Hawkins v. Bennett

• Decision Date: 28 April 1983
• Docket Number: No. 82-5124,82-5124
• Citation: 704 F.2d 1157
• Parties: 113 L.R.R.M. (BNA) 3585, 97 Lab.Cas. P 10,109, 4 Employee Benefits Ca 2310 Leo HAWKINS, Antone M. Rezendes, Benjamin J. Verdi, Union Trustees of Shopmen's Iron Workers Health and Welfare Trust Fund, Plaintiffs-Appellants, v. Russell BENNETT, Paul Hillseth, Winford M. Rawlins, Employer Trustees of Shopmen's Iron Workers Health & Welfare Trust Fund, Defendants-Appellees.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1157

704 F.2d 1157

113 L.R.R.M. (BNA) 3585, 97 Lab.Cas. P 10,109,

4 Employee Benefits Ca 2310

Leo HAWKINS, Antone M. Rezendes, Benjamin J. Verdi, Union Trustees of Shopmen's Iron Workers Health and Welfare Trust Fund, Plaintiffs-Appellants, v. Russell BENNETT, Paul Hillseth, Winford M. Rawlins, Employer Trustees of Shopmen's Iron Workers Health &amp Welfare Trust Fund, Defendants-Appellees.

No. 82-5124.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 6, 1982.

Decided April 28, 1983.

Richard D. Sommers, Schwartz, Steinsapir, Dohrmann, Krepack, Sommers & Edelstein, Los Angeles, Cal., for plaintiffs-appellants.

Raymond W. Thomas, Nelson & Rexon, Los Angeles, Cal., for defendants-appellees.

Appeal from the United States District Court for the Central District of California.

Before TANG and POOLE, Circuit Judges, and THOMPSON, ^* District Judge.

BRUCE R. THOMPSON, District Judge:

On June 5, 1972, a trust agreement was entered into between the Steel Fabricators Association of Southern California and the International Association of Bridge Structural and Ornamental Iron Workers, Local 509, pursuant to Sec. 302(c)(5)(B) of the Labor-Management Relations Act of 1947, 29 U.S.C. Sec. 186(c)(5)(B) (1947). The agreement establishes a fund to be used for health and welfare benefits for the union members. The trust fund is administered by a six-member Board of Trustees, three designated on behalf of the union, and three designated on behalf of the employer. The agreement provides that any matter coming before the Board of Trustees must be passed by a majority of the trustees.

At the Board of Trustees meeting on September 17, 1981, both the union trustees and the employer trustees submitted resolutions to increase employee life and accidental death and dismemberment coverage. The three union trustees voted for their proposal and against the employer's proposal. Likewise, the three employer trustees voted for their proposal. There was no majority for either proposal. Co-counsel for the fund were instructed to initiate the appropriate arbitration procedures to resolve the deadlock.

The trust agreement provides for the appointment of a neutral person to act as an arbitrator to resolve disputes, to the extent that the dispute results in an "impossibility on the part of the trustee to act upon the administration of the fund involved." Pursuant to this section, the union trustees sought to appoint an arbitrator. The employer trustees, however, refused to agree. The union trustees filed a petition in the district court seeking appointment of an impartial arbitrator to resolve the dispute. The jurisdiction of the district court rested on 29 U.S.C. Sec. 186.

The district court denied the union's petition for appointment of an arbitrator, and the union has appealed. We have jurisdiction under 28 U.S.C. Sec. 1291.

The employer trustees contend that under Fed.R.Civ.P. 52(a) the district court's finding that the deadlocks "have not made administration of the Trust Fund impossible nor have they affected any significant aspect of the operation of the Trust Fund," and hence its denial of the petition, may only be set aside if clearly erroneous. But "[t]he clearly erroneous standard of review is applied where a trial court resolves disputed issues of fact by reference to the credibility of conflicting evidence." In re J.A. Thompson and Son, Inc., 665 F.2d 941, 951 (9th Cir.1982). It has no application where the trial judge applies a legal standard to undisputed facts. Id.; 5A Moore's Federal Practice Sec. 52.03, at 2662 (1982).

In the present case, the determination whether the dispute constituted a deadlock concerning administration of the fund within the meaning of 29 U.S.C. Sec. 186(c)(5)(B) was an issue of law. The underlying facts are not disputed. The only issue is what legal conclusion should be drawn from them. Thus, this court's review of the district court's legal conclusion is not constrained by the clearly erroneous standard. In re Howell, 638 F.2d 81 (9th Cir.1980); Soliz v. Plunkett, 615 F.2d 272 (5th Cir.1980).

The Employers Association contends that the merits of the appeal need not be reached because the trustees do not have authority to increase benefits. This argument is meritless. The trust fund was established to provide health and welfare benefits for the members of the union. To accomplish this purpose the trustees are authorized to develop and establish insurance plans "in such amount and forms as in the absolute discretion of the trustees shall be deemed most beneficial, advantageous and desirable from the standpoint of the monies in the trust fund available for such purpose." This provision of the agreement clearly gives the trustees the power to establish insurance plans and to increase or decrease the benefits.

The trust fund is independent of the collective bargaining agreement between the parties. The latter fixes the employer's contribution to the fund, but does not attempt to determine what, if any, particular insurance benefits shall be provided by the trustees. The argument of the Employer Trustees that any increase in benefits should be left to the collective bargaining process ignores the contractual format and was rejected by our court in NLRB v. Driver Salesmen, etc., 670 F.2d 855 (9th Cir.1982). See NLRB v. Amax Coal Co., 453 U.S. 322, 336, 101 S.Ct. 2789, 2797, 69 L.Ed.2d 672 (1981). ¹

The key issue in this case is whether the deadlock over additional life and accidental death and dismemberment coverage concerns "administration" of the trust fund.

The fund was established pursuant to 29 U.S.C. Sec. 186(c)(5)(B), which provides in pertinent part: "in the event the employer and employee groups deadlock on the administration of such fund" they shall agree on an impartial umpire, or failing such agreement, a petition may be filed with the district court to appoint such an umpire. The instant trust fund agreement does not track the statutory language. On the contrary, it provides:

In the event that a disagreement or dispute should occur between the Trustees to the extent that the same shall constitute impossibility on the part of the Trustees to act upon the administration of the Fund involved the Trustees shall select a neutral person to act as an arbitrator to decide the issue resulting from a deadlock.

The employer trustees rely on the language of the agreement and the finding of the district court and contend that a deadlock on a resolution to increase the benefits does not constitute impossibility to act on the administration of the fund--that is, that the trustees are unfettered in their ability to administer the trust fund at the unchanged rate for benefits. Presumably, the argument is that only a deadlock which would hamstring the trustees from doing anything at all would meet the language of the agreement.

The union trustees contend that, aside from the question whether the agreement can restrict the statutory language, the agreement in essence conforms to the statutory language, and the meanings of the statute and the agreement are identical. We agree. There was a deadlock which rendered it impossible for the trustees to act upon an important aspect of the administration of the fund, an increase in benefits. That is all the agreement and the statute purport to require to activate the mechanism for arbitration. See Barrett v. Miller, 276 F.2d 429, 430 n. 1 (2d Cir.1960).

Three circuits have considered what constitutes a deadlock in administration. The Second Circuit has interpreted "administration" to include all issues which the trustees have the power to decide under the trust agreement. Mahoney v. Fisher, 277 F.2d 5 (2d Cir.1960); Barrett v. Miller, 276 F.2d 429 (2d Cir.1960); see also Singleton v. Abramson, 336 F.Supp. 754 (S.D.N.Y.1971). Under this broad interpretation the only dispute for which an arbitrator could not be appointed is one in which the trustees attempted to exceed their powers under the trust. Barrett v. Miller, supra.

The Eighth Circuit has stated that a deadlock in administration encompasses decisions relating to the day to day management of the trust fund but not extraordinary matters. Farmer v. Fisher, 586 F.2d 1226 (8th Cir.1978), held that a decision whether to sue an employer for unpaid contributions arose under the obligations of the collective bargaining agreement and not the trust fund agreement and was such an extraordinary matter excluded from arbitration. The Tenth Circuit has announced no generalized principle but has decided the issue on a case by case basis. In Bath v. Pixler, 283 F.Supp. 632 (D.Colo.1968), a district court held that the deadlocked issue there, whether the trust itself might lawfully be terminated and the funds disbursed, was "a legal controversy, not a dispute over the practical administration of the trust" and could not be resolved by an impartial umpire. In Ader v. Hughes, 570 F.2d 303 (10th Cir.1978), the court, distinguishing between ordinary and extraordinary matters, held that a deadlock on a resolution to amend the trust agreement was not a deadlock on administration and did not bring into play the arbitration requirements of the statute or the agreement.

For the following reasons, we hold that the deadlock in the instant case does concern administration of the trust fund. First, none of the foregoing precedents supports the opposing contention. In fact, the only reported case which we have found or which has been cited by the parties that is directly on point sustains the appointment of an impartial umpire as mandated by the statute. Petition of Feldman, 165 F.Supp. 190 (S.D.N.Y.1958).

Second, a series of our cases in other procedural contexts strongly implies that the instant case involves trust administration. These cases primarily involve determining federal jurisdiction under Sec. 302(e) of the Taft-Hartley Act, 29 U.S.C. Sec. 186(e), ² but incidentally concern the question...