Bd. of Trs. of the Plumbers v. B&B Mech. Servs., Inc.
| Decision Date | 29 September 2013 |
| Docket Number | Case No. 1:12cv195. |
| Citation | 980 F.Supp.2d 883 |
| Parties | BOARD OF TRUSTEES OF the PLUMBERS, PIPEFITTERS & MECHANICAL EQUIPMENT SERVICE, LOCAL UNION NO. 392 PENSION FUND, et al., Plaintiffs, v. B & B MECHANICAL SERVICES, INC., et al., Defendants. |
| Court | U.S. District Court — Southern District of Ohio |
OPINION TEXT STARTS HERE
Dennis Robert Johnson, Joseph E. Mallon, Johnson & Krol, LLC, Chicago, IL, Jeffrey S. Routh, Cincinnati, OH, for Plaintiffs.
Curtis L. Cornett, Cors & Bassett LLC, Cincinnati, OH, for Defendants.
This matter is before the Court upon Plaintiffs' Motion for Summary Judgment (Doc. 20) and Defendants' Motion for Summary Judgment (Doc. 21). Both motions have been fully briefed (Docs. 23, 24, 26, 27).
I. BACKGROUND
Plaintiffs bring claims against Defendants pursuant to Section 502 of the Employee Retirement Income Security Act (“ERISA”) and Section 301 of the Labor–Management Relations Act, 29 U.S.C. § 1132 and § 185. Plaintiffs are the Plumbers, Pipefitters & Mechanical Equipment Service Local Union No. 392 (“Union”) and the board of trustees for several Union trust funds and a pension fund which receive contributions from employers pursuant to collective bargaining agreements between the employers and the Union. Defendants are B & B Mechanical Services, Inc. (“B & B”) and West American Insurance Company. 1
B & B is a commercial plumbing contracting company. B & B is owned and operated by Bryan Kenny and William Williams. (Doc. 21–1, at 4, Bryan Kenny Decl. ¶ 2). Kenny and Williams are long-time members of the Union.2 ( Id., ¶ 3). Kenny and Williams formed B & B in 2002. ( Id., ¶ 4). However, at that time, B & B was operating under the name B & B Plumbing & Piping, LLC. ( Id.) In June of 2006, Kenny and Williams incorporated a company named B & B Plumbing & Piping, Inc., which was merged with B & B Plumbing, LLC in July of 2006. ( Id.) In October of 2006, the name was changed to B & B Mechanical, which is the Defendant in this case. ( Id.)
Defendants claim that at no time did any of these entities enter into a collective bargaining agreement with the Union. ( Id.) Plaintiffs concede that a copy of a collective bargaining agreement signed by B & B has not been located, but claim that B & B is bound by the collective bargaining agreement (“the CBA”) negotiated between the Mechanical Contractors Association (“MCA”) and the Union.
In October of 2009, B & B, as B & B Mechanical, became a member of the MCA. (Doc. 20–12, Jack Bertoli Dep. at 12). The MCA assists mechanical and plumbing contractors who employ members of the Union. ( Id. at 8). When the MCA negotiates a CBA with the Union, it negotiates one CBA on behalf of all of its members. ( Id. at 42). Plaintiffs maintain that all MCA members are bound to the terms and conditions in the CBA as they are negotiated between the MCA and the Union. ( Id. at 42–43).
However, Defendants explain that B & B never authorized the MCA to negotiate with the Union on its behalf. Defendants rely on the testimony of Jack Bertolli, the executive director of the MCA. Bertolli testified that B & B did not submit a signed “Appointment of Agent Form” to the MCA. (Doc. 21–1, at 53). 3 This Appointment of Agent form would permit the MCA to act as B & B's bargaining agent in contract negotiations with the Union. ( Id. at 18–19). Bertolli also testified that membership in the MCA alone does not give the MCA the right to bargain on behalf of a member contractor. ( Id. at 24).
Nevertheless, Plaintiffs claim that B & B manifested its intent to be bound by the CBA between the Union and the MCA through its conduct and the documents it signed which reference the CBA.
First, Plaintiffs explain that the CBA requires that employers make monthly reports of hours worked by covered employees and then make contributions to the Union trust funds based on the hours. (Doc. 20–4, CBA, Art. VIII). Each of the monthly reports includes a declaration which states:
the above named contractor certifies that this report includes only employees covered under the terms of a collective bargaining agreement with the United Association or a United Association Local Union ...
(Doc. 20–8). Contribution reports and contributions to the pension fund are accompanied by a similar declaration:
the above contractor affirms and declares that it is a party to a written agreement requiring contributions to the Plumbers and Pipefitters National Pension Fund ... and also certifies that this report includes only employees covered under the terms of a collective bargaining agreement with the United Association, or a United Association local union....”
(Doc. 20–11).
In June of 2002, B & B's predecessor, B & B Plumbing, LLC, began submitting monthly reports, and in December of 2006 B & B Plumbing, LLC began making contributions to the Union trust funds and the pension fund. (Doc. 20–6, Rinda Hoffman Aff., ¶¶ 2, 3). These monthly reports and contributions continued until July 2012. ( Id., ¶ 5). During the period of time in which B & B Plumbing was making contributions, the contribution rates changed. ( Id., ¶ 6). Contractors were notified of the new rate. ( Id., ¶ 7). B & B Plumbing made payments according to the rate changes. ( Id., ¶ 8).
Next, Plaintiffs explain that under the CBA, contractors may request employees from the Union's Hiring Hall: “Requests by contractors for particular plumbers or pipefitters previously employed by contractors party to this agreement.... shall be given preference of rehire and shall be dispatched to that contractor.” (Doc. 20–4, Article VI). In early 2007, B & B made two requests to the Union's Hiring Hall for employees. (Doc. 20–15).
Third, Plaintiffs point out that B & B agreed to a payroll compliance audit, which is required by the CBA. The audit was conducted in August of 2011 concluded that B & B owed approximately $130,000 the trust fund and pension fund. (Doc. 21–3, at 16–17). In that amount is included$118,285.60 which Plaintiffs claim should have been contributed on behalf of Williams and Kenny.
Plaintiffs explain that the CBA requires contractors to obtain a Wage and Welfare bond with a surety company in order to secure payment to the Trust Funds and the Union. (Hoffman Aff. ¶ 11).4 On June 5, 2002, B & B's predecessor, B & B Plumbing, LLC, entered into a Bond Agreement with Defendant West American for $5,000.00. (Doc. 20–17). The Bond Agreement states that B & B Plumbing, LLC “entered into a certain written contract of employment or has signed a letter of assent to be bound by the Terms of said Contract, titled Agreement between Mechanical Contractors Association of Cincinnati and Pipefitters Local Union No. 392, by which he agrees to pay his employees an agreed current wage scale and further to pay current contractual agreed amounts to various fringe benefit funds established under said agreement ...” ( Id.) On December 15, 2006, the name on the Bond Agreement was amended to read “B & B Mechanical Services, Inc.” ( Id.)
Finally, Plaintiffs explain that in April of 2008, B & B entered into the Equality and Stabilization Program Participation Agreement (“E & S Agreement”). (Doc. 20–13). Through wage subsidies, the E & S Agreement improves the competitiveness of contractors employing union members when bidding against contractors employing non-union members. (Bertoli Dep. at 27, 41). B & B requested wage subsidies under the E & S Agreement approximately four times and signed corresponding memorandums of understanding between itself, the Union, and the MCA. (Doc. 20–14). Each memorandum states that “[i]t applies specifically to the current Labor Agreement negotiated and signed by the two parties.” ( Id.) Defendants acknowledge that it received wage subsidies under the E & S Agreement, but also point out that the E & S Agreement states:
The Local 392 Equality and Stabilization Program was adopted by the Membership and is administered by the Plumbers, Pipe Fitters & MES Local 392 U.A. The Program only effects parties to the Collective Bargaining Agreement between the MCA and the Union and does not seek to impose its terms on non-signatory Contractors.
(Doc. 20–13).
Plaintiffs have brought a claim against B & B for breach of the CBA and a claim for enforcement of bond against West American.
II. ANALYSISA. Summary Judgment Standard
Federal Rule of Civil Procedure 56(a) provides that summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” The moving party has the burden of showing an absence of evidence to support the non-moving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met its burden of production, the non-moving party cannotrest on his pleadings, but must present significant probative evidence in support of his complaint to defeat the motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248–49, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
Where the parties have filed cross motions for summary judgment, a court “must evaluate each motion on its own merits and view all facts and inferences in the light most favorable to the nonmoving party.” Westfield Ins. Co. v. Tech Dry, Inc., 336 F.3d 503, 506 (6th Cir.2003). “[T]he standards upon which the court evaluates the motions for summary judgment do not change simply because the parties present cross-motions.” Taft Broad. Co. v. United States, 929 F.2d 240, 248 (6th Cir.1991) (citing Home for Crippled Children v. Prudential Ins. Co., 590 F.Supp. 1490, 1495 (W.D.Pa.1984)).
B. ERISA
Plaintiffs seek to enforce the contribution requirements in the CBA pursuant to section 515 of Employee Retirement Income Security Act (“ERISA”), which provides:
Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained...
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