Johnson v. Trustees of Western Conference of Teamsters Pension Trust Fund, s. 87-4347
| Decision Date | 11 July 1989 |
| Docket Number | 87-4355,Nos. 87-4347,s. 87-4347 |
| Parties | 11 Employee Benefits Ca 1919 Warren JOHNSON, Plaintiff-Appellant, v. The TRUSTEES OF the WESTERN CONFERENCE OF TEAMSTERS PENSION TRUST FUND, Defendants-Appellees. Thomas E. FARTHING, Plaintiff-Appellant, v. The TRUSTEES OF the WESTERN CONFERENCE OF TEAMSTERS PENSION TRUST FUND, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Ninth Circuit |
Hank McCurdy, Dobbins & McCurdy, Portland, Or., for plaintiff-appellant Warren Johnson.
Bob Whittaker, Lodi, Cal., for plaintiff-appellant Thomas E. Farthing.
Richard R. Carney and Stephen H. Buckley, Carney, Buckley, Kasameyer & Hays, Portland, Or., for defendants-appellees.
Appeal from the United States District Court for the District of Oregon.
Before SCHROEDER, POOLE and NELSON, Circuit Judges.
This appeal arises from a claim for refund of payments made on behalf of employees to an ERISA pension trust fund. The plaintiffs below were twenty-two owner/operator truck drivers who drove for Interstate Distributor, Inc. (Interstate). Between 1977 and September 1984, Interstate paid contributions into the Western Conference of Teamsters Pension Trust Fund (Fund) on plaintiffs' behalf. Article 14 of the Trust Fund Agreement provided during that period that In this litigation plaintiffs contend that the payments made during part of that period were in violation of that provision of the governing trust agreement.
Several different collective bargaining agreements were in force between 1977 and 1984. When the later agreements were in force, the pension contributions, although made by Interstate, were shown on the relevant forms as deductions from the employees' gross pay. Plaintiffs demanded refund of the contributions made under those collective bargaining agreements, contending that the employees rather than Interstate had in reality made the pension contributions, in violation of the Trust Fund Agreement provision.
After the fund administrator and the trustees of the fund refused plaintiffs' demand for refund of the contributions, the plaintiffs brought suit in district court for refund under the ERISA sections on mistake in contributions, 29 U.S.C. Sec. 1103(c)(2) (1982), and recovery of benefits, 29 U.S.C. Sec. 1132(a)(1)(B) (1982). The district court granted summary judgment against the plaintiffs, ruling that the trust agreement should not be construed as forbidding this particular form of employer contribution. We agree with the trustees' and the district court's construction of the trust agreement and affirm.
The facts are not in dispute. Interstate is a Washington corporation that hauls freight throughout the western states. It employs both "regular" drivers and "owner/operator" drivers. The regular drivers operate company-owned rigs, while the owner/operators own the tractors they drive and lease them to Interstate. More than 200 owner/operators worked for Interstate during the relevant period. All drivers were covered by successive collective bargaining agreements. Each of the successive collective bargaining agreements required Interstate to make pension contributions on behalf of the drivers; however, the pension contribution provision changed from agreement to agreement. Under the agreement in force from April 1976 through March 1979, the contributions were not treated as deductions from the drivers' gross pay. Under the agreement in force from April 1979 through January 1981, one-half of the amount of the contributions were shown as deductions. Under the agreement in force after January 1981, all pension contributions were shown as deductions. After September 1984, the Union was decertified and Interstate ceased to make pension contributions on behalf of the owner/operators. The plaintiffs take exception to the latter two agreements, claiming that the deduction mechanism for pension contributions violates the trust agreement.
In addition to the collective bargaining agreements, the owner/operators and Interstate entered into individual Transportation Service Agreements (TSAs), which were incorporated by reference into the collective bargaining agreements. The TSAs described the mechanism used in deducting the pension contribution from the owner/operators' gross pay. The TSAs authorized Interstate to "deduct from the [owner/operator's] final settlement of revenues, the current amount charged for the maintenance of a pension fund." The contributions were reflected in a monthly "settlement statement" issued by Interstate to each owner/operator. Interstate forwarded the contributions to the Fund Administrator, Northwest Administrators, Inc. (Northwest). Interstate did not treat the pension contributions as income or expenses. It did not take deductions for them on its tax returns.
After the collective bargaining agreements began to provide for deductions for pension contributions, the plaintiffs first applied under the terms of the trust to the Fund for refund of the pension contributions. The Fund had earlier requested an audit from Northwest in response to claims by employees other than the plaintiffs. In response to the plaintiffs' claims, the Fund requested a second audit from Northwest. Both audits concluded that the pension contributions deducted from the owner/operators' pay did not violate the trust agreement. The Fund denied the requests and the plaintiffs appealed to the Benefits Review Committee (BRC), a group of union and management trustees delegated power under the trust to deal with claims for refunds and for benefits. The BRC reviewed the relevant trust provisions and collective bargaining agreements, and concluded that the contributions at issue were not at odds with Article 14's requirement that "[a]ll benefits shall be provided solely out of the Trust Fund created by employer contributions." It affirmed Northwest's conclusion from the first audit that they were "payments on behalf of employees ... made pursuant to a valid collective bargaining agreement and therefore acceptable," and denied the appeal.
The plaintiffs then brought this suit in district court under 29 U.S.C. Secs. 1103 & 1132 for refund. The plaintiffs and the defendant Fund trustees submitted the case to the court on the basis of certain depositions, exhibits, and stipulated facts. The district court held in favor of the defendants. It ruled that Article 14 should be construed in light of the economic realities of the arm's-length negotiations between Interstate and the union over the terms of the collective bargaining agreements, terms which included the form of pension contributions for which the employer was responsible. The plaintiffs timely appealed; however, due to a deficiency in their notice of appeal, only plaintiffs Johnson and Farthing are considered appellants before this court. 1
Where, as here, an ERISA trust instrument vests discretionary power in the trustees to construe and administer the trust's terms, we review the trustees' interpretations of those terms in a 29 U.S.C. Sec. 1132(a)(1)(B) benefits denial suit for abuse of discretion. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. ----, 109 S.Ct. 948, 103 L.Ed.2d 80 (1989). The trustees abuse their discretion if they render decisions without any explanation, or construe provisions of the plan in a way that clearly conflicts with the plain language of the plan. Hancock v. Montgomery Ward Long Term Disability Trust, 787 F.2d 1302, 1307 (9th Cir.1986).
The plaintiffs contend that the BRC erred in deciding that the contributions made by the employer, while deducted from the owner/operators' pay, were proper payments by the employer on behalf of the employees. They contend that although...
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