Building Service Local 47 Cleaning Contractors Pension Plan v. Grandview Raceway

• Decision Date: 16 February 1995
• Docket Number: 93-4054 and 93-4133,Nos. 93-3998,s. 93-3998
• Citation: 46 F.3d 1392
• Parties: 41 Fed. R. Evid. Serv. 767 BUILDING SERVICE LOCAL 47 CLEANING CONTRACTORS PENSION PLAN, et al., Plaintiffs-Appellees, Cross-Appellants (93-4133), v. GRANDVIEW RACEWAY, et al., Defendants, Northeast Ohio Harness, et al., Defendants-Appellants (93-3998/4054), Cross-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

Page 1392

46 F.3d 1392

41 Fed. R. Evid. Serv. 767

BUILDING SERVICE LOCAL 47 CLEANING CONTRACTORS PENSION PLAN,

et al., Plaintiffs-Appellees, Cross-Appellants (93-4133),

v.

GRANDVIEW RACEWAY, et al., Defendants, Northeast Ohio Harness, et al., Defendants-Appellants

(93-3998/4054), Cross-Appellees.

Nos. 93-3998, 93-4054 and 93-4133.

United States Court of Appeals, Sixth Circuit.

Argued Jan. 24, 1995.

Decided Feb. 16, 1995.

Eben O. McNair, (argued and briefed), Timothy J. Gallagher (briefed), Schwarzwald & Rock, Cleveland, OH, for plaintiffs-appellees in Nos. 93-3998 and 93-4054, 93-4133.

William F. Snyder (briefed), Laurence R. Synder (argued), Marshman, Snyder & Kapp, Cleveland, OH, for defendants-appellants in Nos. 93-3998 and 93-4054.

William F. Snyder (briefed), Laurence R. Snyder (argued), Marshman, Snyder & Kapp, for William F. Snyder, Robert D. Stakich, Northeast Ohio Harness and Loren W. Houston in No. 93-4133.

William F. Snyder (briefed), Laurence R. Synder (argued), Marshman, Synder & Kapp, James Joseph Bartolozzi, Kahn, Kleinman, Yanowitz & Arnson, Cleveland, OH, for Victor D. Ippolito in No. 93-4133.

Before: JONES, CONTIE, and MILBURN, Circuit Judges.

MILBURN, Circuit Judge.

Defendants appeal and plaintiffs cross-appeal the district court's judgment and award of attorneys' fees for plaintiffs in this action to recover allegedly delinquent pension fund contributions. On appeal, the issues raised by defendants are (1) whether the district court erred in admitting and relying on the summary of deficiencies prepared for trial purposes by plaintiffs' independent auditor, (2) whether there was sufficient evidence of record to support the inclusion of charges for plaintiffs' audit expenses in the district court's judgment, (3) whether the district court erred by failing to credit defendants with additional credits for payments made by or on behalf of defendants in 1984, and (4) whether the district court abused its discretion in awarding attorneys' fees. On cross-appeal, the sole issue raised by plaintiffs is whether the district court applied an improper methodology in reducing the requested attorneys' fee award. For the reasons that follow, we affirm in part and reverse in part.

I.

A.

The plaintiffs in this case are Building Service Local 47--Cleaning Contractors Pension Plan and its trustees, and Local 47 Welfare Fund No. 1 and its trustees (collectively referred to as "the Funds"). Each fund is an employee benefit plan and multi-employer plan as defined in 29 U.S.C. Secs. 1002(3) and 1002(37). The original defendants in this case were Grandview Racing ("Grandview"), an Ohio limited partnership, and its general partners, Northeast Ohio Harness ("NEOH"), an Ohio partnership and its partners, Painesville Raceway, Inc. ("Painesville"), and The Ohio State Racing Commission. The only defendants on appeal are NEOH and its partners (collectively referred to as "defendants"). The Funds sued defendants to collect allegedly delinquent pension and welfare benefit contributions that arose out of defendants collective bargaining agreements with the Funds. The Funds also sought contractual remedies provided in the collective bargaining agreements, as well as remedies under the Employee Retirement Income and Security Act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq. ("ERISA").

The Funds' principal witness at trial was Charles C. Drake, a certified public accountant. ¹ At the time of the audits in question, Drake was an employee of the company that acted as the third-party administrator of the Funds. As such, Drake was responsible for overseeing the audit program. Drake currently has his own accounting firm and he has a relationship with the Funds as an independent auditor. In 1983, after the Funds' trustees had reason to believe that NEOH was delinquent in making employee contributions, an audit was conducted of NEOH's records. This audit, which was in compliance with the Funds' general policy regarding the scheduling of audits, also involved other entities, including Grandview. ² Drake was primarily responsible for conducting the 1983 audit; he supervised one of his staff members, identified as Cheryl Luketic, and he assisted in doing work for some of the years under examination.

In conducting the 1983 audit, Drake tested daily time sheets and reviewed weekly transmittal forms, a computer generated payroll register, the federal employer contribution report (Form 941), NEOH's contribution reports to the Funds, and the collective bargaining agreements. He then prepared an audit report based on his findings. Although Drake initially combined the findings made in regards to NEOH and Grandview because he believed the two companies were like a joint employer, he was able to distinguish between deficiency amounts attributable to each of the two companies because they had different employer identification numbers and used different reporting systems. This audit, along with a similar audit that was conducted in 1984, formed the basis for the Funds' complaint in this action.

At trial, the Funds offered into evidence Plaintiffs' Exhibit 4, ³ which is a summary and analysis of the relevant documents relating to the audits and the calculations of defendants' liabilities. Plaintiffs' Exhibit 4 was prepared from a number of source documents, all of which were independently admitted into evidence and were cross-referenced in the exhibit. The source documents included the following: (1) the collective bargaining agreements (Joint Exhibits 1 & 2); (2) NEOH's contribution reports to the Funds (Joint Exhibits 3-8); (3) the work papers prepared during the audits (Joint Exhibits 12-17); (4) calculations derived by Drake from the audit papers (Joint Exhibits 10 & 11); (5) a letter from Drake regarding the audit findings (Joint Exhibit 9); (6) copies of NEOH and Grandview checks made payable to the Funds (Joint Exhibit 18); and (7) the Funds' accounts receivable ledger for 1984 (Joint Exhibit 19).

B.

This action was commenced by the filing of the Funds' complaint in the district court on January 22, 1985. In the complaint, the Funds alleged that defendants were delinquent in making contributions to defendants' pension plan and welfare funds. A bench trial commenced on August 25, 1992, and concluded on August 27, 1992.

On September 30, 1992, the district court entered judgment for the Funds and against defendants for $25,316.51 in delinquent contributions. The district court also awarded the Funds pre-judgment interest, ERISA interest under 29 U.S.C. Sec. 1132(g)(2)(E), late payment assessments, audit fees and costs, and reasonable attorneys' fees, with the specific amounts of these items to be determined subsequent to the presentation of additional evidence by the Funds. On August 16, 1993, the district court awarded the Funds $908.31 in pre-judgment interest, $18,092.14 in ERISA interest, and $6772.50 in audit fees and costs. After further briefing by the parties, on September 15, 1993, the district court awarded the Funds $70,185.95 in attorneys' fees, which was less than the $99,329.99 requested by the Funds.

On October 6, 1992, the Funds filed a motion to amend the district court's findings of fact; this motion was granted by marginal entry on September 13, 1993. On October 13, 1992, defendants filed a motion to alter or amend the judgment; this motion was denied by marginal entry on September 13, 1993.

On September 8, 1993, defendants filed a notice of appeal from the district court's denial of defendants' motion to alter or amend the judgment (Case No. 93-3998). On September 23, 1993, defendants filed a notice of appeal from the district court's award of attorneys' fees (Case No. 93-4054), and on October 7, 1993, the Funds filed a cross-appeal with regard to the district court's denial of the full amount of attorneys' fees they had requested (Case No. 93-4133). Pursuant to an order of this court dated November 1, 1993, the appeals and cross-appeal were consolidated for purposes of briefing and oral argument.

II.

A.

Defendants argue that the district court erred in admitting and relying on the summary of deficiencies, designated as Plaintiffs' Exhibit 4, prepared for trial purposes by the Funds' agent. Specifically, defendants assert "that Plaintiffs' Exhibit 4 was clearly an inadmissible summary and the total reliance thereon constitutes reversible error." Appellants' Brief at 8. The Funds argue that because defendants failed to raise any objection to the admissibility of Plaintiffs' Exhibit 4 in the district court, they have waived any right to object to its admissibility on appeal.

Federal Rule of Evidence ("Fed.R.Evid.") 103(a) provides, "Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and (1) ... [i]n case the ruling is one admitting evidence, a timely objection or motion to strike appears of record, stating the specific ground of objection, if the specific ground was not apparent from the context...." Fed.R.Evid. 103(a)(1). It is well established that a party who fails to make a timely objection to the admission of evidence is precluded from raising the issue for the first time on appeal. Gentry v. United States, 962 F.2d 555, 558 (6th Cir.1992); Chipman v. Secretary of Health and Human Servs., 781 F.2d 545, 547 (6th Cir.1986); see also Harris Mkt. Research v. Marshall Mktg. and Communications, Inc., 948 F.2d 1518, 1525 (10th Cir.1991). In Gentry, the plaintiffs argued that a certificate of assessments and payments, introduced by the Internal Revenue Service, should not have been admissible as a business record under Fed.R.Evid. 803(6) or as a public record under Fed.R.Evid. 803(8) because it was prepared solely in anticipation of litigation. Gentry, 962 F.2d at 558. This court refused to consider the challenge to the certificate's admissibility because the issue was raised for the first time on appeal and the taxpayers...