HAWAII CARPENTERS'TRUST v. Waiola Carpenter Shop, Civ. No. 83-0253.

• Decision Date: 05 December 1985
• Docket Number: Civ. No. 83-0253.
• Citation: 627 F. Supp. 237
• Court: U.S. District Court — District of Hawaii
• Parties: HAWAII CARPENTERS' TRUST FUNDS (Health & Welfare Trust Fund by its Trustees, Raymond Nagata, Albert Hamamoto, Henry Iida, Roy Iwamoto, Robert Kaya, Fred Shelton, Harold Makilan, Herman Nascimento, Lester Tamura, and Mitsuo Yakuma), et al., Plaintiffs, v. WAIOLA CARPENTER SHOP, INC. a Hawaii corporation, and Tanaka and Uyehara, Inc., a Hawaii corporation, now doing business as Waiola Countertop, formerly doing business as Waiola Carpenter Shop, Defendants.

627 F. Supp. 237

HAWAII CARPENTERS' TRUST FUNDS (Health & Welfare Trust Fund by its Trustees, Raymond Nagata, Albert Hamamoto, Henry Iida, Roy Iwamoto, Robert Kaya, Fred Shelton, Harold Makilan, Herman Nascimento, Lester Tamura, and Mitsuo Yakuma), et al., Plaintiffs, v. WAIOLA CARPENTER SHOP, INC. a Hawaii corporation, and Tanaka and Uyehara, Inc., a Hawaii corporation, now doing business as Waiola Countertop, formerly doing business as Waiola Carpenter Shop, Defendants.

Civ. No. 83-0253.

United States District Court, D. Hawaii.

December 5, 1985.

COPYRIGHT MATERIAL OMITTED

Joseph A. Kinoshita, Ashley K. Ikeda, Wesley H. Ikeda, Honolulu, Hawaii, for plaintiffs.

Gregory Sato, Honolulu, Hawaii, for defendants.

ORDER GRANTING DEFENDANT TANAKA AND UYEHARA, INC.'S MOTION FOR SUMMARY JUDGMENT

PENCE, Senior District Judge.

Defendant's Motion for Summary Judgment with respect to Counts III and IV came on for hearing before this court on November 6, 1985. The court, having considered the motion and the memoranda submitted in support thereof and in opposition thereto, and having heard the oral arguments of counsel, and being fully advised on the premises herein, finds as follows:

In late 1979, Calvin Tanaka and Duffy Uyehara purchased the assets of Waiola Carpenter Shop, Inc. from their retiring boss, Robert Imai. The transaction can be described as arms-length, as both were represented by counsel. Tanaka and Uyehara funded their corporation with $5,000 purchases of stock and loans of $10,000.

After the change of ownership, Tanaka and Uyehara established credit under the new corporate name (Tanaka & Uyehara, Inc. dba Waiola Carpenter Shop (now Waiola Countertop)), obtained business and tax licenses with the U.S. and State, and opened banking accounts in the corporation's name. In his affadavit, Uyehara states that Waiola Carpenter Shop was used solely as a trade name—neither he nor Tanaka made any attempt to cover up the sale or prevent public disclosure. The changeover was effective April 30, 1980.

Tanaka and Uyehara continued to perform fabricating work in the shop, while Thomas Lee was hired to perform Imai's former duties—delivery of product and pick-up of raw material. Lee was never a member of the union, and was never promised trust fund benefits. Following Lee's departure from T & U, the company continued to hire non-union help.

After the sale in April, Tanaka & Uyehara, Inc. (T & U) continued to receive monthly trust fund assessment notices from the Hawaii Carpenters' Trust Funds. The assessments were based on the 1978 to 1981 Collective Bargaining Agreement between the Union and Robert Imai, the former owner. At the time Tanaka and Uyehara negotiated to buy Waiola's assets, the subject of the Agreement never came up. To Tanaka, "it did not seem important." T & U's Memorandum in Support of Summary Judgment, Affadavit of Duffy Uyehara, at 6. At any rate, from May of 1980 through December of 1981, T & U continued the prior practice of paying trust fund contributions and reporting the hours worked of its employees.

On December 23, 1981, T & U received a letter from the Trust Funds demanding payment of delinquent contributions. In January of 1982, former Carpenters' Union business agent Eddie Cantera told Uyehara there was no need for T & U to belong to the funds since none of T & U's employees belonged to the Union. According to Uyehara, his conversation with an attorney for the trust funds confirmed this as well. As a result, T & U refused to make trust fund contributions or report hours worked beginning January 1982.

During this time, T & U joined the Wood Products Association of Hawaii (WPA). Uyehara states T & U joined the association to help "drum up" business. In July of 1981, Percy Ching, the President of the WPA, asked Uyehara to sign a "Survey Form" (also referred to as a power of attorney). Uyehara completed the form, "mainly out of friendship with Mr. Ching," and was given the impression that each company would have the option of signing their own agreement. According to plaintiffs, the form gave T & U no such option, but authorized the WPA to negotiate an agreement on T & U's behalf with the Millwork industry union.

The court notes that at the hearing, it became clear that Percy Ching advised Tanaka and Uyehara extensively on labor matters. In fact, both parties agreed Mr. Ching may have been practicing law without a license.

The WPA and Carpenters' Union commenced negotiations in August 1981 to renew the Mill Cabinet Agreement for 1981-84. A dispute arose, resulting in a strike and lawsuit by the Union against the WPA and its members. That suit was eventually dismissed, the strike settled, and an Agreement was entered into February 25, 1983.

On January 14, 1982, T & U withdrew as a member of the WPA. The letter stated that T & U "had previously given the Association our power-of-attorney for bargaining purposes without understanding the total implications of that action." On the 28th of the same month, both Tanaka and Uyehara resigned from the Carpenters' Union as well.

Finally, the court notes that in late March of 1983, Carpenters' Union business agent Melvin Fujii visited T & U with the collective bargaining agreement between the union and the WPA. Due to confusion over exactly which companies were members of the WPA, the union sought individual company signatures. When Duffy Uyehara refused to sign, the business agent left. Several days later, the same sequence of events was repeated when another Carpenters' Union business agent visited the premises of T & U. Again, Uyehara refused to sign the agreement. See Supplementary Memo in Support of Summary Judgment, Affadavit of Duffy Uyehara at 2, Affadavit of Calvin Tanaka at 2.

DISCUSSION

Defendant seeks summary judgment on Counts III and IV. Count III involves obligations to the trust fund under the 1978-81 Collective Bargaining Agreement, while Count IV is addressed to T & U's obligation to contribute pursuant to the 1981-84 Collective Bargaining Agreement. First, defendant contends that the absence of a written agreement relieves T & U of any obligations to make contributions under the 1978-81 Agreement. Next, defendant argues T & U is not obligated under the 1981-84 Mill Cabinet Agreement since T & U withdrew from the WPA prior to the execution of the agreement. Finally, defendant maintains the applicable state statute of limitations bars plaintiff's ERISA claims.

Standard of Review

The standard for granting summary judgment is well established. Summary judgment is appropriate only when the pleadings and other submissions show there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Filco v. Amana Refrigeration, Inc., 709 F.2d 1257, 1260 (9th Cir.1983).

The 1978-81 Collective Bargaining Agreement

The record reveals no dispute regarding the absence of a written agreement between T & U and the trust funds. Defendants rely on Maxwell v. Lucky Const. Co., Inc., 710 F.2d 1395 (9th Cir.1983), for the proposition that without a written agreement between the trust funds and T & U, T & U is relieved of any obligation to contribute their predecessor may have had vis-a-vis the funds. Maxwell dealt with Section 302 of the LMRA (29 U.S.C. § 186), and noted that under section 302(c)(5), the basis on which an employer is to pay trust contributions must be specified in a written agreement. Since the only written basis for contributions is the 1978-81 Collective Bargaining Agreement, and that was signed by Imai for Waioala Carpenter Shop, Inc., the trust funds are effectively estopped from asserting T & U must contribute to the funds. See Moglia v. Geoghegan, 403 F.2d 110 (2nd Cir.1968), cert. den., 394 U.S. 919, 89 S.Ct. 1193, 22 L.Ed.2d 453 (1969); Thurber v. Western Conference of Teamsters Pension Plan, 542 F.2d 1106 (9th Cir.1976).

To avoid the above line of reasoning, Plaintiffs argue that T & U is Waiola's successor, and therefore T & U must make trust fund contributions under their predecessor's collective bargaining agreement.¹ Regarding the Successorship Doctrine, Professor Morris writes that any determination of successorship "turns on a number of related inquiries, all focused upon the degree of continuity between the old and the new employer's business enterprise." Developing Labor Law (2nd Ed.1983) at 712-713. These inquiries include the continuity in the employing industry and the continuity in the appropriateness of the bargaining unit.

In Burke v. French Equipment Rental, 498 F.Supp. 94, 98 (C.D.Cal.1980), rev'd in part, aff'd in part, 687 F.2d 307 (9th Cir. 1982), the court examined whether an individual who is the sole shareholder, president and only employee of a corporation could be included in a bargaining unit of employees of that corporation. The court wrote, "it is likely that ... French would be excluded, either because he is an employer or a supervisor, ... or because he represents management. See generally NLRB v. Yeshiva University, 444 U.S. 672 100 S.Ct. 856, 63 L.Ed.2d 115 (1980); Beasley v. Food Fair of North Carolina, Inc., 416 U.S. 653 94 S.Ct. 2023, 40 L.Ed.2d 443 (1974)." Id. In the instant case therefore, the fact that Tanaka and Uyehara have become supervisors appears to remove them from the bargaining unit.

Authority for the court's finding that T & U is not Waiola's successor is provided by the 1978-81 Collective Bargaining Agreement's definition of the bargaining unit,² as well as the definition of supervisor set forth in § 2(11) of the NLRA, 29 U.S.C. § 152(11). The term "supervisor" is defined in § 2(11) of the NLRA to mean:

any individual having authority, in the interest of the employer, to hire, transfer, suspend, lay off, recall, promote, discharge, assign, reward, or discipline other employees, or responsibility to direct them, or to adjust their grievances, or effectively to recommend such action, if in connection

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