Rose v. Volvo Const. Equipment North America, Inc.

• Decision Date: 17 March 2008
• Docket Number: Case No. 1:05 CV 168.
• Citation: 542 F.Supp.2d 751
• Parties: Isaac ROSE, et al., Plaintiffs v. VOLVO CONSTRUCTION EQUIPMENT NORTH AMERICA, INC., Defendant.
• Court: U.S. District Court — Northern District of Ohio

542 F.Supp.2d 751

Isaac ROSE, et al., Plaintiffs v. VOLVO CONSTRUCTION EQUIPMENT NORTH AMERICA, INC., Defendant.

Case No. 1:05 CV 168.

United States District Court, N.D. Ohio, Eastern Division.

March 17, 2008.

Joyce Goldstein, Cleveland, OH, for Plaintiffs.

Fred Seleman, Thomas H. Barnard, Jr., Cleveland, OH, for Defendant.

ORDER

SOLOMON OLIVER, JR., District Judge.

On February 1, 2005, Plaintiffs Isaac Rose, Peggy Knox, Joseph Henderson, Wilbert Whitt, Opal Whitt, Andrew Bergant, Jr., A.C. Wade, and Metro Burtyk, on behalf of themselves and all others similarly situated, along with International Union, and the United Automobile, Aerospace, and Agricultural Implement Workers of America ("UAW") (together, "Plaintiffs") filed the above-captioned action against Defendarit Volvo Construction Equipment North America, Inc. ("Defendant" or "VCENA"). After Plaintiffs amended their Complaint by withdrawing all individual claims for monetary damages (see Third Amended Compl. ("TAC"), ECF No. 138), the court certified the instant suit as a class action for declaratory and injunctive relief. (Order, ECF No. 175.) VCENA filed third-party claims against Euclid-Hitachi Heavy Equipment, Inc. ("EHHE"), Hitachi Construction Machinery ("HCM"), Hitachi Construction Manufacturing Ltd. ("HTM"), and Deere-Hitachi Construction Machinery Corp. ("Deere-Hitachi") for declaratory judgment and damages. Upon separate motions from each of the Defendants, the court stayed the third-party claims pending arbitration. (ECF No. 174.)

Plaintiffs comprise a class of hourly-paid retirees and spouses, surviving spouses, and dependents of retirees. Plaintiffs allege that VCENA violated Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and Section 502 of the Employee Retirement Income, Security Act ("ERISA"), 29 U.S.C. § 1132. Specifically, Plaintiffs allege that VCENA breached the parties' Collective Bargaining Agreement ("CBA") to provide lifetime, fully-funded health care insurance benefits to the retirees, spouses, surviving spouses, and eligible dependents of retirees as well as lifetime, fully-funded life insurance benefits to retirees. Plaintiffs seek declaratory judgment and injunctive relief.

Now pending before the court are Plaintiffs' Motion for Summary Judgment (ECF No. 155), Defendant's Motion for Summary Judgment (ECF No. 156); Plaintiffs' Motion for Preliminary Injunction (ECF No. 182), and Defendant's Motion for Order Striking Plaintiffs' Affidavits or, in the Alternative, for Leave to Depose Affiants and Leave to File Surreply ("Motion to Strike") (ECF No. 195). For the reasons set forth below, Plaintiffs' Motion for Summary Judgment (ECF No. 155) is granted, Defendant's Motion for Summary Judgment (ECF No. 156) is denied, Plaintiffs' Motion for Preliminary Injunction (ECF No. 182) is denied as moot, and Defendant's Motion to Strike (ECF No. 195) is denied as moot.

I. FACTS AND PROCEDURAL HISTORY

The court has already set out the general factual background of the within case in a previous Order dated March 21, 2007, 2007 WL 893049. That Order states, in relevant part:

Plaintiffs maintain that VCENA and/or various other corporate entities operated facilities in Euclid, Ohio, involved with heavy truck manufacturing, engineering, and testing (the "Euclid Facility"). The individual Plaintiffs allege they are retirees, retiree spouses, surviving spouses or dependants of retirees from the Euclid Facility, who retired prior to January 1, 1987. While the Plaintiff retirees were employed at the Euclid Facility, the UAW and UAW Local 70, or its predecessor UAW Local 426 (collectively, the "Union"), served as their exclusive bargaining representative.

In 1984, Defendant VCENA, operating under the name of Clark Michigan Company ("Clark"), purchased the assets of the Euclid Facility, involved with heavy truck manufacturing, engineering, and testing. In 1994, Defendant VCENA, then operating under the name of "VME Americas Inc." ("VME"), entered into a joint venture agreement with Hitachi Construction Machinery ("HCM") to create Euclid-Hitachi Heavy Equipment, Inc. ("EHHE") and EHHE's wholly-owned Canadian subsidiary, Hitachi Construction Manufacturing Ltd. ("HTM"). EHHE was to operate the Euclid Facility. Between 1994 and 2000, VCENA transferred its interest in EHHE to HCM, until EHHE became a wholly-owned subsidiary of HCM in 2000. Sometime after 2001, the Euclid Facility was controlled by HTM, which operated the facility through one of its branches or divisions called the Euclid-Hitachi Technical Center ("EHTC").

While operating under the name of Clark, Plaintiffs allege that VCENA was bound by a collective bargaining agreement with the Union, effective [from] 1983 to 1986 (the "1983 CBA"). (See Third Amended Complaint ("TAC"), [] ECF No. 138.) The 1983 CBA allegedly contained a section entitled, "Pension Plan, Insurance Program and Supplemental Unemployment Benefit Plan," which stated that the terms of the healthcare and life insurance benefits were contained in a series of Supplemental Agreements. [See 1983 CBA at 144, ECF No. 144.] [According to Plaintiffs,] [t]he Supplemental Agreements provided for an insurance program that guaranteed retirees and their spouses, surviving spouses, and eligible dependents fully paid healthcare benefits for life. [See Supplemental Agreements, at 22-24-B, 96-B, and 97-98-B, ECF No. 145. Plaintiffs also contend that the insurance program set forth in the Supplemental Agreements also guaranteed retirees fully paid life insurance benefits for life. (See id. at Art II, 28-84-B.)] Plaintiffs maintain that all subsequent collective bargaining agreements with HTM and its predecessors, including VCENA operating as Clark and VME, guaranteed retirees, their spouses and dependents the same coverage that they received under the 1983 CBA.

In a letter dated January 12, 2005, all retirees and their spouses, surviving spouses, and dependents were informed that their benefits would be cancelled as of February 28, 2005. (See TAC, Ex. 9 (January 12, 2005 Form Letter).) The letter stated that EHHE was going out of business and the current retiree life and healthcare benefits would terminate on February 28, 2005. (Id.) Plaintiffs allege that VCENA was obligated to provide them with "vested lifetime retiree health care and life insurance benefits" and that VCENA has breached this obligation. (See TAC ¶¶ 64-66.)

(Order, ECF No. 175, at 2-4.)

On February 9, 2005, the UAW and EHHE and HCM executed a Retiree Benefit Agreement ("RBA"), under which EHHE, VCENA's successor, and HCM agreed to continue funding the same health care and life insurance benefits to hourly-paid retirees and their dependents through March 31,2005, and thereafter to contribute funds through an independent Voluntary Employees' Beneficiary Association ("VEBA"), which was established under Section 501(c)(9) of the Internal Revenue Code. (TAC ¶¶ 42-45.) According to Plaintiffs, the VEBA trust was intended to settle Plaintiffs' claims against the participating entities and to provide temporary benefits to Plaintiffs pending resolution of the instant lawsuit, which seeks lifetime benefits, with VCENA. According to Defendant, Plaintiffs released VCENA from liability through Plaintiffs' settlement agreement with EHHE. On August 24, 2006, both parties moved for summary judgment, arguing that the parties' intention to vest (in Plaintiffs' view) or not vest (in Defendant's view) lifetime, fully-funded benefits is clear from the unambiguous language of the CBA or, alternatively, through extrinsic evidence.

On August 3, 2007, Plaintiffs filed a Motion for Preliminary Injunction (ECF No. 182), seeking temporary relief against VCENA, on the ground that the trustees to the VEBA trust had reduced Plaintiffs' insurance benefits in order to extend the life of the trust due to VCENA's failure to pay lifetime benefits. Defendant then filed a Motion to Strike (ECF No. 195) the affidavits that Plaintiffs submitted with their Reply in Support of Motion for Preliminary Injunction.

II. SUMMARY JUDGMENT STANDARD

Federal Rule of Civil Procedure 56(c) governs summary judgment motions and provides:

The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law ....

In reviewing summary judgment motions, this court must view the evidence in a light most favorable to the non-moving party to determine whether a genuine issue of material fact exists. Adickes v. S.H. Kress & Co., 398 U.S. 144, 153, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970); White v. Turfway Park Racing Ass'n Inc., 909 F.2d 941, 943-44 (6th Cir.1990). A fact is "material" only if its resolution will affect the outcome of the lawsuit. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Determination of whether a factual issue is "genuine" requires consideration of the applicable evidentiary standards. Thus, in most civil cases the Court must decide "whether reasonable jurors could find by a preponderance of the evidence that the [nonmoving party] is entitled to a verdict." Id. at 252, 106 S.Ct. 2505. However, "[c]redibility judgments and weighing of the evidence are prohibited during the consideration of a motion for summary judgment." Ahlers v. Schebil, 188 F.3d 365, 369 (6th Cir.1999).

Summary judgment is appropriate whenever the non-moving party fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial. Celotex Corp. v. Catrett, All U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Moreover, "the trial court no longer has a duty to search the entire record to establish that it is bereft of a genuine...