Locals 302 and 612 of the International Union of Operating Engineers Construction Industry Health and Security Fund et al v. Trepus Corporation

Filing 13

ORDER Granting Pltf's 10 Motion for Summary Judgment by Hon. Mary Alice Theiler.(TF)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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09 LOCALS 302 AND 612 OF THE
INTERNATIONAL ENGINEERS
10 CONSTRUCTION INDUSTRY HEALTH
AND SECURITY FUND, et al.,
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Plaintiffs,
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v.
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TREPUS CORPORATION,
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Defendant.
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CASE NO. C13-0170-MAT

ORDER GRANTING
PLAINTIFFS’ MOTION FOR
SUMMARY JUDGMENT

INTRODUCTION
Plaintiffs move the Court for summary judgment against defendant Trepus Corporation

18 (Dkt. 10) in this matter brought pursuant to the Employee Retirement Income Security Act, 29
19 U.S.C. § 1001, et seq. (ERISA). Defendant did not oppose plaintiffs’ motion. The Court
20 deems defendant’s failure to oppose to be an admission that the motion has merit. See Local
21 Civil Rule 7(b)(2). The Court also, for the reasons described below, finds plaintiffs entitled to
22 summary judgment.

ORDER GRANTING MOTION
FOR SUMMARY JUDGMENT
PAGE -1

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BACKGROUND
Plaintiffs include three trust funds and a local union: (1) Locals 302 and 612 of the

03 International Union of Operating Engineers Construction Industry Health and Security Fund;
04 (2) Locals 302 and 612 of the International Union of Operating Engineers-Employers
05 Construction Industry Retirement Fund; (3) the Western Washington Operating Engineers06 Employers Training Trust Fund; and (4) Local 302 of the International Union of Operating
07 Engineers. Defendant employs members of a bargaining unit represented by IUOE Local 302
08 (“Local 302). (Dkt. 11, ¶9.) Local 302 is an employee organization within the meaning of
09 ERISA.
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Defendant is bound by the Associated General Contractors (AGC) master labor

11 agreement with Local 302 of the International Union of Operating Engineers, requiring it to
12 report and pay monthly contributions to plaintiff Trust Funds at specified rates for eligible
13 employees.

(Id., ¶11, Ex. E at Schedule B.)

Defendant is also bound to three Trust

14 Agreements with the Trust Funds. (Id., ¶2, Exs. A-D.) The Trust Funds provide medical,
15 retirement, and training benefits to eligible participants. (Id., ¶6.)
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A primary function of the Trust Funds is to perform audits on participating employers.

17 (Id., ¶7.) The audits help to ensure employers’ compliance with reporting and contributions,
18 and the proper funding of the Trust Funds.

(Id., ¶12.) The Trust Agreements require

19 defendant to submit to audits of its payroll records. (Id., ¶8, Ex. A, Article IV § 17, Ex. B,
20 Article IV § 17, and Ex. C, Article IV § 11).) The audit process entails the review of
21 defendant’s payroll records, information, data, reports, and other documents. (See id.)
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The Trustees of the Trust Funds deemed it both necessary and advisable to examine

ORDER GRANTING MOTION
FOR SUMMARY JUDGMENT
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01 defendant’s books and records for the period of January 1, 2009 through the present date in
02 order to determine whether defendant has reported and paid all amounts due for eligible
03 employees. (Id., ¶16.) In a letter dated August 21, 2012, auditors sent defendant a letter
04 requesting access to documents to perform an audit. (Id., ¶13, Ex. F.) An appointment to
05 conduct the audit was scheduled, but later canceled. (Id., ¶13.) On or around January 14,
06 2013, defendant notified the auditors it would not be providing access to its records for an audit.
07 (Id.) Counsel for the Trust Funds, in a letter dated January 17, 2013, again requested
08 arrangements be made to conduct the audit. (Id., ¶14, Ex. G.) Defendant did not respond to
09 the request. (Id., ¶14.)
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DISCUSSION
Summary judgment is appropriate when a “movant shows that there is no genuine

12 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
13 R. Civ. P. 56(a). The moving party is entitled to judgment as a matter of law when the
14 nonmoving party fails to make a sufficient showing on an essential element of his case with
15 respect to which he has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23
16 (1986). The Court must draw all reasonable inferences in favor of the nonmoving party.
17 Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
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This case proceeds pursuant to ERISA. ERISA obligates participating employers to

19 make contributions to a multi-employer trust fund in accordance with the contract and trust
20 agreement. ERISA Section 515, 29 U.S.C. § 1145. “The [United States] Supreme Court has
21 made clear that the trust documents, if consistent with the ERISA statute, govern the scope of
22 the trustees’ rights and duties.” Santa Monica Culinary Welfare Fund v. Miramar Hotel

ORDER GRANTING MOTION
FOR SUMMARY JUDGMENT
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01 Corp., 920 F.2d 1491, 1494 (9th Cir. 1990) (citing Cent. States, SE and SW Areas Pension Fund
02 v. Central Transp., Inc., 472 U.S. 559, 568 (1985)).
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It is further well established that a trust fund has the right to conduct audits to ensure

04 proper funding. See generally Cent. States, SE and SW Areas Pension Fund, 472 U.S. 559.
05 In fact, under common law and ERISA, trust funds are obligated to ensure proper funded. Id.
06 at 569-73, 80. Where a trust agreement grants a trust fund the right to conduct an audit, an
07 employer “cannot receive the benefits of the Fund yet escape its attendant burdens,” including
08 “the provision of the Trust Agreement permitting the Trustees to audit an employer’s books and
09 records.” Santa Monica Culinary Welfare Fund, 920 F.2d at 1493.
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In this case, it is undisputed defendant signed the compliance agreement binding it to

11 the Trust Agreements. (Dkt. 11, ¶2, Ex. D.) It is further clear that the Trust Agreements
12 require defendant to submit to audits of its records:
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. . . The Board may require the Employers . . . to promptly furnish to the
Trustees, on demand, such payroll records, information, data, reports or
documents reasonably required for the purposes of administration of the Fund.
The parties agree that they will use their best efforts to secure compliance with
any reasonable request of the Board for any such information, data, reports or
documents. The Trustees, or their authorized representatives, may examine the
pertinent payroll records of each Individual Employer with respect to the
Employees benefiting from this Agreement whenever such examination is
deemed necessary or advisable by the Trustees in connection with the proper
administration of the Fund.

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In the event that any such audit shall determine that the Individual
Employer is delinquent in the payment of contributions due the Fund, the
Individual Employer shall be obligated for the cost of such audit; provided,
however, that the Board of Trustees may waive the imposition of such costs
upon good cause shown.

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22 (Id., Ex. A, Article IV § 17; accord id., Ex. B, Article IV § 17 and Ex. C, Article IV § 11

ORDER GRANTING MOTION
FOR SUMMARY JUDGMENT
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01 (containing same or similar language).)
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Plaintiffs here attest they deem an audit of defendant’s records necessary and advisable

03 in the administration of the Trust Funds. (Id., ¶16.) They demonstrate they requested review
04 of defendant’s records to conduct an audit, and attest that defendant refused to comply with
05 their requests.

(Id., ¶¶ 13-16, Exs. F-G.)

In failing to respond to the current motion,

06 defendant does not deny its obligation to submit to the audit, or dispute its failure to comply.
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The Court finds no issues of fact regarding either the enforceability of the compliance

08 and trust agreements, or plaintiffs’ entitlement to conduct an audit. Accordingly, the Court
09 finds plaintiffs entitled to summary judgment. Defendant is required to provide access to its
10 records for its employees in order to allow for an audit for the period of January 1, 2009 through
11 the present date.
CONCLUSION

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Plaintiffs’ motion for summary judgment (Dkt. 10) is GRANTED. Defendant is

14 hereby ORDERED to provide the Trust Funds – within two (2) weeks of the date of this Order
15 – the following documents for the time period of January 1, 2009 through the present date:
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(1)
Collective bargaining agreements and subscriber’s agreements, for the
entire testing period, covering the employees who are reported to the Trust
Funds.
(2)
Payroll register or other documents which show wages paid and hours
worked by month (preferably) or week.

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(3)

Washington tax and wage reports (EMS 5208).

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(4)
Monthly hours summaries or other documents used to facilitate accurate
reporting to the Trust Funds.

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(5)

Time cards for the most recent full quarter of the current year.

ORDER GRANTING MOTION
FOR SUMMARY JUDGMENT
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(6)
Monthly transmittals to the Trust Funds showing the names reported for
benefits.

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Monthly transmittals to other Trust Funds.

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(8)
Detailed documentation of the job classifications of employees NOT
reported to the Trust Funds.

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(9)

Cash disbursement journals or check registers.

06 The Court further ORDERS that defendant give the authorized representatives of the Trustees
07 of the Trust Funds both ample time and opportunity to examine all such materials, without
08 harassment, at such time and at such place as shall be convenient to the Trustees’ authorized
09 representatives. The Court will also consider a motion for attorney’s fees and costs associated
10 with plaintiffs’ efforts in this lawsuit upon submission of a properly supported motion.
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DATED this 28th day of August, 2013.

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A

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Mary Alice Theiler
Chief United States Magistrate Judge

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ORDER GRANTING MOTION
FOR SUMMARY JUDGMENT
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