Musson Brothers, Inc. v. Central States, Southeast And Southwest Areas Health And Welfare Fund et al

Filing 90

Amended Memorandum Opinion and Order signed by the Honorable Robert W. Gettleman on 4/2/2014: Mailed notice (gds)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MUSSON BROTHERS, INC.,

)
)
Plaintiff,
)
v.
)
)
CENTRAL STATES, SOUTHEAST AND
)
SOUTHWEST AREAS HEALTH AND
)
WELFARE FUND, CHARLES A. WROBLEY,
)
JERRY YOUNGER, GEORGE J. WESTLEY,
)
MARVIN KROPP, ARTHUR H. BANTE, JR.,
)
GARY F. CALDWELL, RONALD DESTEFANO, )
GARY R. MAY, and TEAMSTERS GENERAL
)
UNION LOCAL 662,
)
)
Defendants.
)

No. 13 C 3506
Judge Robert W. Gettleman

AMENDED MEMORANDUM OPINION AND ORDER
Plaintiff Musson Brothers, Inc. (“Musson”) filed this action under 28 U.S.C. § 2201 for
declaratory judgment and injunctive relief1 against defendants Central States Health and Welfare
Fund, a multiemployer benefit plan, its trustees2 (collectively, the “Fund”), and the Teamsters
General Union Local 662 (“the Union”). Musson seeks a declaration that it does not owe
contributions to the Fund on behalf of seven of its employees under agreements that it entered
with defendants. The Fund filed a counterclaim, which alleges in Count One that Musson failed
to pay contributions due for two employees covered by the collective bargaining agreements
with the Union and the bargaining unit participation agreements, in violation of Section 515 of

1

Musson initially filed this action in the Western District of Wisconsin. Defendant filed a
motion to transfer venue to the Northern District of Illinois, which the district court in Wisconsin
granted.
2

Defendants Charles A. Wrobley, Jerry Younger, George J. Westley, Marvin Kropp,
Arthur H. Bante, Jr., Gary F. Caldwell, Ronald Destefano, and Gary R. May are referred to as
“the Trustees.”

the Employee Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1145, the collective
bargaining agreements, the bargaining unit participation agreements and the Health and Welfare
Fund Trust Agreement (“Trust Agreement”). In Count Two, the Fund alleges that Musson owes
contributions for seven non-covered employees under an agreement (the “Non-Bargaining Unit
Participation Agreement”) between the Fund and Musson and the Trust Agreement.
Musson initially admitted liability on Count One of the Fund’s counterclaim and asserted
a defense to Count Two that the employees in question were excluded from participation in the
Fund because of their various employment positions. The Fund then filed a motion for partial
summary judgment on the issue of liability on both counts of the counterclaim. Concurrent with
its response to the Funds’ motion, Musson filed a Motion for Leave to File an Amended Answer
to the Fund’s counterclaim to withdraw its admission of liability on Count One and assert a new
defense to the Funds’ claims of delinquent contributions.
For the reasons described below, plaintiff’s motion to amend its answer is denied. The
Fund’s motion for partial summary judgment is granted.
FACTS
Musson and the Union are parties to multiple collective bargaining agreements that span
the period of April 1, 2001, through March 31, 2013 (“the CBAs”)3, as well as Participation
Agreements in 2001 and 2007 (“the 2001 Bargaining Unit Participation Agreement” and “the
2007 Bargaining Unit Participation Agreement,” respectively). These agreements required

3

The various CBAs were signed roughly every three years. They include: the 2001-2004
CBA, the 2004-2007 CBA, the 2007-2010 CBA, and the 2010-2013 CBA.
2

Musson to contribute to the Fund for each “covered employee.” The participation agreements
defined “covered employee” as:
[A]any full-time or part-time employee covered by a collective bargaining
agreement requiring contributions to the Fund … Covered Employee shall not
include any person employed in a managerial or supervisory capacity …
In 2001, Musson also entered into the Non-Bargaining Unit Participation Agreement
directly with the Fund, to which the Union was not a party. That agreement required Musson to
contribute to the Fund for “each and every individual employed by the employer on either a fulltime or part-time basis who is not covered by the collective bargaining agreement between the
Employer and the Union.” The terms of the agreement stated that it would remain in effect
“until 30 days after service of a written notice served by either the Health and Welfare Fund or
the Employer of their intent to terminate this Participation Agreement.” Musson gave notice to
terminate the agreement on October 15, 2012, and elected March 31, 2013, as the date of
termination.
In September 2012, the Fund conducted an audit of the work history records of Musson’s
employees, pursuant to the provisions of the Trust Agreement that permitted such an audit. The
audit encompassed the time period between January 1, 2008, and December 31, 2010. As a
result of that audit, the Fund alleges that Musson failed to accurately report the work history of
its employees and demanded contributions for nine employees. Two of the employees, Gary
Robinson and Robert Langeberg, were covered employees under the participation agreements,
and the Fund demanded at least $71,000 for unpaid contributions related to those two covered

3

employees. The remaining seven employees were employees not covered by the CBAs,4 and the
Fund demanded contributions for those employees under the Non-Bargaining Unit Participation
Agreement.
On October 15, 2012, in response to the Fund’s demand letter (which preceded this
litigation), Musson stated that contributions were not due on five of the seven non-covered
employees because they had other health coverage, and that the two other non-covered
employees were ineligible because the Union agreements excluded part-time employees from the
bargaining unit. Musson conceded that contributions were due for the remaining two covered
employees.
On December 19, 2012, however, Musson revised its position and indicated that it did
not owe contributions for the seven non-union employees because the 2001 Non-Bargaining Unit
Participation Agreement was “trumped in spades” by the 2007 Bargaining Unit Participation
Agreement and the 2007-2010 CBA. On December 26, 2012, Musson instituted the instant
action in the Western District of Wisconsin, seeking a declaratory judgment that Musson did not
owe the amounts alleged by the Fund in their demand.
On January 23, 2013, the dispute over the contributions was presented to the Board of
Trustees of the Fund at their regularly scheduled meeting. The Board of Trustees determined
that the 2001 Non-Bargaining Unit Participation Agreement was not superseded by the 2007
Bargaining Unit Participation Agreement or the CBAs, and that contributions were due for those
seven non-covered employees.

4

The non-covered employees are: John R. Riopel, Andrew J. Ruffing, Paul A. Heikkinen,
Jr., James B. Rice, John K. Kerr, Delore J. Deau, and David C. Polak.
4

In its January 2014 response to the Fund’s motion for summary judgment and in its
motion to amend its answer, Musson now argues that it did not have proper notice of the January
2013 meeting, that it should have been given the opportunity to present its case to the Board, and
that no deference should be awarded to the Trustees’ “findings.” Musson argues that, had it been
given the chance, Musson would have argued to the Board that John Kaiser, a Union
representative, acted as the Fund’s agent in the 2010 negotiations between the Union and
Musson. Musson alleges that Kaiser orally agreed in those negotiations that Musson could
continue its practice of selective participation in other health plans, thereby modifying the terms
of the participation agreements and, therefore, the contributions due.
DISCUSSION
I.

Motion to Amend Answer to Counterclaim
Musson seeks to amend the answer it initially filed to the Fund’s counterclaim. The

proposed amended answer withdraws Musson’s previous admission of liability on Count One,
and puts forth a new defense to both counts: that John Kaiser, a Union representative, made an
oral modification to the 2010-2013 CBA and the 2007 Participation Agreement that exempts all
nine employees from contributions to the Fund. Musson argues that it initially conceded
liability on Count One in an effort to reach a settlement with the Fund, and that the breakdown of
settlement negotiations has caused it to reconsider its position. Musson further argues that
“since the inception of this litigation” it has consistently taken the position advanced in its
response to the Fund’s motion for summary judgment regarding Kaiser and the alleged oral
modifications to those agreements. Therefore, Musson contends, the Fund will not be prejudiced
by the proposed amendment to the answer. The Fund opposes the motion.

5

Fed. R. Civ. P. 15 provides that a party may amend its pleadings with leave of the court,
and that the court “should freely give leave when justice so requires.” The court is not required
to grant leave to amend a pleading, however, when there is “undue delay, bad faith or dilatory
motive on the part of the movant, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the amendment [or]
futility of amendment.” Payne for Hicks v. Churchich, 161 F.3d 1030, 1036 (7th Cir. 1998)
(quoting Foman v. Davis, 371 U.S. 178, 182 (1962)). The Fund has not objected to the
amendment of the answer on grounds other than futility, and the court will therefore evaluate
only that question.5 An amendment would be futile if the proposed amended pleading would not
survive a motion to dismiss. Brunt v. Service Employees Intern. Union, 284 F.3d 715, 721 (7th
Cir. 2002).
The Fund argues that amendment would be futile because any evidence of an oral
modification would be barred under the parol evidence rule. “The parol evidence rule provides
that evidence of prior or contemporaneous agreements or negotiations may not be introduced to
contradict the terms of a partially or completely integrated writing.” Merk v. Jewel Food Stores
Div. of Jewel Companies, Inc., 945 F.2d 889, 892 (7th Cir. 1991) (citing Restatement (Second)
of Contracts § 215). Where the language of an agreement appears to be the final manifestation of
the parties' intent, and there is no evidence to the contrary, the agreement is considered to be
integrated. Restatement (Second) of Contracts, § 209(3). Whether an agreement is fully
integrated is generally a question of law to be resolved by a court. Merk, 945 F.2d at 893.

5

The court notes that, in its reply, Musson chose not to respond substantively to the
Fund’s argument that amendment would be futile. The court therefore evaluates the argument
without the benefit of a response from Musson.
6

The court finds the relevant agreements between the parties to be integrated agreements.
The 2010-2013 CBA contains an integration clause and provides that “[t]he Agreement sets forth
the entire understanding and agreement of the parties and may not be modified in any respect
except by writing subscribed to by the parties.” The Trust Agreement and 2007 Bargaining Unit
Participation Agreement, coupled with the 2010-2013 CBA, represent the complete and final
manifestation of the parties’ intent regarding Union employees. The Trust Agreement coupled
with the Non-Unit Participation Agreement represents the complete and final manifestation of
the parties’ intent regarding non-covered employees. In its reply to the motion to amend,
Musson even admits that the agreements are integrated agreements. Further, the agreements
“contain[] such language as imports a complete legal obligation,” consistent with an integrated
writing. Davis v. G.N. Mortgage Corp., 396 F.3d 869, 879 (7th Cir. 2005). The terms of the
agreements are unambiguous, and Musson admits as much.6
The parol evidence rule bars Musson’s proffered defense because Musson seeks to
explain the “real” terms of the contract despite the complete writings of the agreements between
the parties. See Hoover v. ABF Freight System, Inc., 2008 WL 1805392, at *8 (C.D.Ill. 2008)
(“The parol evidence rule bars the introduction of the most questionable form of extrinsic
evidence– self-serving testimony by one of the parties as to what the parties ‘really’ agreed to in
the negotiations leading up to the signing of the contract.”).
More importantly, Musson’s oral modification defense is futile because the Seventh
Circuit has held that § 515 of ERISA (29 U.S.C. § 1145), which governs delinquent

6

Musson does not argue that parol evidence is required to resolve an ambiguous term, but
rather to identify a modification.
7

contributions, and § 302(c)(5)(B) of the NLRA (29 U.S.C. § 186(c)(5)(B)), regarding employer
contributions to a pension plan, “prevent[ ] a court from giving force to oral understandings
between union and employer that contradict the writings.” Central States, Southeast and
Southwest Areas Pension Fund v. Gerber Truck Service, Inc., 870 F.2d 1148, 1154 (7th Cir.
1989); see also Cent. States, Se. & Sw. Areas Pension Fund v. Auffenberg Ford, Inc., 2009 WL
2145384, at *5 (N.D. Ill. July 9, 2009) aff'd, 637 F.3d 718 (7th Cir. 2011) (stating that “federal
law precludes a court from considering an oral agreement allegedly made between an employer
and a union if that oral agreement contradicts the written agreements”). Although Musson
alleges that the modification was also made between Musson and Fund, because of Kaiser’s
alleged agent status (a contested issue that the court need not reach), oral modifications are still
prohibited even when the Fund is a party. See Orth v. Wisconsin State Employees Union
Counsel 24, 546 F.3d 868, 872 (7th Cir. 2008).
Because Musson’s proposed amended answer would be futile, the court denies Musson’s
motion to amend its answer to the counterclaim.
II.

Motion for Summary Judgment
The Fund has moved for partial summary judgment on the issue of liability on both

counts of the counterclaim. Musson has responded consistent with the position taken in its
proposed amended answer to the counterclaim.7 Because the court has denied Musson’s motion

7

The court notes that Musson’s arguments are unnecessarily difficult to comprehend
because Musson chose to articulate its arguments in its Response to the Fund’s L.R. 56.1
statement and an affidavit by counsel, instead of in its supporting memorandum of law. “Judges
are not like pigs, hunting for truffles buried in briefs” or Responses to L.R. 56.1 statements.
United States v. Dunkel, 927 F.2d 955, 956 (7th Cir. 1991). Under L.R. 56.1, a party’s “concise
response” should contain “a response to each numbered paragraph in the moving party’s
(continued...)
8

to amend its answer, the court will not consider Musson’s new arguments regarding oral
modifications to the agreements.
Under § 515 of ERISA, employers are required to make pension and welfare fund
contributions agreed to in collective bargaining agreements to the extent the terms of the
agreement are not inconsistent with law. Central States Pension Fund v. Hartlage Truck, 991
F.2d 1357, 1360 (7th Cir. 1993). Section 515 provides:
Every employer who is obligated to make contributions to a multiemployer plan
under the terms of the plan or under the terms of a collectively bargained
agreement shall, to the extent not inconsistent with law, make such contributions
in accordance with the terms and conditions of such plan or such agreement.
29 U.S.C. § 1145. Although the Fund is not a party to the CBAs, it is a third-party beneficiary,
Central States v. Gerber Truck, 870 F.2d 1148, 1151 (7th Cir. 1989), and is authorized to pursue
a collection action under 29 U.S.C. § 1132(a)(3)(B)(ii). That section provides that “[a] civil
action may be brought . . . by a participant, beneficiary, or fiduciary . . . to obtain other
appropriate equitable relief . . . to enforce any provisions of this subchapter or the terms of the
plan.”

7

(...continued)
statement, including, in the case of any disagreement, specific references” to the record, as well
as “a statement, consisting of short numbered paragraphs, of any additional facts that require the
denial of summary judgment.” Musson’s counsel have violated L.R. 56.1 by failing to
specifically admit or deny numerous paragraphs of the Fund’s Statement of Facts, and by adding
additional facts into its response paragraphs, instead of in a separate statement. Additionally, a
party’s legal argument should be contained in its memorandum of law. It is wholly inappropriate
and a frustrating waste of this court’s resources and time for counsel to make their arguments
against summary judgment in its L.R. 56.1 answer instead of in their memorandum of law.
Counsel for plaintiffs are admonished to follow the Local Rules in the future.
9

A.

Count One

In its initial answer, Musson admitted liability for the two employees addressed in Count
One of the counterclaim.8 The only defense Musson presents is related to the time period for
which it is liable.9
The Fund seeks missing contributions from May 27, 2001, the date when Musson
initially joined the Fund. Under Article XI, Section 7 of the Trust Agreement, there is a ten-year
limitations period for the commencement of claims to collect contributions under Section 515 of
ERISA 29 U.S.C. § 1145. The Trust Agreement further establishes that the limitations period
does not begin to accrue with respect to any unpaid contributions until the Fund receives actual
written notice of the existence of the cause of action. Musson acknowledges that the Fund’s
claim accrued when the Fund received notice of Musson’s potential liability once the 2012 audit
was complete. Musson argues, however, that the ten-year provision is unfair because Musson
did not conduct an audit prior to 2012, and there is therefore a “‘tail’ of potential liability[] and
adjudication of liability on stale facts.” This defense, which appears to be an equitable defense,
is wholly unsupported by any facts or case law, and is not pled in Musson’s answer to the
counterclaim. The court therefore rejects Musson’s argument that the ten year provision is
unfair.

8

The court notes that, even if the court granted Musson’s motion to amend in part in
order to allow Musson to withdraw its admission of liability on Count One, Musson has not
offered any defense to the Count other than the oral modification argument.
9

The court notes that these affirmative defenses are not contained anywhere in Musson’s
response to the summary judgment motion. Musson has placed the burden on the court to find
its arguments in its other filings.
10

Musson also argues that any collection of delinquencies in contributions to that Fund
should be calculated by application of the Wisconsin 6 year statute of limitations period.
Musson does not provide a reason to support the application of the Wisconsin statute of
limitations, although the Fund speculates that Musson’s argument is based on the initial venue of
this lawsuit. See Cent. States, Se. & Sw. Areas Pension Fund v. Jordan, 873 F.2d 149, 152 (7th
Cir. 1989) (stating that the default rule in ERISA cases is to adopt the appropriate state statute of
limitations period for claims for delinquent contribution). The instant case was initially filed in
Wisconsin, but it was transferred to this district upon defendant’s motion to transfer venue. The
transferring judge accorded significant weight to the fact that the parties had a forum selection
clause in the Trust Agreement that designated Illinois as the appropriate forum. Because the
parties consented to venue in Illinois, and the Trust Agreement explicitly applies the Illinois
statute of limitations, the court finds the ten-year Illinois statute period to be appropriate. Id. at
154.
The second affirmative defense Musson presents is that an additional audit for the years
2001-2010 is necessary in order for the Fund to seek contribution for that time period. Musson
also fails to offer any support for this defense. Under the terms of the Trust Agreement, there are
no predicate requirements that the Trustees must satisfy before instituting legal proceedings for
contributions. The court therefore rejects Musson’s second affirmative defense, and grants the
Fund’s motion for summary judgment on Count One.
B.

Count Two

Count Two concerns the dispute regarding the seven non-covered employees that was
presented to the Board of Trustees at the January 2013 meeting. The Fund argues that Article V,

11

Section 2 the Trust Agreement gives the Trustees discretionary authority to resolve disputes.10
That provision states:
All questions or controversies, of whatsoever character, arising in any manner or
between any parties or persons in connection with the Fund or the operation
thereof, whether as to any claim for any benefits, preferred by any participant,
beneficiary or any other person or whether as to the construction of the language
or meaning of the rules and regulations adopted by the Trustees or of this
instrument, or as to any writing, decision, instrument or accounts in connection
with the operation of the Trust Fund or otherwise, shall be submitted to the
Trustees, or to a committee of Trustees, and the decision of the Trustees or of
such committee thereof shall be binding upon all parties or persons dealing with
the Fund or claiming any benefit thereunder. The Trustees are vested with
discretionary and final authority in making all such decisions...
The Fund argues that explicit grants of discretion to the Board of Trustees are “judicially
reviewable only for abuse of discretion, which is to say deferentially.” Operating Eng’rs Local
139 Health Benefit Fund v. Gustafson Constr. Corp., 258 F.3d 645, 653 (7th Cir. 2001); see also
Suburban Teamsters of N. Illinois Welfare & Pension Funds v. Moser, 867 F. Supp. 665, 670
(N.D. Ill. 1994). Therefore, the Fund asserts that the Board of Trustees’ decision can be
overturned only if it is arbitrary and capricious. Musson concedes that arbitrary and capricious
review is appropriate, but argues that the court should award the Board’s decision reduced
deference because of the Trustees’ potential conflict of interest and the allegedly unreasonable
procedures followed by the Board in their hearing. Musson alleges a potential conflict of interest
exists because it is in the Trustees’ interest to maximize the contributions to the Fund. Musson

10

Under the 2001 Bargaining Unit Participation Agreement and the 2007 Bargaining Unit
Participation Agreement, Musson agreed to be bound by the provisions of the Fund’s Trust
Agreement and agreed to pay contributions to the Fund in accordance with the CBAs.
12

also argues that the procedures were unfair because the proceeding before the Board of Trustees
was ex parte, and the record before the Board was allegedly incomplete.11
A number of courts in this district have discussed whether arbitrary and capricious
review of a Trustee’s decision regarding delinquent contributions is appropriate when there is a
potential conflict of interest. See Moser, 867 F. Supp. at 670; Cent. States, Se. & Sw. Areas
Pension Fund v. Waste Mgmt. of Michigan, Inc., 268 F.R.D. 312, 315 (N.D. Ill. 2010) aff'd, 674
F.3d 630 (7th Cir. 2012). In Moser, the court found that the Fund’s interests were protected by a
delegation of authority to the Board of Trustees, and the employer’s interests were likewise
protected because the trust agreement provided for employer representatives on the Board of
Trustees. Moser, 867 F. Supp. at 670. The same situation exists in the instant case; Article II,
Section 2 of the Trust Agreement for the Fund provides for “four persons representative of the
Employers” on the Board of Trustees, which equates to one-half of the Board’s membership.
Under the reasoning of Moser, with which this court agrees, Mussons’ concerns regarding a
potential conflict of interest are therefore mitigated.
Regarding Musson’s objection to the ex parte nature of the proceeding, Musson was
aware of and consented to the terms of the Trust Agreement that provided for this procedure. It
cannot now object to the very procedures to which it consented. Regarding Musson’s claim that

11

Musson simultaneously argues that Article V, Section 2 the Trust Agreement does not
give the Trustees authority to resolve disputes about contributions, but rather is a mechanism to
allow the Trustees to review claims by employee participants and their beneficiaries. Musson
argues that Article III, Section 4, which grants the trustees discretion to initiate legal
proceedings, is the more appropriate course of action. The plain language of Article V, Section
2, however, states that any controversy “as to the construction of the language or meaning of the
rules and regulations adopted by the Trustees or of this instrument, or as to any writing, decision,
instrument or accounts in connection with the operation of the Trust Fund” may be submitted to
the Trustees. Controversies over contributions fall within that language.
13

the record before the Trustees was incomplete, the court notes that the record indicates that
Musson’s complaint in this matter, and thus its asserted position as of December 2012, was
submitted to the Board of Trustees. The relevant agreements, including the CBAs, the relevant
Participation Agreement, and the Non-Bargaining Unit Participation Agreement, were also
submitted to the Board of Trustees. Musson contends that, with additional time and notice, it
would have developed its theory regarding Kaiser as an agent of the Fund, and that it should now
have the opportunity for a rehearing before the Board of Trustees to present that defense.
The court rejects this argument as unpersuasive. Musson had every opportunity to
present its chosen theory of defense when it instituted the instant action in federal court. The
complaint Musson filed did not assert the (meritless) oral modification argument Musson now
seeks to submit to the Board of Trustees. The position that Musson advocated when it filed this
action is the position that was presented to the Trustees at the January 2013 meeting, and it is not
procedurally unreasonable for the Board to have reviewed that stated position. Musson’s
delayed attempts to revise its position do not entitle it to a rehearing, or to a less deferential
standard of review. Under the reasoning of Moser and Waste Mgmt., the deferential abuse of
discretion standard may appropriately be applied in this case.
The Board of Trustees made numerous findings at the January 2013 meeting after the
consideration of the dispute. Those findings included:
2.
The 2001 Non-Unit Participation Agreement . . . remains in full force and effect
and was not superseded or modified by the 2007 Bargaining Unit Participation
Agreement or the 2007-2010 CBA or the 2010-2013 CBA. The Non-Unit Participation
Agreements and the 2007 Bargaining Participation Agreement and CBA are separate
contracts between different parties covering different employees. These conclusions are
supported by the following:

14

a.
The 2001 Non-Unit Participation Agreement is an agreement between the
Fund and Musson. Since Local Union 662 is not party to the Non- Unit
Participation Agreement and does not represent the non-unit employees, it did not
have authority to cancel the 2001 Participation Agreement.
b.
Musson's contention that the 2001 Non-Unit Participation Agreement has
been superseded is inconsistent with the language of the two Participation
Agreements which indicate that they cover different employees. The 2007
Participation Agreement applies to the bargaining unit of drivers and mechanics.
The 2001 Non-Unit Participation Agreement applies to all other Musson
employees. Thus, the subject matter of the two Participation Agreements is
different. The fact that the 2010-2013 CBA mentions the commitment to
contribute on non-unit employees does not mean the non-unit employees are
covered by the 2010-2013 CBA because they are not covered in the recognition
clause or the other provisions of the 2010- 2013 CBA.
c.
lf the 2007 Participation Agreement and the 2010-2013 CBA eliminate the
duty to contribute on some of Musson's non-unit employees as Musson contends,
they create an impermissible conflict with the Fund's "all-in" rule which is
incorporated in the 2001 Non-Unit Participation Agreement.
d.
Musson's position is not consistent with the practice of the parties. Since
2007, Musson has contributed on management and supervisory employees (its
president and office manager, and perhaps others) and the Fund has provided
coverage for these individuals. Indeed, contributions were received on the
president and office manager for November and December 2012 after the
attorney's letter contending that Musson had no duty to contribute on management
and supervisory employees.
e.
Four of the seven employees listed in Musson's Complaint were employed
before the 2007 Participation Agreement, yet contributions were not paid on their
behalf. This fact plus the payment of contributions on some
management/supervisory employees since 2007 establishes that Musson's defense
is merely pretextual and its non-payment on the seven employees really had
nothing to do with the 2007 Participation Agreement, the 2007-2010 CBA or the
2010-2013 CBA, the real reason was Musson's erroneous belief that it could
exclude employees who had alternate benefit coverage from participation.
f.
Paragraph 7 of the Non-Unit Participation Agreement required
Musson to provide the Fund with a written notice of termination which has not
occurred so it has not terminated. Indeed, when the 2007 Participation
Agreement and 2007-2010 CBA were sent to the Fund and the 2010-2013 CBA
was sent to the Fund, neither Musson nor Local662 advised the Fund that they

15

intended to supersede the 2001 Non-Unit Participation Agreement. Nor was this
claim ever made before the audit claim was asserted in 2012 .
The Trustees’ decision that the 2001 Non-Bargaining Unit Participation Agreement was
not superseded by the 2007 Bargaining Unit Participation Agreement or the 2010-2013
Collective Bargaining Agreement was reasonable. The findings provide a complete analysis of
the issues presented to the Board of Trustees and document the sound reasoning of the Board. In
fact, Musson does not object to the actual findings by the Board, but rather to the procedures
followed, which this court has already approved. Under the findings of the Board, Musson is
responsible for contributions for the seven non-covered employees under the 2001 Non-Unit
Participation Agreement. Because the court finds no error with the conclusions of the Board, it
upholds the Board’s conclusion that contributions are due on the non-covered employees and
grants the Fund’s motion for summary judgment on Count Two.
CONCLUSION
For the foregoing reasons, the court denies plaintiff’s motion to amend its answer to the
counterclaim and grants the defendant Fund’s motion for partial summary judgment on the issue
of liability. This matter is set on April 16, 2014, at 9:00 a.m., for a report on the procedure for
determining the amount of contributions due from Musson.
ENTER:

April 2, 2014

__________________________________________
Robert W. Gettleman
United States District Judge

16