Bricklayers Local 21 v. Banner Restoration

• Decision Date: 22 September 2004
• Docket Number: No. 02-3512.,02-3512.
• Citation: 385 F.3d 761
• Parties: BRICKLAYERS LOCAL 21 OF ILLINOIS APPRENTICESHIP AND TRAINING PROGRAM and Masonry Institute, Bricklayers Local 21 Pension Fund, Plaintiffs-Appellees, v. BANNER RESTORATION, INCORPORATED, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

385 F.3d 761

BRICKLAYERS LOCAL 21 OF ILLINOIS APPRENTICESHIP AND TRAINING PROGRAM and Masonry Institute, Bricklayers Local 21 Pension Fund, Plaintiffs-Appellees, v. BANNER RESTORATION, INCORPORATED, Defendant-Appellant.

No. 02-3512.

United States Court of Appeals, Seventh Circuit.

Argued May 28, 2004.

Decided September 22, 2004.

Appeal from the United States District Court for the Northern District of Illinois, Martin C. Ashman, United States Magistrate Judge.

COPYRIGHT MATERIAL OMITTED

Robert B. Greenberg, Librado Arreola (argued), Asher, Gittler, Greenfield, & D'Alba, Chicago, IL, for Plaintiffs-Appellees.

Gerard C. Smetana (argued), Smetana & Avakian, Chicago, IL, for Defendant-Appellant.

Before BAUER, RIPPLE and ROVNER, Circuit Judges.

RIPPLE, Circuit Judge.

The plaintiffs brought this action to compel an audit of Banner Restoration, Incorporated ("Banner") to determine ERISA compliance. Banner filed a counterclaim, seeking a refund of prior payments. After a bench trial, the district court ordered an audit and denied Banner's counterclaim. Banner timely appealed. For the following reasons, we affirm the judgment of the district court.

I BACKGROUND

A. Facts

The present dispute involves trust fund litigation to ensure that an employer has paid all required fringe benefit contributions. The employer, Banner, is an Illinois corporation that performs concrete and masonry restoration work. The plaintiff trust funds, collectively referred to as "the Funds," were established pursuant to a collective bargaining agreement ("the CBA") entered into by Illinois District Council No. 1 of the International Union of Bricklayers and Allied Craftsmen ("the Bricklayers") and various other parties.

Since 1991, Charles Ciancanelli has been the president of Banner. As president of Banner, Ciancanelli would call Bricklayer's Local 21 ("Local 21") or Local 21's Apprenticeship and Training Program, at least four times per year, to ascertain if any bricklayers were available to perform work. If bricklayers were available, they would be provided by Local 21.

On several occasions, Local 21 representatives visited Banner's work sites and insisted that Ciancanelli hire Local 21 members, pay union wages and make contributions to the Funds. Ciancanelli asserted that the representatives threatened "shut down" of the job sites or union picketing if Banner would not comply. On one occasion, Ciancanelli was asked to assume responsibility for the wage and benefit obligations of another employer working at the same job site as Banner. Ciancanelli's son, Charles Ciancanelli, Jr., testified that representatives came to nearly ninety percent of Banner's work sites, demanding that Banner employ Local 21 members. Local 21 representatives also repeatedly requested that Ciancanelli sign the CBA on behalf of Banner, but Ciancanelli never did so.

Despite Ciancanelli's refusal to sign the CBA, Banner operated in a manner consistent with CBA obligations. In particular, from June 1991 through March 1998, Banner submitted monthly fringe benefit contributions and contribution reports to the Funds. The contribution reports noted the names and social security numbers of union and apprentice employees who performed regular and overtime work covered by the CBA. Some of the monthly reports contained the following language:

I hereby certify that this is a true report of all hours worked by Bricklayers and Bricklayer Apprentices during the month and includes no self-employed persons. The undersigned agrees to the terms of payment to these funds set forth in the current applicable Collective Bargaining Agreement and to the terms of the applicable Trust Agreements, and that dues remitted to District Council # 1 were deducted only from the paychecks of bricklayers and bricklayer apprentices who have authorized such deductions in writing.

R.40 at 2-3.¹ Ciancanelli signed the monthly contribution checks drawn on Banner's various accounts and submitted with the contribution reports. Banner's monthly contributions corresponded with the rates prescribed in memoranda sent by the Bricklayers to Banner and signatories of the CBA. Those memoranda detailed the applicable annual wage and benefit rates required by the CBA.

Banner also remitted union dues on behalf of its employees to Local 21. Moreover, in February 1995, Banner cooperated in a payroll audit by the Funds pursuant to CBA terms. The audit covered April 1, 1992, through December 31, 1994. No delinquencies were found. In 1997, Ciancanelli donated a truck and driver to Local 21's Apprenticeship and Training Program. In May 1998, Local 21 notified Banner that it had failed to remit union dues for one employee, and Banner responded by sending the dues.

In 1997, 1998 and 1999, Banner was notified of hearings before the Joint Arbitration Board of the Bricklayers concerning charges of CBA violations brought by Bricklayers Local No. 14. After each of the three hearings, the Joint Arbitration Board found CBA violations at a job site in Romeoville, Illinois. After the 1999 hearing, the Joint Arbitration Board ordered Banner to pay damages to the Bricklayers. Banner did not challenge any of the Joint Arbitration Board's decisions, nor did it pay damages in accordance with the 1999 order.

In October 1999, the Funds filed this action seeking a compliance audit of Banner's payroll from January 1, 1995, to the present, alleging that Banner had failed to submit accurate monthly contribution reports and had failed to make required monthly contributions. Banner filed a counterclaim for a refund of the monthly contribution payments it previously had paid the Funds on the ground of mistake of fact or law.

B. District Court Proceedings

The district court held a bench trial. The Funds entered into evidence agreed stipulations of fact and offered exhibits submitted as part of the final pre-trial order; Banner additionally presented the testimony of Ciancanelli and Ciancanelli's son. The Ciancanellis testified that Banner complied with CBA obligations because of union coercion.

In its written findings of fact after the trial, the district court rejected, on credibility grounds, the Ciancanellis' version as to why Banner complied with CBA obligations:

After review, this Court finds that Ciancanelli, as president of Defendant, did not perform any of the acts narrated above solely in response to Local 21's threats of work stoppages and pickets. This Court finds not credible Ciancanelli's testimony that, as president of Defendant, he sent in the contribution reports, paid union wages and fringe benefit contributions, etc., solely in response to Local 21's threats of work stoppages and pickets considering his demeanor and his son's demeanor at trial when testifying on the issue, and considering that he hired employees through Local 21, that Local 21 asked him to assume responsibility for the correct and timely payment of wages and fringe benefit contributions of another employer working at General Jones Armory, that he donated a truck and driver to Local 21's Apprenticeship and Training Program, and that he continued on his course of conduct for approximately seven years without complaining to any agency or similar authority, even in the face of three adverse decisions and an order to pay damages by the Joint Arbitration Board.

R.40 at 5-6 (footnotes omitted). The court thus rejected Banner's position that it paid monthly contributions only as a result of union coercion.

The court then determined that Banner had adopted the CBA through its course of conduct:

namely, its continuous submission of contribution reports to Plaintiffs, its adherence to the wage and fringe benefit contribution rates prescribed by the Collective Bargaining Agreement when making such payments and contributions, its practice of remitting union dues on behalf of its employees to Local 21, and its complete cooperation in the 1995 payroll audit, which revealed no delinquencies.

R.40 at 8. Moreover, the court concluded that the contributions were made according to the terms of the written CBA, thus satisfying the requirement of section 302(c)(5)(B) of the Labor Management Relations Act ("the LMRA"), 29 U.S.C. § 186(c)(5)(B), that payments to employee representatives be made only "as specified in a written agreement with the employer." As a result, the court concluded that the Funds were entitled to conduct an audit and that Banner was not entitled to recoup any of the amounts paid to the Funds due to mistake of fact or law. Banner timely appealed.²

II ANALYSIS

A. Standard of Review

Banner brings a variety of legal and factual challenges to the district court's decision. On appeal following a bench trial, we review the district court's conclusions of law de novo and its findings of fact for clear error. See Petrilli v. Drechsel, 94 F.3d 325, 329 (7th Cir.1996). "[O]ne who contends that a finding is clearly erroneous has an exceptionally heavy burden to carry on appeal." Spurgin-Dienst v. United States, 359 F.3d 451, 453 (7th Cir.2004). Additionally, a credibility determination "`can virtually never be clear error.'" Id. (quoting United States v. Archambault, 62 F.3d 995, 999 (7th Cir.1995)).

B. Conduct Manifesting Intent To Be Bound

We begin with the well-established principle "`that a collective bargaining agreement is not dependent on the reduction to writing of the parties' intention to be bound,' ... rather `[a]ll that is required is conduct manifesting an intention to abide and be bound by the terms of an agreement.'" Gariup v. Birchler Ceiling & Interior Co., 777 F.2d 370, 373 (7th Cir.1985) (quoting Capitol-Husting Co. v. NLRB, 671 F.2d 237, 243 (7th Cir.1982)); see also Atchley v. Heritage Cable Vision Assocs., 101 F.3d 495, 500 n. 2 (7th Cir.1996); Operating Eng'rs Local 139 Health Benefit Fund v. Gustafson Const. Corp., 258 F.3d 645, 650 (7th Cir.2001); Moriarty v. Larry G. Lewis Funeral Dirs. Ltd., 150 F.3d 773, 777 (7th Cir.199...