Southern California Retail Clerks Union and Food Employers Joint Pension Trust Fund v. Bjorklund

• Decision Date: 21 March 1984
• Docket Number: 83-5852,Nos. 83-5848,s. 83-5848
• Citation: 728 F.2d 1262
• Parties: 115 L.R.R.M. (BNA) 3529, 100 Lab.Cas. P 10,902, 5 Employee Benefits Ca 1285 SOUTHERN CALIFORNIA RETAIL CLERKS UNION AND FOOD EMPLOYERS JOINT PENSION TRUST FUND; Retail Clerks Unions and Food Employers Benefit Fund, Plaintiffs-Appellees, v. Erling T. BJORKLUND, individually and d/b/a Muzio's Market, Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1262

728 F.2d 1262

115 L.R.R.M. (BNA) 3529, 100 Lab.Cas. P 10,902,

5 Employee Benefits Ca 1285

SOUTHERN CALIFORNIA RETAIL CLERKS UNION AND FOOD EMPLOYERS JOINT PENSION TRUST FUND; Retail Clerks Unions and Food Employers Benefit Fund Plaintiffs-Appellees, v. Erling T. BJORKLUND, individually and d/b/a Muzio's Market Defendant-Appellant.

Nos. 83-5848, 83-5852.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Dec. 9, 1983.

Decided March 21, 1984.

Stuart Libicki, Schwartz, Steinsapir, Dohrmann, Krepack, Sommers & Edelstein, Los Angeles, Cal., for plaintiffs-appellees.

Gary W. Robinson, Mullen, McCaughey & Henzell, Santa Barbara, Cal., for defendant-appellant.

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

Before CHAMBERS and SNEED, Circuit Judges, and MARQUEZ, ^* District Judge.

SNEED, Circuit Judge:

The Trust Funds brought two suits to recover delinquent trust fund contributions required under collective bargaining agreements signed by Bjorklund, an employer. The district court granted summary judgment in favor of the plaintiff Trust Funds in both suits and Bjorklund appealed. We affirm.

I. FACTS

Bjorklund owns a small grocery in San Luis Obispo, California. He signed collective bargaining agreements with the Retail Clerks Union, Local 899 (currently known as Local 899, United Food and Commercial Workers Union) covering the periods July 28, 1975, through July 30, 1978, and July 31, 1978, through July 26, 1981. These collective bargaining agreements incorporated the terms and conditions of certain multiemployer trust agreements establishing the plaintiff-appellee Trust Funds. Thus, by signing the collective bargaining agreements, Bjorklund agreed to make pension, health, and welfare contributions to the Trust Funds based upon the number of hours his employees worked.

Bjorklund alleges that he was fraudulently induced into signing the collective bargaining agreements. He claims that Harry Warren, an officer of the union, secured his signature on the collective bargaining agreements by falsely telling him that he would be eligible for a pension under the agreement. ¹ Bjorklund alleges that Warren falsely assured him that he would be required to make contributions only for himself and his only full time employee, his The Trust Funds brought these suits under the Labor Management Relations Act (LMRA) and the Employee Retirement Income Security Act (ERISA) to collect contributions for the hours worked by these employees. The plaintiff Trust Funds moved for summary judgment. The district court initially denied this motion because it believed that there was a genuine issue of material fact concerning whether Warren was acting as an agent of the plaintiff Trust Funds when he allegedly fraudulently induced Bjorklund to enter into the collective bargaining agreement. Later, however, the district court modified its order and granted the Trust Funds' motion for summary judgment because it discovered that the issue of Warren's agency was not included in the pretrial orders in the suits. As a consequence, the court refused to consider it in ruling on the motion for summary judgment. The parties stipulated to the amount of damages and judgment was entered on behalf of the Trust Funds.

son. Bjorklund made contributions only for himself and his son. He made no contributions for the hours worked by his part-time employees.

On appeal, Bjorklund advances two arguments. ² First, he maintains that summary judgment was improper because the material issue of fact concerning whether Warren was acting as an agent of the Trust Funds had been raised. Second, he argues that even if Warren was an agent only of Local 899 and not an agent of the Trust Funds, the Trust Funds should be legally prevented from recovering because Bjorklund's signatures on the collective bargaining agreements had been fraudulently induced by Local 899.

II. THE TRUST FUND FRAUD ISSUE

Bjorklund contends that summary judgment was improper because a review of the entire record in the case would have revealed several references to the issue of Warren's status as an agent of the Trust Funds. These references, Bjorklund asserts, should have indicated to the district court that he intended to show that Warren was an agent of the Trust Funds. Nonetheless, the pretrial orders do not contain even a colorable reference to this issue and Bjorklund made no request to have the orders modified.

Under Rule 16(e) of the Federal Rules of Civil Procedure, a pretrial order controls the subsequent course of the action unless modified at the trial to prevent manifest injustice. We have consistently held that issues not preserved in the pretrial order have been eliminated from the action. See United States v. Joyce, 511 F.2d 1127, 1130 n. 1 (9th Cir.1975). Thus, Bjorklund's failure to preserve the issue of whether Warren was acting as an agent of the plaintiff Trust Funds prevents him from asserting that this is a material issue of fact that precludes summary judgment. The existence of references to this issue in the record of the case compiled before the pretrial orders is irrelevant. The very purpose of the pretrial order is to narrow the scope of the suit to those issues that are actually disputed and, thus, to eliminate other would-be issues that appear in other portions of the record of the case.

Of course, Rule 16 allows district courts to modify pretrial orders "to prevent manifest injustice." Fed.R.Civ.P. 16(e). Bjorklund did not request a modification to the pretrial orders, however. He cannot now maintain that the agency issue was before the district court. See L & E Co. v. United States ex rel. Kaiser Gypsum Co., 351 F.2d 880, 882 (9th Cir.1965) (because no request for modification of the pretrial order was made, an issue that did not appear in the

pretrial order was no longer an issue in the case).

III. THE UNION FRAUD ISSUE

Bjorklund contends that Warren, acting as an officer of Local 899, induced him into entering the initial agreement by misrepresenting his eligibility for a pension under the agreement. The lower court held that fraud by the union, as opposed to fraud by a trust fund itself, can not serve as an affirmative defense to a trust fund collection action.

Under traditional contract law, the Trust Funds, as third party beneficiaries of the collective bargaining agreements, would be subject to any contract defenses generally available against the contracting parties themselves. But the traditional contract law does not apply in full force in suits brought under the LMRA and ERISA to collect delinquent trust fund contributions. See Chicago District Council of Carpenters Pension Fund v. Dombrowski, 545 F.Supp. 325, 326 (N.D.Ill.1982). Under Lewis v. Benedict Coal Corp., 361 U.S. 459, 80 S.Ct. 489, 4 L.Ed.2d 442 (1960), and a section of the Multiemployer Pension Plan Amendments of 1980, the range of defenses to such a suit is severely limited.

In Benedict Coal, the employer, sued by trustees for delinquent contributions, argued that the union had violated the no-strike clause of the contract that established the trust fund. The employer attempted to set off any damages caused by the strike against any delinquent contributions it owed the trust fund. The Supreme Court rejected this position by...