791 F.2d 769 (9th Cir. 1986), 84-5689, Southwest Administrators, Inc. v. Rozay's Transfer

Docket Nº:84-5689, 85-6020.
Citation:791 F.2d 769
Party Name:Employee Benefits Ca 1841 SOUTHWEST ADMINISTRATORS, INC., Plaintiff/Appellee, v. ROZAY'S TRANSFER, a California corporation, Defendant/Appellant.
Case Date:June 10, 1986
Court:United States Courts of Appeals, Court of Appeals for the Ninth Circuit

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791 F.2d 769 (9th Cir. 1986)

Employee Benefits Ca 1841



ROZAY'S TRANSFER, a California corporation, Defendant/Appellant.

Nos. 84-5689, 85-6020.

United States Court of Appeals, Ninth Circuit

June 10, 1986

Argued and Submitted April 10, 1986.

As Amended on Denial of Rehearing and Rehearing En Banc Aug. 28, 1986.

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[Copyrighted Material Omitted]

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James Oswald, Davies, Roberts, Reid & Wacker, Seattle, Wash., for plaintiff/appellee.

Stephen P. Pepe, O'Melveny & Myers, Peter Marx, Los Angeles, Cal., for defendant/appellant.

On Appeal from the United States District Court for the Central District of California.

Before WALLACE, PREGERSON, and BEEZER, Circuit Judges.

BEEZER, Circuit Judge:

Southwest Administrators, Inc., an employee benefit trust fund administrator, brought this action against Rozay's Transfer, an employer, to recover allegedly delinquent trust fund contributions. Rozay's Transfer contends Teamsters Local 208 fraudulently induced it to execute the underlying collective bargaining agreement and thus Rozay's Transfer has no obligation to pay retroactive contributions. The district court concluded that sections 502(a) and 515 of the Employee Retirement Income Security Act, 29 U.S.C. Secs. 1132(a), 1145, do not permit such a defense to non-payment. We affirm.



Prior to September 30, 1981, Rozay's Transfer, an employer in the trucking industry, and Teamsters Local 208 were parties to a collective bargaining agreement. Pursuant to the agreement, Rozay's Transfer made monthly contributions on behalf of its employees to the Western Conference of Teamsters Pension Trust Fund. This trust fund is a multiemployer pension plan as defined by subsections 3(2) and (37)(A) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1002(2), (37)(A).

After the agreement had expired, and while negotiations were continuing over the terms of a successor agreement, Rozay's Transfer continued to make contributions to the trust fund pursuant to the terms of the 1978-81 bargaining agreement. In July, 1982, when no successor agreement had yet been adopted, Rozay's Transfer informed the union that it had ceased making contributions to the pension fund.

In September, 1982, Local 208 filed an unfair labor practice claim with the National Labor Relations Board (NLRB) charging Rozay's Transfer under 29 U.S.C. Sec. 158(a)(5) with refusal to execute a collective bargaining agreement that had allegedly been negotiated. The NLRB charge was subsequently amended to include the charge that Rozay's Transfer had unilaterally altered benefits and conditions of employment, including cessation of payments to the pension fund. Local 208 also filed a grievance alleging the cessation of contributions to the trust fund violated the collective bargaining agreement.

While the NLRB charge and the grievance were pending, William S. Rozay, the owner of Rozay's Transfer, and Archie Murrietta, president of Local 208, eventually reached a settlement. Under this settlement, employee wages would be reduced by $1.00 and Rozay's Transfer would resume payments to the trust fund on behalf of each employee at the approximate rate of $.99 per hour.

In light of the company's precarious financial position, Rozay expressed serious concerns about being required to make retroactive pension fund contributions for the period between May, 1982 and February, 1983. Murrietta, and Maurice E. Anderson, the director of the Western Conference of Teamsters, agreed to contact the trust fund and request a waiver of the obligation to make contributions for this period. 1 Murrietta and Anderson assured

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Rozay that the delinquent payments would be forgiven, noting that the trust fund had waived the unpaid pension contributions of other employers under similar circumstances.

Murrietta wrote to the trust fund on behalf of Rozay's Transfer requesting relief from payment of contributions for this interim period. However, on February 16, 1983, the trustees of the Western Conference of Teamsters Pension Fund, voted to deny the request to forgive the unpaid contributions.

When the new collective bargaining agreement was executed on March 8, 1983, Murrietta had been informed of the trust fund's decision to deny a waiver of the delinquent contributions. He did not advise Rozay of this action. Rozay, assuming that unpaid contributions would be forgiven, signed the agreement, which covered the period from September 1, 1981 to September 30, 1984. The parties also executed a settlement agreement resolving the NLRB unfair practice complaint and the breach of agreement grievance. Local 208 thereafter withdrew the NLRB unfair labor practice charge and the grievance.

Subsequently, Southwest Administrators, Inc., the assignee of the Western Conference of Teamsters Pension Trust Fund, filed this action against Rozay's Transfer under sections 502(a) and 515 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. Secs. 1132(a), 1145, to collect delinquent contributions for the period between May, 1982 and February, 1983.

Rozay's Transfer contended that its obligation to make pension fund contributions dated only from March 8, 1983, when the collective bargaining agreement was signed. Rozay's Transfer also filed a counterclaim seeking the return of $57,235.28 in contributions made to the trust between October, 1981 and April, 1982, the period between expiration of the old bargaining agreement and the date Rozay's Transfer ceased making payments.

The district court denied cross-motions for summary judgment on Southwest Administrators' complaint to collect delinquent contributions. However, the court did grant summary judgment against Rozay's Transfer on the counter-claim to recover contributions paid after the expiration of the old agreement. 2

After a one day bench trial, the district court held that the trust fund's right to enforce the express terms of the collective bargaining agreement, requiring pension fund contributions for the contested period, was not impaired by the union official's oral misrepresentations. The district court did find that Rozay had been "fraudulently induced" by Murrietta to sign the collective bargaining agreement, and that there had been no "meeting of the minds" on the issue of the retroactive pension fund contributions. However, as the fraud was not committed by the trust fund, the court held it was not precluded from enforcing Rozay's Transfer's obligation to make contributions as required by the express terms of the bargaining agreement.

The district court entered judgment for Southwest Administrators in the amounts of $76,133.29 in retroactive pension fund contributions, $15,226.25 in liquidated damages, $25,039.09 in interest, and $6,390.00 in attorneys fees.



We accept the district court's findings of fact because they are not clearly erroneous.

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See Operating Engineers Pension Trust v. Gilliam, 737 F.2d 1501, 1502 (9th Cir.1984).

Whether certain contract defenses are available in an action to recover delinquent trust fund contributions is a question of law. We review de novo a district court's conclusions of law. Maxwell v. Lucky Construction Co., Inc., 710 F.2d 1395, 1397 (9th...

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