons that follow, we affirm.

I.

Appellants are trustees of various union benefit plans and funds (collectively, the “Funds”). Hunt was the general contractor overseeing the construction of the new Busch Stadium in St. Louis, Missouri. Hunt contracted with Daktronics to construct and install electric signs in the stadium. Daktronics in turn subcontracted with Renaissance Electric, Inc. (“Renaissance”)2 to install the signs. Hunt had previously entered into a Project Labor Agreement (“PLA”) with the owner of the stadium and various unions. Section 4.09 of the PLA states:

Project Contractor and its Subcontractors performing Construction Work on the Project shall pay into fringe benefit funds directly accrued to the employees (such as pension, health and welfare, training, vacation, holiday, income security, annuity, etc.,) and hereby adopts and agrees to be bound by the written terms of legally established trust agree[775]*775ments specifying the detailed basis on which payments are to be made into, and agrees to accept as its representatives in administration of such funds, the Management and Labor Trustees servicing such funds. Subcontractors agree to execute a Participation Agreement and any other documents reasonably necessary or appropriate to effect them obligations with respect to such fringe benefit payments. The Owner shall support the Unions to the extent possible within the bound of this Agreement in resolving any issues related to Project Contractor’s or its Subcontractor’s payment of fringe benefits. Upon receipt of notice from any Union that fringe benefit contributions have not been paid to the Union for the previous month for work performed on the Project, Owner and Project Contractor will withhold an equal amount from the Subcontractor’s current pay application until the contribution has been paid, and Project Contractor shall have the right to make fringe benefit contributions on behalf of any Subcontractor who has failed to timely make such contributions.

(App’x at 74.)

In the first half of 2006, Renaissance was obligated to contribute $190,000 to the Funds based on work performed by Renaissance employees. None of Appellees have made any payments to the Funds to satisfy the delinquent amount. The District Court3 granted Hunt and Daktron-ics’s motion to dismiss the Funds’ claims against them based on its interpretation of the word “employees” in the provision of the PLA quoted above. The District Court held that the provision unambiguously required each employer to make contributions only for work completed by its own employees; therefore, neither Hunt nor Daktronics was liable to the Funds for the contributions accrued for work completed by Renaissance’s employees. The District Court further held that the Funds failed to allege that they had notified Hunt of Renaissance’s delinquency, thereby triggering Hunt’s right to satisfy any amounts owed by Renaissance. Finally, the District Court held that the PLA’s collective reference to Hunt and its subcontractors as “the Employer” did not by itself create an employer/employee relationship.

II.

This Court reviews a dismissal under Rule 12(b)(6) de novo, “applying the same standards as the district court.” Ballinger v. Culotta, 322 F.3d 546, 548 (8th Cir.2003). “At this stage of the litigation, we accept as true all of the factual allegations contained in the complaint, and review the complaint to determine whether its allegations show that the pleader is entitled to relief.” Schaaf v. Residential Funding Corp., 517 F.3d 544, 549 (8th Cir.2008), cert. denied — U.S. ——, 129 S.Ct. 222, 172 L.Ed.2d 142 (2008) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007)). Construction of an unambiguous contract is a question of law for the Court to determine. Contract Freighters, Inc. v. J.B. Hunt Transp., Inc., 245 F.3d 660, 663 (8th Cir.2001).

A.

The outcome of this case hinges on the interpretation of the phrase “the employees” in the first sentence of Section 4.09. The District Court held that Section 4.09 required each employer to make contributions only on behalf of its own employees. [776]*776The Court agrees with the District Court’s interpretation of Section 4.09.

In passing on whether a particular contractual provision is ambiguous, the Court is to give the words used their ordinary meanings. See Press Machinery Corp. v. Smith R.P.M. Corp., 727 F.2d 781, 784 (8th Cir.1984). An employee is ordinarily “[a] person who works in the service of another person (the employer) under an express or implied contract of hire, under which the employer has the right to control the details of work performance.” Black’s Law Dictionary (8th ed.2004). As will be discussed in more detail below, there is no reason that the term “employees” in the PLA should have anything other than its ordinary meaning. Therefore, the first sentence of Section 4.09 obligates Hunt and Daktronics to make contributions only on behalf of persons who were working “in the service of’ Hunt and Daktronics, respectively.

The structure of Section 4.09 requires the same result. The reference to “the employees” in the first sentence of Section 4.09 must be interpreted within the context of the provision as a whole. The last sentence of that section requires Hunt, on proper notice, to withhold from its subcontractors an amount equal to any unpaid contributions, and authorizes Hunt to make the contributions on behalf of the subcontractor.4 If the first sentence of Section 4.09 required Hunt to make the contributions owed by its subcontractors, as the Funds contend, then the last sentence of that provision would be rendered meaningless. The Court rejects such an interpretation. See Beister v. John Hancock Mut. Life Ins. Co., 356 F.2d 634, 641 (8th Cir.1966) (“Another rule for construction of contracts is that interpretations should be sought that give meaning to all parts of the contract, and interpretations which render meaningless parts of the contract should be avoided.”).

The myriad uses of the word “employees” in other parts of the PLA do not require a different interpretation of Section 4.09. Although the Court agrees with the Funds that “[a]s a whole, the PLA is hardly a model of clarity” (Appellants’ Brief at 31), the use of “employees” in Section 4.09 is unambiguous. That the same word was used to mean something else in other parts of the PLA does not make its meaning in the context and structure of Section 4.09 ambiguous.

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334 F. App'x 772, Counsel Stack Legal Research, https://law.counselstack.com/opinion/schoemehl-v-renaissance-electric-co-ca8-2009.