Alaska Trowel Trades Pension Fund v. Lopshire, A93-033 Civ. (JWS).
| Decision Date | 04 May 1994 |
| Docket Number | No. A93-033 Civ. (JWS).,A93-033 Civ. (JWS). |
| Citation | 855 F. Supp. 1077 |
| Parties | ALASKA TROWEL TRADES PENSION FUND; Alaska Trowel Trading Apprenticeship & Training Fund, and Alaska Laborers-Construction Industry Health & Security Fund, Plaintiffs, v. Jack LOPSHIRE d/b/a Spenard Plastering Company, Defendant. |
| Court | U.S. District Court — District of Alaska |
Randall G. Simpson and James A. Gasper of Jermain, Dunnagan & Owens, P.C., in Anchorage, AK, for plaintiffs.
Robert K. Stewart and James Juliusen of Davis, Wright & Tremaine, Anchorage, AK, for defendant.
ORDER FROM CHAMBERS
Plaintiffs Alaska Trowel Trades Pension Fund, Alaska Trowel Trading Apprenticeship & Training Fund, and Alaska Laborers-Construction Industry Health & Security Fund (the "trust funds") sue defendant Jack Lopshire d/b/a Spenard Plastering Company for delinquent contributions to employee benefit funds pursuant to 29 U.S.C. §§ 1132 and 1145 of the Employee Retirement Income Security Act (ERISA). Defendant has moved for summary judgment arguing that it terminated the only operative agreement between it and Operative Plasterers & Cement Masons International Association, Local Union 867 which obligated defendant to make contributions to employee trust funds. Defendant says that he was under no obligation to make contributions upon termination of the agreement. Plaintiffs oppose defendant's motion and have cross moved for partial summary judgment.
Magistrate Judge Roberts has filed a Report and Recommendation that defendant's motion for summary judgment be denied and that plaintiffs' motion for partial summary judgment be granted in part and denied in part. Defendant objects. The court reviews the motions de novo. U.S. v. Remsing, 874 F.2d 614 (9th Cir.1989).
Defendant is a plasterer and cement mason employer. On November 12, 1976, defendant entered into a compliance agreement with Operative Plasterers & Cement Masons International Association, Local Union 867 (Local 867), by which it agreed to adhere to the Alaska Master Labor Agreement between the Association of General Contractors, Alaska Chapter (Alaska AGC), and Local 867. The compliance agreement specifically reaffirmed defendant's obligation to make contributions to the trust funds in accordance with the Alaska Master Labor Agreement. Defendant entered into a subsequent compliance agreement on April 5, 1978, reaffirming his obligations under the collective bargaining agreement between the Alaska AGC and Local 867, and its obligation to make contributions to the trust funds.
In April 1986, defendant wrote to Local 867 terminating the compliance agreement. The parties have submitted a letter dated April 2, 1986, from defendant to Local 867 giving notice of termination. The trust funds deny receipt of the letter. Defendant has also submitted a copy of the April 2, 1986, letter with the signature of Cheryl Stubbs acknowledging receipt on April 9, 1986. Ms. Stubbs was then employed by Local 867 as an office manager/receptionist.1
After April 1986 defendant continued to request and use union employees. Defendant also continued to make contributions to the trust funds.2 In January 1993 defendant entered into another agreement with Local 867. During the period between April 1986 and 1991, the trust funds allege that four of defendant's employees became vested and received pension benefits. The trust funds further allege that during that period defendant's employees have received approximately $140,000 in medical benefits.
The trust funds contend that defendant underrepresented its contributions from April 1986 through 1991. They maintain that they did not discover these underrepresentations until late 1990 or early 1991.
Defendant moves for summary judgment based upon his termination of the compliance agreements with Local 867. He argues that termination of the compliance agreements necessarily terminated any obligation to fund employee benefits by contributing in accordance with the collective bargaining agreement between Alaska AGC and Local 867. Defendant also argues that the trust funds' claims for delinquent contributions arising before January 1987 are barred by the statute of limitations.
Plaintiffs have cross moved for summary judgment. They maintain that defendant cannot raise termination of the compliance agreements as a defense to challenge their collection action. Alternatively, the trust funds deny that defendant terminated the compliance agreements with Local 867, and charge defendant adopted the collective bargaining agreement by its post-termination conduct, that the compliance agreements matured into a collective bargaining agreement, or that defendant's post-termination conduct estops him from denying the vitality of the compliance agreements.
A preliminary matter concerns the nature of the relationship between defendant and Local 867. Defendant contends that the compliance agreements were pre-hire agreements under 29 U.S.C. § 158(f) that could be terminated in accordance with the terms of the agreements, with no requirement to enter subsequent negotiations or maintain the status quo during those negotiations. The trust funds argue that the compliance agreements matured into a collective bargaining agreement under 29 U.S.C. § 159(a), thereby requiring defendant to enter subsequent negotiations and continue his employee contributions.
The National Labor Relations Act, 29 U.S.C. §§ 151, et seq. (NLRA), governs employee representation by labor organizations and defines unfair labor practices relating to union representation. An employer "violates the National Labor Relations Act, 29 U.S.C. §§ 151-169 (1982) ... if he enters into an agreement with a labor organization that has not won a representation election sponsored by the National Labor Relations Board or that has not been recognized pursuant to the procedures specified in the Act." Orange Belt Dist. Council of Painters v. Kashak, 774 F.2d 985, 987 (9th Cir.1985) (citing International Ladies Garment Worker's Union v. NLRB, 366 U.S. 731, 81 S.Ct. 1603, 6 L.Ed.2d 762 (1961)). Under § 9(a) of the NLRA, 29 U.S.C. § 159(a), an exclusive bargaining agent must be "designated or selected for the purposes of collective bargaining by the majority of the employees." Id. (emphasis in original). The NLRA recognizes an exception for an "employer engaged primarily in the building and construction industry." 29 U.S.C. § 158(f). Such employers may enter into a labor agreement with a union without majority status among the employer's employees. These agreements are referred to as "pre-hire agreements" though the agreement "need not be negotiated before a construction employer hires his workforce." Id. at 988.
Under a collective bargaining agreement, the employer must continue to negotiate a successive collective bargaining agreement and maintain the status quo under the expired collective bargaining agreement until the parties reach an impasse. 29 U.S.C. § 158(d). Unlike an employer that is a party to a § 9(a) collective bargaining agreement, a construction employer's obligations end upon expiration of a pre-hire agreement. The parties do not dispute that defendant is engaged primarily in the construction business, or that the 1976 and 1978 compliance agreements were pre-hire agreements. The disputes raised by the parties challenge the effectiveness of defendant's alleged termination, the effect defendant's continued use of union labor and contributions to the trust funds had on his obligations to continue to make those contributions, and the timeliness of the present action.
Because ERISA does not contain a statute of limitations for actions to recover delinquent contributions, the court borrows the forum state's statute of limitations for breach of contracts. Pierce County Hotel Employees and Rest. Employees Health Trust v. Elks Lodge, No. 1450, 827 F.2d 1324, 1328 (9th Cir.1987). The parties do not dispute that the applicable Alaska statute of limitations for the trust funds' claims is six years under AS 09.10.050. See Trustees for Alaska Laborers-Constr. Indus. Health & Sec. Fund v. Ferrell, 812 F.2d 512, 516 (9th Cir.1987). The parties do challenge when the trust funds' causes of action accrued. The trust funds' cause of action arises under federal law, and, therefore, "federal law determines the time at which the cause of action accrues." Northern Cal. Retail Clerks Unions v. Jumbo Markets, 906 F.2d 1371, 1373 (9th Cir.1990). Under federal law, the trust funds' cause of action for delinquent contribution accrued when they knew or had reason to know of the injury giving rise to their cause of action. Id.; Pierce County Hotel Employees, 827 F.2d at 1328.
Defendant argues that, working backwards, "any claim that accrued before January 28, 1987 is barred." Defendant's Memorandum in Support of Motion for Summary Judgment (Docket No. 29) at 9. Plaintiffs argue that defendant has refused to submit to an audit of hours his employees worked, and frustrated any earlier discovery of the alleged underreporting for contributions. The trust funds state that they did not know of the underreporting, nor did they have any reason to know of the underreporting until an employee submitted pay stubs to them in October or November 1990 demonstrating that he had worked more hours than defendant had reported. Defendant argues that upon termination, the trust funds should have conducted a comprehensive audit.
For the reasons stated in Sections III and V, infra, the court finds that defendant did terminate the compliance agreements, but that the trust funds never had knowledge of that fact. Under defendant's argument there was no reason for the trust funds to conduct an audit of defendant's contributions because they never knew he had terminated the compliance agreements. Therefore, the only evidence in the record dictates a conclusion that the trust funds...
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