Central States, Southeast and Southwest Areas Pension Fund v. Jordan

• Decision Date: 18 April 1989
• Docket Number: No. 88-1493,88-1493
• Citation: 873 F.2d 149
• Parties: 111 Lab.Cas. P 11,106 CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, a pension trust, and Howard McDougall, trustee and fiduciary of such pension trust, Plaintiffs-Appellants, v. Donald JORDAN, d/b/a Donald Jordan Truck Service, Defendant-Appellee.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 149

873 F.2d 149

111 Lab.Cas. P 11,106

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND a pension trust, and Howard McDougall, trustee and fiduciary of such pension trust Plaintiffs-Appellants, v. Donald JORDAN, d/b/a Donald Jordan Truck Service, Defendant-Appellee.

No. 88-1493.

United States Court of Appeals Seventh Circuit.

Argued Nov. 8, 1988.

Decided April 18, 1989.

Thomas C. Nyhan, Chicago, Ill., for plaintiffs-appellants.

Bruce Mitchell, Mitchell & Armstrong, Marion, Ill., for defendant-appellee.

Before WOOD, Jr., COFFEY, and FLAUM, Circuit Judges.

HARLINGTON WOOD, Jr., Circuit Judge.

Plaintiff-Appellant Central States, Southeast and Southwest Areas Pension Fund ("Pension Fund") is one of the largest multiemployer pension funds in the nation. Plaintiff-Appellant Howard McDougall serves as trustee of the Pension Fund and controls and manages its operation and administration. (Central States and Howard McDougall are hereinafter referred to collectively as "Pension Fund.") Pursuant to section 502(e)(1) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. Sec. 1132(e)(1), and section 301(a) of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. Sec. 185(a), the Pension Fund filed suit in federal district court against Donald Jordan, owner of an unincorporated business operating under the name of Donald Jordan Truck Service, claiming Jordan failed to make the proper contributions to the fund. The district court granted Jordan's motion for summary judgment. The Pension Fund appeals, claiming the district court improperly applied the Illinois statute of limitations governing oral contracts to this dispute.

I. FACTUAL BACKGROUND

Appellant Central States, Southeast and Southwest Areas Pension Fund is a common law pension trust governed by section 302(c)(5) of the LMRA, 29 U.S.C. Sec. 186(c)(5), ERISA, 29 U.S.C. Secs. 1001-1461, and the Multiemployer Pension Plan Amendments Act of 1980, Pub.L. 96-364, 94 Stat. 1208. The Pension Fund operates as a trust for the purpose of providing pension benefits to employees providing work under collective bargaining agreements negotiated between employers and local unions affiliated with the International Brotherhood of Teamsters. The Pension Fund serves nearly 500,000 participants employed by approximately 13,000 employers pursuant to thousands of different collective bargaining agreements. See Central States Pension Fund v. Central Transport, Inc., 472 U.S. 559, 561-62, 105 S.Ct. 2833, 2835-36, 86 L.Ed.2d 447 (1985). Under these collective bargaining agreements, employers agree to make periodic contributions to the Pension Fund for each employee performing work covered by the agreements.

Appellee Jordan operates the Donald Jordan Truck Service in Tamms, Illinois. On March 25, 1966, Jordan executed a written Membership Agreement with a multiemployer association known as the Egyptian Truck Owners Association ("Employer Association"). In executing the Membership Agreement, Jordan granted the Employer Association "authority to negotiate all union contracts relative to the trucking business and further agree[d] to be fully bound by said contract[s]."

On September 1, 1967, the Employer Association executed a Participation Agreement with the Chauffeurs and Helpers Local Union No. 347 ("Local 347"). Under the Participation Agreement, the Employer Association agreed to be bound by the terms of the Trust Agreement governing the Pension Fund as well as all regulations adopted by the Trustees. The Participation Agreement also provided for weekly contributions to be made for each employee covered by the collective bargaining agreement. The Participation Agreement did not identify any of the Employer Association members by name. On the agreement form, the "Employer" was identified as the Egyptian Truck Owners Association. The Participation Agreement was not signed by Jordan or anyone else on behalf of Donald Jordan Truck Service.

Following the execution of the Participation Agreement, the Employer Association and Local 347 entered into a series of three-year collective bargaining agreements. These agreements, styled "Articles of Construction Agreements," were entered into between the Illinois Conference of Teamsters and the Associated General Contractors of Illinois, the Southern Illinois Builders Association, and the Central Illinois Builders. The first agreement ran from March 1, 1974 until April 30, 1977, and the second ran from May 1, 1977 until April 30, 1980. Article XI of the agreement dealt with pensions and required employers bound by the agreement's terms to make contributions to the Pension Fund at the specified rates on behalf of all covered employees. The collective bargaining agreements themselves were not signed by Jordan or anyone else on behalf of Donald Jordan Truck Service and the agreements do not indicate that Jordan was covered by them.

The Employer Association became involved by signing a series of amendments to these general agreements. These amendments indicated that the Employer Association and Local 347 were bound by the Articles of Construction Agreement. ¹ On April 5, 1974, an addendum agreement was entered into between the Employer Association and Local 347 that modified portions of the Articles of Construction Agreement. Jordan did not sign this agreement. On April 1, 1977, another addendum agreement was entered into again modifying portions of the bargaining agreement. This agreement was signed by Jordan in his capacity as a member of the Employer Association negotiating committee. Nothing on the face of either addendum agreement indicates that Jordan or Donald Jordan Truck Service was a party to the agreements. Jordan did admit that during the 1975-1979 period, he was a member of the Employer Association and bound to the collective bargaining agreements in place during that time. Jordan's membership in the Employer Association terminated on December 31, 1979 and the entire association dissolved in 1980.

This dispute arose on October 9, 1984 when the Pension Fund filed an action seeking to collect delinquent contributions allegedly owed by Jordan on behalf of three employees. After filing the suit, the Pension Fund conducted two audits of Jordan's employee records. The Pension Fund claims these audits revealed that Jordan had not reported work history or remitted contributions on behalf of approximately thirty other employees during the 1975-1979 period. The Pension Fund then amended its original complaint to recover for these earlier delinquencies and, for reasons unrelated to this appeal, withdrew its claims for contributions arising after January 1, 1980.

On September 17, 1987, the district court granted Jordan's motion for summary judgment. The court found that the Illinois five-year statute of limitations for oral contracts barred the Pension Fund's efforts to enforce Jordan's obligations prior to October, 1979. The court stated that since the collective bargaining agreement was not signed by Jordan and did not specifically identify Jordan as a party, parol evidence would be required to establish that Jordan was a party to the agreement. Under a strict interpretation of Illinois law, the need for such extrinsic evidence to establish the identity of a party to a contract means that the contract must be characterized as oral for statute of limitations purposes. The Pension Fund appeals, arguing that the Illinois ten-year statute of limitations for written contracts should be applied.

II. DISCUSSION

This court must review the district court's entry of summary judgment de novo. Summary judgment should be granted only when no genuine issues of material fact exist and when the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). This standard closely resembles that used for entry of a directed verdict, Fed.R.Civ.P. 50(c), where the district court must direct a verdict if there can be only one reasonable decision made under the governing law. Anderson v. Liberty Lobby, 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). The district court found as a matter of law that the Pension Fund's claims were time barred. A ruling on the proper statute of limitation is a question to be reviewed de novo. Pierce County Hotel Employees and Restaurant Employees Health Trust v. Elks Lodge, 1450, 827 F.2d 1324 (9th Cir.1987). We must review this holding and determine whether the district court properly applied Illinois law.

Neither ERISA nor the LMRA contains a statute of limitations that applies to suits by fund trustees to collect delinquent employer contributions. Jenkins v. Local 705 Int'l Bhd. of Teamsters Pension Plan, 713 F.2d 247, 250-51 (7th Cir.1983). In the absence of a governing federal provision, "the settled practice has been to adopt a local time limitation as federal law if it is not inconsistent with federal law or policy to do so." Wilson v. Garcia, 471 U.S. 261, 266-67, 105 S.Ct. 1938, 1941-42, 85 L.Ed.2d 254 (1985). When choosing which state limitation to apply, the court must first "characterize the essence of the claim in the pending case, and decide which state statute provides the most appropriate limiting principle." Id. at 268, 105 S.Ct. at 1942. This determination is a matter of federal law, Jenkins, 713 F.2d at 250-51, and the court must look to the underlying federal claim and the federal policies involved, Jenkins, 713 F.2d at 251. Unless it is inconsistent with federal policy or federal law, a federal court will adopt the most analogous state limitation period. International Union of Elevator Constructors v. Home Elevator Co., 798 F.2d 222, 226-29 (7th Cir.1986).

Finding that the Supreme Court and this court had both endorsed using state statutes of limitation in LMRA and ERISA claims, International Union, United Automobile, Aerospace & Agricultural Implement Workers of America (UAW) v. Hoosier Cardinal Corp., 383 U.S. 696, 86 S.Ct. 1107, 16...