Clark v. Washington Teamsters Welfare Trust, 92-35054
| Decision Date | 05 November 1993 |
| Docket Number | No. 92-35054,92-35054 |
| Citation | 8 F.3d 1429 |
| Parties | 144 L.R.R.M. (BNA) 2696, 126 Lab.Cas. P 10,940, 17 Employee Benefits Cas. 1843, Pens. Plan Guide P 23893C Cedric CLARK, Plaintiff-Appellee, v. WASHINGTON TEAMSTERS WELFARE TRUST, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Russell J. Reid and Kim Williams, Davies, Roberts, and Reid, Seattle, WA, for defendant-appellant.
James K. Adams, Almon, Berg and Adams, Yakima, WA, for plaintiff-appellee.
Appeal from the United States District Court for the Eastern District of Washington.
Before: J. WALLACE, BOOCHEVER, and NOONAN, Circuit Judges.
Cedric Clark brought suit against the Washington Teamsters Welfare Trust (the Trust) seeking to establish his right to health benefits under the Trust. The district court gave summary judgment for Clark. The Trust appealed. We reverse the district court and direct that judgment be entered for the Trust.
Clark is the president of the Yakima County Beverage Company (the Company), which delivers beer and wine to taverns, grocery stores and cocktail lounges primarily in Yakima County, Washington. Clark started the business in 1961 and the business was incorporated in the mid-1960s. Clark and his wife are the corporate officers and the shareholders of the Company.
The Company has a collective bargaining agreement with Local 524 of the International Brotherhood of Teamsters, Shippers, Warehousemen and Helpers of America (the Teamsters). The agreement, inter alia, provides that Local 542 is the exclusive bargaining representative for all employees of the Company except those listed in Article 1(C) of Appendix C of the agreement; the exceptions include supervisors "not engaged in bargaining unit work" and owners "not engaged in bargaining unit work." Article 10 provides:
Article 12 of the collective bargaining agreement is entitled "HEALTH CARE BENEFIT PLANS" and provides: "The Employer shall pay each month into the following employee health care benefit plans, on account of each member of the bargaining unit who was compensated for eighty (80) hours or more in the preceding month."
Article 13 is entitled "PENSION PLAN" and provides: "The Employer shall pay each month into the Western Conference of Teamsters Pension Trust Fund on account of each member of the bargaining unit, for each hour for which compensation is paid to him, but not to exceed one hundred seventy-three (173) hours for such calendar month."
Article 17 provides in part: "The Employer further agrees that the employer-trustees named in the said trusts, and their successors in trust, are and shall be his representatives, and consents to be bound by the actions and determinations of the Trustees." The collective bargaining agreement is signed on behalf of Yakima County Beverage Company by Clark.
The Trust is a recipient of payments under Article 12. It is a Taft-Hartley employee benefit trust governed by a board of trustees consisting of an equal number of employer trustees selected by employer representatives and union trustees selected by representatives of the Teamsters. The Board of Trustees is governed by the Washington Teamsters Welfare Agreement and Declaration of Trust. The administrator of the Trust is Northwest Administrators, Inc. (the Administrator).
Ever since its incorporation the Company has paid contributions to the Trust on behalf of Clark. Clark is also a member of Local 524. Prior to 1988 and the controversy that led to this lawsuit Clark and his family did receive some benefits from the Trust. Since 1980 Clark also carried health insurance from Yakima County Blue Shield.
In 1988, as a result of a random audit conducted by the Administrator, the Administrator questioned Clark's eligibility for benefits under the Trust. To quote Clark's brief Clark appealed the Administrator's determination of eligibility to the board of trustees of the Trust. The Administrator agreed that Clark performed some bargaining unit work but observed that "a majority of Mr. Clark's time was not spent performing bargaining unit work." The Administrator also observed that the Company did contribute for Clark to the Trust, but did not make contributions for Clark to the Pension Trust.
on appeal, "The apparent reason for the determination that Cedric Clark was ineligible for Trust benefits was the belief that the labor agreement required that, to be eligible for Trust benefits, a bargaining unit employee must be compensated for 80 hours of bargaining unit work each month. This was the interpretation given the labor agreement by Northwest Administrators, Inc."
The Appeals Committee of the Trust (the Committee) met and reviewed Clark's appeal and determined that Clark was not eligible for benefits under the Trust. The Committee recognized that Clark did bargaining unit work but also concluded that a majority of his work was non-bargaining unit work. Clark was so notified. He was also notified of his right to appear before the Committee.
Clark did appear before the Committee and offered his oral testimony, supported by the testimony of the general manager of the Company. The Committee also considered affidavits and other documents submitted by Clark as well as documents and records in the administrative file. After review of all the evidence the Committee "specifically determined that Mr. Clark was the owner of Yakima County Beverage and did not perform sufficient bargaining unit work (as defined in the governing labor agreement), to be eligible to participate under the Trust's rules."
Clark thereupon brought this suit in the Superior Court of the County of Yakima. The Trust removed to the federal district court because the complaint stated a claim arising under the laws of the United States. 28 U.S.C. § 1441. Both parties moved for summary judgment. The district court gave summary judgment for Clark. The court found that Clark did bargaining unit work and that he was therefore within the provisions of the Trust. The court found totally unambiguous the provision of Article 12 directing the employer to pay the Trust on a monthly basis "on account of each member of the bargaining unit who was compensated for eighty (80) hours or more in the preceding month." The court held the determination of ineligibility made by the Trustees to be arbitrary and capricious.
The Trust appealed.
It is conceded by Clark, according to his brief on this appeal, that the "focus of the inquiry is the June 8, 1989 appeal before the Trust Appeals Committee." It is further conceded by Clark that this Committee did not deny that Clark did bargaining unit work and that the basis of its decision was that he had not done sufficient bargaining unit work as defined in the collective bargaining agreement to make him a covered employee, a conclusion, as Clark puts it, "obviously based on the additional requirement ... that a bargaining unit employee must perform 80 hours of bargaining unit work per month to be eligible."
Under the provisions of the Trust, Article 9 § 4, "Trustees' Discretion," it is provided: "Any questions arising in connection with the performance of the provisions of this Trust Agreement not hereto specifically provided for shall be left to the sole discretion of the Trustees." Language in the Trust Agreement which is capable of more than one interpretation does pose a question arising in connection with the performance of the provisions of the Trust, and questions of the interpretation of such language are not specifically provided for. Such questions, therefore, are left "to the sole discretion of the Trustees." Under solidly established precedent, a matter left to the discretion of the trustees and decided by them cannot be decided differently by a court unless the decision of the trustees is arbitrary and capricious. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115, 109 S.Ct. 948, 956 103 L.Ed.2d 80 (1989); Eley v. Boeing Co., 945 F.2d 276, 278 (9th Cir.1991).
The language of Article 12 was open to the interpretation reached by Clark, viz., that any 80 hours of work by a member of the bargaining unit counted in determining eligibility for benefits under the Trust. The language was also open to the interpretation that it was only hours compensated for bargaining unit work that counted in determining eligibility under the 80-hour requirement. Each interpretation has its drawbacks; each...
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