The opinion of the court was delivered by: Chief Judge Curtis L. Collier
Plaintiffs Trustees of the Plumbers and Steamfitters Local Union No. 43 Health and Welfare Fund and Trustees of the Plumbers and Steamfitters Local Union No. 43 Pension Fund ("Plaintiffs") filed this case against defendant Larry Crawford, individually and doing business under various names ("Defendant"),*fn1 alleging violations of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(a)(3), 1132(g)(2), and 1145. Plaintiffs and Defendant agree that for 25 years Defendant contributed to a health and welfare fund and a pension fund run by Plaintiffs. Most everything else the parties disagree on, including whether those contributions were pursuant to a collective bargaining agreement, what work Defendant's non-union employees performed, and whether Defendant owes Plaintiffs over $1.2 million, which Plaintiffs sued to recover. The parties filed cross-motions for summary judgment (Court File Nos. 58 & 60), along with accompanying memoranda (Court File Nos. 61 & 70), responses (Court File Nos. 65 & 69), replies (Court File Nos. 71 & 72), and a sur-reply at the Court's invitation (Court File No. 78). For the following reasons, the Court will GRANT IN PART Plaintiff's motion (Court File No. 58) and DENY Defendant's motion (Court File No. 60).
Plaintiffs operate a health and welfare fund and a pension fund ("Funds"), which serve the Plumbers and Steamfitters Local Union No. 43 ("Union"), which represents employees, and the Associated Mechanical Contractors, which represents employers. The Funds are governed by trust agreements, and Defendant contributes to them for himself and his employees. Defendant has contributed to these multiemployer Funds for approximately twenty-five years, each month submitting a signed statement certifying "that the information contained in this report is a full and accurate statement of hours worked and wages earned by all employees working at the trade under the bargaining agreement." (Court File No. 70, p. 11). Plaintiffs contend Defendant contributes to the Funds because he is bound by a collective bargaining agreement, but Defendant contends he is not party to the collective bargaining agreement ("CBA"). He contends he contributes to the Funds under a provision of the trust agreements allowing participation by employees not covered by a CBA. Plaintiffs assert Defendant agreed to be bound by a CBA in 1983 and again in 1992 and that these CBAs perpetually renew. Defendant, however, argues the CBAs do not renew automatically and denies signing the 1993 CBA, and asserts he is not bound by a CBA.
The CBA requires employers to submit contributions to the Funds on behalf of all employees performing work covered by the CBA ("covered work"), including work done by non-Union employees (Court File No. 58-3, "CBA"). Plaintiffs assert Defendant did not make contributions for non-union employees performing covered work. They brought this action under ERISA, 29 U.S.C. §§ 1132(a)(3), 1132(g)(2), and 1145, seeking $1.2 million in delinquent contributions, interest, penalties, liquidated damages, and punitive damages, along with costs, expenses, and attorney's fees. In addition to denying he is bound by the CBA, Crawford denies using non-union employees for covered work. He also claims the definition of "covered work" in the CBA is ambiguous and asserts that requiring him to pay delinquent contributions for non-Union employees who did not receive benefits from the Funds would lead to a windfall for Plaintiffs.
Summary judgment is proper when "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 the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). When evaluating cross-motions for summary judgment, each motion is evaluated on its own merits with all facts and inferences in the light favorable to the nonmoving party. Bakery & Confectionery Union & Indus. Int'l Health Benefits & Pension Funds v. New Bakery Co., 133 F.3d 955, 958 (6th Cir. 1998).
First, the moving party must demonstrate no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Leary v. Daeschner, 349 F.3d 888, 897 (6th Cir. 2003).
The Court views the evidence, including all reasonable inferences, in the light most favorable to the non-movant. Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574 (1986); Nat'l Satellite Sports, Inc. v. Eliadis Inc., 253 F.3d 900, 907 (6th Cir. 2001). However, the non-movant is not entitled to a trial based solely on its allegations, but must submit significant probative evidence to support its claims. Celotex, 477 U.S. at 324; McLean v. Ontario, Ltd., 224 F.3d 797, 800 (6th Cir. 2000). The moving party is entitled to summary judgment if the non-movant fails to make a sufficient showing on an essential element for which it bears the burden of proof. Celotex, 477 U.S. at 323. In short, if the Court concludes a fair-minded jury could not return a verdict in favor of the non-movant based on the record, the Court may enter summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52 (1986); Lansing Dairy, Inc. v. Espy, 39 F.3d 1339, 1347 (6th Cir. 1994).
If the Court does not render summary judgment on the whole action, it "should, to the extent practicable, determine what material facts are not genuinely at issue." Fed. R. Civ. P. 56(d).
Plaintiffs brought this action under a section of ERISA stating: "Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreementshall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement." 29 U.S.C. § 1145. That section may be enforced by the trustees of a plan in federal court. Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539, 547 (1988). Plaintiffs also brought suit under 29 U.S.C. § 1132(a)(3) & (g)(2), which allows fiduciaries to bring civil actions to obtain equitable relief and recover unpaid contributions, interest or liquidated damages, and reasonable attorney's fees and costs.
Essentially, Plaintiffs make the following allegations:
(1) Defendant is bound by a collective bargaining agreement;
(2) the CBA requires contributions for non-union employees performing covered work;
(3) Defendant had non-union employees perform covered work; and
(4) Defendant did not make the required contributions for such employees.
Defendant denies being bound by the CBA, denies using non-union employees for covered work, and argues non-union employees never received benefits and cannot receive them now.
A. Defendant is Bound by the CBA
After reviewing the evidence, the Court concludes Defendant is bound by the CBA. To reach this conclusion, the Court began with a central fact agreed upon by both parties: Defendant contributed to the Funds for 25 years. The only way Defendant could contribute to employee benefit funds is pursuant to written agreement creating the Funds. 29 U.S.C. § 1102. Defendant contends he was bound by the trust agreements, not the CBA. But, as is discussed below, his explanation of being bound by the trust agreements without being bound by the CBA is not reasonable. The facts show the only way Defendant could participate in the Funds is if he was bound by the CBA.
Contract interpretation is a question of law for the Court. Golden v. Kelsey-Hayes Co. (In re Golden), 73 F.3d 648, 653 (6th Cir. 1996). For the parties to have entered into the trust agreements, there must have been a meeting of the minds in mutual assent. See Howell v. Rivergate Toyota, Inc., 144 F. App'x 475, 480 (6th Cir. 2005) (applying Tennessee law). To determine whether there was a meeting of the minds, the Court looks at objective manifestations of the parties' intent. Bosley v. 21 WFMJ TV, Inc., Nos. 06-3091, 06-3624, 06-3625, 06-3626, 06-3894, 06-3895, 2007 WL 2050655, *4, 2007 U.S. App. LEXIS 17396, *13 (6th Cir. July 13, 2007); RE/MAX Int'l, Inc. v. Realty One, Inc., 271 F.3d 633, 646 (6th Cir. 2001). Defendant's after-the-fact subjective manifestations, that he was never bound by the CBA, are superseded by the objective evidence.
Objective manifestation is contained in the trust agreements. Defendant argues the trust agreements allow for participation by employees who work for employers not party to a CBA. However, his reading of the trust agreements is not a possible valid interpretation.
In construing the trust agreements, the Court looks to general rules of contract interpretation. See Rodriguez v. Tenn. Laborers Health & Welfare Fund, 89 F. App'x 949, 953 (6th Cir. 2004). "When interpreting ERISA plan provisions, general principles of contract law dictate that we interpret the provisions according to their plain meaning in an ordinary and popular sense. In applying the 'plain meaning' analysis, we must give effect to the unambiguous terms of an ERISA plan." Williams v. International Paper Co., 227 F.3d 706, 711 (6th Cir. 2000) (internal citations and quotation marks omitted). The terms of a contract should "be interpreted as part of an integrated whole." Musto v. American General Corp., 861 F.2d 897, 906 (6th Cir. 1988).
Starting first with the health and welfare trust agreement (Court File No. 60-5), it defines an "Employer" as:
Any person, firm association, union, trust, partnership, or corporation employing an employee working under the "jurisdiction of the Unions" and contributing into the Welfare Fund, for said "Employees." "Jurisdiction or the Unions" as used in this Agreement shall mean the area of place covered by collective bargaining agreements maintained with the employers. (id., art. I § 1).
This section provides that an employer must employ employees working under the "jurisdiction of the Union," and expressly states the "jurisdiction of the Unions" is workplaces with CBAs "maintained with the employers." There is no provision allowing for participation by an employer who is not bound by a CBA.
The trust agreement contains two relevant definitions of an "Employee." The first is: Any person covered by a collective bargaining agreement; who is engaged in employment with respect to which the employer is obligated to make contributions to this Health and Welfare Fund That provision requires contributions on behalf of employees covered by a CBA. The second definition of "Employee" is:
Any other person, or classification of persons, not covered under a collective bargaining agreement between the employer and union as may be accepted by the trustees and for which contributions are received at the ...