71 F.3d 1361 (7th Cir. 1995), 95-1769, Illinois Conference of Teamsters and Employers Welfare Fund v. Steve Gilbert Trucking

Docket Nº:95-1769.
Citation:71 F.3d 1361
Case Date:December 18, 1995
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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71 F.3d 1361 (7th Cir. 1995)




STEVE GILBERT TRUCKING, Defendant-Appellant.

No. 95-1769.

United States Court of Appeals, Seventh Circuit

December 18, 1995

Argued Sept. 11, 1995.

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Thomas H. Wilson (argued), Michael A. Myers, Sorling, Northrup, Hanna, Cullen & Cochran, Springfield, IL, for Plaintiff-Appellee.

Gordon W. Gates (argued), Londrigan, Potter & Randle, Springfield, IL, for Defendant-Appellant.

Before BAUER, KANNE, and DIANE P. WOOD, Circuit Judges.

BAUER, Circuit Judge.

The Illinois Conference of Teamsters and Employers Welfare Fund ("Fund") brought this claim pursuant to section 502(a)(3) of the Employment Retirement Income Security Act ("ERISA"), see 29 U.S.C. Sec. 1132(a)(3), seeking to collect delinquent contributions owed to it by Steve Gilbert Trucking ("Gilbert Trucking"). Gilbert Trucking appeals the district court's order granting the Fund's motion for summary judgment as to Gilbert Trucking's liability and as to the amount of damages. This court has jurisdiction of the appeal pursuant to 28 U.S.C. Sec. 1291. We affirm in part and reverse in part.



Until March 1990, Gilbert Trucking, a sole proprietorship owned by Steve Gilbert ("Gilbert"), operated as a non-union company. Earlier that year, however, Gilbert met several times with Michael Carr, the business representative of the Teamsters union, Local 26. At that time, Local 26 was recruiting non-union companies to sign up with the union. Carr told Gilbert that if Gilbert Trucking signed up with the union, it could participate in a major federally funded interstate highway project near Champaign, Illinois. Carr also told Gilbert that the union would not organize his shop or appoint a union steward. According to Gilbert, Carr did not advise him that Gilbert Trucking would have any obligation to make health or pension fund contributions.

On March 19, 1990, Gilbert signed an Articles of Construction Agreement ("Agreement") between the Associated General Contractors of Illinois and the Illinois Conference of Teamsters. Gilbert signed the Agreement (which was effective from May 1, 1989 through April 30, 1992) without reading it and without seeking the advice of an attorney. At the same time, Gilbert signed a Participation Agreement, by which he subscribed to the Declaration of Trust and trust agreement for the Fund. According to Gilbert, he did not know that by signing the Agreement and the Participation Agreement, he obligated Gilbert Trucking to pay to the Fund contributions calculated according to the hours of "covered" work (work performed by Gilbert Trucking drivers who

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made deliveries to construction sites). The Fund used those contributions to provide health insurance and other benefits to eligible employees of signatory employers. According to Gilbert, he would not have knowingly obligated Gilbert Trucking to make such contributions because many of its employees worked part-time, and therefore never would have been eligible for Fund benefits.

Gilbert made one contribution payment to the Fund for work performed by two of his employees in July 1990. Gilbert made no payments thereafter. However, Gilbert did receive five letters from the Fund between April and July 1991 advising him that the Fund had not received the required contributions. Gilbert did not respond to the letters because he did not believe that his employees were covered by the Fund.

In August 1992, the Fund informed Gilbert Trucking that it intended to audit the company's records to determine whether it had paid all required contributions. 1 Sometime after Gilbert Trucking received notice of the audit, Gilbert renewed the contract with the union by signing another agreement effective from May 1, 1992 through April 30, 1995. The renewed agreement again obligated Gilbert Trucking to make contributions to the Fund. Gilbert Trucking nevertheless refused to allow the audit.

The Fund then filed this lawsuit to compel Gilbert Trucking to permit the audit and to pay all audit costs and other specified fees. Gilbert Trucking subsequently allowed Michael Cairns, an auditor employed by the Fund, to conduct the audit. The company gave Cairns payroll ledger sheets listing each employee's name, job title, and gross pay. The ledger sheets were the only employment records maintained by Gilbert Trucking. In order to determine the contributions owed to the Fund, Cairns listed the employees designated as drivers, divided their gross pay by the union hourly rate of pay, and thus arrived at a number of hours worked. Cairns then multiplied the number of hours by the contribution amount. Using this method, Cairns determined that Gilbert Trucking owed the Fund $196,632.45 in delinquent contributions, late fees, and audit charges.

After Gilbert Trucking failed to make payment, the Fund amended its complaint to seek a monetary judgment for the delinquent contributions, late fees, and audit fees, as well as for reasonable attorneys' fees and costs. The Fund moved for summary judgment, claiming that Gilbert Trucking was liable for the contributions under the Agreement signed by Gilbert. The district court granted the Fund's motion both as to Gilbert Trucking's liability and as to the amount of damages. Gilbert Trucking now appeals.


Summary Judgment

  1. Standard of Review

    We review the grant of summary judgment de novo, applying the same standards as the district court. CSX Transp., Inc. v. Chicago & North Western Transp. Co., Inc., 62 F.3d 185, 188 (7th Cir.1995). We view the record and all reasonable inferences to be drawn from it in the light most favorable to the non-moving party. Id. Summary judgment is appropriate only if there is no genuine...

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