Greater Kansas City Laborers Pension Fund v. Superior General Contractors, Inc.

• Decision Date: 27 February 1997
• Docket Number: 95-3176,Nos. 95-3128,s. 95-3128
• Court: U.S. Court of Appeals — Eighth Circuit
• Parties: , 20 Employee Benefits Cas. 2552, Pens. Plan Guide P 23930Z GREATER KANSAS CITY LABORERS PENSION FUND, a Trust Fund; Greater Kansas City Laborers Welfare Fund, a Trust Fund; Greater Kansas City Laborers Vacation Plan, a Trust Fund; Greater Kansas City Laborers Training Fund, a Trust Fund, Appellants/Cross-Appellees, John Rider; Jeffrey Chaikin, parties immediately above acting as Trustees of the Greater Kansas City Laborers Pension Fund, Greater Kansas City Laborers Welfare Fund, Greater Kansas City Laborers Vacation Plan and Greater Kansas City Laborers Training Fund; Charles Jones; Charles Mackey, Appellants, v. SUPERIOR GENERAL CONTRACTORS, INC.; Bohnert Construction Company, Appellees/Cross-Appellants.

Page 1050

104 F.3d 1050

65 USLW 2552, 20 Employee Benefits Cas. 2552,

Pens. Plan Guide P 23930Z

GREATER KANSAS CITY LABORERS PENSION FUND, a Trust Fund;

Greater Kansas City Laborers Welfare Fund, a Trust Fund;

Greater Kansas City Laborers Vacation Plan, a Trust Fund;

Greater Kansas City Laborers Training Fund, a Trust Fund,

Appellants/Cross-Appellees,

John Rider; Jeffrey Chaikin, parties immediately above

acting as Trustees of the Greater Kansas City Laborers

Pension Fund, Greater Kansas City Laborers Welfare Fund,

Greater Kansas City Laborers Vacation Plan and Greater

Kansas City Laborers Training Fund; Charles Jones; Charles

Mackey, Appellants, v. SUPERIOR GENERAL CONTRACTORS, INC.; Bohnert Construction

Company, Appellees/Cross-Appellants.

Nos. 95-3128, 95-3176.

United States Court of Appeals,

Eighth Circuit.

Submitted March 11, 1996.

Decided Jan. 15, 1997.

Rehearing and Suggestion for Rehearing En Banc Denied Feb. 27, 1997.

Linda N. Winter, argued, Kansas City, MO (Michael G. Newbold, on the brief), for Appellants/Cross-Appellees.

Robert Joseph Harrop, argued, Kansas City, MO, for Appellees/Cross-Appellants.

Before McMILLIAN, BEAM and HANSEN, Circuit Judges.

McMILLIAN, Circuit Judge.

Four employee trust funds--the Greater Kansas City Laborers Pension Fund, the Greater Kansas City Laborers Welfare Fund, the Greater Kansas City Laborers Vacation Fund, and the Greater Kansas City Laborers Training Fund (collectively plaintiffs or the Funds)--appeal from a final order entered in the United States District Court ¹ for the Western District of Missouri holding that defendants Bohnert Construction Company, Inc. (New Bohnert), and Superior General Contractors, Inc. (Superior General), ² were not liable to the Funds under §§ 502(g)(2) and 515 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. §§ 1132(g)(2), 1145, for employee fringe benefit contributions allegedly due between July 1, 1992 and March 31, 1994. Greater Kansas City Laborers Pension Fund v. Superior General Contractors, Inc., No. 94-0374-CV-W-1 (W.D.Mo. July 21, 1995) (Findings of Fact & Conclusions of Law). For reversal, the Funds argue the district court erred in (1) holding that New Bohnert was not the alter ego of Superior General, (2) failing to consider certain documentary evidence submitted by the Funds, and (3) admitting into evidence an NLRB charge and decision addressing whether alter ego status should apply to defendants. In addition, defendants argue on cross-appeal that the district court erred in holding that it had jurisdiction over the present action under §§ 502(g) and 515 of ERISA, 29 U.S.C. §§ 1132(g), 1145. For the reasons discussed below, we affirm the order of the district court.

I. Background

The Funds are employee trust funds established between 1962 and 1974 pursuant to the collective bargaining agreement entered into between the Builders Association of Missouri and various affiliates of the Laborers International Union of North America in Kansas City, Missouri. ³ The Funds were established under § 302 of the Labor Management Relations Act, 29 U.S.C. § 186. In addition, they are employee benefit plans governed by § 3 of ERISA, 29 U.S.C. § 1002.

New Bohnert is a Missouri corporation in the business of construction in Missouri and Kansas. It was incorporated in 1991, when the construction company originally founded in 1979 by Al Bohnert, Bohnert Construction Co. (Old Bohnert), changed its name to Bohnert CC, Inc., and transferred its general contracting work to New Bohnert. ⁴

In 1981 and 1982, Charlie Morgan, Terry Tackett, and Stan Minor joined Old Bohnert. At that time, Old Bohnert provided several types of services: general contracting, foundation work, interior work, and refrigeration. According to defendants' theory of the case, Al Bohnert decided several years later to assist Morgan, Tackett, and Minor in starting their own company. Thus, in 1988, Al Bohnert helped them establish Superior General. Superior General was incorporated in late 1988. Although Al Bohnert was the majority shareholder in Superior General, Morgan served as president of the company, made all decisions concerning the daily operations, and directed Superior General's labor relations. In 1989, Tackett became a vice-president of Superior General. At approximately the same time, Minor decided to sell his interest in Superior General to Morgan and Tackett. Thereafter, Morgan and Tackett operated Superior General.

On January 1, 1989, Superior General signed a contract stipulation to be bound by the collective bargaining agreement between the Builders Association and the Union. This collective bargaining agreement contained an "evergreen clause," meaning that the terms of agreement would be automatically renewed unless either party provided written notice of termination to the other within a specified time period. Between 1988 and November 1992, when it ceased operations, Superior General employed laborers performing work covered by the collective bargaining agreement. This agreement provided that Superior General would make fringe benefit contributions to the Funds for the laborers it employed.

In March 1991, Al Bohnert incorporated another construction business, New Bohnert. At the same time, the original company (Old Bohnert) changed its name to Bohnert CC, Inc., and transferred all of its general contracting business to New Bohnert. Defendants maintain that New Bohnert was created because Al Bohnert wanted Kelsey Goss, one of his employees, to acquire an ownership interest in the general contracting business. Goss became a shareholder of New Bohnert at its inception. After New Bohnert was created, Old Bohnert performed only interior finishing work and accounting services.

Throughout its existence, Superior General had operated from its own premises, which were initially leased from Old Bohnert. As business grew, Superior General leased additional property from other companies. In addition, Superior General also used the accounting department of Old Bohnert for its routine accounting functions. Between 1988 and 1991, Superior General made a single monthly payment for these accounting services. In 1992, however, Superior General and New Bohnert began a "proportionate assessment" system in which Stan Minor had the discretion to distribute the cost of the accounting services between New Bohnert and Superior General based upon his assessment of the use each company had made of Old Bohnert's accounting department during a particular time period.

Superior General did a substantial amount of business with Old Bohnert, and later, New Bohnert, through a competitive bid process. These arrangements were negotiated between Charlie Morgan and Terry Tackett on behalf of Superior General and the project managers for Old Bohnert and New Bohnert. Superior General also performed subcontracting work for other entities.

In 1992, Superior General began to lose money and, by mid-1992, had experienced severe financial losses. In August 1992, Charlie Morgan resigned from Superior General. Terry Tackett remained at Superior General to wind up its outstanding projects. Superior General ceased operations on November 30, 1992, and therefore employed no laborers after that date.

The present litigation arose when the Funds' trustees instituted suit in federal district court against Superior General and New Bohnert, under §§ 502(g)(2) and 515 of ERISA, 29 U.S.C. §§ 1132(g)(2), 1145, seeking fringe benefit contributions due under two collective bargaining agreements to which Superior General was a signatory employer. The first collective bargaining agreement ran from June 1, 1990, to March 21, 1993; the second ran from April 26, 1993, through March 31, 1996. The Funds alleged that New Bohnert was an alter ego of Superior General, and that New Bohnert and Superior General should be held jointly and severally liable to the Funds for any contributions due. Following a bench trial, the district court determined that (1) Superior General had made all the contributions it was legally obligated to make before it ceased operations ⁵ and (2) New Bohnert was neither a signatory to the collective bargaining agreements nor an alter ego of Superior General. Slip op. at 7, 9.

The district court relied on the factors presented in Iowa Express Distribution, Inc. v. NLRB, 739 F.2d 1305, 1310 (8th Cir.1984) (Iowa Express ), cert. denied, 469 U.S. 1088, 105 S.Ct. 595, 83 L.Ed.2d 704 (1984), and Crest Tankers, Inc. v. National Maritime Union, 796 F.2d 234, 237 (8th Cir.1986) (Crest Tankers ), to determine whether a successor employer which has not signed a labor contract is nevertheless bound by its terms as an "alter ego" of a signatory employer. The district court found that Superior General and New Bohnert were not alter egos because the two companies did not share substantially identical ownership, management, supervision, business purposes, operation, customers, or equipment. Slip op. at 9. The district court specifically found that (1) control and management of Superior General and New Bohnert were distinct and separate, because, although Al Bohnert was the majority shareholder in Superior General, he played no role in its operations; (2) the arrangement by which Superior General utilized the accounting department of Old Bohnert was negotiated in an arm's length transaction; (3) separate books were kept for Superior General and New Bohnert which clearly showed their separate operations and employees; and (4) although Superior General and New Bohnert did a substantial volume of business with one another, such arrangements were negotiated in arm's length transactions, through a competitive bidding process. Id. at 4-6. Finally, noting that "[g]enerally, an alter ego finding requires the existence of an unlawful motive or intent to avoid the terms of the collective bargaining agreement," the district court found that the closing of Superior General and the creation of...