Operating Engineers Local 324, et al v Ajax Paving Industries Inc, et al

Filing 67

MEMORANDUM AND ORDER DENYING CROSS MOTIONS FOR SUMMARY JUDGMENT WITHOUT PREJUDICE [DOCS. 43, 44, AND 45] AND DIRECTING FURTHER FILINGS. Signed by District Judge Avern Cohn. (MVer)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION

TRUSTEES OF THE OPERATING
ENGINEERS LOCAL 324 PENSION
FUND, et al.,
v.

Case No. 16-14161

AJAX PAVING INDUSTRIES, INC.,
MARK JOHNSTON, JAMES A. JACOB,
and JAMES M. FRIEL,

HON. AVERN COHN

Defendants.
_______________________________/
MEMORANDUM AND ORDER
DENYING CROSS MOTIONS FOR SUMMARY JUDGMENT WITHOUT PREJUDICE
(Docs. 43, 44, 45)
AND
DIRECTING FURTHER FILINGS
I.
This is an action for the collection of unpaid employee fringe benefits under
ERISA. Plaintiffs are the Trustees of various fringe benefit funds (“Trustees”)
associated with the International Union of Operating Engineers, Local 324. The
Trustees have sued defendant Ajax Paving Industries, Inc. (“Ajax”) and three individuals
associated with Ajax, claiming they owe fringe benefit contributions under a collective
bargaining agreement which the parties refer to as the Road Agreement.1
The Trustees contend that under the Road Agreement Ajax is required to pay
fringe benefits throughout the year for covered work. Ajax says that the Road
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The Trustees rely on a June 10, 2016 Audit Report, covering the time period of
January 2008 through May 2014, which indicates due and owing balance in fringe
benefit contributions in the amount of $1,342,614.39.

Agreement does not apply to certain work performed in the “off season” (January to
early April).
Before the Court are three (3) motions for summary judgment:
Ajax’s motion for summary judgment (Doc. 43)
The Trustees’ motion for summary judgment (Doc. 44)
The individual defendants’ motion for summary judgment (Doc. 45).
The Court held a hearing on the motions on September 18, 2018. For the
reasons stated on the record and as elaborated below, the motions are DENIED
WITHOUT PREJUDICE.
II.
While the papers contain a multitude of legal arguments, the crux of the issue
before the Court is the proper interpretation of the Road Agreement, a collectively
bargained agreement between the Labor Relations Division of the Michigan
Infrastructure and Transportation Association (MITA) and the International Union of
Operating Engineers, Local 324. Ajax is a member of MITA. The Trustees rely
primarily on Article I, Section 2 of the Road Agreement in support of their position. This
section provides:
Highway construction work is defined is work performed provided at facility to
accommodate vehicular and pedestrian traffic and all work in connection with
the construction of streets, roads, expressways, turnpikes, highways, bridges,
separations and parking lots, including rest areas, sidewalks, pedestrian
overpasses, bicycle paths, running tracks, bridle paths, guard rails, fences,
storms sewers, sanitary sewers, and the relocation and rerouting of any utilities
including sewer and water lines.
(Emphasis added). The Trustees contend that “all work in connection with” includes
work performed during the off season. Ajax, relying on other provisions and the course
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of performance, argues that the Road Agreement does not require fringe benefit
contributions during the off season.
As stated at the hearing, the Court has made a preliminary finding that Article I,
Section 2 is ambiguous and the Court must apply the rules of contract interpretation to
resolve the dispute. The Court also found that the parties’ papers raised genuine issues
of material fact such that summary judgment is inappropriate at this time.
In order to move the case forward, Ajax shall within thirty (30) days file a
supplemental paper focusing on its argument as to the proper interpretation of the Road
Agreement as supported by the record. Ajax may also address the issues of (1)
whether the Trustees may seek fringe benefits on behalf of three unnamed funds and
(2) whether the statute of limitations bars some of the Trustees recovery. The Trustees
shall file a response to Ajax’s supplemental paper within fifteen (15) days later.
SO ORDERED.

S/Avern Cohn
AVERN COHN
UNITED STATES DISTRICT JUDGE
Dated: 9/20/2018
Detroit, Michigan

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