Trustees Of The Ohio Bricklayers Pension Fund et al v. Mirage Caulking, Inc. et al

Filing 33

MEMORANDUM OPINION AND ORDER granting 22 Plaintiffs' Motion for Partial Summary Judgment. Judgment on Count I of Plaintiffs' claim is entered against Defendants in the amount of $62,975.12. Judgment is also rendered on Count II, to the extent that Mirage shall submit to an audit of its books by Plaintiffs' representatives beginning 1/1/2013 until the present time. Signed by Magistrate Judge Stephanie K. Bowman on 2/28/2014. (km1)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
TRUSTEES OF THE OHIO
BRICKLAYERS PENSION FUND, et al.,
Plaintiffs,

Case No. 1:13-cv-66
Bowman, M.J.

v.

MIRAGE CAULKING, INC., et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
On January 30, 2013, Plaintiffs, through counsel, filed suit against Defendants
under the Employee Retirement Income Security Act, 29 U.S.C. §1132 et seq.
(“ERISA”). Plaintiffs are the Trustees of the Ohio Bricklayers Pension Fund, the Ohio
Bricklayers Health and Welfare Fund, and the Bricklayers and Trowel Trades
International Pension Fund (hereinafter collectively “Plaintiffs” or “Funds”). 1 Defendant
Mirage Caulking, Inc. (“Mirage”) is engaged in the construction industry in the Greater
Cincinnati area, and has employed persons represented by the International Union of
Bricklayers and Allied Craftworkers (the “Bricklayers Union”). Defendant Willie Reeves
is the principal owner of Mirage.
Plaintiffs’ complaint originally sought a judgment for delinquent fringe benefit
contributions (Count I), an audit of Mirage’s books and records from January 1, 2010
through the present (Count II), judgment on alleged unaccounted cash payments (Count
III); and judgment on a cognovit note signed by Willie Reeves (Count IV). After the date
1

A prior fund entity, known as the Greater Cincinnati Health and Welfare Fund, merged with the Ohio
Bricklayers Health and Welfare Fund effective January 1, 2008.

that the complaint was filed, an audit of Mirage’s books was completed for the period of
January 1, 2010 through December 31, 2012.

According to Plaintiffs, that audit

revealed a delinquency for the audited period, providing additional support for Plaintiffs’
claim under Count I. However, Mirage denies that it is bound by the collective
bargaining agreement (“CBA”) as alleged in the Complaint, and denies that the
employees for whom contributions are sought are covered employees under the CBA.
On January 2, 2014, Plaintiffs’ filed a motion seeking partial summary judgment
on the issue of whether Mirage is bound by the CBA, and on the secondary issue of
whether the employees for whom contributions are sought are covered employees.
Asserting that the answer to both questions is affirmative, Plaintiffs request that
judgment be entered in their favor on Count I, in the amounts supported by the recently
conducted audit. Plaintiffs further request judgment on Count II, insofar as they seek an
additional audit of Mirage’s books from January 1, 2013 through the present. For the
reasons that follow, the Court will grant Plaintiffs’ motion.
I. Background
Plaintiffs have filed Proposed Undisputed Facts. (Doc. 21). The Court adopts
those facts to the extent that they are expressly admitted by Defendants. (Doc. 30). To
the extent that material facts are disputed, they have been construed in favor of the
Defendants.
Willie Reeves signed the 2001-2004 Collective Bargaining Agreement (“CBA”) on
behalf of Mirage on August 1, 2002. That CBA covered all defined bricklayer work
performed within the Bricklayers Union’s jurisdiction. Article 35 of the 2001-2004 CBA
states in relevant part:
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….Such voluntary changes as may be desired by either or both parties
hereto shall be submitted in writing, and in detail, not less than sixty (60)
days prior to the expiration of this Agreement; otherwise this Agreement
shall continue in full force and effect from year to year in the absence of a
similar notice. This Agreement shall be effective when signed by the
individual Employer and the Union, and shall remain in force in
accordance with the terms of this Agreement.
By execution of this Agreement the Employer authorizes the Mason
Contractors Association of Cincinnati to act as its collective bargaining
representative for all matters relating to this Agreement. The parties
agree that the Employer will hereafter be a member of the multi-Employer
bargaining unit by said Association unless this authorization is withdrawn
by written notice to the Association and the Union at least sixty (60) days
prior to the current expiration dates of the Agreement.
All intervening CBAs through the 2012-2017 CBAs contain the same provision. Reeves
testified that at some indefinite point in time, he gave verbal notice to one of two Union
representatives that Mirage was not signing an extension of the 2001-2004 CBA, but he
never sent a written Notice of Termination either to the Bricklayers Union or to the
Mason Contractor’s Association of Cincinnati (“Cincinnati Association”).

(Doc. 19-1,

Reeves Depo., at 30-33).
In addition to the above provision regarding changes or termination, the CBA
signed by Reeves contained, in Articles 8 and 9, agreements for the Employer to
contribute to a Health & Welfare Fund and to various Pension Funds. Through June of
2011, Mirage continued to submit monthly fringe benefit reports to the Plaintiff Funds.
With each contribution paid, Mirage submitted a form that stated that submission and
payment was “in accordance with the obligations assumed by the firm under the current
applicable collective bargaining agreement and the provisions of the applicable trust
agreements.” (Doc. 19-1, Exhibit 4). Mirage also continued to withhold union dues from
the paycheck of Kelly Nolan until June of 2011.
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Mirage’s employee, Kelly Nolan, has been employed exclusively by Mirage as a
caulker. In addition, employees Michael Storer, David Bollinger, Jerome Edwards,
Jeffrey A. Francis, Nikolay Sinenko and Brian Speed were all employed by Mirage as
bricklayers. Caulking work and bricklayer work are defined as covered work in the
applicable Collective Bargaining Agreements of the International Union of Bricklayers
and Allied Craftworkers.
The Bricklayers Union and the Cincinnati Association have negotiated several
Collective Bargaining Agreements since the 2001-2004 CBA signed by Reeves. The
most recent CBA will expire on May 31, 2017.
II. Analysis
A. Standard of Review
On summary judgment, a court must determine whether there is any genuine
issue as to any material fact in dispute. See Rule 56(c), Fed. R. Civ. P. In a motion for
summary judgment, a court “must view the facts and any inferences that can be drawn
from those facts ... in the light most favorable to the nonmoving party.” Keweenaw Bay
Indian Comm. v. Rising, 477 F.3d 881, 886 (6th Cir. 2007) (internal quotation marks
omitted).

“Summary judgment is only appropriate ‘if the pleadings, depositions,

answers to interrogatories, and admissions on file, together with the affidavits, if any,
show that there is no genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.’” Id. (quoting Fed.R.Civ.P. 56(c)) (internal
quotation

marks

omitted).

“Weighing

of

the

evidence

or

making

credibility

determinations are prohibited at summary judgment-rather, all facts must be viewed in
the light most favorable to the non-moving party.” Id. In this case, summary judgment
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should be granted to the Plaintiffs based upon the uncontested evidence filed in support
of their motion.
B. Defendant’s Motion
1. The Validity of the Evergreen Clause
Plaintiffs rely on Article 35 of the 2001-2004 Local Union 18/2 CBA, signed by
Reeves and set forth above, to argue that successor CBAs, entered into after the 20012004 CBA, are equally enforceable against the Defendants.

As referenced above,

Article 35 of the CBA that Reeves signed clearly states that changes “shall be submitted
in writing, and in detail, not less than sixty (60) days prior to the expiration of this
Agreement,” and that in the absence of such writing, “this Agreement shall continue in
full force and effect from year to year….” Article 35 also provides that “[t]he parties
agree that the Employer [Mirage] will hereafter be a member of the multi-Employer
bargaining unit by said Association unless this authorization is withdrawn by written
notice to the Association and the Union at least sixty (60) days prior to the current
expiration dates of the Agreement.” In other words, the latter provision states that
Mirage became a member of the Cincinnati Association for purposes of the 2001-2004
CBA, and that the Cincinnati Association thereafter was authorized to bargain
collectively on Mirage’s behalf.
The language of Article 35 is referred to as an “evergreen clause.”

Similar

clauses consistently have been upheld as legally valid and enforceable in the Sixth
Circuit. “When a contract is renewed via the operation of an evergreen clause, all of the
attendant contractual obligations naturally continue for the period of renewal.” Trustees
of the B.A.C. Local 32 Ins. Fund v. Fantin Enterprises, Inc., 163 F.3d 965, 968-69 (6th
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Cir. 1998); see also Eastern Enterprises v. Apfel, 524 U.S. 498 (1998); Trustees of
Painting Indus. Ins. Fund v. Pharaoh Glass Systems, Inc., 2008 WL 276412 at *4 (N.D.
Ohio Jan. 31, 2008)(citing Apfel and Fantin for proposition that “[b]oth the United States
Supreme Court and the Sixth Circuit Court of Appeals have found that evergreen
clauses in CBAs are legally valid and enforceable.”).
Plaintiffs persuasively argue that because Mirage did not comply with the
express terms of the evergreen clause by providing written notice of termination at least
sixty days prior to May 31, 2004 (or any subsequent year), then Mirage continued to be
bound by all of the CBAs that the Cincinnati Association negotiated on its behalf. Even
though the 2012-2017 CBA that is currently in effect is not signed by Reeves or another
representative of Mirage, Mirage remains bound under its prior assignment of
bargaining rights to the Cincinnati Association.
The Court agrees that the reasoning of Fantin applies fully to the case presented.
The current CBA contains the same type of evergreen provision and specifies that
Mirage will remain a member of the Cincinnati Association unless authorization is
withdrawn by written notice given to the Cincinnati Association and the Union at least
sixty days prior to May 31, 2017. (See generally Article 35 of 2001-2004 CBA;
Article 36 of 2004-2007 CBA; Article 36 of 2007-2010 CBA; Article 37 of 2010-2011
CBA; Article 37 of 2012-2017 CBA; Hubbard Affidavit, Exhibit F). To date, Defendants
have yet to provide the type of written notice of termination that is expressly required
under Article 35 and successive clauses of the referenced CBAs, to which Defendants
previously agreed to be bound.

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Defendants argue that Plaintiffs and/or their agents had “actual, constructive
notice of Mirage’s intent not to be a party to the CBA” after the expiration of the 20012004 CBA, despite the lack of written notice, based solely upon the verbal notice to
which Reeves testified. (Doc. 29 at 3). However, Defendants offer no factual or legal
defense to the body of case law, including Fantin, that holds that the inclusion of a
contractual evergreen clause is valid and enforceable. Moreover, Defendants fail to
offer any factual or legal explanation why the express grant of authority to the Cincinnati
Association to act as Mirage’s Collective Bargaining Representative in the future, and
Mirage’s agreement that it would “hereafter be a member of the multi-Employer
bargaining unit by said association” absent written notice of withdrawal, should not be
enforced by this Court as a valid and binding contract.
While Reeves’s testimony was somewhat equivocal as to the timing of his
alleged verbal notice of non-renewal to one of two Union representatives, he admitted
that he never gave any notice to the Cincinnati Association to terminate its authority to
act as Mirage’s agent for purposes of the CBA (as required under the 2001-2004 CBA).
He also never provided written notice to the Cincinnati Association or to the Union that
he intended to terminate Mirage and not be bound by the successor CBAs.
The Sixth Circuit has held that language terminating the authority to negotiate a
CBA must be clear and explicit. Office & Professional Employees Int’l Union, Local 42
v. United Automobile, Aerospace & Agricultural Implement Workers of America,
Westside Local No. 174, UAW, 524 F.2d 1316, 1317 (6th Cir. 1975). As a matter of
law, Reeve’s alleged verbal notice to a Union representative does not satisfy that
standard. The affidavit of Fred Hubbard (Doc. 21-1) and attached copies of the CBAs
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provide evidence of the successive CBAs entered into by the Union and the Cincinnati
Association. As a member of the latter entity, Mirage remains bound by those CBAs,
unless and until Defendants issue the requisite written notice of termination.
Defendants alternatively argue that Plaintiffs have failed satisfy their burden
under Rule 56 that no material facts exist concerning the enforceability of the
subsequent CBAs. For example, Defendants suggest that Plaintiffs themselves have
failed to prove that they complied with the “written changes only” provision of Article 35.
In other words, Defendants suggest that if any of the post-2004 CBAs that are alleged
to be binding on Mirage contained any changes from the 2001-2004 CBA signed by
Reeves, then in order to gain summary judgment Plaintiffs would need to prove that
those changes were submitted in writing not less than sixty (60) days prior to the
expiration of the prior CBA. Defendants do not contend that there were any changes, or
that any changes were not made in accord with Article 35; they instead merely argue
that Plaintiffs must offer proof on this issue. Using the same logic, Defendants assert
that to the extent that material language of the successive CBAs was not changed, then
Plaintiffs are required to prove that fact.
Defendants offer no authority for this alternative argument other than a general
citation to Rule 56, Fed. R. Civ. P. In their reply, Plaintiffs contend that the argument
simply is not relevant, in part because Mirage authorized the Cincinnati Association to
negotiate on its behalf and never revoked that authority. There is no evidence that
Cincinnati Association ever challenged the successor CBAs as not properly modified
(even assuming that they were modified). The Court agrees that the argument is not
material in the context of the record presented. The issues presented by the motion are
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whether: (1) the evergreen clause is valid and enforceable; (2) Defendants provided
written notice of termination; (3) Defendants had covered employees and violated the
CBAs. Defendants cannot defeat the motion by attempting to create a factual issue out
of thin air that has never previously been presented, and as to which Defendants offer
only a speculative theory that an issue may exist, without so much as the slightest
evidence to suggest that a material factual dispute does exist (or citation to authority
that they would have standing to present it).
2. Prior Course of Conduct
In addition to the evergreen clause, Plaintiffs argue that Mirage is bound to
comply with the CBAs based upon its prior course of conduct. Plaintiffs rely upon
several cases, including Michigan Bricklayers & Allied Craftsmen Health Care Fund,
116 F.3d 1480 at *2 (6th Cir. 1997)(Table, text available on Westlaw), to argue that
Mirage remains bound by successor agreements to the 2001-2004 CBA, because
Mirage continued to withhold union dues, and prepared and submitted contribution
reports to the union that were equivalent to the rate listed in the CBA. Plaintiffs argue
that for the same reasons that the Sixth Circuit held that the defendant was bound in the
Michigan Bricklayers case, so too is Mirage liable in this case.

Mirage submitted

monthly contribution reports reflecting the current union rates for each Fund, and
submitted those reports through June of 2011 before stopping their submission.
Reeves repeatedly signed certification language similar to that in Michigan Bricklayers,
stating that the forms were being submitted “in accordance with the obligations
assumed by this firm under the current applicable collective bargaining agreement and
the provisions of the applicable trust agreements.” (Reeves Depo Ex. 4). The fact that
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Mirage continued to withhold Union dues for Kelly Nolan up to January of 2011 provides
additional evidence that Mirage acted in accordance with the CBAs. Although Reeves
testified that he was withholding those dues in trust in the event that Nolan decided to
reinstate his dues with the Union, that explanation is inconsistent with Mirage not being
a party of the CBA. If Mirage were not bound to the CBA, Mirage would not have the
legal authority to withhold Union dues, and would not be able to submit them to the
Union on Nolan’s behalf.
As discussed, the Court finds the interpretation of the evergreen clause under
Fantin to be controlling in this case. However, the Sixth Circuit’s reasoning in Michigan
Bricklayers and similar cases supports an additional conclusion that Defendants’ course
of conduct confirmed the extension of the successive CBAs, and the willingness to be
bound by those agreements at least through June 2011. See also Ohio and Vicinity
Regional Council of Carpenters v. Greg Constr. Co., 433 F. Supp.2d 862, 865 (N.D.
Ohio 2006)(employer’s conduct supported “implied acceptance” of successive CBA);
Silveri, 78 F. Supp.2d at 683, n. 15 (finding Defendants’ argument to be “specious in
light of the fact that the record evidence…establishes that Defendants routinely paid the
Funds shortly after covered work was done at whatever rate was in effect at the time
they made Fund contributions.”).
3. Whether the Identified Employees are Performing Covered Work
Four specific employees were identified by the Funds’ auditor as covered
employees to date: Kelly Nolan, Michael Storer, David Bollinger, and Jerome Edwards.
The CBA specifically defines covered work as including caulking work and bricklaying.
Kelly Nolan testified that the only type of work he performed was caulking work; Reeves
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similarly testified that Nolan performed caulking work. The testimony concerning Storer,
Bollinger, and Edwards also confirms their work as bricklayers, 2 which work is also
described as covered work by the CBA. During his deposition, Reeves admitted that
three additional employees (Jeffrey A. Francis, Nikolay Sinenko, and Brian Speed), all
of whom were listed on fringe benefit reports submitted by Mirage, also were employed
as bricklayers.
The CBAs contain language that requires contributions to be paid for “each
Employee covered by this Agreement,” and Article 4 of the 2001-2004 CBA specifically
provides for the Agreement to cover “all bricklayers, pointer-cleaner-caulkers, and stone
masons[’] work falling within the jurisdiction of the Union….”

In other words, all

employees who perform covered work are covered by the CBA regardless of whether
they are members of the Union, so long as they fall “within the jurisdiction” of the Union.
Reeves testified, essentially, that he did not believe that the CBA applied
because Mirage was not a “union” business and did not have covered union employees.
However, Plaintiffs have submitted the affidavit of the auditor, who found “no
exceptions” to the determination that the referenced employees would fall “within the
jurisdiction” of the Union based upon the work performed. Defendants do not dispute
this interpretation of Article 4 of the CBA, which is supported by the case law cited by
Plaintiffs.

See Fantin, 163 F.3d at 967-968, 970 (written notice that individual

employees were terminating their affiliation as Union members did not serve to
terminate the CBA, which required continued contributions, because employer was

2

Reeves testified that Edwards, his nephew, performs work as a bricklayer, but also “can” perform work
as a caulker to help out. (Reeves Depo. at 25).

11

obligated to remit contributions for each employee regardless of Union status); see also
Trustees of B.A.C. Local 32 Ins. Fund v. Silveri, 78 F. Supp.2d 670, 678 (E.D. Mich.
2000).
In response to Plaintiffs’ argument, Defendants object only to Plaintiffs’ citation to
the affidavit of the auditor, arguing that he is not qualified to determine which employees
are allegedly covered by the CBA. However, as Plaintiffs point out in their reply, the
classification of the covered employees is not based solely on the auditor’s affidavit, but
instead is irrefutably confirmed by the deposition testimony of both Nolan and Reeves
who confirmed the referenced employees’ work as caulking and bricklaying.
Defendants offer no evidence to contradict that testimony.
4. Judgment to be Granted
In sum, the Court concludes that there is no issue of material fact and that
Defendant Mirage remained bound by the successor CBAs that followed the expiration
of the 2001-2004 CBA, based upon Mirage’s course of conduct, the existence of the
valid evergreen clause, and the lack of any valid written termination either of Mirage’s
membership in the Association or of the Defendants’ participation in the CBA.
Additionally, there appears to be no issue of material fact concerning whether the
referenced employees were covered employees under the CBA.
Defendants’ response in opposition challenges only the underlying issues
(whether Mirage remains bound by the CBAs and whether the employees performed
covered work). Defendants do not directly challenge the calculation of the amounts that
Plaintiffs seek in judgment, which sums are based upon Plaintiffs’ recent audit. For the
reasons previously expressed, and because no dispute has been presented concerning
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the mathematical calculations resulting from the audit, the Court agrees that partial
judgment should be awarded in the amount of $62,975.12.
In addition to the sum calculated from the prior audit, Plaintiffs seek an additional
audit of Mirage’s books and records beginning January 1, 2013 and continuing through
to the present. Plaintiffs seek a prospective judgment “for any additional sums which
Mirage may become obligated to pay as discovered by audit and/or that are incurred
between the date of the filing of the Complaint…and that date of judgment together with
liquidated damages, interest, costs and Plaintiffs’ reasonable attorney fees.” (Doc. 22 at
16). Unlike the sum determined from the prior audit, the Court declines to enter a
prospective judgment in an undetermined future amount. There is no basis for finding
that Defendants have waived their right to challenge any future calculation, including but
not limited to the amount of reasonable attorney’s fees.
III. Conclusion and Order
For the stated reasons, IT IS ORDERED that Plaintiffs’ motion for partial
summary judgment (Doc. 22) be GRANTED and that judgment on Count I of Plaintiffs’
claim be entered against Defendants in the amount of $62,975.12. Judgment is also
rendered on Count II, to the extent that Mirage shall submit to an audit of its books by
Plaintiffs’ representatives beginning January 1, 2013 until the present time.

s/ Stephanie K. Bowman
Stephanie K. Bowman
United States Magistrate Judge

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