Enos v. Union Stone, Inc.

Filing

OPINION issued by Sandra L. Lynch, Chief Appellate Judge; Juan R. Torruella, Appellate Judge and Richard Stearns, U.S. District Judge. Published. [12-2480]

Case: 12-2480

Document: 00116596398

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Date Filed: 10/15/2013

Entry ID: 5771783

United States Court of Appeals
For the First Circuit
No. 12-2480
PAUL ENOS,
Chairman of the Rhode Island Bricklayers Benefit Funds,
Plaintiff, Appellee,
v.
UNION STONE, INC.,
Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF RHODE ISLAND
[Hon. Mary M. Lisi, U.S. District Judge]

Before
Lynch, Chief Judge,
Torruella, Circuit Judge,
and Stearns,* District Judge.

Andrew J. Tine with whom Law Offices of Andrew J. Tine was on
brief for appellant.
Karl J. Gross with whom O'Reilly, Grosso & Gross, P.C. was on
brief for appellee.

October 15, 2013

*

Of the District of Massachusetts, sitting by designation.

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STEARNS, District Judge.

Date Filed: 10/15/2013

Entry ID: 5771783

This is an appeal of a final

judgment awarding the Rhode Island Bricklayers Benefit Funds ("the
Funds" or "the Rhode Island Funds") fringe benefit contributions
that Union Stone, Inc. failed to make for work performed in
Massachusetts and Connecticut by members of the International Union
of Bricklayers and Allied Craftworkers Local #1 Rhode Island ("the
Union" or "the Rhode Island Bricklayers Union").

Finding no merit

in Union Stone's arguments on appeal, we affirm.
I.
Union

Stone

is

a

Background
party

to

a

collective

bargaining

agreement ("CBA") with the Rhode Island Bricklayers Union.

Under

the terms of the CBA, Union Stone is required to make benefit
contributions to the Union members' pension funds.

When Union

Stone employs member bricklayers on out-of-state jobs, typically in
Massachusetts and Connecticut, it is obligated to make the benefit
payments to affiliate pension funds in those states. The affiliate
funds then transfer the payments to the Rhode Island Funds for the
members' account.

Union Stone is also obligated by the CBA to

maintain books and records substantiating the payments.
Paul Enos, the Chairman of the Trustees of the Rhode
Island Funds, sued Union Stone in the Rhode Island District Court
pursuant to the Employment Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. § 1132, and the Labor Management Relations
Act, id. § 185, alleging that Union Stone had failed to pay the

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full

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amount

due

for

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work

Massachusetts and Connecticut.

Date Filed: 10/15/2013

performed

by

Union

Entry ID: 5771783

members

in

The district court entered partial

summary judgment for the Funds, awarding the contributions that
were agreed to be owing for members' labor in Massachusetts.
Because

there

were

disputes

about

the

amount

owed

for

work

performed in Connecticut, the court set a bench trial for June 7,
2012.
On the morning of trial, Union Stone's counsel presented
the

Funds'

Connecticut

attorney
funds

in

with
an

copies
amount

of

checks

that

made

ostensibly

out

to

the

covered

the

outstanding contributions owed to the Union's Rhode Island members.
Union Stone did not, however, provide copies of the remittance
reports, which would have allowed the Funds to compare the amounts
tendered with the contributions being sought. Perhaps naively, the
attorney

for

the

Funds

informed

the

court

that

the

checks

"resolve[d] that . . . portion of the judgment [the Funds] were
seeking as to the Connecticut funds," thus obviating the need for
a trial.

Only afterwards did the Funds realize that the bulk of

the payments to the Connecticut funds were in satisfaction of
contributions owed by Union Stone to Connecticut bricklayers, and
not to the Union's Rhode Island members.
Believing that he had been deliberately misled, Enos
repaired

to

the

district

"misrepresent[ation]"

of

court,
the

alleging

nature

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of

that
its

Union

payment

Stone's
to

the

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Connecticut funds was "nothing more than a ruse against the Court."
Union Stone responded with a Rule 11 motion denying the accusation
and seeking sanctions.

Chief Judge Lisi determined that the June

7 morning-of-trial exchange between counsel had resulted in a
"miscommunication"

and

denied

the

Rule

11

motion

as

"ill-conceived."
The court then scheduled a second bench trial to resolve
the

dispute

over

the

amounts

owed

by

Union

Stone

performed by Rhode Island bricklayers in Connecticut.

for

labor

Following

the trial, the court entered judgment in favor of the Funds,
awarding the unpaid contributions, interest, and attorneys' fees.
Union Stone then brought this appeal.
II.

Discussion

Union Stone argues that the district court erred in: (i)
refusing to enforce the June 7 exchange as an oral settlement
agreement between the parties; (ii) admitting evidence that was not
properly disclosed under Rule 26; (iii) declining to impose Rule 11
sanctions; and (iv) awarding interest and attorneys' fees.
A.

Settlement Agreement
Union Stone points first to counsel's statement on the

record that the payments to the Connecticut funds "resolve[d] [the
remainder of] the judgment [sought]" as evidence that a settlement
agreement had been reached, and argues that the district court
erred in not enforcing it by dismissing the case.

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We disagree.

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A settlement agreement is a species of contract.
Props., Inc. v. Gold, 895 F.2d 30, 33 (1st Cir. 1990).

NBA

This court

reviews for clear error a trial court's determination of whether an
enforceable contract has been formed.

See Adelson v. Hananel, 652

F.3d 75, 85 (1st Cir. 2011). Where, as here, the underlying action
is brought pursuant to a federal statute, whether a settlement
agreement is enforceable is a question of federal law.

See Quint

v. A.E. Staley Mfg. Co., 246 F.3d 11, 14 (1st Cir. 2001).

The

load-bearing element of a contract is the mutual assent of the
parties to the essential terms of the agreement, the so-called
"meeting of the minds."

See ITT Corp. v. LTX Corp., 926 F.2d 1258,

1260 n.1, 1265 n.7 (1st Cir. 1991).

Under First Circuit law, as

elsewhere, where there is no meeting of the minds between the
parties because of a mistake of fact, no contract is formed, and
the imperfect agreement is voidable at the election of the party
adversely affected.

13 S. Williston, Contracts § 1535 (1970).

Moreover, "[a] mistake by one party with knowledge thereof by the
other is equivalent to a mutual mistake; a party should not be
benefitted by a mistake he knew the other had made."

Hashway v.

Ciba-Geigy Corp., 755 F.2d 209, 211 (1st Cir. 1985); see also
O'Rourke v. Jason Inc., 978 F. Supp. 41, 48 (D. Mass. 1997)
(applying the doctrine of unilateral mistake to a settlement
agreement).

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The district court specifically found the June 7 exchange
between

counsel

regarding

the

Connecticut

payments

to

have

engendered a "miscommunication," that is, a mistaken understanding
on the part of the lawyer for the Funds.
clearly erroneous.

This finding is not

It is evident from the record that the Funds'

attorney erroneously assumed that the Union Stone checks he had
been given represented the payment of the sums owed to the Rhode
Island bricklayers for their work in Connecticut. There is no hint
whatsoever in the record that the Funds were willing to accept, in
settlement

of

different

that

debt.

litigation

—

obligation,
It

was

the

payment
from

from

specifically

explicit

entry

the

of

an

altogether

the

history

of

the

of

partial

summary

judgment resolving the claim for contributions for labor performed
by Union members in Massachusetts — that the Funds expected an
additional payment for work done by the Rhode Island bricklayers in
Connecticut. There was no error in the district court's refusal to
enforce the purported June 7 settlement agreement.
B.

Evidentiary Rulings
In

the

district

court

proceedings,

Union

Stone

unsuccessfully objected to the admission of certain evidence on the
ground that it was tainted by violations of the discovery rules.
On

appeal,

sufficiently

Union

Stone

egregious

to

contends
compel

disagree.

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that

these

vacating

the

violations

were

judgment.

We

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We review evidentiary rulings for abuse of discretion.
United States v. Tetioukhine, 725 F.3d 1, 6 (1st Cir. 2013). Union
Stone complains that the Funds failed to comply with Fed. R. Civ.
P. 26 in that: (i) "new" evidence was not timely disclosed before
the originally scheduled trial; (ii) affidavits reporting the
results of an "expert" audit determining the amount of Union
Stone's outstanding obligations were not timely produced; and (iii)
the identities of the "expert" witnesses who analyzed the audit
were never specifically revealed.
On our review of the record, we find nothing that rises
to a violation of Rule 26: (i) the evidence identified by Union
Stone as "new" was either admitted to by Union Stone in prior
proceedings

or

originated

from

Union

Stone

itself;

(ii)

the

allegedly "expert" audit was nothing more than an arithmetic
calculation of Union Stone's outstanding Connecticut payments; and
(iii) the Union's financial witnesses (Enos and Charles Raso, the
Assistant Administrator of the Funds) did not testify as "experts,"
but simply explained from personal knowledge how the math had been
done. As the district court noted, resolution of the case required
nothing more complicated than "review[ing] . . . Union Stone
payroll

records,

identifying

who

the

workers

were,

.

.

.

[a]nd . . . apply[ing] the mathematical formula that is set forth
in the CBA[]."

The district court's evidentiary rulings do not

warrant vacating the judgment.

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C.

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Sanctions
Union Stone next argues that the district court erred in

denying its motion for Rule 11 sanctions.

We disagree.

We review for abuse of discretion a district court's
disposition of a Rule 11 motion.

CQ Int'l Co., Inc. v. Rochem

Int'l, Inc., USA, 659 F.3d 53, 59 (1st Cir. 2011).

While this

standard always entails "considerable latitude," Lichtenstein v.
Consol. Servs. Grp., Inc., 173 F.3d 17, 22 (1st Cir. 1999), a
district court's decision to deny rather than to impose sanctions
"is accorded extraordinary deference," id. (internal quotation
marks omitted).
"[Federal] Rule [of Civil Procedure] 11 imposes a duty on
attorneys to certify that they have conducted a reasonable inquiry
and have determined that any papers filed with the court are well
grounded in fact, legally tenable, and not interposed for any
improper purpose."

Cooter & Gell v. Hartmarx Corp., 496 U.S. 384,

393 (1990); see also Fed. R. Civ. P. 11(b).
Union Stone's Rule 11 motion is relevant.

Here, the genesis of
In litigating the

eventual award of attorneys' fees, Union Stone moved to strike one
of the Funds' affidavits.

In their opposition to the motion to

strike, the Funds asserted that by representing to counsel and to
the court that the checks paid to the Connecticut funds were in
satisfaction of "the obligations sought by the Plaintiffs in this
action," Union Stone had made "a material misrepresentation in an

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effort to avoid pending trial which Plaintiff was prepared to
proceed on that day."
misrepresentation

It was to the accusation of a deliberate

that

Union

Stone's

counsel

took

umbrage,

prompting the Rule 11 motion and the counter-accusation that the
Funds' counsel "was simply motivated to undo [the] settlement
reported to the Court on June 7, 2012."
The record of the aborted June 7 trial is ambiguous and
more

suggestive

—

as

the

district

court

found

—

of

a

miscommunication between counsel than of a deliberate attempt by
Union Stone's counsel to mislead the court.

But we cannot fault

the Funds for an "improper motive" in vigorously pursuing what they
rightly believed their members were due.

Under the circumstances,

the district court clearly acted within its discretion in deeming
Union Stone's Rule 11 motion "ill-conceived."
D.

Interest and Attorneys' Fees
Union Stone finally argues that the district court erred

in awarding the Funds interest and attorneys' fees.

We disagree.

With respect to interest, "[i]n ERISA cases the district
court

may

grant

prejudgment

interest

in

its

discretion

prevailing fiduciaries, beneficiaries, or plan participants.

to

This

judicial discretion encompasses . . . the . . . rate to be used in
calculating interest."

Cottrill v. Sparrow, Johnson & Ursillo,

Inc., 100 F.3d 220, 223 (1st Cir. 1996), abrogated on other grounds
by Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010).

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This

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court

reviews

a

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district

Date Filed: 10/15/2013

court's

taxing

interest "only for abuse of discretion."

of

Entry ID: 5771783

prejudgment

Janeiro v. Urological

Surgery Prof'l Ass'n, 457 F.3d 130, 145 (1st Cir. 2006).

While

Union Stone complains that the district court did not explain how
it arrived at the amount of interest awarded, it is apparent from
the

record

that

the

amount

was

extrapolated

from

stipulated in the CBA and recommended by the Funds.

the

rate

The district

court did not abuse its broad discretion by selecting an interest
rate set out in the parties' own agreement.
With respect to attorneys' fees, Union Stone suggests
that the district court failed to recognize that the decision to
award them was discretionary.

The suggestion is misguided.

ERISA

provides for a mandatory award of attorneys' fees against an
employer who defaults on making benefit fund contributions.

29

U.S.C. § 1132(g)(2)(D) ("In any action under this subchapter by a
fiduciary for or on behalf of a plan to enforce section 1145 of
this title in which a judgment in favor of the plan is awarded, the
court

shall

fees . . . ."

award

the

plan

.

(emphasis added)).

.

.

reasonable

attorney's

In addition, the CBA itself

stipulates that defaulting employers will pay all attorneys' fees
involved in the Funds' efforts to collect any deficiency.

The

district court did not err in awarding fees.1

1

Union Stone's alternative argument — that it should not be
liable for "self-incurred" fees arising after the Funds repudiated
the June 7 settlement agreement — does not survive the district
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III.

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Entry ID: 5771783

Conclusion

For the foregoing reasons, the judgment is affirmed.

court's determination that the June 7 exchange did not give rise to
an enforceable agreement between the parties.
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