Gay v. Brencorp, Inc., CASE NO. 3:09-cv-1002-J-JBT

• Decision Date: 19 January 2012
• Docket Number: CASE NO. 3:09-cv-1002-J-JBT
• Court: U.S. District Court — Middle District of Florida
• Parties: W.W. GAY, et al., as Trustees of the Jacksonville Plumbers & Pipefitters Local Union 234 Fringe Benefit Funds, Plaintiffs, v. BRENCORP, INC., a Georgia corporation, Defendant.

W.W. GAY, et al., as Trustees of the

Jacksonville Plumbers & Pipefitters

Local Union 234 Fringe Benefit Funds, Plaintiffs,

v.BRENCORP, INC., a Georgia corporation, Defendant.

CASE NO. 3:09-cv-1002-J-JBT

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

Dated: January 19, 2012

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Plaintiffs, who are trustees of the Jacksonville Plumbers & Pipefitters Local Union 234 ("Local 234") Fringe Benefit Funds, which include the Health and Welfare Fund and Pension Fund (collectively, "the Fund"), brought this action under Sections 502(a)(3), 502(g)(2), and 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1132(a)(3), 1132(g)(2), 1145, as well as Section 301(a) of the Labor Management Relations Act of 1947 ("LMRA"), as amended, 29 U.S.C. § 185(a). (Doc. 1 at 1-5.) The Court has jurisdiction pursuant to these federal statutes in conjunction with 28 U.S.C. § 1331.

Plaintiffs assert what is essentially a breach-of-contract claim against Defendant, Brencorp, Inc. ("Brencorp"). Plaintiffs allege that Brencorp was bound by the terms of a collective bargaining agreement ("CBA"), and breached the CBA by performing work within the scope and territory defined in the CBA without using Local 234's labor to perform the work and not making contributions to the Fundbased on that work. (Doc. 1 at 1-5.)¹ On October 24, 2011, the Court held a bench trial solely on the issue of whether Defendant was bound by the CBA (Doc. 60), and this order follows.

I. Issues and Summary of Decision

In determining whether Defendant was bound by the CBA during the time period in question, the Court must decide one or more of the following subsidiary issues: (a) whether Kenneth Welchel ("Welchel"), one of Defendant's employees who in fact signed the CBA on behalf of Brencorp, had actual authority to do so; (b) whether Welchel had apparent authority to do so; and (c) whether Defendant ratified by conduct the CBA signed by Welchel. If the Court determines any one of these issues in Plaintiffs' favor, Defendant is bound by the CBA. The Court does decide in Plaintiffs' favor on the first issue, actual authority, and although not necessary to the decision, also on the third issue, ratification. Given these conclusions, the Court need not decide whether Welchel had apparent authority as well.

Additionally, the Court must decide the merits of Defendant's affirmative defenses, which include the following: (i) Defendant's obligations under the CBA never accrued because of the failure of a condition precedent contained in the CBA; (ii) Defendant satisfied and performed its obligations under the CBA; and (iii)assuming Defendant entered into the CBA, it did so under a mistaken understanding of the terms of the CBA. The Court finds in Plaintiffs' favor on all of Defendant's affirmative defenses.²

Thus, Plaintiffs are entitled to an accounting as requested in the Complaint (Doc. 1). The Court entered a separate order scheduling the remainder of this case. (See Doc. 66.)

II. Findings of Fact³

The parties stipulated to certain facts in their Joint Pre-Trial Statement. (Doc. 54 at 2-3.) The Court accepts all of these facts, which are set forth below, as admitted.

For the remainder of the Court's findings of fact, the Court relies on the testimony presented at the October 24, 2011 bench trial (see Doc. 65 (to be cited as "Tr. [page #]")), as well as the exhibits, including deposition testimony, admitted into evidence at that trial (to be cited as "Ex. [#] at [page #]"). Plaintiff called five witnesses: Jimmy Johnson, Curtis K. Tharpe, David Edward Mass, Kenneth Welchel, and Ronnie Andrews. Plaintiff also admitted thirty-nine exhibits into evidence, which included the transcripts of the depositions of Ted Brennan, LaurieWard, and Kenneth Welchel.⁴ Defendant called two witnesses: Ted Brennan and Laurie Ward.

A. Stipulated Facts

a. The Jacksonville Plumbers and Pipefitters Local Union 234 is a labor union located in Jacksonville, Florida and its members perform plumbing and pipefitting work.

b. Plaintiffs are the Trustees of Local 234's Pension Fund and its Health and Welfare Fund.

c. The Defendant, Brencorp, Inc., is a Georgia corporation located in Cartersville, Georgia.

d. Brencorp does industrial contracting work which often requires it to employ labor that performs the type of work done by members of Local 234.

e. On July 31, 2007, Ted Brennan ["Brennan"], President of Brencorp, Inc., sent a letter to Local 234 pursuant to which he stated that Brencorp would agree to pay employees from Local 234 per the breakdown of Local 234's Collective Bargaining Agreement ("CBA") for a piping modification project that was being performed at Anheuser-Busch Jacksonville Brewery[.]

f. On August 2, 2007, Jimmy Johnson, then Business Manager for Local 234, sent a letter to Mr. Brennan, along with two copies of Local 234's CBA, and asked Mr. Brennan to sign the CBA.

g. On August 3, 2007, Kenneth Welchel signed a CBA ["the First CBA"] with Local 234, and signed the drug testing authorization letter.

h. The [First] CBA signed by Mr. Welchel on August [3], 2007⁵ expired on August 31, 2007.

i. On September 1, 2007, Mr. Welchel signed a new CBA ["the Second CBA"] for the period from September 1, 2007, through August 31, 2010.

j. Local 234 provided labor for the Anheuser-Busch project for the period from August, 2007 until June, 2008.

k. Brencorp submitted reports on the labor and paid contributions to the Fringe Benefit Funds for all such labor.

(Doc. 54 at 2-3.)

B. Remainder of Findings of Fact

Brencorp is an industrial contracting company located in Cartersville, Georgia that does millwright, pipefitting, and rigging work. (Tr. 142.) Ted Brennan is Brencorp's president and sole executive officer. (Tr. 142-43.) Kenneth Welchel, a union member of Local 72 of the Plumbers, Steamfitters & Service Technicians in Atlanta, Georgia, began working for Brencorp in November 2005. (Tr. 102; Ex. 40 at 5-6.) During the time in question, Welchel's title at Brencorp was "[P]roject [S]upervisor." (Tr. 147.)

Brencorp bid on and was awarded a job at the Jacksonville Anheuser-Busch ("A-B") facility, which was scheduled to begin on August 6, 2007, a Monday. (Tr. 193.) As Project Supervisor, Welchel began reviewing the plans and preparing for this job in early July 2007. (Tr. 106.) These preparations lasted several weeks, and during this time, Welchel and Brennan discussed and concluded that they would use local union labor for the job. (Id.)

On or about July 31, 2007, the Tuesday before the job was scheduled to begin, Welchel came to Local 234's union hall in Jacksonville, Florida to discuss using its labor on the job. (Tr. 38.) Welchel met with Jimmy Johnson ("Johnson"), who was the business manager for Local 234, and told Johnson that he would be "run[ning] the job for Brencorp." (Tr. 108.) Welchel further told Johnson that Brencorp was interested in using Local 234's labor but wanted to enter into only a one-job labor contract—i.e., for the one job Brencorp had been awarded at the Jacksonville A-B facility. (Tr. 38-39, 108.) Johnson told Welchel that Local 234 would agree only to the standard three-year CBA that it had with all the other contractors. (Tr. 34, 39, 108-10.) Welchel said that he would have to discuss Local 234's position with Ted Brennan, president of Brencorp. (Tr. 39.) Before leaving, Welchel gave Johnson one of his business cards, which reflected his title as Project Supervisor for Brencorp. (Tr. 103, 107.) After leaving the union hall, Welchel relayed to Brennan Local 234's position that it would not agree to a one-job contract and would agree only to its standard three-year CBA. (Tr. 110.)

On August 1, 2007, Brennan faxed the following letter, dated July 31, 2007, to Ronnie Andrews, who was Local 234's business agent at the time:

Please except [sic] this letter as our commitment with Plumbers & Steamfitters Local 234.

We agree to hire and pay all wages and benefits for any employees that Local 234 sends to us per the breakdown of your Collective Bargaining Agreement and Pay Scale. All benefits will be paid to the appropriate fund office.

Terms and conditions of this agreement will be to perform piping work at the Anheuser-Busch Jacksonville Brewery for the piping work associated with the Piping Modification Project No. 4890 BP 300. Upon completion of the above said project, this agreement will self terminate.

I hope that this satisfies your concerns and I look forward to a successful project.

(Ex. 2.)

Johnson read the above letter, and on August 2, 2007, sent Brennan by overnight mail two signed copies of the Local's standard CBA and a letter, which stated the following:

Please find enclosed two copies of Local 234's [CBA], wage and fringe sheet and a letter confirming the obligation of Brencorp, Inc. to pay the drug testing cost of $45.00 per employee tested for your company.

I hope you will find the [CBA] acceptable. We have no intention of trying to obligate Brencorp, Inc. to anything different than our local contractors agree to.

Please sign and return to us one of the [CBAs] and the drug testing authorization letter.

I do look forward to working with you.

(Tr. 41-45; Ex. 3.) Brennan received this letter and the accompanying documents on August 3, 2007, the Friday before the job was scheduled to start. (Tr. 158, 173, 175.) Brennan was fully aware that the CBA included a three-year term and was not limited to the A-B job. (Tr. 175-76.)

That same day, Johnson called Brennan and they had a 41-minute conversation. (Tr. 40-43; Ex. 31.) During this conversation, Brennan said that hewas interested in signing a one-job agreement and Johnson said that Local 234 was interested in signing only the standard three-year CBA. (Tr. 40-41.) At no time during that conversation did Johnson indicate that the Local would agree to a one-job agreement. (Tr. 43.)

With Brencorp's project at the A-B facility scheduled to begin the following Monday...