Operating Engineers Local 324 Health Care Plan et al v. G&W Construction Company et al

Filing 17

ORDER Denying 9 Motion for Summary Judgment. Signed by District Judge Victoria A. Roberts. (LVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

OPERATING ENGINEERS LOCAL 324
HEALTH CARE PLAN, ET AL,
Plaintiff,
vs

Case No: 11-10494
Honorable Victoria A. Roberts

G&W CONSTRUCTION COMPANY,
Defendant.
____________________________/
OPINION AND ORDER
I.

INTRODUCTION
This matter is before the Court on Plaintiffs’ Motion for Summary Judgment To

Establish Liability (Doc. #9). The Motion is DENIED.
II.

CASE SUMMARY
Plaintiffs, a group of union trust funds, argue that Defendants G&W Construction

Co. and its President, Gary Nollar, failed to pay them fringe benefits as mandated by
union contract. Plaintiffs say this non-payment violates ERISA as well as the Michigan
Building Contract Fund Act (“MBCFA”), M.C.L. § 570.151. Plaintiffs move for summary
judgment and seek damages from G&W in the amount of $435,802.23; damages from
Nollar in the amount of $348,118.42; plus interest and attorneys fees. (R. 14 at 1-2).
Defendants concede that they have not paid the fringe benefits in question;
however, Defendants argue they have no legal obligation to pay because: (1) no

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collective bargaining agreement (“CBA”) or contractual agreement exists between the
parties; (2) no provision for fringe benefits was ever made; and, (3) none of Defendants’
employees is a union member. (R. 15). With regard to these issues, a genuine dispute
of material fact seems to exist. See Bobbie Brooks, Inc. v. Int’l Ladies, 835 F.2d 1164,
1168 (6th Cir. 1987) (“Whether a collective bargaining agreement exists is a question of
fact; technical rules of contract law are not strictly binding.”).
Although Plaintiffs’ opening brief contains excerpts from a CBA (see R. 9-3), this
CBA (1) was not signed or negotiated by Defendants; (2) does not make an explicit
provision for fringe benefits; and (3) has an effective date of June 1, 2008, as opposed
to January 1, 2007, the starting date that Plaintiffs allege they are owed fringe benefits.
This CBA, on its own, does not establish liability on the part of Defendants.
However, in their reply brief, Plaintiffs enclose an agreement dated June 25,
1984, which appears to establish a contractual relationship between the parties. (See
R. 16-2). This 1984 agreement states that Defendant G&W “agrees to abide by the
Wage Rates, Fringe Benefits, and all other terms, conditions, and provisions in the
[Union’s] most current Collective Bargaining Agreement,” and “further agrees that the
Wage Rates, Fringe Benefits, and all other terms, conditions, and provisions contained
in the aforementioned Labor Agreements shall be applicable according to the work
being performed by the Employer.” (Id.).
The 1984 agreement also states that Plaintiff Union is the sole bargaining agent
for all of Defendants’ employees, and that Defendants’ employees must become union
members. (Id.) Finally, the agreement states that it “shall renew itself and become
binding again as to all the Wage Rates, Fringe Benefits, and all other terms, conditions,
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and provisions negotiated in new applicable Master Agreements,” unless timely notice
of termination is given; and, that the agreement is binding on all “heirs, successors,
representatives and assignees.” (Id.)

Plaintiffs argue that the 1984 agreement is still

binding on Defendants due to this renewal clause, making Defendants subject to its
most recent CBA, dated June 1, 2008. (R. 16 at 1-2). However, Plaintiffs only make
this argument in the reply brief; Defendants have not had an opportunity to respond with
argument of their own.
Plaintiffs’ lawsuit also raises several legal questions. First, since Defendants
admit that they have not made regular fringe benefit payments since 1984, Plaintiffs’
lawsuit may present statute of limitations issues. See Winnett v. Caterpillar, Inc., 609
F.3d 404, 408-09 (6th Cir. 2010) (holding that accrual of the ERISA statute of limitations
is a question of federal law, and discussing terms). Second, Plaintiffs’ attempt to
recover damages under Michigan’s MBCFA statute may be barred by ERISA
preemption. See Associated Builders & Contractors v. Mich. Dep’t of Labor & Economic
Growth, 543 F.3d 275, 279-80 (6th Cir. 2008) (discussing when state law is preempted).
Third, it is unclear why Plaintiffs seeks to hold Defendants Nollar and G&W jointly and
severally liable for damages, but in different amounts. Although some of these issues
may be affirmative defenses.
The Court DENIES Plaintiffs’ Motion for Summary Judgment; too many issues of
fact exist.

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IT IS ORDERED.

/s/ Victoria A. Roberts
Victoria A. Roberts
United States District Judge
Dated: August 25, 2011
The undersigned certifies that a copy of this
document was served on the attorneys of
record by electronic means or U.S. Mail on
August 25, 2011.
s/Linda Vertriest
Deputy Clerk

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