Detroit Carpenters Fringe Benefit Funds v. Tri-Crossing Installation Services, Inc. et al

Filing 37

ORDER denying 34 Motion for Reconsideration. Signed by District Judge John Corbett O'Meara. (WBar)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
TRUSTEES OF THE DETROIT
CARPENTERS FRINGE BENEFITS FUNDS,
Plaintiffs,
Case No. 16-12344
v.
Hon. John Corbett O’Meara
TRI-CROSSING INSTALLATION
SERVICES, INC., a MI corporation,
and SYNERGY INSTALLATION
SOLUTIONS, LLC, a South Carolina
limited liability company, jointly
and severally,
Defendants.
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ORDER DENYING DEFENDANTS’
MOTION FOR RECONSIDERATION
Before the court is Defendants’ motion for reconsideration, filed May 22,
2017. Defendants seek reconsideration of the court’s Opinion and Order denying
Defendants’ motion to dismiss and granting Plaintiffs’ motion to file an amended
complaint.
The standard for granting a motion for reconsideration is as follows:
Generally, and without restricting the court’s discretion,
the court will not grant motions for rehearing or
reconsideration which merely present the same issues
ruled upon by the court, either expressly or by reasonable

implication. The movant shall not only demonstrate a
palpable defect by which the court and the parties have
been misled but also show that correcting the defect will
result in a different disposition of the case.
LR 7.1(h)(3). A motion for reconsideration “is not properly used as a vehicle to rehash old arguments or to advance positions that could have been argued earlier but
were not.” Smith v. Mount Pleasant Schools, 298 F. Supp.2d 636, 637 (E.D. Mich.
2003) (citing Sault Ste. Marie Tribe of Chippewa Indians v. Engler, 146 F.3d 357,
374 (6th Cir. 1998)).
As in their motion to dismiss, Defendants argue that Plaintiffs may not
recover fringe benefit contributions under the collective bargaining agreement,
which they contend is an illegal and void 8(f) pre-hire agreement. Defendants do
not cite case law, however, for the proposition that an invalid 8(f) pre-hire
agreement constitutes the type of “illegal” or “void” agreement that is
unenforceable by a trust fund under ERISA – such as an agreement in which the
contributions themselves are illegal or when the agreement is void because of fraud
in the execution. Cf. MacKillop v. Lowe’s Market, Inc., 58 F.3d 1441, 1443-45
(9th Cir. 1995) (“[W]hile cases such as Benson and Agathos recognize that section
515 does not mandate employer contributions where the CBA is void ab initio,
they nevertheless hold that the very defense raised here, lack of majority status, is
not a valid defense to the employer’s obligation to an ERISA plan.”); National
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Elec. Benefit Fund v. Heary Bros. Lighting Protection Co., 931 F. Supp. 169, 180183 (W.D. N.Y. 1995) (reviewing case law describing limited nature of section 515
defenses and finding fund contributions “themselves” not inconsistent with the law
and CBA not void despite union extortion scheme); Laborers’ Pension Fund v. A
& C Envtl., Inc., 301 F.3d 768, 779 (7th Cir. 2002) (“Several circuits have
recognized fraud in the execution as a viable defense to suits by funds to collect
delinquent contributions under ERISA because fraud in the execution renders the
collective bargaining agreement void rather than merely voidable.”).
The case law is clear that an employer may not assert the defense that an 8(f)
agreement is unenforceable under ERISA because the union lacks the support of
the majority of employees. Indeed, the legislative history indicates that § 515 was
enacted to repudiate cases in which employers successfully avoided ERISA
liability by arguing that pre-hire agreements were invalid because the union did not
have the support of the majority of employees. See, e.g., Central States, Southeast
& Southwest Areas Pension Fund v. Gerber Truck Servs., 870 F.2d 1148, 1152-54
(7th Cir. 1989) (en banc) (citing 126 Cong. Rec. 23039 (Rep. Thompson)); Benson
v. Brower’s Moving & Storage, Inc., 907 F.2d 310, 315-16 (2d Cir. 1990)
(discussing legislative history). Defendants’ argument – that the 8(f) here is not
valid because it was imposed upon a non-construction workforce – is not
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materially distinguishable from the argument that the union lacks majority support.
These types of defenses are “unrelated” to the employer’s promise to contribute to
the funds. Although these kinds of defenses call into question the union’s ability to
enforce the collective bargaining agreement as a whole, they nonetheless do not
affect the employer’s obligation to the ERISA plan. See, e.g., Benson, 907 F.2d at
316 (“We recognize that the result in this and similar cases may seem quite harsh.
Brower’s now must contribute to the Funds without a preliminary determination
that there exists a collective bargaining agreement that would be recognized as
valid under labor-management relations law.”).
Accordingly, Defendants have not demonstrated a “palpable defect” that
warrants reconsideration of the court’s May 8, 2017 opinion and order.
IT IS HEREBY ORDERED that Defendants’ motion for reconsideration is
DENIED.
s/John Corbett O’Meara
United States District Judge
Date: June 20, 2017

I hereby certify that a copy of the foregoing document was served upon
counsel of record on this date, June 20, 2017, using the ECF system.

s/William Barkholz
Case Manager
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