D.E.W., Inc. v. Local 93, Laborers' Intern. Union of North America

• Decision Date: 03 April 1992
• Docket Number: No. 91-5519,91-5519
• Citation: 957 F.2d 196
• Parties: 140 L.R.R.M. (BNA) 2113, 121 Lab.Cas. P 10,155 D.E.W., INC., Plaintiff-Appellee, v. LOCAL 93, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, et al., Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 196

957 F.2d 196

140 L.R.R.M. (BNA) 2113, 121 Lab.Cas. P 10,155

D.E.W., INC., Plaintiff-Appellee, v. LOCAL 93, LABORERS' INTERNATIONAL UNION OF NORTH AMERICA, et al., Defendants-Appellants.

No. 91-5519.

United States Court of Appeals Fifth Circuit.

April 3, 1992.

Rehearing Denied April 30, 1992.

Stephen Edward Price, Freedman & Hull, P.C., Houston, Tex., for Local 93 Intern. Union of North America, et al.

Terry S. Bickerton, Arthur C. Nicholson, III, Thomas R. Giltner, Cox & Smith, Inc., San Antonio, Tex., for D.E.W., Inc.

Appeal from the United States District Court for the Western District of Texas.

Before WILLIAMS, DUHE, and EMILIO M. GARZA, Circuit Judges.

JERRE S. WILLIAMS, Circuit Judge:

Plaintiff/appellee, D.E.W., Inc. ("D.E.W."), a San Antonio general contractor in the construction business, brought suit against the Southern Texas Laborers' District Council Health & Welfare Trust Fund, the Laborers' National Pension Fund, and the Southern Texas Laborers' District Council Training Program (the "Laborers' Funds" or "Funds"), multi-employer trust funds administered by defendant American Benefit Plan Administrators, Inc. (Administrators), as well as Local Union 93 and the Laborers' International Union of North America. D.E.W. sought a declaratory judgment under 28 U.S.C. § 1337 as a federal question involving the application of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA). The judgment was sought as to liability under an adoption agreement. The parties agree that the employer was required to make contributions to the Laborers' Funds for its union employees. D.E.W. asserts, however, that it had no obligation under the agreement to contribute for its non-union employees. The district court agreed with D.E.W. and granted a summary judgment motion, ruling that D.E.W. was not legally obligated to make benefit contributions to the enumerated Funds for its non-union laborers. In its final judgment, the district court also awarded D.E.W. its reasonable attorneys' fees, costs, and interest. ¹ We reverse and grant summary judgment in favor of the Laborers' Funds.

I. FACTS AND PRIOR PROCEEDINGS

On September 27, 1984, D.E.W. entered into an adoption agreement ² with the Laborers' Funds under which D.E.W. undertook to make contributions to the Funds ³ based on each hour the covered employees worked. D.E.W. made the contractually obligated contributions only on behalf of its union employees to the Laborers' Funds. An audit was conducted of D.E.W.'s payroll records by the Administrators as to its contributions to the adopted Funds. The audit resulted in the Administrators making a demand on D.E.W. for $124,683.28 for contributions they concluded were owed to the Laborers' Funds for D.E.W.'s non-union employees. D.E.W. disputed the demand, claiming that it was not required to contribute benefit payments to the Laborers' Funds for its non-union employees. ⁴ It brought this suit for a declaratory judgment to that effect. After the civil action was filed, the Funds filed an amended answer and counterclaim asserting that, pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1001 et seq., and the Labor Management Relations Act of 1947 (LMRA), 29 U.S.C. § 185 et seq., D.E.W. had breached the agreements by D.E.W. to pay contributions to the Funds on behalf of all of its laborers. After D.E.W. and the appellants submitted a joint pretrial order, including several stipulations, both parties filed summary judgment motions. The district court granted D.E.W.'s motion, concluding that the adoption agreement was unambiguous and a reading of the agreement compelled only one reasonable construction--that the contributions to the Laborers' Funds were due only for union workers and that the defendants take nothing on their counterclaim. The court subsequently entered a final judgment awarding D.E.W. $32,169.29 as its reasonable attorneys' fees, plus costs, and interest.

II. DISCUSSION

On appeal, the Laborers' Funds raise one definitive issue: whether the district court erred in granting summary judgment and entering final judgment in favor of D.E.W.? According to the Funds, by entering into the adoption agreement D.E.W. agreed to adopt the terms of the Multi-Employer Union Trust Fund Agreements and agreed to make contributions to the Laborers' Funds for its employees, regardless of union affiliation.

We review a summary judgment de novo, applying the same standard as the district court. NL Indus., Inc. v. GHR Energy Corp., 940 F.2d 957, 963 (5th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 873, 116 L.Ed.2d 778 (1992). In reviewing a grant of summary judgment, this Court must determine if there are any genuine issues of fact material to the resolution of the case in dispute, and if not, whether under the undisputed facts the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56. Boze v. Branstetter, 912 F.2d 801, 804 (5th Cir.1990) (per curiam). A mere scintilla of evidence is insufficient to avoid summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986). We must view the evidence and draw all inferences, however, in the light most favorable to the non-moving party.

The parties are in agreement that there is no genuine issue as to any material fact regarding D.E.W.'s contractual obligations to make contributions to the Laborers' Funds. According to the parties, the adoption agreement is unambiguous. Both parties contend that no genuine issue exists, and both parties assert that the adoption agreement is unambiguous. Yet, the interpretations of the contract by the parties result in diametrically opposed conclusions as to the obligation to contribute for non-union laborers.

The Funds counterclaimed against D.E.W. under, inter alia, section 301(a) of LMRA, 29 U.S.C. § 185(a). United Paperworkers Int'l Union, AFL-CIO, CLC v. Champion Int'l Corp., 908 F.2d 1252, 1255-56 (5th Cir.1990). Federal substantive law governs the interpretation and enforcement of contracts under section 301(a). Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 455, 77 S.Ct. 912, 917, 1 L.Ed.2d 972 (1957). In interpreting a labor contract, " 'traditional rules for contractual interpretation are applied as long as their application is consistent with federal labor policies.' " United Paperworkers Int'l Union, 908 F.2d at 1256 (citations omitted).

The construction of the adoption agreement, and the interpretation of its language, is pivotal in this case. The interpretation of this adoption agreement, as with any contract, is a question of law. Id. The determination of whether a contract is ambiguous is also a question of law. Richland Plantation Co. v. Justiss-Mears Oil Co., 671 F.2d 154, 156 (5th Cir.1982). A contract is not ambiguous merely because the parties disagree upon the correct interpretation or upon whether it is reasonably open to just one interpretation. REO Indus., Inc. v. Natural Gas Pipeline Co. of America, 932 F.2d 447, 453 (5th Cir.1991) (footnotes omitted). The mere disagreement of the parties upon the meanings of contract terms will not transform the issue of law into an issue of fact. General Wholesale Beer Co. v. Theodore Hamm Co., 567 F.2d 311, 313 (5th Cir.1978). If the written instrument is so worded that it can be given a certain or definite legal meaning or interpretation, then it is not ambiguous, and this Court will construe the contract as a matter of law. Of course, if the contract is ambiguous, summary judgment is deemed inappropriate because its interpretation becomes a question of fact. Fireman's Fund Ins. Co. v. Murchison, 937 F.2d 204, 207 (5th Cir.1991).

Two sections of the adoption agreement, sections 1 and 3, control the critical inquiry in this case: whether D.E.W. is obligated to make contributions on behalf of non-union member employees?

(1) Adopting of Trust Funds:

(a) Effective as of September 27, 1984, the undersigned Employer adopts the Southern Texas Laborers' District Council Health & Welfare Trust Fund for all those employees (the "employees"): (i) who are members of a participating Local Union of the Laborers' International Union of North America, or (ii) who have their wage rate and working conditions established by the collective bargaining agreement negotiated by the Association and the Local Union which established this Fund; it agrees to make contributions on behalf of its employees and it agrees to be bound by all the terms, provisions, limitations, and conditions of the Welfare Fund.

(b) Effective as of September 27, 1984, the undersigned Employer adopts the Laborers' National Pension Fund for its employees; it agrees to make contributions on behalf of its employees; and it agrees to be bound by all the terms, provisions, limitations and conditions of the Pension Fund.

(c) Effective as of September 27, 1984, the undersigned Employer hereby adopts the Southern Laborers' District Council Training Program for its employees; it agrees to make contributions on behalf of its employees; and it agrees to be bound by all the terms, provisions, limitations and conditions of said Training Program.

* * * * * *

(3) The undersigned Employer agrees to contribute to each: the Welfare Fund, the Pension Fund and the Training Program, the contributions required by the then current collective bargaining agreement which is in effect from time to time between L.I.U.N.A. Local 93 and South Texas Contractors Association at the times and in the amounts set forth therein and in accordance with the Trust Agreement establishing each of the Trust Funds as they may be amended from time to time. The Employer further agrees that it is aware of the due dates required for each of the contributions and further agrees that all past due payments shall be subject to the liquidated damages, interest and to all costs of collections, including reasonable attorney's...