Olejniczak v. Industrial Mach. & Die Co., Inc., 57
| Decision Date | 15 January 1997 |
| Docket Number | No. 57,96-3251,No. 95-4292,57,95-4292 |
| Citation | 106 F.3d 401 |
| Parties | Pens. Plan Guide P 23932M NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit. Ray OLEJNICZAK, Duane Krueger, Michael Lamphier, and Harry Rorarius, Jr., Plaintiffs-Appellants, v. INDUSTRIAL MACHINE & DIE CO., INC.; James Liptack, President Industrial Machine & Die Company, Inc., Individually and as Trustee of the LocalI.A.M. Pension Fund; Fred Hall; Richard Pack; and Local D.S. 160 Pension Plan, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Before: GUY, RYAN, and COLE, Circuit Judges.
Plaintiffs, former employees of defendant Industrial Machine & Die Company, appeal the district court's grant of summary judgment to defendants 1 on all claims. Plaintiffs further appeal the denial of their motion for partial summary judgment under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., on their claim for delinquent contributions to the employer's pension plan. See id. at § 1145. The district court found that the employer had established a pension plan. It further concluded, however, that agreements between the employer and the union settling claims for unpaid contributions, in which agreements plaintiffs had acquiesced, barred not only plaintiffs' delinquent contributions claim but also their breach of the collective bargaining agreement claim.
After reviewing the record, we conclude that plaintiffs' motion for partial summary judgment was properly denied. For the period in dispute there was no ERISA plan "established or maintained" as that term is defined under the Act.
We reverse the court's grant of summary judgment to defendants on plaintiffs' breach of collective bargaining agreement claim, however, because we conclude a genuine issue of material fact exists as to whether Industrial Machine & Die breached the agreement as to retirement benefits for the period January 1, 1992, to the date of plaintiffs' termination on November 7, 1992. In all other respects we affirm.
Plaintiffs were employees of Industrial Machine & Die Company, a die forging company located in Moline, Ohio. The company's plant is located in Walbridge, Ohio. The plaintiffs were members of the International Association of Machinists Union (IAM).
As part of their compensation, plaintiffs were provided retirement benefits. The company had been contributing to a retirement plan that was administered by an insurance company, but the employees decided to terminate that plan. The company was then required under the existing collective bargaining agreement to initiate another retirement program. The collective bargaining agreement (CBA) effective from July 1, 1990, to June 30, 1993, provided in pertinent part as follows:
The company shall continue to contribute, as stated below, per week to a jointly administered retirement plan for each bargaining unit employee on the active payroll. Learners must have six (6) months on the company payroll to qualify. Their payment shall start with the first week after the six (6) month qualifying period.
Pension Plan
1st Year 2nd Year 3rd Year
-------- -------- --------
$31.00 $34.00 $37.00
(App. 31.)
On November 19, 1990, the union and the company signed an agreement requiring the company to make contributions to Plan B of the IAM Pension Fund (the Fund). In the agreement, which was appended to the 1990-1993 CBA, the parties incorporated by reference the IAM pension fund trust agreement and rules adopted by the trustees in establishing and administering the trust and plan.
A few months later, on April 11, 1991, the company received a provisional acceptance letter from the Fund. The letter set forth the agreed upon rates of contribution, requested that the acceptance letter be posted to inform employees, and referred to summary plan descriptions that the Fund had mailed to all employees. The letter plainly stated, however, that "[u]nder the rules of the Pension Plan your Company does not become a Contributing Employer until you begin contributions to the Fund." Id. at 222.
The company did not make timely contributions. On June 4, 1991, the Fund informed the company that if payment was not received in full by June 17, 1991, "the company and employees' participation will be revoked." Id. at 223.
In response, the company remitted partial payment. The Fund acknowledged receipt of the contributions by letter dated July 26, 1991, but reminded the company that it would not become a contributing employer until it paid its contributions in full. A copy of the letter was sent to all covered employees.
Due to financial difficulties, the company was unable to comply in full. On October 16, 1991, the Fund notified the company and its employees that the April 11, 1991, notice of acceptance was rescinded, and employees would not be entitled to credited service under the plan. The company, in further correspondence with the Fund, attempted to leave open the option of becoming a contributing employer. The company ultimately informed the Fund, however, that it could not pay its contributions in full and requested a refund of the amounts previously submitted, which had been held in escrow pending full remittance. Pursuant to the company's request, on March 1, 1993, the Fund refunded $56,910. Prior to the refund being made, however, the plaintiffs were laid-off on November 7, 1992.
On March 8, 1993, the union and the company signed a letter agreement, which was sent to the company's employees including plaintiffs as former employees, providing for disbursement of the escrowed money. Prior to his discharge, plaintiff Olejniczak, who was a former vice president of the union and the current recording secretary at the time of his departure from the company, participated in these negotiations between the union and the company regarding disposition of the returned funds. The agreement provided that "both parties agree the checks submitted by Industrial Machine & Die and made payable to each individual employee satisfies the pension agreement according to the Economic & Bargaining Agreement signed on July 1, 1990, for the periods of September 1990 through December 31, 1991." (App. 93.) The agreement further provided that the funds to be distributed to the employees
are for contribution funds paid to the I.A.M. National Pension Fund for the employees' pension plan beginning September, 1990 and paid through December 31, 1991.
The employees also agree they fully understand these funds were set aside into an escrow account instead of being contributed into a qualified pension plan because of financial difficulties that are occurring at Industrial Machine & Die.
Id. Each of the plaintiffs was listed as a recipient in the agreement and received a copy of the agreement along with a check for the amount specified in the agreement. Plaintiffs all cashed their checks.
In the next collective bargaining agreement between the union and the company, representing the one-year period from July 1, 1993, to June 30, 1994, no provision was made for retirement benefits. The CBA did include, however, "Exhibit A," which addressed the retirement plan contained in the 1990-1993 CBA. In that exhibit, the company acknowledged that "if a qualified retirement plan could have been maintained at IAM," id. at 101, the company would have been required to contribute amounts as specified in the CBA for each bargaining unit employee for the period from January 1, 1992 to June 30, 1993. The exhibit goes on to state "[i]n this regard, the company shall contribute to each bargaining unit employee who [was] on the active payroll in 1992 and 1993 such funds, in the form of a bonus, when the company's current extreme cash flow difficulties permits such funds to be distributed." Id.
In the next CBA, for the three-year period from July 1, 1994, to June 30, 1997, the company agreed that these amounts would be paid "within the life of" that agreement. Id. at 103. On February 23, 1995, each of the plaintiffs was sent a check for these amounts. Plaintiffs have not cashed these checks.
Plaintiffs, upset that the company had given itself four years to repay retirement benefits for the second period of default, January 1, 1992, to November 1992, when plaintiffs were laid off, brought suit against the company and the plan in late 1994. Plaintiffs alleged various violations of ERISA and included a claim for breach of the collective bargaining agreement. Defendants filed a motion for summary judgment on all grounds, which the court granted. The court denied plaintiffs' motion for partial summary judgment on its claims of delinquent contributions under 29 U.S.C. § 1145 and failure to pay benefits under 29 U.S.C. § 1056(a). Plaintiffs now appeal.
On appeal, plaintiffs claim that the district court erred (1) in granting summary judgment to defendants when a genuine issue of material fact existed as to whether plaintiffs acquiesced in the agreements between the employer and union disposing of retirement benefits under the 1990-1993 CBA; and (2) in denying plaintiffs' motion for partial summary judgment on delinquent contributions when defendants' affirmative defense of accord and satisfaction (a) was not supported by consideration (b) did not reflect mutual assent and (c) the agreement reflecting the accord and satisfaction was unconscionable.
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