Locals 302 and 612 of the International Union of Operating Engineers Construction Industry Health and Security Fund et al v. Barry Civil Construction, Inc.
Filing
18
ORDER GRANTING Plaintiffs' 11 Motion for Summary Judgment by Hon. James P. Donohue.(AE)
1
2
3
4
5
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE
6
7
8
9
LOCALS 302 AND 612 OF THE
INTERNATIONAL UNION OF OPERATING
ENGINEERS CONSTRUCTION INDUSTRY
HEALTH AND SECURITY FUND, et al.,
Case No. C16-0404-JPD
ORDER GRANTING PLAINTIFFS’
MOTION FOR SUMMARY JUDGMENT
10
Plaintiffs,
11
v.
12
13
BARRY CIVIL CONSTRUCTION, INC., a
Washington corporation,
Defendant.
14
15
I.
16
INTRODUCTION AND SUMMARY CONCLUSION
17
Plaintiffs, Local 302 of the International Union of Operating Engineers (“Local 302” or
18
the “Union”) and three Operating Engineers trust funds, move the Court for summary judgment
19
against defendant Barry Civil Construction, Inc. (“Barry Civil”). Dkt. 11. Barry Civil opposes
20
the motion. Dkt. 14. After careful consideration of the plaintiffs’ motion, Barry Civil’s
21
opposition, plaintiffs’ reply, and the balance of the record, the Court GRANTS plaintiffs’ motion
22
for summary judgment. Dkt. 11.
23
24
ORDER
PAGE - 1
1
II.
BACKGROUND
2
The relevant facts of this case are undisputed. Plaintiff Operating Engineers trust funds
3
(the “Trust Funds”) are employee benefit plans governed by § 302(c)(5) of the Labor
4
Management Relations Act of 1947, and the Employee Retirement Income Security Act of 1974
5
(“ERISA”). See 29 U.S.C. § 186(c)(5); 29 U.S.C. § 1001 et seq., as amended (1988). The Trust
6
Funds provide medical, retirement, and training benefits to eligible employees. See Dkt. 12 at
7
¶ 7 (Kafer Decl.). Specifically, the Trust Funds include the Locals 302 and 612 of the
8
International Union of Operating Engineers - Construction Industry Health and Security Fund,
9
the Locals 302 and 612 of the International Union of Operating Engineers - Employers
10
Construction Industry Retirement Fund, and the Western Washington Operating Engineers 11
Employers Training Trust Fund. Id. at ¶ 2; Dkt. 11 at 1. Each Trust Fund was established by a
12
written trust agreement (the “Trust Agreements”). See Dkt. 12 at ¶ 10 (Kafer Decl.).
13
Individual employers bound by a collective bargaining agreement with plaintiff Local
14
302, the 2015-2018 Operating Engineers Local 302 Master AGC Labor Agreement (the “Master
15
Labor Agreement”), are required to promptly pay monthly contributions to the Trust Funds at
16
specified rates for each hour of compensation the employer pays to its eligible employees. Dkt.
17
12, Ex. B. The Master Labor Agreement and Trust Agreements provide that the contributions to
18
the trust funds shall be made promptly, and in any event on or before the fifteenth (15) day of the
19
month following the month in which the hours were worked. See Dkt. 12, Ex. C at 83-84; Dkt.
20
12, Ex. D at 146-47; Dkt. 12, Ex. E at 184-85. In addition, the Trust Agreements provide that an
21
employer who is delinquent in making its required contributions to the Trust Funds must pay the
22
unpaid contributions, as well as liquidated damages “in the sum of twelve percent (12%) of the
23
amount of [the] delinquency,” “interest at the rate of twelve percent (12%) per annum” for the
24
ORDER
PAGE - 2
1
delinquent contributions, attorneys’ fees, and court costs relating to the collection of delinquent
2
contributions. See Dkt. 12, Ex. C at 84; Dkt. 12, Ex. D at 147; Dkt. 12, Ex. E at 185.
3
Barry Civil became bound to the Master Labor Agreement, as well as the three Trust
4
Agreements, when it entered into an Operating Engineers Local 302 Compliance Agreement (the
5
“Compliance Agreement”) with Local 302 on January 12, 2010.1 See Dkt. 12, Ex. A. Barry
6
Civil acknowledges that it is a party to the above-described agreements, and is therefore
7
obligated to remit monthly contributions to the Trust Funds following work by its eligible
8
Operating Engineers employees and that “such payment shall be tendered by the 15th of the
9
month following the month that the hours were worked.” Dkt. 14 at 2. Moreover, Barry Civil
10
admits that its contributions to the Trust Funds for January 2016 through April 2016 were not
11
timely paid. Id. at 3 (acknowledging that payment was not tendered “until after the 15th day of
12
the month following the month in which the union members worked.”).
13
On March 18, 2016, plaintiffs initiated this action against Barry Civil to recover over
14
$25,000 in unpaid contributions, liquidated damages, interest, attorneys’ fees and costs. Dkt. 1;
15
Dkt. 12, Ex. G. Plaintiffs’ initial motion for summary judgment asserted that Barry Civil made
16
delinquent payments for January 2016, owes no payments for February 2016, and “has still not
17
made any payments for March and April of 2016.” Dkt. 11 at 2. However, in their reply brief,
18
plaintiffs acknowledged that since this action was initiated, “Barry Civil has also made its
19
contributions, dues, and UP payments for March and April 2016.” Dkt. 16 at 2. Thus, “Barry
20
21
22
23
24
1
Specifically, by signing the Compliance Agreement, Barry Civil agreed to be bound by
the 2007-2010 Associated General Contractors of Washington Agreement, as well as any
successor agreement. Dkt. 12 (Kafer Decl.) at ¶ 8; Dkt. 12, Ex. A at 1. The parties’ relationship
is currently governed by the 2015-2018 Master Labor Agreement, which is the successor to the
2007-2010 Associated General Contractors of Washington Agreement. Dkt. 12 (Kafer Decl.) at
¶ 8; Dkt. 12, Ex. B.
ORDER
PAGE - 3
1
Civil has paid all of its contributions, dues, and UP payments for January through April 2016,”
2
although these payments were all late. Dkt. 17 (Second Kafer Decl.) at ¶ 4. As a result,
3
plaintiffs are only seeking $3,667.68 in liquidated damages, $154.72 in interest, and attorneys’
4
fees and costs to be determined because Barry Civil violated the Trust Agreements and federal
5
law by making its contributions, dues, and UP payments late. Dkt. 16 at 2, 9; Dkt. 17 (Second
6
Kafer Decl.) at ¶¶ 5-6, Ex. A.
7
As noted above, Barry Civil concedes that its contributions and/or payments to the Trust
8
Funds were made after the fifteenth of the month following the month in which the work was
9
completed. However, Barry Civil contends that the parties entered into a Settlement Agreement
10
on March 27, 2015 to resolve two previous cases filed by plaintiffs against Barry Civil in this
11
district (Case Nos. C13-1883-TSZ and C14-1930-JCC). In addition to setting forth the terms by
12
which Barry Civil would pay the overdue contributions and dues that were at issue in those two
13
cases, Barry Civil believes the Settlement Agreement altered its legal obligations under the Trust
14
Agreements to pay by the fifteenth of the month by requiring payment to be tendered via joint
15
check from Barry Civil’s general contractors in the future. Dkt. 14 at 3.
16
Specifically, the Settlement Agreement provides the following with respect to any future
17
payments made by Barry Civil to plaintiffs:
18
19
20
21
22
23
In addition, current monthly contributions must be made timely; to wit, the
15th of each month.
Defendant will deliver to its general contractors and/or subcontractors
remittance reports for future contributions commencing with its March 2015
contributions and its general contractors and/or subcontractors will then
issue joint checks to [Barry Civil] and Operating Engineers Trust Funds,
which [Barry Civil] will endorse over to operating Engineers Trust Funds.
If payment is not made pursuant to the above agreement, upon ten (10) days
written notice to Defendant, the entire balance will become due and owing, with
24
ORDER
PAGE - 4
1
2
3
4
5
6
interest thereafter at the rate of 12% per annum, together with reasonable
attorneys’ fees and costs thereof . . .
This Agreement sets forth the entire agreement between the parties hereto, and
fully supersedes any and all prior agreements or understandings between the
parties hereto pertaining to the subject matter hereof.
Dkt. 12, Ex. H at 2-3 (bold in original).
Barry Civil contends that “since execution of the Settlement Agreement, [Barry Civil]
7
has delivered remittance reports to its general contractors, and its general contractors have issued
8
joint checks for the contributions owed. The timing of the general contractors’ payment is
9
beyond [Barry Civil]’s control,” and during the period in question the general contractors did not
10
deliver the joint checks until after the fifteenth of the month following the month in which the
11
union members worked. Dkt. 14 at 3. Barry Civil asserts the Settlement Agreement should be
12
interpreted as waiving the timing requirement for payment of contributions and dues in the Trust
13
Agreements, due to the joint check requirement. Id. at 4. Alternatively, Barry Civil asks the
14
Court to find that plaintiffs are estopped from enforcing their right to liquidated damages,
15
interest, and attorneys fees and costs because they put this new “joint check” requirement in the
16
Settlement Agreement. Id. at 4-5. For the reasons discussed below, the Court finds defendant’s
17
arguments unpersuasive.
III.
18
19
JURISDICTION
The parties have consented to this matter proceeding before the undersigned United
20
States Magistrate Judge pursuant to 28 U.S.C. § 636(c). Dkt. 9. The Court has exclusive
21
jurisdiction over this action pursuant to 29 U.S.C. §§ 1132(e)(1) and (f). Venue is proper
22
because the Trust Funds are administered in this district. 29 U.S.C. § 1132(e)(2).
23
24
ORDER
PAGE - 5
1
IV.
DISCUSSION
2
A.
Summary Judgment Standard
3
Summary judgment is appropriate when, viewing the evidence in the light most favorable
4
to the nonmoving party, there exists “no genuine issue as to any material fact” such that “the
5
moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). A material fact
6
is a fact relevant to the outcome of the pending action. See Anderson v. Liberty Lobby, Inc., 477
7
U.S. 242, 248 (1986). Genuine issues of material fact exist when the evidence would enable “a
8
reasonable jury . . . [to] return a verdict for the nonmoving party.” Id. In response to a summary
9
judgment motion that is properly supported, the nonmoving party may not rest upon mere
10
allegations or denials in the pleadings, but must set forth specific facts demonstrating a genuine
11
issue of fact for trial, and produce evidence sufficient to establish the existence of the elements
12
essential to his case. See Fed. R. Civ. P. 56(e); Celotex Corp. v. Cattrett, 477 U.S. 317, 323
13
(1986). A mere scintilla of evidence, however, is insufficient to create a factual dispute. See
14
Anderson, 477 U.S. at 252. To defeat a motion for summary judgment, the non-moving party
15
must make more than conclusory allegations, speculations, or argumentative assertions that
16
material facts are in dispute. T.W. Elec. Service, Inc. v. Pacific Elec. Contractors Ass'n, 809 F.2d
17
626, 630-32 (9th Cir. 1987).
18
B.
19
20
21
22
23
24
ERISA Governs the “Delinquent Contributions” Provisions of the Trust
Agreements, and the Parties’ Settlement Agreement Did Not Change the
Deadline for Payment
ERISA governs cases such as this one, where an employer owed contributions to an
employee benefit plan at the time the lawsuit was initiated. See 29 U.S.C. § 1144(a) (providing
that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate to
any employee benefit plan. . . .”); Egelhoff v. Egelhoff, 532 U.S. 141, 146 (2001) (observing that
ERISA’s preemption provision is “clearly expansive”); General Am. Life Ins. Co. v. Castonguay,
ORDER
PAGE - 6
1
984 F.2d 1518, 1521 (9th Cir. 1993) (“ERISA’s preemption clause is one of the broadest ever
2
enacted by Congress, and it preempts even generally applicable laws, not just laws aimed
3
exclusively at employee benefit plans. . . .”) (internal citations omitted). ERISA provides
4
specific remedies for delinquent contributions, including an award of “(A) the unpaid
5
contributions, (B) interest on the unpaid contributions, (C) an amount equal to the greater of—
6
(i) interest on the unpaid contributions, or (ii) liquidated damages provided for under the plan in
7
an amount not in excess of 20 percent (or such higher percentage as may be permitted under
8
Federal or State law) of the amount determined by the court under subparagraph (A), [and] (D)
9
reasonable attorney’s fees and costs of the action, to be paid by the defendant. . . .” 29 U.S.C.
10
§ 1132(g)(2).
11
Furthermore, ERISA obligates participating employers to make contributions to a multi12
employer trust fund in accordance with the terms of the trust agreement or collective bargaining
13
agreement. See 29 U.S.C. §§ 1102(a), 1103(a), 1145. The language of a written trust agreement
14
defines the rights and obligations of the parties to the trust to the extent they are consistent with
15
ERISA. Id. at § 1145; Santa Monica Culinary Welfare Fund v. Miramar Hotel Corp., 920 F.2d
16
1491, 1493-94 (9th Cir. 1990) (internal citations omitted). As noted above, the Trust
17
Agreements in this case provide that an employer shall pay liquidated damages of 12% of the
18
amount of the delinquent contributions. Defendant has made no showing in these proceedings
19
that this requirement is somehow inconsistent with ERISA, which provides for liquidated
20
damages of up to 20% of any delinquent contributions.
21
Finally, the Ninth Circuit has held that § 1132(g)(2) is “mandatory and not
22
discretionary.” Northwest Adm'rs Inc. v. Albertson's, Inc., 104 F.3d 253, 257 (9th Cir. 1996)
23
(quoting Operating Eng'rs Pension Trust v. Beck Eng'g & Surveying, Co., 746 F.2d 557, 569
24
ORDER
PAGE - 7
1
(9th Cir. 1984)). Section 1132(g)(2) requires only that: “(1) the employer must be delinquent at
2
the time the action is filed; (2) the district court must enter a judgment against the employer; and
3
(3) the plan must provide for such an award.” Id. (citing Idaho Plumbers & Pipefitters Health &
4
Welfare Fund, 875 F.2d at 215). In addition, the Ninth Circuit has held that an employer is liable
5
for mandatory fees under § 1132(g)(2), including interest and liquidated damages,
6
“notwithstanding the defendant’s post-suit, prejudgment payment of the delinquent contributions
7
themselves.” Albertson’s, 104 F.3d at 258.2
8
Here, the Court finds that all three criteria for a mandatory award under § 1132(g)(2) are
9
satisfied. Although neither party has advised the Court regarding the precise date that the
10
delinquent contributions were paid to plaintiffs by Barry Civil, it is undisputed that contributions
11
and dues were still outstanding in March 2016 when this action was filed. In addition, Barry
12
Civil paid all delinquent contributions and dues by no later than June 6, 2016. Dkt. 15 (Sturrock
13
Decl.), Ex. B (June 6, 2016 affidavit from the Union confirming that Barry Civil “has paid all
14
benefits due on hours worked by its employees through the month of April 2016.”).
15
Accordingly, because Barry Civil made delinquent contributions to the Trust Funds, and the
16
Trust Agreements provide for an award of interest on delinquent contributions, liquidated
17
damages, attorneys’ fees, and costs, Barry Civil is liable for such payments pursuant to the Trust
18
Agreements and ERISA.
19
20
21
22
23
24
2
Specifically, the Ninth Circuit expressly rejected the argument that “a mandatory award
under § 1132(g)(2) is improper because the employer voluntarily paid the delinquent
contributions . . . thus the district court did not enter judgment against [the employer] relating to
those contributions. . . .” Id. Instead, the court held that mandatory “[f]ees may be awarded even
though there is no judgment on the merits or when the dispute has become moot because relief is
otherwise obtained.” Id. (citing Lads Trucking Co. v. Board of Trustees of W. Conference of
Teamsters Pension Trust Fund, 777 F.2d 1371, 1375 (9th Cir. 1985)).
ORDER
PAGE - 8
1
C.
Barry Civil’s Waiver and Estoppel Arguments are Unavailing
2
Barry Civil argues that because the Settlement Agreement provided that, starting in
3
March 2015, Barry Civil would deliver remittance reports to its general contractors and the
4
general contractors would pay contributions by joint check, the Settlement Agreement modified
5
the terms for when and how Barry Civil would tender payment. Dkt. 14 at 6. Moreover, Barry
6
Civil reasons that “when read together,” the Settlement Agreement and Trust Agreements must
7
be interpreted as requiring payment by joint check issued by the general contractor, and this term
8
“trumps” the deadline for payment. Id. Barry Civil contends that “[b]ecause neither plaintiffs
9
10
nor [Barry Civil] can compel a general contractor to issue joint checks by the 15th day of the
month following the month that work was performed, the due date of the 15th was, in effect,
11
superseded by the Settlement Agreement.” Id.
12
The Court declines defendant’s invitation to interpret the language of the Settlement
13
Agreement as “waiving” Barry Civil’s obligations under the Trust Agreements to make timely
14
payment by the fifteenth of the month. Although the Settlement Agreement provides that “[t]his
15
Agreement sets forth the entire agreement between the parties hereto, and fully supersedes any
16
and all prior agreements or understandings between the parties hereto pertaining to the subject
17
matter hereof,” it does not contain language waiving any provision of the Trust Agreements with
18
respect to making timely future payments. See Dkt. 12, Ex. H at 2-3. In fact, the opposite is
19
true. The Settlement Agreement provides, in bold font, that “current monthly contributions must
20
be made timely; to wit, the 15th of each month.” Id. This clear and unambiguous deadline is
21
fully consistent with the Master Labor Agreement and Trust Agreements that require trust
22
contributions and/or payments by the fifteenth of the month following the month that the hours
23
were worked. Dkt. 12 (Kafer Decl.) at ¶ 15. The Settlement Agreement also makes it clear that
24
ORDER
PAGE - 9
1
if the current monthly contributions are not made by the fifteenth of each month via joint check,
2
the agreement will be breached. As a result, the Settlement Agreement did not release, waive or
3
excuse Barry Civil from meeting the deadline under the Trust Agreements – it only added to the
4
terms of those agreements by specifying a form of payment, i.e., a joint check issued by the
5
general contractor.
6
Barry Civil’s estoppel argument is similarly unavailing. Barry Civil contends that under
7
Ninth Circuit law, the estoppel doctrine applies if the following elements are satisfied: (1) the
8
party being estopped must know the facts; (2) the party must intend that its conduct shall be
9
acted on or must so act that the party asserting estoppel has the right to believe it so intended;
10
(3) the latter must be ignorant of the true facts; and (4) the party asserting estoppels must rely on
11
the former’s conduct to its injury. Dkt. 14 at 6-7 (citing Ellenburg v. Brockway, Inc., 763 F.2d
12
1091, 1096 (9th Cir. 1985)).
13
However, Barry Civil does not attempt to apply each of these elements to the facts of this
14
case, perhaps because they are not satisfied here. Specifically, Barry Civil does not identify any
15
“facts” that it did not know when it entered into the Settlement Agreement with plaintiffs, or that
16
the plaintiffs allegedly misrepresented. For example, Barry Civil cannot plausibly claim that it
17
was unaware that general contractors can sometimes be late in making payments to
18
subcontractors, necessitating further effort on Barry Civil’s part in order to ensure timely
19
payment by joint check. As plaintiffs point out, Stephany Sturrock, the President of Barry Civil,
20
admitted in her declaration that “Often, [Barry Civil] general contractors are slow to pay, leaving
21
[Barry Civil] without funds to pay plaintiff Trusts by the 15th day of the month following the
22
month that union members worked.” Dkt. 15 (Sturrock Decl.) at ¶ 3. Indeed, Ms. Sturrock
23
explains that late payments by general contractors have been the primary cause of Barry Civil’s
24
ORDER
PAGE - 10
1
difficulty making timely payments to the trusts in recent years, prompting plaintiffs to file
2
several lawsuits against Barry Civil because “we are dependent upon our general contractors
3
making payment to [Barry Civil] before we can afford to tender payment to the Trusts.” Id.
4
Thus, Barry Civil was fully aware that general contractors can be late in making payments before
5
it entered into the Settlement Agreement in question. The company cannot reasonably claim that
6
it did not know, or could not have known that general contractors may be late in issuing joint
7
checks. As a result, the estoppel doctrine does not apply in this case.
8
Although the Court is sympathetic to defendant’s apparent plight and financial situation,
9
as its general contractors are not following through on their obligation to timely issue joint
10
checks, only Barry Civil – and not plaintiffs – are in a position to remedy the situation or seek
11
legal redress against a general contractor who is late in issuing payment. The plain and
12
unambiguous language of the Trust Agreements, Master Labor Agreement, and Settlement
13
Agreement all require Barry Civil to pay liquidated damages, interest on unpaid contributions,
14
attorneys’ fees and costs as a result of its failure to timely pay contributions to the Trust Funds,
15
regardless of the reason for the untimely payment. As a result, there is no genuine issue of
16
material fact regarding whether Barry Civil is liable for these payments due to its breach of the
17
Trust Agreements and federal law. See Albertson’s, 104 F.3d at 257.
18
V.
CONCLUSION
19
For the reasons discussed above, the Court finds no genuine issues of fact that preclude
20
summary judgment in plaintiffs’ favor. Plaintiffs are entitled to liquidated damages equal to
21
12% of the amount of the delinquent contributions for January through April 2016, interest at the
22
rate of twelve percent (12%) per annum for the delinquent contributions, attorneys’ fees, and
23
24
ORDER
PAGE - 11
1
costs from Barry Civil. See Dkt. 17 (Second Kafer Decl.) at ¶¶ 3-4. Accordingly, the Court
2
hereby ORDERS as follows:
3
(1)
Plaintiffs’ motion for summary judgment, Dkt. 11, is GRANTED.
(2)
Judgment is awarded in favor of plaintiffs and against defendant Barry Civil in
4
5
the following amounts: $3,667.68 in liquidated damages, $154.72 in interest, and
6
attorneys’ fees and costs.
7
(3)
The Clerk is directed to send copies of this Order to counsel for all parties.
8
9
DATED this 29th day of August, 2016.
A
10
JAMES P. DONOHUE
Chief United States Magistrate Judge
11
12
13
14
15
16
17
18
19
20
21
22
23
24
ORDER
PAGE - 12
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?