Salem Laundry Co. v. New England Teamsters and Trucking Industry Pension Fund

• Decision Date: 28 September 1987
• Docket Number: No. 87-1113,87-1113
• Citation: 829 F.2d 278
• Parties: 8 Employee Benefits Ca 2670 SALEM LAUNDRY COMPANY, Plaintiff, Appellant, v. NEW ENGLAND TEAMSTERS AND TRUCKING INDUSTRY PENSION FUND, et al., Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

Page 278

829 F.2d 278

8 Employee Benefits Ca 2670

SALEM LAUNDRY COMPANY, Plaintiff, Appellant, v. NEW ENGLAND TEAMSTERS AND TRUCKING INDUSTRY PENSION FUND, et

al., Defendants, Appellees.

No. 87-1113.

United States Court of Appeals, First Circuit.

Argued July 31, 1987.

Decided Sept. 28, 1987.

Laurence J. Donoghue with whom Robert P. Morris and Morgan, Brown & Joy, Boston, Mass., were on brief, for plaintiff, appellant.

Gabriel O. Dumont, Jr., with whom James T. Grady and Grady, Dumont & Dwyer, Boston, Mass., were on brief for defendants, appellees.

Before BOWNES, TORRUELLA and SELYA, Circuit Judges.

TORRUELLA, Circuit Judge.

Salem Laundry Co., a Massachusetts corporation located in Salem, sold part of its business to Whyte's Laundry, Inc., a Massachusetts corporation located in Lynn, in a written agreement dated September 30, 1980. The issue before us on appeal is whether the district court erred in concluding that the parties had no prior, oral contract to effect the sale. The existence of an enforceable contract of sale on or before September 26, 1980, would relieve Salem of withdrawal liability on behalf of its former employees to the New England Teamsters and Trucking Industry Pension Fund. See 29 U.S.C. Secs. 1381 et seq. (1985).

In July 1980, John Hooper, president of Salem Laundry, approached Russell Goldsmith, president of Whyte's Laundry, about the possibility of selling a portion of Salem's business to Whyte's. Goldsmith told Hooper he was interested, provided certain conditions could be worked out, and that Hooper's suggested price was fine. Hooper and Goldsmith met three more times, in August and on September 16 and 19, and discussed and agreed upon increasingly more detailed aspects of the sale. Salem's attorney prepared the first written draft of the sales agreement in August. Whyte's attorney prepared a new draft on September 23, which he altered slightly on September 26 in response to a telephone conversation between Hooper and Goldsmith. Hooper and Goldsmith signed that agreement on September 30.

The truck drivers in the laundry delivery system sold to Whyte's had been represented by Local 42 of the Teamsters. As part of the collective bargaining agreement between Local 42 and Salem, Salem had been contributing to the Pension Fund on the employees' behalf for many years. Under the Multiemployer Pension Plan Amendments Act of 1980 ("MPPAA"), 29 U.S.C Secs. 1381 et seq. (1985), which amended the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Secs. 1001 et seq. (1985), employers that withdraw from a multiemployer pension fund, such as the Pension Fund here, are liable for withdrawal payments to offset the unfunded pension liability of covered employees. See generally Keith Fulton & Sons, Inc. v. New England Teamsters and Trucking Industry Pension Fund, 762 F.2d 1124 (1st Cir.1984), reh'g en banc, 762 F.2d 1137 (1985). Accordingly, the Pension Fund assessed a withdrawal liability of $173,831 on Salem in August 1981. Salem then filed this action in December 1981, seeking declaratory and injunctive relief from the withdrawal liability.

Salem's theory below was based on Sec. 558 of the Deficit Reduction Act of 1984, Pub.L. 98-369, which provided that no withdrawal liability would be assessed on employers that had a "binding agreement to withdraw" from a multiemployer pension plan on or before September 26, 1980. The United States District Court for the District of Massachusetts found that Salem did not have such an agreement, however, because neither Salem nor Whyte's could have enforced the sales agreement until it was signed on September 30, 1980.

Standard of Review

Salem argues that this court should review the trial court's finding as to the date of the sales agreement de novo, rather than under the "clearly erroneous" standard applicable to findings of fact. See Fed.R.Civ.P. 52(a). Because the only evidence offered on the date of the contract was through Salem's witnesses Hooper and Goldsmith, the company argues that the "facts" were uncontradicted, leaving only the legal question of whether those facts indicate a prior oral contract.

We disagree. "[I]t is a question of fact whether any particular conduct or actions imply a contractual understanding." Corbin on Contracts Sec. 18(B), at 21 (Kaufman supp. 1984); see Chedd-Angier Production Co. v. Omni Publications Int'l, Ltd., 756 F.2d 930, 935 (1st Cir.1985). In this case, the existence of a prior oral contract depended on the intentions of Hooper and Goldsmith. Regardless of whether one takes a more subjective, or a more objective, approach to intention, determining that intention involves considering the credibility of witnesses, weighing competing, plausible inferences that can be drawn from events and documents, separating the significant testimony and documentary evidence from the insignificant, and other "factual" inquiries that are better performed by the trial court, either with or without the help of a jury. See Nigro v. Conti, 319 Mass. 480, 66 N.E.2d 353, 354 (1946) (intention of parties is a question of fact); see also 1 Corbin Sec. 29, at 87-88 (1963) ("A transaction is complete when the parties mean it to be complete. It is a mere matter of interpretation of their expressions to one another, a question of fact."). RCI Northeast Services Division v. Boston Edison Co., 822 F.2d 199, 202 (1st Cir.1987) (it is the factfinder "who must ferret out the intent of the parties").

The Effective Date of the Contract

Parties do not become contractually bound until they mutually assent to bind themselves to an agreement. See 1 Williston on Contracts Sec. 18, at 32 (3d ed. 1954). Courts determine that mutual assent, not on the basis of what goes on inside the parties' heads, but rather on the basis of what they...