Trs. of the Operating Eng'rs Pension Trust v. Smith-Emery Co.

• Decision Date: 02 November 2012
• Docket Number: No. CV 09–1476–CAS (VBKx).,CV 09–1476–CAS (VBKx).
• Citation: 906 F.Supp.2d 1043
• Parties: TRUSTEES OF the OPERATING ENGINEERS PENSION TRUST, et al. v. SMITH–EMERY COMPANY, INC.
• Court: U.S. District Court — Central District of California

906 F.Supp.2d 1043

TRUSTEES OF the OPERATING ENGINEERS PENSION TRUST, et al.

v.SMITH–EMERY COMPANY, INC.

No. CV 09–1476–CAS (VBKx).

United States District Court, C.D. California.

Nov. 2, 2012.

Marija Kristich Decker, Laquer Urban Clifford & Hodge LLP, Pasadena, CA, for Trustees of the Operating Engineers Pension Trust, et al.

David B. Simpson, Christina Rose Mitchell, Gregory D. Wolflick, Steven H. Taylor, Wolflick and Simpson, Glendale, CA, Frederick Scott Page, George E. Preonas, Holger G. Besch, Kamran Mirrafati, Seyfarth Shaw LLP, Los Angeles, CA, for Smith-Emery Company, Inc.

(In Chambers:) CROSS–MOTIONS FOR SUMMARY JUDGMENT AND PARTIAL SUMMARY JUDGMENT

CHRISTINA A. SNYDER, Judge.

Catherine Jeang, Deputy Clerk.

I. INTRODUCTION

This is an ERISA trust fund collection suit. Defendant Smith–Emery Company (“SEC”) is a signatory to a collective bargaining agreement (“CBA”) with the International Union of Operating Engineers, Local Union No. 12 (“Local 12”). Defendant and Local 12 perform field inspection work on construction projects within Local 12's geographic jurisdiction. Pursuant to the CBA, defendant must pay fringe benefitcontributions for the hours worked by covered employees to four distinct fringe benefit trust funds.

On March 2, 2009, plaintiffs Trustees of the Operating Engineers Pension Trust, Trustees of the Operating Engineers Health and Welfare Fund, Trustees of the Operating Engineers Vacation Holiday Savings Trust, and Trustees of the Operating Engineers Training Trust (“Trustees”) initiated this suit to collect ERISA trust fund contributions from defendant Smith–Emery Corporation (“SEC”), pursuant to 29 U.S.C. §§ 1132(g) and 1145 (§ 515 of ERISA). Dkt. No. 1. Plaintiffs allege that based upon their audit of the hours worked from March 1, 2003, through December 31, 2009, defendants have failed to make all the required trust fund contributions. Defendant filed its answer on March 25, 2009. Dkt. No. 5.

After protracted and contentious discovery, plaintiffs filed a motion for summary judgment, or in the alternative partial summary judgment, on August 2, 2012. Dkt. No. 80. Defendants filed a motion for partial summary judgment on the same date. Dkt. No. 79. On August 20, 2012, defendant and plaintiffs filed their respective oppositions. Dkt. No. 103; 113. On August 27, 2012, both parties filed their respective replies. Dkt. No. 116; 121. The Court held a hearing on September 10, 2012 and requested supplemental briefing on the “coverage issue,” described more fully below. The parties submitted their respective responses on September 21, 2012. Dkt. Nos. 125, 126. After considering the parties' arguments, the Court finds and concludes as follows.

II. BACKGROUNDA. Origins of the Current Dispute

Since 1969, SEC and Local 12 have entered into a series of collective bargaining agreements (“CBA”) governing working conditions, wages, hiring, and fringe benefit contributions, among other items. At issue here are three CBAs covering the period from March 1, 2003 until December 31, 2009 for which the Trusts claim SEC owes additional contributions: the 2001 Agreement, the 2004 Agreement, and the 2007 Agreement. See Pls.' Separate Statement of Uncontroverted Facts (“SS”) 5–7.¹

Pursuant to the relevant CBAs, SEC pays fringe benefit contributions to the Trusts based on the number of hours worked by or paid to covered employees under the agreement. Pls.' SS 19. Much of this dispute turns on who is a covered employee under the CBA, and what work is covered, such that fringe benefit contributions must be paid to the Trusts. Both parties assert that the plain language of the CBAs unambiguously supports their respective interpretations.

In October and November of 2005, and again in September 2008, the Trustees demanded that SEC submit to audits for the work performed from March 2003 forward. Pls.' SS 25. SEC allegedly refused to comply, leading to the instant lawsuit. Pls.' SS 26, 28.²

After piecing together various forms of evidence, Trustees conducted an audit of the available records and determined that SEC allegedly owes the Trusts unpaid fringe benefit contributions relating to work performed from March 1, 2003 through December 31, 2009.³ Trustees then issued a revised audit on June 29, 2012. See Def.'s Ex. 4A–C.⁴ This revised audit is divided into parts A through K, all covering different alleged deficiencies in contributions. See id.; Pls.' SS 37–39. The revised audit removes parts D, I, and J entirely. Part A of the revised audit covers clerical errors resulting in underpayment. Part B seeks contributions for travel hours by certain employees on certain dates. Part C pertains to unpaid holiday hours. Parts E, F, and G seek contributions for employees or sub-employees of SEC for whom plaintiffs allege, and defendants deny, are covered by the relevant CBA. Part H seeks contributions for work performed by SEC for the Los Angeles Unified School District, which plaintiffs allege was performed pursuant to a Project Stabilization Agreement mandating certain contributions. Finally, part K of the audit pertains to “cash disbursements” allegedly made to other inspection companies who were performing covered work within Local 12's jurisdiction. In sum, plaintiffs seek contributions for 111,414.50 hours of work which purportedly went unreported, for a total of $920,994.53 in unpaid fringe benefit contributions. Id. Defendant disputes both the categories of hours claimed as “covered” under the agreement and the total figure claimed by the Trustees in its motion.

Pursuant to 29 U.S.C. § 1132(g)(2), plaintiffs also seek interest on these unpaid contributions, liquidated damages, audit fees, and attorney's fees and costs of suit. Pls.' Mot. at 14.

B. The Disputed CBAs

The parties dispute who and what work is covered under the relevant CBAs. The relevant portion of each CBA begins with Article I, “Coverage,” the terms of which are identical for all three CBAs at issue except as noted below. Article I, section A states:

This Agreement shall apply to all field work inspection by Building/Construction Inspectors of concrete, steel, masonry work and non-destructive and or/grading inspection performed by employees of the Employer in the following Southern California Counties: Imperial, Inyo, Kern, Los Angeles, Mono, Orange, Riverside, San Bernadino, San Diego, San Luis Obispo, Santa Barbara and Ventura.

Plaintiff's Ex. 1 at 2; Def's Ex. 1 at 2. Article I, Section B then sets forth the definition of a “Building/Construction Inspector”:

A Building/Construction Inspector as used in the Agreement is defined as follows:

1. A Licensed and/or Registered Building/Construction Inspector in those areas where Building Officials/Departments license Building Inspectors.

2. In those areas where Building/Construction Inspectors are not licensed by Building Officials/Departments, a Building/Construction Inspector is an inspector who performs the same duties as a Licensed and/or Registered Deputy Building Inspector.

It is mutually agreed that the term “Building/Construction Inspector” shall apply to and cover all forms of construction inspection work, however such work may be referred to by the Employer. This shall include all forms of inspection work described in this Agreement, and shall also specifically include such work where it is referred to by utilization of such terms as “quality control” or “quality assurance”, so long as there is actual work being performed on a construction jobsite of the type described in this Agreement including Appendix B.

3. Any employee or sub-employer performing work covered by this Agreement including but not limited to Ultrasonic Testing, Magnetic Particle Testing, and Grading Inspector. Penetrant Testing, Spray Applied Fireproofing, Concrete Batch Plant, Asphaltic Concrete, Earthwork, Grading Inspector Glu Lam Truss Joints, Load Testing for Ceiling Anchors, Shear Walls and Floor Systems used as Shear Diaphrams. Included shall be all new or existing construction, alteration, demolition, repair work or any seismic evaluation.

Id.⁵ The aforementioned Appendix B sets forth “general descriptions of inspection and testing work covered by this Agreement,” stating further that:

Although all work described hereinbelow is covered by this Agreement, any similar duties performed by employees in the classifications covered by this Agreement, or other tasks pertaining to the completion of the work described hereinbelow, shall be covered by this Agreement even if not set forth in this Agreement.

Id. The categories of work covered in Appendix B are: reinforcing steel, pre- and post-tensioned concrete, structural steel and welding inspection, nondestructive testing, glu lam and truss joints, truss-type joint construction, shear walls and floor systems, concrete batch plants, spray-applied fireproofing, structural masonry, shotcrete, and concrete. Id. Appendix B, 22–37.

III. LEGAL STANDARDA. Summary Judgment

Summary judgment is appropriate where “there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The moving party has the initial burden of identifying relevant portions of the record that demonstrate the absence of a fact or facts necessary for one or more essential elements of each claim upon which the moving party seeks judgment. See Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

If the moving party meets its initial burden, the opposing party must then set out specific facts showing a genuine issue for trial in order to defeat the motion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see alsoFed.R.Civ.P. 56(c), (e). The nonmoving party must not simply rely on the pleadings and must do more than make “conclusory allegations [in] an affidavit.” Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); see also Celotex, 477...