Johnson v. Charps Welding & Fabricating, Inc.
| Decision Date | 07 February 2020 |
| Docket Number | No. 19-1206,No. 18-3007,18-3007 |
| Citation | 950 F.3d 510 |
| Parties | Glen JOHNSON, TRUSTEE OF the OPERATING ENGINEERS LOCAL #49 HEALTH AND WELFARE FUND; Timothy Gillen, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Kyle Jones, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Steven Hall, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Clayton Johnson, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Mark Hubbard, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Steve Piper, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Bill Patt, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Michael R. Fanning, Fiduciary of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers; Joseph Ryan, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Bruce Carlson, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Glen Johnson, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Frank Frattalone, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Lee Hiller, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Tony Phillippi, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Greg Waffensmith, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Mark Ryan, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; The Operating Engineers Local #49 Health and Welfare Fund; The Central Pension Fund of the International Union of Operating Engineers and Participating Employers; The Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program Plaintiffs - Appellants v. CHARPS WELDING & FABRICATING, INC.; Clearwater Energy Group, Inc., formerly known as C & G Holding Company of Clearbrook, Inc. ; C & G Construction Inc. of Clearbrook ; Alpha Oil & Gas Services, Inc.; Kenneth Charpentier Defendants - Appellees Glen Johnson, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Timothy Gillen, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Kyle Jones, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Steven Hall, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Clayton Johnson, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Mark Hubbard, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Steve Piper, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Bill Patt, Trustee of the Operating Engineers Local #49 Health and Welfare Fund; Michael R. Fanning, Fiduciary of the Central Pension Fund of the International Union of Operating Engineers and Participating Employers; Joseph Ryan, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Bruce Carlson, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Glen Johnson, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Frank Frattalone, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Lee Hiller, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Tony Phillippi, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Greg Waffensmith, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; Mark Ryan, Trustee of the Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program; The Operating Engineers Local #49 Health and Welfare Fund; The Central Pension Fund of the International Union of Operating Engineers and Participating Employers; The Local #49 International Union of Operating Engineers and Associated General Contractors of Minnesota Apprenticeship and Training Program Plaintiffs - Appellants v. Charps Welding & Fabricating, Inc.; Clearwater Energy Group, Inc., formerly known as C&G Holding Company of Clearbrook, Inc. ; C & G Construction Inc. of Clearbrook ; Alpha Oil & Gas Services, Inc.; Kenneth Charpentier Defendants - Appellees |
| Court | U.S. Court of Appeals — Eighth Circuit |
Amy Lu Court, Christy Elizabeth Lawrie, Carl S. Wosmek, MCGRANN & SHEA, Minneapolis, MN, for Plaintiffs-Appellants.
Martin Donald Kappenman, I, William Edward Parker, Thomas R. Revnew, PETERS & REVNEW, Minneapolis, MN, for Defendants-Appellees.
Before SMITH, Chief Judge, GRUENDER and BENTON, Circuit Judges.
The Trustees of three employee benefit funds sued Charps Welding & Fabricating, Inc., its corporate affiliates—C&G Construction Inc., Alpha Oil and Gas, Inc., and Clearwater Energy Group, Inc.—and their owner, Kenneth Charpentier. The Trustees assert that Charps and its affiliates breached collective bargaining agreements by not contributing to the employee benefit funds for work performed by the affiliates, in violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1145. The district court granted summary judgment to the defendants and awarded them attorney’s fees and costs. The Trustees appeal. Having jurisdiction under 28 U.S.C. § 1291, this court affirms appeal 18-3007, and reverses and remands appeal 19-1206.
Kenneth Charpentier founded all the defendant companies. He first created Charps Welding & Fabricating as a union company to service oil and gas pipelines, then C&G Construction as a non-union company for pipelines in North Dakota. For financing, Charpentier added Clearwater Energy Group, Inc. as a parent company for both Charps and C&G. Charpentier later founded Alpha Oil and Gas, Inc., another non-union company, to eventually replace C&G. As owner, Charpentier retained control and high-level management of all the companies. They shared a corporate headquarters and some administrative staff. The companies also lent each other workers or jobs. They shared a line of credit (based on their collective accounts receivable) and lent each other funds.
Charps entered collective bargaining agreements requiring contributions to the employee benefit funds. The district court found Charpentier personally liable for Charps’s obligations under the agreements. The agreements stated:
If and when Employer shall perform work covered by this Agreement under its own name, under the name of another, as a corporation, company, partnership, enterprise, or any combination, including a joint venture, this Agreement shall be applicable to all such work performed under the name of Employer or the name of any other corporation, company, partnership, enterprise, combination or joint venture.
Charps’s affiliates—C&G, Alpha, and Clearwater—did not enter the collective bargaining agreements. The Trustees assert that under ERISA, Charps, its affiliates, and Charpentier owe contributions for work performed by the affiliates. Ordinarily, a collective bargaining agreement imposes a duty only on parties to the agreement. Crest Tankers, Inc. v. Nat’l Mar. Union of Am. , 796 F.2d 234, 237 (8th Cir. 1986). The Trustees counter that the affiliates were Charps’s alter egos, or in joint venture or joint enterprise with Charps. Under these theories, the affiliates’ work is covered by the collective bargaining agreements. See Trustees of the Graphic Commc’ns Int’l Union Upper Midwest Local 1M Health & Welfare Plan v. Bjorkedal , 516 F.3d 719, 729 (8th Cir. 2008). Alternately, the Trustees argue that the agreements’ language independently imposes a duty to contribute for the affiliates’ work.
This court reviews de novo a grant of summary judgment. Torgerson v. City of Rochester , 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc).
The alter ego doctrine may apply when a pension fund tries to collect unpaid contributions. See Greater Kansas City Laborers Pension Fund v. Superior Gen. Contractors, Inc. , 104 F.3d 1050, 1055 (8th Cir. 1997) (). A corporation acts as another’s alter ego if the corporation is (1) controlled by another to the extent it has independent existence in form only and (2) used as a subterfuge to defeat public convenience, justify wrong, or perpetuate a fraud. Id. In the context of a collective bargaining agreement, a "critical part" of the inquiry is whether an employer displays anti-union sentiment by using the alter ego to avoid its obligations. Crest Tankers , 796 F.2d at 237-38 ; Marathon Ashland Petroleum, LLC. v. Int’l Bhd. Of Teamsters, Local No. 120 , 300 F.3d 945, 948 (8th Cir. 2002). See also Carpenters Dist. Council of Kansas City Pension Fund v. JNL...
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