section 302(c)(5)(B) of the LMRA allows employers to make
payments to employee benefit funds held in trust provided that
the basis for the payments is detailed in a written agreement.
29 U.S.C. § 186(c)(5)(A), (B). Section § 186(g) provides that
this exception, even if otherwise lawful, does not apply to
contributions to trust funds that were established prior to 1946.
Finally, ERISA requires that employers who are "obligated to
make contributions to a multi-employer plan under the terms of
the plan or under the terms of a collectively bargained agreement
shall, to the extent not inconsistent with law, make such
contributions in accordance with the terms and conditions of such
plan or agreement." 29 U.S.C. § 1145.
Whether the Funds may lawfully seek contributions depends on
two factors: (1) whether the agreement to which Vanderveer is
bound satisfies the requirement in LMRA § 302(c)(5)(B) that
employers may contribute to employee trust funds only as long as
the basis for those contributions is set forth in a "written
agreement," although Vanderveer never signed this agreement; and
if so, (2) whether the Trust Agreements authorize the Funds to
collect contributions from non-member employers.
1. Written Agreement
The Second Circuit has interpreted the written agreement
requirement of LMRA § 302(c)(5)(B) in two recent opinions.
Both parties cite Moglia v. Geoghegan, in which the Court held
that an employer's contributions to an employee trust fund would
violate ERISA where the employer had not signed either the
collective bargaining agreement or the trust fund agreement, and
had shown no intention to be bound by those instruments.
403 F.2d 110, 118 (2d Cir. 1968), cert. denied, 89 S.Ct. 1193 (1969).
In 1999, however, the Second Circuit revisited Moglia in the
context of an employer which had been a party to a previous
collective bargaining agreement but had not signed two subsequent
CBA's. See Brown v. C. Volante Corp., 194 F.3d 351 (2d Cir.
1999). In Brown, the Court held that "an unsigned, written
agreement satisfies Section 302(c)(5)(B)'s `written agreement'
requirement." Id., 194 F.3d at 355. Unlike the employer in
Moglia, the employer in Brown had continued to contribute to the
Funds pursuant to its previous practice despite not having signed
two subsequent CBA's, which the Court held manifested an intent
to be bound by the unsigned CBA's. Id., 194 F.3d at 355 & n. 1.
In this case, there is a written Trust Agreement — 1997 RAB
Agreement signed by Vanderveer's predecessor. Because a court has
found that this agreement validly binds Vanderveer as an assignee
see Bevona v. Vanderveer Estates Holding, LLC, No. 98 Civ. 8689
(S.D.N.Y. Feb. 11, 1999), aff'd, Bevona v. Vanderveer Estates
Holding, LLC, Nos. 98 Civ. 9529 and 99 Civ. 7048 (2d Cir. April
12, 1999), this Court need not inquire into Vanderveer's intent
to be bound by the Agreement. The written agreement that was in
effect when Vanderveer purchased the property, although unsigned,
fulfills the requirement of § 302(c)(5)(B) with regard to all
contributions due from Vanderveer while it was obligated to pay
under that Agreement, from June 5, 1998, the date Vanderveer
purchased Vanderveer Estates, until the Agreement expired on
April 20, 2000. For this period, the question therefore becomes
whether the Trust Agreements authorize the Funds to seek contribution
from non-members such as Vanderveer.
However, the terms of the 1997 Agreement provided that it would
remain in effect until its successor was executed, and a new RAB
Agreement was executed on April 21, 2000 (the "2000 Agreement").
Pltf. Stimt. of Undisp. Mat. Facts ¶¶ 4, 12.
Because the 1997 Agreement was no longer in effect as of April 21,
2000, Vanderveer's obligation as an assignee of the 1997 Agreement
also ceased on that date. Vanderveer did not sign the 2000 Agreement
and argues it had no intent to be bound by it. Both parties agree
that Vanderveer has done nothing to indicate any interest in
adopting the 2000 Agreement, and has neither made any contributions
to the Fund nor expressed any willingness to assume such an
obligation. See Moglia, 403 F.2d at 118. Therefore, Vanderveer is
not bound by the 2000 Agreement and so is not responsible for
back contributions accruing after April 20, 2000, even if the
Trust Agreements authorize the Funds to seek such contributions.
2. The Trust Agreements Authorize the Funds
to Seek Contributions from Non-Members
Who Are Bound By the RAB Agreement
The Agreements governing each Fund contemplate that nonmember
employers will be bound to make contributions and grants
the Trustees significant authority in effectuating all such
contributions. Each agreement authorizes the Trustees to seek and
receive contributions from both member-employers, who have
signed CBA's and the Trust Agreements, as well as from "other
employers . . . [who] hereafter will execute, collective
bargaining agreements. . . ." Def. Ex. 1 at 1 ¶ 2 (Health Fund);
Ex. 2 at 1 ¶ 2 (Pension Fund); see also Def. Ex. 3 at 1 ¶ 3
(Annuity Fund) (the Union . . . will hereafter execute,
collective bargaining agreements with other Employers, who are
not members of said Employer Groups, who are likewise bound to
make similar payments to the Trust Fund. . . .").
Although the Agreements make reference to contributions
from non-member employers who will execute collective bargaining
agreements, there is no indication from the Agreements that the
Trustees are in any way limited from receiving contributions from
non-member employers who have not executed such agreements but who
are nonetheless bound by them. The Health Fund Trustee Agreement
provides that "any owner of a member-building of the RAB . . . may
participate in the Fund . . . whether or not any of such employees
is covered by a collective bargaining agreement between such
Employer and the Union." Def. Ex. 1 ¶ 6(b)(i). The Pension Fund
Trust Agreement applies to "any Employers" — whether or not
they become parties to the Trust Agreement — who are bound to
contribute to the Fund pursuant to collective bargaining
agreements. Def. Ex. 3, p. 1; Art. 1 § 1(c). The Annuity Fund
Trust Agreement applies to any employer, whether member or nonmember,
who is "obligated to make payment to the trust created by
this Agreement by a Collective Bargaining Agreement with the
Union". Def. Ex. 3, Art. I § 1(c).
Finally, each of the Agreements grants the Trustees broad
discretion in construing the language of the Agreements and in
conducting additional, unenumerated acts in the interests of the
Funds. See Def Ex. 1 ¶ 19(B) (Health Fund) (authorizing Trustees to
"take such other and further action not inconsistent with the terms
hereof or with ERISA to carry out the provisions and purpose of
this Agreement. . . ."); "Def. Ex. 2 ¶¶ 6(a), 11(b) (Pension Fund)
(empowering Trustees to do all acts whether or not expressly
authorized herein, which the Trustees may deem necessary to
accomplish the general objectives of maintaining the Fund solely in
the interests of the participants and beneficiaries."); Def. Ex. 3,
Art. IX § 3 (Annuity Fund) (empowering Trustees "to do all acts
whether or not expressly authorized herein" in the interests of the
Therefore, both the language specifically contemplating
contributions from non-members and the broad discretion granted to
Trustees in each Agreement authorize the Trustees to seek and
receive contributions from entities such as Vanderveer which are
non-members who are
obligated to contribute pursuant to the RAB Agreement.
In light of the foregoing, the plaintiffs' motion for summary
judgment will be granted as to the contributions due through
April 20, 2000 and denied as to those contributions claimed due
3. Contributions, Interest, Liquidated
Damages, Fees and Costs will be Assessed
Section 502(g)(2) of ERISA provides that:
In any action under this title by a fiduciary for or
on behalf of a plan to enforce section 515 in which a
judgment in favor of the plan is awarded, the Court
shall award the plan:
(A) The unpaid contributions;