Trustees of So. Cal. Ibew-Neca v. Flores

• Decision Date: 27 March 2008
• Docket Number: No. 06-55812.,06-55812.
• Citation: 519 F.3d 1045
• Parties: TRUSTEES OF the SOUTHERN CALIFORNIA IBEW-NECA PENSION TRUST FUND, Plaintiff-Appellant, v. Herman FLORES, d/b/a BHF Electrical Contractors, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

519 F.3d 1045

TRUSTEES OF the SOUTHERN CALIFORNIA IBEW-NECA PENSION TRUST FUND, Plaintiff-Appellant, v. Herman FLORES, d/b/a BHF Electrical Contractors, Defendant-Appellee.

No. 06-55812.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted February 5, 2008.

Filed March 27, 2008.

J. David Sackman, Reich, Adell, Crost & Cvitan, Los Angeles, CA, for the plaintiff-appellant.

Marla B. Hendrickson, Tustin, CA, for the defendant-appellee.

Appeal from the United States District Court for the Central District of California; Florence Marie Cooper, District Judge, Presiding. D.C. No. CV-04-10011-FMC.

Before ALFRED T. GOODWIN, DIARMUID F. O'SCANNLAIN, and WILLIAM A. FLETCHER, Circuit Judges.

OPINION

GOODWIN, Circuit Judge:

The Trustees of the Southern California IBEW-NECA Pension Trust Fund ("Trustees") appeal the district court's judgment against them in their action to collect delinquent trust fund contributions from employer Herman Flores. The Trustees contend that the district court erred by holding that the term "covered employees" in the relevant collective bargaining agreements is ambiguous and by considering extrinsic evidence of the parties' oral representations. We hold that the collective bargaining agreements require Flores to make benefit contributions for all electrical workers engaged in project work. For this reason, we reverse and remand for further proceedings.

BACKGROUND

In late August 2003, the Los Angeles Unified School District awarded a construction contract to general contractor DJM/Borbon for the Commonwealth Avenue and Hoover Elementary School Safety and Technology Upgrades Project. Flores, an individual doing business as BHF Electrical Contractors ("BHF"), worked as an electrical subcontractor on the project.

On October 1, 2003, Flores signed a Subscription Agreement with Local Union 11 of the International Brotherhood of Electrical Workers in which he agreed to make pension trust fund contributions on behalf of his employees. In addition to the Subscription Agreement, Flores' obligation to make trust fund contributions was regulated by a Project Stabilization Agreement ("PSA"), the Local Union 11 Inside Wiremen's Agreement ("IWA") and other trust agreements.

Flores began work on the project in October 2003. Sections 4.6 and 4.8 of the PSA obligated Flores to hire all project workers, excluding his core employees, from the union's referral system, unless the referral system did not fulfill Flores' request within forty-eight hours. In October and November 2003, Flores made several calls to union officials, requesting union workers. The union did not refer workers until December 8, 2003. In the meantime, Flores used his own workforce of nonunion employees for project work.

Flores made no contributions to the pension trust fund on behalf of his employees before December 8, 2003. The Trustees later conducted an audit of BHF by comparing the employer's monthly payroll reports with its certified payroll. The audit discovered unpaid contributions for project work performed before December 8, 2003, by electricians other than Flores himself.

The Trustees filed this action against Flores in federal district court to collect delinquent trust fund contributions under section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), and section 502(e)(1) of the Employee Retirement Income Security Act, 29 U.S.C. § 1132(e)(1). The district court conducted a three-day bench trial.

On March 13, 2006, the district court entered judgment in favor of Flores. The court held that the PSA is ambiguous because "it never defines the term `covered workers' and never expressly requires contributions for nonunion workers." After considering parol evidence, the district court concluded that "defendant's Subscription Agreement was not in effect and his obligations under the PSA did not arise until December 8, 2003."

On May 10, 2006, the district court denied the Trustees' motion to alter or amend the judgment. This appeal followed.

STANDARD OF REVIEW

We review the interpretation of contract provisions de novo. Operating Eng'rs Pension Trusts v. B & E Backhoe, Inc., 911 F.2d 1347, 1351 (9th Cir.1990) (citing Kemmis v. McGoldrick, 706 F.2d 993, 996 (9th Cir.1983)).

DISCUSSION

The Trustees contend that the district court erred by holding that the term "covered employees" is ambiguous in the PSA. They argue that the PSA's language, structure, and purpose unambiguously require Flores to pay benefit contributions for electrical workers engaged in project work, including the nonunion workers he employed prior to December 8, 2003, and after accepting the contract. We agree.

Written terms are ambiguous only if multiple reasonable interpretations exist. 11 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 30:4 (4th ed.1999). We interpret written terms in the context of the entire agreement's language, structure, and stated purpose. See Huber, Hunt & Nichols, Inc. v. United Ass'n of Journeymen & Apprentices of the Plumbing & Pipefitting Indus., Local 38, 282 F.3d 746, 752 (9th Cir.2002). Litigants cannot isolate terms of a collective bargaining agreement in order to create an ambiguity where none exists. See id. at 753-54.

In this case, the collective bargaining agreements cover both union and nonunion employees. Section 3.7 of the PSA extends coverage to "construction craft employees" and provides a detailed list of excluded job classifications. For example, the PSA does not apply to "office or clerical employees, draftspersons, supervisors, timekeepers, messengers, guards, inspectors, or any other employees above the classification of general superintendent." When a collective bargaining agreement defines covered employees by job classification, it generally covers "all employees within those classifications, regardless of union membership." Teamster's Local 348 Health & Welfare Fund v. Kohn Beverage Co., 749 F.2d 315, 318 (6th Cir.1984).

The recognition clauses in both the PSA and the IWA also show that the agreements cover all electrical workers engaged in project work, regardless of union status. "The presence in the agreement of a recognition clause designating the union as the exclusive bargaining agent for all employees indicates that fringe benefit contributions are required for both union and non-union members." Id. (citing Audit Servs., Inc. v. Rolfson, 641 F.2d 757, 761 (9th Cir.1981); Manning v. Wiscombe, 498 F.2d 1311, 1313 (10th Cir.1974)).

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