Sprinkler Fitters Local Union No. 692 v. First Indemnity Insurance

840 F. Supp. 38, 1993 U.S. Dist. LEXIS 19211, 1993 WL 545714
CourtDistrict Court, E.D. Pennsylvania
DecidedDecember 30, 1993
DocketCiv. A. No. 93-1465
StatusPublished
Cited by1 cases

This text of 840 F. Supp. 38 (Sprinkler Fitters Local Union No. 692 v. First Indemnity Insurance) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sprinkler Fitters Local Union No. 692 v. First Indemnity Insurance, 840 F. Supp. 38, 1993 U.S. Dist. LEXIS 19211, 1993 WL 545714 (E.D. Pa. 1993).

Opinion

ORDER

KATZ, District Judge.

AND NOW, this 30th day of December, 1993, upon consideration of Plaintiffs’ Supple[39]*39mental Motion for Summary Judgment and Defendants’ response thereto, it is hereby ORDERED that Plaintiffs’ Motion is GRANTED.

DISCUSSION

I. Facts

This a contract enforcement action involving a series of labor contracts and a separate series of surety agreements. The facts are not in dispute. See First Set of Joint Stipulated Facts. Plaintiffs are Sprinkler Fitters Local Unions 692 and 696 (“Local 692 and Local 696”) and the Trustees of the National Automatic Sprinkler Industry Pension, Welfare, Educational and Supplemental Pension Funds (“NASI Funds”). Local 692 and Local 696 are labor organizations as defined under the Labor-Management Relations Act (“LMRA”). 29 U.S.C. § 152(5). The NASI Funds are employee benefit trust funds as defined under the Employee Retirement Income Security Act (“ERISA”). 29 U.S.C. § 1002(3). Defendants are First Indemnity of America, Inc. and Homestead Insurance Company.

On behalf of laborers engaged in the installation and maintenance of fire protection systems (“Laborers”), Local 692 and Local 696 entered into a series of collective bargaining agreements (“CBAs”) with Adelphia Automatic Sprinkler Company, Inc. (“Adelphia”). These CBAs obligated Adelphia, in exchange for services performed, to make hourly payment of wages directly to the Laborers and fringe benefit contributions to the NASI Funds on the Laborer’s behalf. Separately and on a per-project basis, Adelphia entered into a series of uniform surety bonds with the Defendants. Under these bonds the Defendants agreed to guarantee a certain class of Adelphia’s labor and material payment obligations.

Adelphia failed to make wage payments and fringe benefit contributions as required by the operative CBA on several projects covered by one of the CBAs and by one of the Defendants’ surety bond (the “Bonded Projects”). In response, Plaintiffs sought payment from Defendants pursuant to the terms of the applicable bonds.1 Defendants denied the request for payment and Plaintiffs initiated this action.

The parties have stipulated that Adelphia breached the operative CBAs for the Bonded Projects in question and that the total amount of wages and benefits due is $75,000. See Joint Stipulation ¶ 14.

II. Issues Presented

Defendants contest Plaintiffs claims on two legal grounds. First, they contend that this court lacks subject matter jurisdiction. Second, they assert that the Plaintiffs are not proper claimants under the terms of the bonds.

III. Jurisdiction

The parties are not diverse. Therefore, the issue is whether the Plaintiffs claims present a justiciable federal question. Plaintiffs assert jurisdiction under two comprehensive bodies of federal law, the LMRA and ERISA. See 29 U.S.C. § 185 and 29 U.S.C. § 1132. There is conflicting authority regarding the scope of federal jurisdiction under each statutory scheme.2

By Order of September 29, 1993, the court denied Defendants’ Motion to Dismiss Plaintiffs’ Claims for Lack of Subject Matter Jurisdiction and held that jurisdiction was proper under the LMRA. The court also concluded that ERISA could not provide a basis for jurisdiction as the Defendants are not “employers” as defined by ERISA. A review of the parties’ contentions regarding jurisdiction and the court’s previous order is appropriate.

Jurisdiction Under Section 301 of the LMDRA

Section 301(a) of the LMRA provides in relevant part:

[40]*40Suits for violation of contracts between an employer and a labor organization representing employees in an industry affecting commerce ..'. or between any such labor organizations, may be brought in any district court ... without respect to the amount in controversy or without regard to the citizenship of the parties.

29 U.S.C. § 185(a). The Plaintiffs argue that jurisdiction is proper because1 this action is premised on Adelphia’s breach of the CBAs. The Defendants contend that Section 301 jurisdiction is limited to claims against parties who are signatories to a contract between an employer and a labor organization and does not encompass suits against non-signatories who have agreed to guarantee obligations detailed in such agreements.

Section 301 jurisdiction and its corresponding preemption of state law is not dependent upon whether the parties to the suit are signatories to a contract between an employer and a labor organization. See, e.g., Allis-Chalmers Corp. v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985) (tort claim by employee against employer for bad faith denial of benefits detailed in collective bargaining agreement falls within ambit of federal contract law). Rather, the existence of Section 301 jurisdiction depends upon the nature of the subject matter in controversy. See, e.g., Teamsters v. Lucas Flour Co., 369 U.S. 95, 103-104, 82 S.Ct. 571, 576-577, 7 L.Ed.2d 593 (1962) (a suit for violation of a labor contract is to be resolved by reference to a common body of federal law); Rehmar v. Smith, 555 F.2d 1362, 1366 (9th Cir.1976). This principle was recently explained by the Third Circuit in Angst v. Mack Trucks, Inc., 969 F.2d 1530 (3d Cir.1992):

Although [Sjeetion 301 refers only to suits between employers and unions, and does not explicitly mention suits between employers and employees, the Supreme Court has read this provision to create federal jurisdiction over all claims that are substantially dependent upon analysis of a collective bargaining agreement____

Angst, 969 F.2d at 1536 n. 5 (citing Allis-Chalmers v. Lueck, 471 U.S. 202, 105 S.Ct. 1904, 85 L.Ed.2d 206 (1985); Griesmann v. Chemical Leaman Tank Lines, Inc., 776 F.2d 66 (3d Cir.1985)).

Her.e, in order for the Plaintiffs to prevail they must establish that: (1) one of CBAs was operative; (2) Adelphia violated the terms of that CBA; and, (3) the obligations in question were guaranteéd by the Defendants for the projects in question. Therefore, resolution of this controversy necessarily involves interpreting and applying of a contract between an employer and a labor organization.

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840 F. Supp. 38, 1993 U.S. Dist. LEXIS 19211, 1993 WL 545714, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sprinkler-fitters-local-union-no-692-v-first-indemnity-insurance-paed-1993.