Opinion
No. C-98-2211-EDL.
October 4, 1999
Order Granting in Part and Denying in Part Plaintiff's Motion for Summary Judgment
I. INTRODUCTION
Plaintiff, Board of Trustees of the Northern California Floor Covering Industry, Welfare Fund ("Trust Fund"), brought an ERISA collection action against Defendant Dalton Interiors ("Dalton") for unpaid pension contributions to the Trust Fund. Plaintiff moved for summary judgment alleging that Dalton is responsible for pension contributions for all employee work performed during the term of the collective bargaining agreement ("CBA") entered into between Dalton and Carpet, Linoleum Soft Tile Workers Union. Plaintiff seeks to recover $198,408.78 which allegedly represents the amount of Dalton's unpaid contributions, together with statutory damages, interest, audit fees and attorney fees. See Plaintiff's Mot. at 2.
The term of the CBA was from June 1, 1994 through July 31, 1995. See Plaintiff's Motion For Summary Judgment And Attorneys' Fees Or Evidentiary Hearing ("Plaintiff's Mot.") at 2.
The court held a hearing on the motion on September 7, 1999. Both parties appeared through their counsel of record. Upon consideration of the parties arguments at the hearing and their submissions, and for the reasons set forth below, the Court enters the following order.
II. BACKGROUND
The basic facts are undisputed. Dalton is a "mom and pop" enterprise that had no prior union experience. See Defendant's Memorandum of Points and Authorities In Opposition To Trustees' Motion For Summary Judgment ("Defendant's Opp.") at 1-2; see also Declaration of Stephen Dalton ("Dalton Decl.") at ¶ 8. Dalton was interested in "signing up with the union" because he had a project for Cisco that required union staffing. See Defendant's Opp. at 2; Dalton Decl. at ¶ 3.
Dalton met with the union's business representative, William Bennett ("Bennett"), and after their first meeting, Bennett left Dalton with a copy of the CBA to read overnight. See Dalton Decl. at ¶ 3. Dalton admits that he did not "read" the CBA but "glanced through it." See Defendant's. Opp. at 3:9; see also Dalton Decl. at ¶ 5 and Reply Declaration of Micheal J. Carroll ("Caroll Reply Decl."), Ex. 7 at 21:5-8. At the time, Dalton claims he was "very busy" because he was in a "hurry to sign up with the union" so he could begin the Cisco job. See Dalton Decl. at ¶ 5; see also Caroll Reply Decl., Ex. 7 at 38.
The next day Bennett returned to see Dalton. Dalton recalls his second meeting with Bennett as follows:
. . . I brought up the matter of doing non-union work. From our conversation I understood that when we did union jobs we paid the union and used union help; when we did non-union jobs we used non-union labor and we paid them normal non-union rate. (Emphasis added; Dalton Decl. at ¶ 4.)
Dalton does not dispute that he signed a contract with the union. However, Dalton claims that the premise under which he signed the CBA was that he would only be required to make pension contributions for employees who were union members or for non-union members who worked on union jobs. See Defendant's Opp. at 1-2. Dalton explains that he got that impression through his conversation with Bennett, but does not claim that Bennett told him that directly. See also Caroll Reply Decl., Ex. 7 at 31-33. Bennett, on the other hand, flatly denies telling Dalton that the agreement only covered union jobs or that it only covered one specific job. See Plaintiff's Mot. at 2; Declaration of William Bennett ("Bennett Decl.") at ¶ 5, 6.
Dalton claims that he did not sign the CBA booklet, but signed an "unattached white sheet" and another "sheet of paper, which was attached to several pages entitled `Addendum to the Agreement'." See Defendant's Opp at 3:4-8. Dalton contends that it was his understanding that when he signed the "unattached white sheet" that it would be attached to a document that memorialized the discussions between him and Bennett. Id. at 3:11:15; see also Caroll Reply Decl., Ex. 7 at 21:5-8. There is no evidence in the record explaining how Dalton came to this understanding nor why the document that allegedly memorialized the discussions between him and Bennett was never attached to the CBA.
During the term of the agreement, Dalton had only one union job, the Cisco job, which lasted for less than one month. See Dalton Decl. at ¶ 6, 7. Dalton paid the Cisco workers according to union rates and also made pension contributions to the Trust Fund. Id. However, after the Cisco job ended, Dalton stopped making pension contributions to the Trust Fund. Id. In fact, after the Cisco job ended, Dalton sent the Trust Fund a series of monthly blank remittances showing "zero" for "allocated funds." See Defendant's Opp. at 7; see also Dalton Decl. at Exs. B and C.
On or about June 14, 1996, the Trust Fund conducted an audit of Dalton covering the period June 1, 1994 through June 30, 1995. The audit found that although Dalton had employees on his payroll, he had not made pension contributions for them as required under the CBA. See Declaration of Richard Kim ("Kim Decl.") at ¶ 4-6. Prior to the audit, no one had told Dalton that he owed money to the Trust Fund. See Dalton Decl. at ¶ 10. The results of the audit were submitted to the Trust Fund on May 14, 1997. See Kim Decl. at Ex. 3.
Although the term of the CBA was from June 1, 1994 through July 31, 1995, Plaintiff's audit only covered the period of June 1, 1994 through June 30, 1995. Plaintiff does not seek unpaid contributions beyond June 30, 1995. Dalton argues that since it is "customary" to conduct a twelve month audit, Plaintiff's recovery should be limited to a twelve month period (i.e., through May 30, 1995). See Defendant's Opp. at 10:13-16. The Court finds that there was nothing improper about Plaintiff's thirteen month audit.
III. LEGAL ANALYSIS
A. Summary Judgment Standard
Rule 56(c) of the Federal Rules of Civil Procedure provides that summary judgment "shall be rendered forthwith 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 judgment as a matter of law." Fed.R.Civ.P. 56(c). Material facts are those that may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute as to a material fact is "genuine" if there is sufficient evidence for a reasonable jury to return a verdict for the nonmoving party. See id. The court may not weigh the evidence. See id. at 255. Rather, the nonmoving party's evidence must be believed and "all justifiable inferences must be drawn in [the nonmovant's] favor." United Steelworkers of America v. Phelps Dodge Corp., 865 F.2d 1539, 1542 (9th Cir. 1989) (en banc) (citing Liberty Lobby, 477 U.S. at 255).
The moving party bears the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the pleadings, depositions, interrogatory answers, admissions and affidavits, if any, that it believes demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the nonmoving party will bear the burden of proof at trial, the moving party's burden is discharged when it shows the court that there is an absence of evidence to support the nonmoving party's case. See id. at 325.
A party opposing a properly supported motion for summary judgment "may not rest upon the mere allegations or denials of [that] party's pleading, but . . . must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e); Liberty Lobby, 477 U.S. at 250. However, the opposing party need not produce evidence in a form that would be admissible at trial in order to avoid a summary judgment. See Celotex, 477 U.S. at 324. Nor must the opposing party show that the issue will be resolved conclusively in its favor. See Liberty Lobby, 477 U.S. at 248-49. All that is necessary is sufficient evidence supporting the asserted factual dispute and requiring a jury or judge to resolve the parties' differing versions of the truth at trial. See id.
B. Contract Analysis
1. Dalton Had An Opportunity To Review The CBA Before Signing It And By Signing It Became Bound By Its Terms
Dalton argues that his understanding of the terms of the contract was so different from what he actually signed that no contract was formed. Dalton relies heavily on Operating Engineers Pension Trust v. Gilliam, 737 F.2d 1501 (9th Cir. 1984) in his effort to defeat summary judgment. Dalton asserts that, like the Defendant in Gilliam, because he did not understand what he was signing, no contract was formed. See Def's Opp. at 5-6. As in Gilliam, Dalton claims there was no "meeting of the minds." See id. The fact that an employer does not fully understand the consequences of signing an agreement does not mean that there was no mutual assent and, thus, no contract. See Operating Engineers Pension Trust v. Cecil Backhoe Service, Inc., 795 F.2d 1501, 1504 (9th Cir. 1986). A party who signs a contract is bound by its terms, regardless of whether he considers the legal consequences of signing it or even reads it. See Gilliam, 737 F.2d at 1504.
Furthermore, Dalton's reliance on Gilliam is misplaced. In Gilliam, the Defendant did not read the documents he signed because he did not receive copies of them. See Gilliam, 737 F.2d at 1504-5. Therefore, in that case, Defendant reasonably believed that the document he was signing was an application for union membership, not a binding CBA. Id.
In contrast, Dalton was given a copy of the CBA to read overnight. Notwithstanding his lack of experience in dealing with unions, there is no dispute that Dalton knew he was "signing up" with the union. In fact, Dalton admits that he did so in order to secure the Cisco job. Since Dalton knew he was signing to become a union employer and understood the basic purpose of the contract, the Court finds that by signing the CBA, Dalton became bound by its express terms. See Cecil Backhoe Service, supra, 795 F.2d at 1505 (defendant who understood the basic purpose of the forms he signed could not later claim he was unaware of the legal consequences).
2. The Agreement Is Not Ambiguous
Dalton argues that even if a contract was formed, its terms are ambiguous, thereby permitting parole evidence to determine the true meaning of the contract, including his "understanding" of the terms. Collective bargaining agreements are to be strictly interpreted and the parties intentions are "irrelevant if the written agreement unambiguously expresses something other than what they intended." See, generally, Pierce County Hotel Employees, et. al. Health Trust v. Elks Lodge, No. 1450, 827 F.2d 1324, 1329 (9th Cir. 1987). Oral modification of a collective bargaining agreement is not permitted. See Maxwell v. Lucky Construction Co., Inc., 710 F.2d 1395, 1398 (9th Cir. 1983) (citing Waggoner v. Dallaire, 649 F.2d 1362, 1366 (9th Cir. 1981)); see also Gilliam, 737 F.2d at 1505.
If ambiguity parole evidence becomes relevant, the matter would not be appropriate to dismiss on summary judgment. See Wards Company, Inc. v. Stamford Ridgeway Associates, 761 F.2d 117, 120 (2nd Cir. 1985) (summary judgment is improper unless the terms are "wholly unambiguous"). Ambiguity in contract language is a question of law. See O'Neill v. United States, 50 F.3d 677, 682 (9th Cir. 1995).
"A contract is ambiguous if reasonable people could find its terms susceptible to more than one interpretation." O'Neill v. United States, 50 F.3d 677, 683 (9th Cir. 1995) (quoting Kennewick Irr. Dist. v. United States, 88 F.2d 1018, 1032 (9th Cir. 1989)). Although the CBA in this case does not distinguish between the treatment of union and non-union employees, it unequivocally states that "[e]ach employer party hereto agrees to make the contributions to said pension fund as set forth in Appendix `B.' Pension contributions shall be paid for all hours worked." (emphasis added) See Bennett Decl, Ex.1 at 20. The CBA's jurisdiction covers all work including and related to the installation of floor, wall, and carpet. Id. at p. 3, section (a). Under a plain reading of the text, the agreement applies to all employees for all hours worked, regardless of union membership, as long as the type of work is covered in the agreement. Pierce, supra, 827 F.2d at 1327 (agreement that requires paying for any employee, whether member of union or not, means contributions must be made for non-union employees).
Appendix B does not classify workers by union affiliation, but rather as journeyman, apprentice, or handler. See Bennett Decl., Ex.1 at Appendix B.
Dalton's urges this Court to consider his lack of sophistication, his lack of prior union experience with the union and his general good-faith to find ambiguity in the CBA's language. The Ninth Circuit makes no exception for the less powerful and experienced party. Even where a union agent did not explain the terms or consequences of signing the union agreement to a "mom and pop" employer and where the "evidence showed that the union agent misled the employer[, e]stablished case law in this circuit supports unions when they impose hidden, burdensome obligations on small employers who have little or no bargaining power." Operating Engineers Pension Trust v. Giorgi, 788 F.2d 620, 621 (9th Cir, 1986). The concurrence noted that "holding a tiny subcontractor to a massive contract, the contents of which he has never seen and as to which the union's representative has lied" underscores this circuit's "very broad reading of a statutory provision that calls for nothing more than a written trust agreement." Id. at 623. The facts here are less compelling than Giorgi, where the employer was liable despite being misled by the union agent. Here, there is no credible evidence that Dalton was misled by Bennett. Dalton, admittedly in a rush to "sign up," simply failed to read "in detail" the contract that he was given overnight or negotiate any limitations to its terms (i.e, to only cover the Cisco project). See Carroll Reply Decl., Ex. 7 at 7; see also Plaintiff's Reply at 2-3. The Court finds that there is no ambiguity in the CBA's terms.
The Ninth Circuit has consistently held in favor of the Trusts in similar ERISA actions. See, e.g., Operating Engineers Pension Trust v. Cecil Backhoe Service, Inc., 795 F.2d 1501 (9th Cir. 1986); Operating Engineers Pension Trust v. Giorgi, 788 F.2d 620, 622 (9th Cir. 1986); S. Cal. Retail Clerks Union, et al Joint Pension Trust Fund v. Bjorklund, 728 F.2d 1262 (9th Cir. 1984); Kemmis v. McGoldrick, 706 F.2d 993 (9th Cir. 1983); Waggoner v. Dallaire, 649 F.2d 1362 (9th Cir. 1981); Audit Services, Inc. v. Rolfson, 641 F.2d 757, 761 (9th Cir. 1981).
C. Defendant's Defenses
1. "Fraud In The Execution"
Pursuant to discussion at the hearing and without opposition from Plaintiff, Defendant filed a First Amended Answer to Complaint on September 20, 1999, asserting a defense of fraud in the execution. See Camarillo v. McCarthy, 998 F.2d 638, 639 (9th Cir. 1993) (if there is no prejudice, an affirmative defense may be raised for the first time at summary judgment)). Fraud in the execution is not an available defense on these facts.
Fraud in the execution is to be distinguished from fraud in the inducement. Southwest Adm'r, Inc. v. Rozay's Transfer, 791 F.2d 769, 774 (9th Cir. 1986). Fraud in the inducement is not recognized as a defense to the formation of collective bargaining agreements. Southern Cal. Retail Clerks Union Food Employers Joint Pension Trust Fund v. Bjorklund, 728 F.2d 1262 (9th Cir. 1984). "`Fraud in the inducement' induces a party to assent to something he otherwise would not have; [fraud in the execution] induces a party to believe the nature of his act is something entirely different than what it actually is." See Southwest Adm'r, Inc. v. Rozay's Transfer, supra, 791 F.2d at 774. For example, in Bjorklund, the court found that a "fraudulent inducement" defense was unavailable in a suit for delinquent ERISA contributions where the union agent secured the employer's signature by making false promises. Id. at 1265-66.
Fraud in the execution arises when a party executes an agreement "with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms," Southwest Adm'r, supra, 791 F.2d at 774. In such a case, the agreement is void ab initio. Id. A party asserting fraud in the execution must establish "excusable ignorance of the contents of the writing signed." Id. The Gilliam decision is a classic example of fraud in the execution. See Gilliam, supra, 737 F.2d 1501. In Gilliam, the court held that the union led Defendant to believe that the nature of the document was other than what it actually was where the union representative neither informed the employer that he signed a collective bargaining agreement nor did he give him copies of the agreement or a "reasonable opportunity" to review the document. Id. at 1503. Here, by contrast, Dalton knew that he was signing a contract for union membership, he was given a "reasonable opportunity" to review the CBA booklet, and there is no evidence in this record that Dalton was misled by the union agent.
At the hearing, Plaintiff urged this Court to rely on the reasoning in Iron Workers' Local 25 Pension Fund v. Allied Fence Systems, 922 F. Supp. 1250 (E.D.Mich. 1996), a case not previously cited by either party. Although the citation was unexcusably late, the Court has reviewed Iron Workers' and concludes that it supports Defendant's position. In Iron Workers', the Defendant had no prior familiarity with unions, had claimed that he was completely unaware that the document he signed was a CBA, and Plaintiffs failed to present evidence to rebut Defendant's claim that the union agent made a false representation regarding the nature of the document he signed. Id. at 1258-9. Notwithstanding those facts, the court held that there was "no excuse for [Defendant's] failure to avail himself of the opportunity to review the document before signing it." Id. at 1259. Even the "`passive' fraud Defendant has charged against the [union agent] could not have so overborne [Defendant's] will as to have negated his subsequent opportunity to review the agreement before signing it." Id. at 1259. Similarly, here, Dalton had an opportunity, outside the presence of Bennett, to thoroughly review the CBA before signing it and his failure to avail himself of that opportunity precludes him from defeating summary judgment with a "fraud in the execution" defense.
2. Equitable Estoppel
Defendant's CBA with the union expired July 31, 1995, but the audit was conducted on or about June 14, 1996 and the results of the audit were not submitted to the Trust Fund until May 14, 1997. See Kim Decl. ¶ 4-6 and at Ex. 3. Prior to the audit, no one had told Dalton that he owed money to the Trust Fund. See Dalton Decl. at ¶ 10. Dalton contends that had he been told of his delinquency earlier, he could have "entered into negotiations for a modified agreement with the union [or] could have ceased performing work within the union's geographical jurisdiction for the remainder of the contract year." Id. at n. 2.
Dalton claims that since the Trust Fund knew he was at least two months delinquent in pension payments, he was entitled to notice under the CBA:
In the event that any employer is delinquent with any two payments during the contract year, the employer shall be required to appear before the Joint Committee, which committee shall have the authority to require weekly payments of contributions to said funds, by certified or cashier's check, payable weekly to the designated depository. (See Bennett Decl. at Ex. 1, p. 2).
The defense of equitable estoppel is available in some ERISA cases. Bd. of Trustees v. Gibbons, No. 98-0596, 1998 WL 574400, at *4 (N.D.Cal. Aug. 13, 1998). To prevail, Dalton must show: (1) the Trustees knew the relevant facts; (2) the Trustees intended that their conduct be acted on or they acted in a way that Dalton had a right to believe the Trustees so intended; (3) Dalton was ignorant of the true facts; and (4) Dalton relied on the Trustees's conduct to his injury. Id.; Audit Serv., Inc. v. Rolfson, 641 F.2d 757, 762 (9th Cir. 1981).
Dalton fails to meet the first prong of the test to establish equitable estoppel. Dalton has not established that the Trustees knew or should have known that he was delinquent. Dalton claims that the Trust Fund should have known he was delinquent because he kept sending them blank remittances and it should have realized that an employer cannot run a business doing no work whatsoever. See Defendant's Opp. at 7; Dalton Decl. at Ex. B.
The declaration of Mary Ann Downey ("Downey") disposes of Dalton's arguments. Downey is the custodian of the books and records of the Trust Fund. See Mary Ann Downey Declaration ("Downey Decl.") at ¶ 1. Downey stated that the Trust Fund did not know Dalton was delinquent since it "is not unusual, indeed it is frequently the case, that small employers will report that no funds are due because it had no covered employees reportable for that month." Id. ¶ 4, 5. Downey explains that the Trust Fund defines a "delinquent employer" as an employer who:
1) submits a monthly report showing fringe benefits due, but does not send in payment, or 2) submits a bad check or only a partial payment with the report. The third type of delinquency is when the administrator is notified by the union that an employer had employees on a job, but the employer fails to send a report. (Id.)
Since Dalton did not fall into any of these categories, Downey explains that he was never considered a delinquent employer by the Trust Fund. Id. Defendant conceded at the hearing that he could not refute the substance of Downey's declaration.
Defendant relies on Iron Workers'. There, nearly three years after Defendant's last union job was completed, the Plaintiff conducted an audit to determine the amount of Defendant's delinquent contributions. Iron Workers', 922 F. Supp at 1252. The court noted that the "Plaintiffs' three year delay in seeking delinquent contributions suggest that Plaintiffs may have been derelict in their fiduciary duties toward any of Defendant's employees who might be covered by Plaintiff's funds." Id. at n. 7. The Iron Workers' court decided that an evidentiary hearing was necessary to determine the extent of Defendant's liability, including whether Plaintiffs' delay may have resulted in a forfeiture of their right to collect all or part of Defendant's delinquent contributions. Id. (citing Agathos v. Starlite Motel, 977 F.2d 1500, 1506-8 (3d. cir. 1992) (audit not conducted for ten years)).
Here, unlike Iron Workers', the audit was conducted within one year of the expiration of the CBA. In No. Cal. Retail Clerks Unions v. Jumbo Markets, 906 F.2d 1371, 1373 (9th Cir. 1990), the Court held that since the Trust Funds had no duty under the trust agreement to make an independent verification of the employer's under-reporting, the statue of limitations for conducting the audit did not begin to run until the
Trust Funds had reason to know of Defendant's underpayment. Here, the Trust Fund conducted the audit well within the four year statute of limitations, even assuming arguendo, that it should have known of Defendant's delinquency from the first submission of a blank remittance form.
The unrebutted evidence before this Court is that, without the aid of the audit, the Trust Fund did not know nor should it have known that Dalton was delinquent in his contributions. The Court finds that the defense of equitable estoppel is inapplicable on these facts. Plaintiff's one year delay did not trigger the need for a hearing to determine whether the delay should result in a forfeiture of Plaintiff's right to collect all or part of Defendant's delinquent contributions.
In ERISA actions the federal courts employ a state statute of limitations, but federal law determines the time at which the cause of action accrues. No Cal. Retail Clerks Unions v. Jumbo Markets, supra, 906 F.2d at 1372. In this case, as in Jumbo Markets, California's four year statute of limitations for breach of a written contract would accrue when the Plaintiff knew or had reason to know that Defendant was delinquent. Id. at 1372.
D. LIABILITY CALCULATIONS
1. Dalton Is Liable For Pension Contributions Of All Employees
Dalton must make pension contributions for all employees who perform work covered by the CBA regardless of whether the individual employee is a union member. If the type of work (as distinguished from the worker) is covered by the CBA, the employer must make pension contributions. Under the National Labor Relations Act, 29 U.S.C. § 158(a)(3), an employer "may not distinguish between members of a bargaining unit who belong to the union and those who do not." Central States, et al., Pension Fund v.
McClelland, Inc., 23 F.3d 1256, 1258 (7th Cir. 1994). In Hotel Emp., et al. Health Trust v. Elks Lodge, 827 F.2d 1324, 1327 (9th Cir. 1987), the Ninth Circuit held that an employer was required to make trust fund contributions on behalf of non-union temporary employees because the employees performed work within the bargaining unit's jurisdiction.
Here, the CBA does not link the obligation to pay contributions with union affiliation. See Plaintiff's Motion at 10:6-7. The CBA, Section I (a) states that "[b]y way of illustration and not limitation, the jurisdiction applies to all work including and related to the installation of resilient floor, wall, and ceiling materials. . . ." Id. Dalton has not demonstrated that the work his employees performed was unrelated to floor, wall and ceiling installation. Therefore, he must make the required pension fund contributions for all employees who performed covered work within the bargaining unit's jurisdiction.
Dalton argues that his employees that performed the "lift operation" were not covered under the CBA because these employees were his own employees, trained in this special operation, and that it would not have made economic sense for him to hire union employees who would first need to be trained in this special technique. See Dalton Decl. ¶ 12. The relevant inquiry, however, is whether the work the employees performed was covered under the CBA. The "lift operation is a `specialized technique' whereby
2. Dalton Is Liable For Non-Union Sub-Contractor's Contributions
The CBA provides that the employer will not subcontract any work covered by the CBA except to persons who are signatories "to an existing current labor agreement with the union." See Bennet Decl., Ex. 1 at Section VI(a), 8. If a subcontractor is delinquent in making trust fund contributions, the union notifies both the employer and the subcontractor, and the employer must pay the subcontractor's delinquency. Id. at Section VI(b), pp. 8-9. In Brogan v. Swanson Painting Co., 682 F.2d 807, 809 (9th Cir. 1981), the Ninth Circuit upheld this type of contractual provision and found that trust funds may enforce it themselves.
The audit revealed that Dalton subcontracted work, yet records showed that none of the subcontractors were signatories to the CBA and none of the subcontractors made trust fund contributions. See Carroll Decl. at ¶ 6. Dalton has not contested Plaintiff's request to recover non-union subcontractor contributions. The Court finds that Dalton is liable for any unpaid non-union subcontractor contributions.
3. Reclassification Of Dalton's Employees At the Lower Paid Wage Categories
The CBA lists three general categories of workers. The amount of pension contributions depend on the classification of the workers. See Bennett Decl. at Ex. 1, Appendix B (Sched. of Hourly Wages and Fringe Benefits) pp. 37-38. Journeyman is the highest paid wage category, following with apprentice, and then handler-warehouseman. Id. Dalton seeks to reduce his pension contributions claiming that some employees should be redesignated from "journeyman" to the lower paid wage categories of "helper" or "apprentice." Id. at pp. 47-48, Secs. XIV XV.
Dalton's argues that some of his workers were casual laborers with "no training or experience," some of whom were hired solely to clean-up a warehouse, while others were not even sent to a job site. See D's Opp at 9-10; Dalton Decl. at ¶ 13. Dalton explains that Plaintiff's auditor noted that these employees were "helpers" which "in union parlance . . . would be regarded as `apprentices.'" Id. at 9:24-28. Plaintiff argues that since the workers were not "helpers" or "apprentices" as defined by the CBA, they must have been journeymen.
According to Plaintiff, the "helper" classification only applies to work performed for the government (Davis-Bacon work) (P's Motion at p. 10; see also Bennett Decl. at Ex. 1, Section XI(f)), p. 15), and "apprentice" refers to a participant in a specific training program. Id. at Section XV, p. 17; Bennett Decl. at ¶ 4. workers lift "partitions off the floor to enable placement of carpet or tile beneath them." Id. Since the jurisdiction of the CBA extends to "all work including and related to the installation of resilient floor . . . materials" and "preparatory removal of floor covering," the Court finds that "lift operations" would be covered work under the CBA. See Bennett Decl., Ex. 1, Section I(a), 2. Therefore, Dalton is responsible for pension contributions for these workers.
Defendant has raised a triable issue of material fact as to whether some of his employees have been properly classified and, therefore, whether the rate he has been assessed for trust fund contributions on their behalf is accurate. Plaintiff's motion for summary adjudication of this issue is denied.
4. Geographical Limitations Of The CBA
The CBA covers "all . . . work performed within the territorial jurisdictions of Local 1235, 1288, and 1290 encompassing Santa Clara, Santa Cruz, San Benito, Monterey, San Mateo, Merced, Alameda, Contra Costa, Napa, Solano, San Francisco, Marin, Sonoma, Lake and Mendocino Counties, California." See Bennett Decl. at Ex. 1, Section I(b), p. 4. Dalton claims that some of the work performed was outside of the union's geographic area, in Sacramento and Colorado. See Dalton Decl. at ¶ 11. Dalton estimates that "labor costs for work done with contractors' employees outside the Bay Area is approximately $50,500. Id. At the hearing, the Trust Fund accepted Dalton's $50,500 calculation as accurate. Dalton submitted invoices from subcontractors in the Bay Area for work allegedly performed in Sacramento and Colorado. Id. at Ex. D.
The Trust Fund argues that Dalton bears the burden of proof on whether the work performed falls within the union's geographical jurisdiction and claims that Dalton did not meet his burden, relying on two cases, Brick Masons Pension Trust v. Industrial Fence Supply, 839 F.2d 1333 (9th Cir. 1988), and Operating Engineers Pension Trust v. A-C Company, 859 F.2d 1336 (9th Cir. 1998). In both cases, the court found that there is a rebuttable presumption that an employer is liable for pension contributions based on an employee's forty-hour work week, and the employer has the burden of proving that the employee worked fewer hours. Since Dalton has offered some evidence that he performed work in Sacramento and Colorado and the CBA does not apply to work performed in those jurisdictions, he has raised a triable issue of fact as to whether he is liable for trust fund contributions on such work. See D's Opp. at 9; see also Bennett Decl. at Ex. 1, Section I (b), p. 4. Plaintiff's motion for summary adjudication of this issue is denied.
Both cases involve situations where the number of hours an employee worked per week was at issue, rather than the particular jurisdiction in which the employee worked.
IV. CONCLUSION
For the reasons stated above, this Court finds Defendant liable for pension contributions for all employee work performed within the territorial jurisdiction of the collective bargaining agreement ("CBA") entered into between Dalton and Carpet, Linoleum Soft Tile Workers Union during its term. Therefore, the Court GRANTS partial summary adjudication in favor of Plaintiff with respect to Dalton's liability under the CBA.
However, Plaintiff's Motion For Summary Judgment on the issue of damages is DENIED, since the amount of Defendant's liability will be determined after a trial on the following two remaining issues: (1) whether Defendant's employees were accurately classified as "journeyman" and if not, what the appropriate classification, rate of wages, and pension contributions should be for those employees; and (2) the amount of work Dalton performed outside the geographical limitations of the CBA and the resulting reduction in his liability for pension contributions for such work performed, but not covered by the CBA.