Moriarty v. Glueckert Funeral Home, Ltd.
| Decision Date | 02 September 1998 |
| Docket Number | L,98-2131,Nos. 97-4239,No. 727,727,s. 97-4239 |
| Citation | 155 F.3d 859 |
| Parties | 136 Lab.Cas. P 10,235, Pens. Plan Guide (CCH) P 23947G Thomas J. MORIARTY, Trustee, on behalf of the Trustees of the Local Unionocal 727 I.B.T. Pension Trust Fund and Local 727 Trustees of the Teamsters Local Union 727 Health and Welfare Trust, Plaintiffs-Appellees, v. GLUECKERT FUNERAL HOME, LTD., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Charles Orlove, Karen I. Engelhardt (argued), Jacobs, Burns, Sugarman, Orlove & Stanton, Chicago, IL, for Plaintiffs-Appellees in No. 97-4239. Karen I. Engelhardt (argued), Jacobs, Burns, Sugarman, Orlove & Stanton, Chicago, IL, for Plaintiffs-Appellees in No. 98-2131.
Kenneth R. Dolin (argued), Gerard Andrew McInnis, Jenner & Block, Chicago, IL, for Defendant-Appellant.
Before CUMMINGS, RIPPLE and EVANS, Circuit Judges.
Thomas J. Moriarty ("Moriarty"), in his capacity as Trustee for the Teamsters Local Union No. 727 Pension Trust and the Teamsters Local Union No. 727 Health and Welfare Trust (the "Funds"), filed suit against Glueckert Funeral Home, Ltd. ("GFH") seeking to collect employer contributions to the Funds. The action was brought under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, and § 515 of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1132. After a bench
trial, the district court entered judgment in favor of the Funds 1 for unpaid contributions, liquidated damages, audit costs and interest in the amount of $366,423.25. GFH appeals, and, for the reasons set forth in the following opinion, we reverse the judgment of the district court and remand for further proceedings in light of this opinion.
Glueckert Funeral Home, Ltd. operates a funeral home in Arlington Heights, Illinois. John Glueckert, Sr., ("Glueckert") is GFH's President, founder and majority shareholder. 2 Glueckert runs GFH with his son, John, Jr., who is, like his father, a licensed funeral director and embalmer. In March 1989, GFH joined the Funeral Directors Services Association ("FDSA"), an association of approximately 250 funeral homes and related businesses. The FDSA, among its other activities, represents employers in the Chicago-area funeral home industry in collective bargaining negotiations with the International Brotherhood of Teamsters, Local No. 727 (the "Union"). 3 The Funds in this case are third-party beneficiaries of collective bargaining agreements ("CBAs") negotiated between the FDSA and the Union. The essence of the dispute before us is whether GFH, by virtue of joining the FDSA and continuing its membership in the association for several years, manifested its intent unequivocally to authorize the FDSA to act on its behalf in collective bargaining negotiations and to bind GFH to the resulting agreements. If GFH was so bound, then it was required to contribute to the Funds pursuant to the terms of certain CBAs. We therefore review the circumstances surrounding GFH's membership in the FDSA.
In 1988, Glueckert began to consider joining an association of funeral homes in order to remain current on business and legal developments affecting his business. Glueckert's testimony at trial indicates that he was concerned with staying abreast of legal issues in light of the increasingly regulated nature of his business. In response to GFH's inquiry about membership in the FDSA, Thomas Moriarty, the Executive Director of the FDSA, sent GFH an introductory letter on July 7, 1988, outlining the services FDSA provides to its members. That letter indicates that the FDSA is involved in monitoring government regulations affecting the funeral industry, supplying insurance for its members and providing continuing education-type programs for its members. Moreover, a brochure accompanying the letter stating "What FDSA Can Do For You" further described the association's services and activities. 4 The trial testimony of Moriarty established that it is not mandatory for a member of the FDSA to participate in any of these services or activities. These introductory materials sent to GFH are devoid of any mention of the Union or FDSA's role as a representative of the funeral homes in collective bargaining activities with the Union. However, also enclosed with the brochure and letter were six months of FDSA newsletters Glueckert and his son John, Jr. also met with Moriarty to discuss the possibility of joining the FDSA. At this meeting, Moriarty reportedly discussed the FDSA's activities and the benefits of membership in the organization. In addition, Glueckert asked Moriarty some questions regarding the details of GFH's membership in the FDSA. One question he had pertained to the color of the hearse that GFH used (blue); he was concerned that FDSA membership could require him to use a gray hearse. In addition, he asked whether he had to become a member of the Union if he joined the FDSA. Moriarty told him that he did not. 6 This question and answer are interpreted differently by the parties. The Funds' position, accepted by the district court, is that Glueckert's question indicated that GFH was aware that the FDSA conducted collective bargaining activities. Moreover, the Funds note that Moriarty's answer was true because the principal owner of a funeral home generally is not required to be in the Union. 7 In contrast, GFH views the exchange as an indication that membership in the FDSA did not necessarily entail involvement with the Union. Despite the disagreement over this statement, it is undisputed that nothing said at the meeting indicated that FDSA's alleged principal activity 8 was collective bargaining or that, by joining the FDSA, GFH agreed to be bound by the terms of CBAs negotiated by the FDSA. GFH submits that such information regarding membership in the FDSA would have been significant to it because none of GFH's employees were, or ever have been, members of the Union. In addition, such a requirement would have been inconsistent with Glueckert's knowledge of other funeral homes that operated without union employees but were members of the FDSA. 9
provided by Moriarty to give Glueckert an idea of the association's recent activities. Two of those newsletters contained references to the Union and the FDSA's role as a representative of the funeral directors in collective bargaining. 5 However, those references do not indicate that all members of the FDSA are purportedly bound by the results of those negotiations
Because the FDSA would enable him to keep current on regulatory and other matters, testified Glueckert, GFH decided to apply Despite these indications and the district court's finding to the contrary, however, GFH maintains that it was unaware throughout its membership that, by virtue of its membership, it was necessarily bound by the CBAs negotiated by the FDSA with the Union. The Funds note that, when GFH signed its membership application, it agreed to be bound by the FDSA's Constitution, By-laws, Rules and Regulations. However, no reference to collective bargaining activities can be found in the Constitution or the By-laws. 12 In addition, GFH never signed any document authorizing the FDSA to negotiate on its behalf.
for membership in the FDSA; that membership was approved on March 22, 1989. GFH was a member of the association until September 1994. During GFH's membership in the association, there were additional indications that FDSA was involved in collective bargaining activities. For example, GFH received the monthly FDSA newsletter. Some newsletters contained references to labor negotiations conducted by FDSA. In addition, John, Jr. ultimately became a member of the FDSA's Board of Directors in February or March 1994. As a director, John, Jr. was present at a July 20, 1994, meeting in which labor negotiations were discussed. 10 In addition to these references to the FDSA's collective bargaining activities, all members were sent copies of the labor agreements themselves. The cover letters to those agreements indicate that the agreements apply to "every member of the Association." 11
Although Glueckert attended membership meetings, no discussion of the Union or collective bargaining occurred at any of those meetings. Moreover, although John, Jr. attended meetings in 1994 at which labor negotiations were discussed, it was not clear from those meetings that all members were bound by those negotiations. In addition to the lack of evidence indicating that the FDSA made GFH aware of its position that GFH would be bound to the CBAs by virtue of its membership in the association, GFH points to facts surrounding its behavior that indicate that it never understood itself to be bound by the CBAs. For example, GFH notes that it has never applied the terms and conditions of employment in any CBA to its employees. In addition, GFH has paid for GFH-obtained health insurance and profit sharing plans for its employees throughout its membership in the FDSA--actions inconsistent with an understanding that such benefits were available to the employees under the CBAs. When GFH employees attended continuing education programs co-sponsored by the FDSA and the Union, the employees paid the enrollment fee required for non-Union members. Finally, as soon as GFH learned, in September 1994, that the FDSA's position was that all members were bound by the CBAs it negotiated, GFH immediately resigned from the association and John, Jr. resigned as a member of the Board.
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