Opinion
Case No. 96 C 6973
August 23, 2000
MEMORANDUM OPINION AND ORDER
This is an ERISA collection action brought by plaintiff Thomas J. Moriarty, as trustee of Local 727, International Brotherhood of Teamsters' health and pension funds ("the Funds"), against defendants Leyden Livery Service, Inc. and Cuneo-Columbian Funeral Home, Inc. (collectively, "Leyden/Cuneo-Columbian"). Before the Court are issues identified by the Seventh Circuit in its opinion vacating and remanding the Court's grant of defendants' motion for summary judgment.
BACKGROUND
The parties have jointly stipulated to the facts. Defendant Leyden is an Illinois corporation in the business of providing livery services for funeral homes. Defendant Cuneo-Columbian is also an Illinois corporation that provides funeral home services. Until April of 1995, both entities were owned and directed by Ann Cuneo. The defendants concede for purposes of summary judgment that the two entities operate as a single employer.
Larry Lewis, the brother of Ann Cuneo, worked for Leyden/Cuneo-Colurnbian until October 1993. So did Larry's daughter Gina Lewis. In October of 1993, however, Ann fired both Larry and Gina over a family conflict. Consequently, Larry decided to strike out on his own and formed the Larry G. Lewis Funeral Directors, Ltd. ("LGLFD"). Larry was the sole owner, president, treasurer, and director of LGLFD. Gina joined her father at LGLFD in February of 1994. During the few months that LGLFD was in business, Larry and Gina were its only employees.
In March 1994, LGLFD became a member of the Funeral Directors Services Association of Greater Chicago ("FDSA") At that time, Larry became a member of Local 727 of the International Brotherhood of Teamsters ("Union"). The FDSA is a multi-employer association that has negotiated collective bargaining agreements with the Union. The collective bargaining agreements obligate each employer member of the FDSA to contribute to the Funds for the work performed by qualifying employees. Larry joined the Union in order to obtain health insurance through the Funds.
As it turned out, LGLFD was not a successful concern. LGLFD conducted business only until October 1994, during which time it grossed only $12,000 to $15,000. LGLFD never paid any salaries to either Larry or Gina. LGLFD did, however, regularly submit contributions to the Funds in accordance with the collective bargaining agreement. The money for these contributions came from either LGLFD or Larry's personal funds.
After October 1994, LGLFD ceased to conduct any business. Instead, Larry and Gina opened another funeral business, Oak Park Chapels. During the time Larry and Gina were operating Oak Park Chapels, LGLFD continued to make contributions to the Funds. Oak Park Chapels also failed and closed shop by March of 1995.
Meanwhile, in January of 1995, Larry sought financial assistance for LGLFD from Leyden. Larry wrote to Leyden requesting that they take over LGLFD's accounts payable. Leyden granted this request without any evaluation of the size of LGLFD's debts or its ability to pay. Ann Cuneo simply accepted the request regardless of the amount of debt because she wanted to help her brother. In 1995, in accordance with this agreement, Leyden/Cuneo-Columbian paid for the following items: lease payments on a hearse, mortgage payments on a van, Larry and Gina's dues for membership in the Union, and contributions to the Funds; neither Leyden or Cuneo-Columbian, however, were members of FDSA nor were they signatories to any stand alone agreement with the Union.
Furthermore, in April of 1995, Ann rehired Larry and Gina as funeral directors at Leyden/Cuneo-Columbian, the family conflict apparently resolved. During the same month, Ann transferred ownership of Leyden/Cuneo-Columbian to Larry and he became sole director, sole officer, and sole shareholder of both entities. After April of 1995, neither Larry nor Gina performed any services for LGLFD.
During 1995, when Leyden/Cuneo-Columbian were providing the money for LGLFD's contributions to the Funds, the remittance reports that accompanied the payments continued to name only LGLFD as the participating employer. Nowhere on the form was either Leyden or Cuneo-Columbian listed. In addition, the remittance reports required a signature from the party submitting the report, assenting to the following language:
I hereby certify that the information contained in this report is true and correct, and hereby agree to accept and abide by the terms of the Trust Agreement of the Pension Plan, Local 727, I.B. of T. Labor Agreement, and any amendments.
The remittance reports that were submitted in 1995 were all signed by Gina with the exception of one remittance report, which was signed by Larry.
Leyden/Cuneo-Columbian continued to provide the funds for the contribution payments until December 1995, when Gina was able to secure cheaper health insurance on her own. At that time both Larry and Gina renounced their membership in the Union. Larry then also informed FDSA that LGLFD was resigning its membership and notified the Funds that LGLFD was discontinuing all business operations. LGLFD was involuntarily dissolved as a corporation by the Illinois Secretary of State in June of 1996.
DISCUSSION
This case is on remand for the second time from the Seventh Circuit after that appeals court vacated this Court's last decision granting summary judgment for defendants. The Funds bring this action against Leyden/Cuneo-Columbian seeking an audit and payment of delinquent fund contributions on the ground that Leyden/Cuneo-Columbian, by providing the contribution payments for Larry and Gina, are now obligated under the collective bargaining agreement to contribute on behalf of all other eligible Leyden/Cuneo-Columbian employees. The last time the parties were before this Court, each had moved for summary judgment against the other on the stipulated facts. The Court granted Leyden/Cuneo-Columbian summary judgment, concluding that Larry and Gina were employees of Leyden/Cuneo-Columbian, and not LGLFD, when Leyden/Cuneo-Columbian were providing the contribution payments to the Funds. Therefore, since LGLFD had no eligible employees, and since Leyden/Cuneo-Columbian were not formal signatories to any collective bargaining agreement, the 1995 contributions made in the name of LGLFD should not have been made and the Funds are not entitled to any additional contributions on behalf of any other employees of Leyden/Cuneo-Columbian.
On review, the Seventh Circuit held that merely resolving the issue of whom actually employed Larry and Gina did not dispose of the case. Moriarty v. Leyden Livery Service, Inc., 99-4005, slip. op. at 2 (7th Cir., March 21, 2000) ("Moriarty II"). Outstanding was the question of whether Leyden/Cuneo-Columbian not only provided the money for the contributions but also took other actions that de facto made them a party to the collective bargaining agreement. Id. If they did, then the Funds would be entitled to an audit and contributions on behalf of all qualifying individuals employed by the defendants, and not just Larry and Gina.
In Moriarty v. Larry G. Lewis Funeral Directors, Ltd., 150 F.3d 773 (7th Cir. 1998) (" Moriarty I"), the first time the Seventh Circuit addressed this case, it noted various ways by which Leyden/Cuneo-Columbian could have become parties to the collective bargaining agreement without being signatories to the agreement itself. For example, affirming previous Seventh Circuit case law that held that an employer may adopt a collective bargaining agreement by course of conduct plus a writing such as the certification line on a contribution report, the appellate court posited that when Gina signed the remittance reports in 1995, she may have signed them as an agent of Cuneo-Columbian — not as an agent of LGLFD — and, therefore, pledged Cuneo-Columbian to abide by the terms of the agreement in accordance with the certification language. Moriarty I, 150 F.3d at 777 (citing, Gariup v. Birchier Ceiling Interior Co., 777 F.2d 370 (7th Cir. 1985)).
Picking up on the Seventh Circuit's cue, the Funds urge that is what happened here. Pointing to evidence that Larry and Gina were employees of Leyden/Cuneo-Columbian at the time they signed and submitted the 1995 remittance forms, and that Leyden/Cuneo-Columbian provided the money for the contribution payments in order to provide Larry and Gina of the benefits of the collective bargaining agreement, i.e., affordable insurance coverage, the Funds argue that Leyden/Cuneo-Columbian conducted themselves toward the Funds in a way that manifested an intent to be bound by the terms of the collective bargaining agreement.
The defendants, of course, disagree. They argue that Gina and Larry wore two hats during 1995 with respect to the Funds. The defendants agree that Larry and Gina were acting for Leyden/Cuneo-Columbian when they issued the checks out of the Leyden/Cuneo-Columbian accounts for the contribution payments. However, they insist that such payments were made only in accordance with Leyden/Cuneo-Columbian's January 1995 agreement to assume LGLFD's accounts payable. They took no action on behalf of Leyden/Cuneo-Columbian to bind those entities to the collective bargaining agreement. In fact, the defendants argue, when Larry and Gina signed the remittance forms that accompanied the contribution payments, they signed them only in the name of LGLFD as evidenced by the fact that only LGLFD was named on those remittance forms. They did not sign them as agents of Leyden/Cuneo-Columbian.
Although the parties have moved for summary judgment, since the facts are not in dispute, the only task of the Court is to determine whether one or the other party is entitled to judgment as a matter of law. See ANR Advance Transportation Co. v. International Brotherhood of Teamsters, Local 710, 153 F.3d 774, 777 (7th Cir. 1998). Because the Funds insist upon proving their case on the sole theory that Leyden/Cuneo — Columbian's conduct manifested an intent to be bound by the terms of the collective bargaining agreement, the Funds have placed themselves in a difficult position. On the one hand, the Funds would like this Court to adhere to the line of Seventh Circuit precedent binding employers to a collective bargaining agreement when employers conduct themselves toward the funds in ways that evidence an intent to be bound. See, e.g., Robbins v. Lynch, 836 F.2d 330, 332 (7th Cir, 1988).
At the same time, however, the Funds urge the Court to ignore, what even to the Seventh Circuit, is a crucial piece of evidence: the identity of the signatory on the remittance forms, the only piece of writing that could conceivably bind Leyden/Cuneo-Columbian to the collective bargaining agreement. See Moriarty I, 150 F.3d at 777. In response to the defendants' point that only LGLFD is named on the remittance forms, the Funds argue that an ambiguity exists as to the identity of the actual signatory.
But there is little ambiguity as to who was named on the remittance forms. Clearly, only LGLFD is named. And "[i]f a written contract is clear, that is, if reading it one doesn't sense any ambiguity, gap, or contradiction that makes one doubt one's ability to understand the contract merely by reading it, the court normally won't look any further for evidence of meaning." Mathews v. Sears Pension Plan, 144 F.3d 461, 466 (7th Cir. 1998). Furthermore, the doctrine of extrinsic ambiguity, which the Funds seek to invoke to question the actual identity of the signatory to the remittance form, is not applicable to a multi-employer pension plan. Id. at 466-67.
That being the case, the line of precedence the Funds rely upon, such as Gerber Truck Service, Inc., is not quite on point. Those cases involved situations in which employers' outward actions indicated to the Funds that the employers intended to abide by a labor agreement while, at the same time, the employers had private understandings that sought to limit the scope of those agreements. See Gerber Truck Services, 870 F.2d at 1150. In such cases, the Seventh Circuit ruled that private understandings cannot discharge the employer from their obligations to the Funds since, from the perspective of the Funds, the employers had assented to abide by the full terms of the agreement. Id., 870 F.2d at 1155.
But here, Leyden/Cuneo-Columbian do not seek to limit their obligations on the grounds of some private understanding reached with the Union or another third party despite outward conduct that indicated to the Funds a full commitment to the labor agreement. From the Funds' point of view, all that Leyden/Cuneo-Columbian did was provide the money by which LGLFD was able to continue to make its contributions. That, by itself, is insufficient to raise a question of fact as to whether Leyden/Cuneo-Columbian intended to abide by the terms of the effective labor agreement. See Moriarty I, 150 F.3d at 776 (rejecting the theory that merely providing the money for LGLFD's contributions necessarily renders Leyden/Cuneo-Columbian liable to the Funds); see also, Gariup, 777 F.2d at 374 (finding that employer manifested an intent to abide by a labor agreement where the employer signed a participation form, contributed to the Funds in accordance with the agreement, paid the union wages, and had adhered to past collective bargaining agreements). And since the Funds do not, in their submissions to this Court, address alternative theories of liability, such as whether Leyden/Cuneo-Columbian assumed or succeeded to LGLFD's obligations and liabilities, see Moriarty I, 150 F.3d at 777 (listing alternative methods by which Leyden/Cuneo-Columbian may be bound), whether the assumption of ownership and control by Larry of Leyden/Cuneo-Columbian thus obliterated LGLFD's distinct corporate identity, or whether even the defendants committed a fraud against the Funds, this Court has no choice but to once again grant judgment on behalf of the defendants.
CONCLUSION
Accordingly, for the reasons stated herein, defendants' motion for summary judgment is granted and plaintiff's motion for summary judgment is denied.
IT IS SO ORDERED.