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Trustees of the Plumbers and Steamfitters Local 267 Pension, Annuity, and Insurance Funds v. Buchanan

February 14, 2006

TRUSTEES OF THE PLUMBERS AND STEAMFITTERS LOCAL 267 PENSION, ANNUITY, AND INSURANCE FUNDS; AND PLUMBERS AND STEAMFITTERS LOCAL 267, PLAINTIFFS,
v.
BUCHANAN, INC.; AND THOMAS BUCHANAN, INDIVIDUALLY AND AS PRINCIPAL OFFICER OF BUCHANAN, INC., DEFENDANTS.



The opinion of the court was delivered by: Scullin, Chief Judge

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiffs commenced this action on July 7, 2003, pursuant to the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1132(d)(1), 1145 ("ERISA"), and under 29 U.S.C. § 185.*fn1 Specifically, Plaintiffs claim that Defendants violated ERISA's provisions by failing to make contributions to a multi-employer plan in compliance with the terms and conditions of the collective bargaining agreement and that Defendants breached the collective bargaining agreement when they failed to permit an audit, failed to pay employee benefit contributions as that agreement required, and failed to withhold or remit dues. In addition, Plaintiffs claim that they are entitled to liquidated damages, accrued interest, audit fees, attorney's fees, costs, and injunctive relief permitting them to conduct an audit. Currently before the Court is Plaintiffs' motion, pursuant to Rule 56 of the Federal Rules of Civil Procedure, for summary judgment.

II. BACKGROUND

Plaintiffs are the Trustees of Plumbers and Steamfitters Local 267 Pension Fund ("Pension Fund"), the Trustees of Plumbers and Steamfitters Local 267 Annuity Fund ("Annuity Fund"), the Trustees of Plumbers and Steamfitters Local 267 Insurance Fund ("Insurance Fund"), (collectively "the Funds"), and Plumbers and Steamfitters Local 267 ("Local 267").*fn2

Defendant Buchanan, Inc., an independent contractor, signed a collective bargaining agreement, effective May 1, 2000, through April 30, 2003 ("2000-2003 CBA" or "Agreement"), between Local 267 and the Mechanical Trades and Master Plumbers Association of Central New York. See Plaintiffs' Statement of Material Facts at ¶ 1; Defendants' Response to Statement of Material Facts at ¶ 1; Plaintiffs' Memorandum of Law at 1; Defendants' Brief in Opposition at 1. The Agreement, which contained an evergreen clause,*fn3 required the employer to make contributions to the Funds for each hour that its employees worked under the terms of the Agreement and to deduct dues from its employees' wages and remit them to Local 267. See Plaintiffs' Statement of Material Facts at ¶¶ 1-2; Plaintiffs' Statement of Material Facts at Exhibit "A" at Arts. 18-19; Defendants' Response to Statement of Material Facts at ¶ 2. In addition, the Agreement contained provisions that entitled Plaintiffs to audit the employer's records to determine the correctness of an employer's contributions and incorporated by reference the Agreements and Declarations of Trust which created the Funds. See Complaint at ¶¶ 11, 13; Plaintiffs' Statement of Material Facts at Exhibit "A" at Art. 18 §18.8.*fn4

Plaintiffs allege that, for the period of January 1, 2003, to the present, Defendants have violated 29 U.S.C. § 1145 and that, despite demands that Defendants submit remittance reports and pay delinquent contributions and dues, Defendants have refused and continue to refuse to provide the reports and pay the amounts due. See Complaint at ¶ 15. To the contrary, Defendants assert that they contacted Local 267 and the Funds to try to arrange payment on numerous occasions in 2002, 2003, and 2004, and were willing to pay, without admission, the amounts that Defendants computed; however, Plaintiffs allegedly refused payments unless the amounts due for work performed after May 1, 2003, were calculated using the rates that were established after May 1, 2003.*fn5 See id. at ¶ 3.

III. DISCUSSION*fn6

A. Standard for Summary Judgment

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 a judgment as a matter of law." Fed. R. Civ. P. 56(c). Material facts are those "that might affect the outcome of the suit under the governing law . . . ." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is a genuine issue of fact "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In evaluating the evidence on a motion for summary judgment, the court must resolve ambiguities and draw all reasonable inferences in a light most favorable to the non-moving party and must accept the non-moving party's version of the facts as true. See id. at 255 (citation omitted); Liscio v. Warren, 901 F.2d 274, 276 (2d Cir. 1990) (citations omitted). However, conclusory statements, conjecture or speculation will not defeat the motion. See Kulak v. City of N.Y., 88 F.3d 63, 71 (2d Cir. 1996) (citations omitted). Rather, the non-moving party must come forward with "specific facts showing that there is a genuine issue for trial." Fed. R. Civ. P. 56(e) (emphasis added).

B. Fund Contributions

1. Liability*fn7

With regard to the Funds' claims for delinquent contributions, it does not appear that Defendant Buchanan Inc. disputes that under the CBA it is required to and has failed to make contributions to the Funds. Rather, the crux of the parties' disagreement is the proper calculation of the amount of these delinquent contributions. Accordingly, the Court grants Plaintiffs' motion for summary judgment on the issue of Defendant Buchanan Inc.'s liability to remit the contributions due to the Funds.

2. The applicable rates that the Court should use to compute contributions that Defendants owe to the Funds Plaintiffs assert that they are entitled to recover the amount of contributions that Defendants owe to the Funds using the rates in effect during the period of April 7, 2003, through June 13, 2003, i.e. from April 7, 2003, through May 31, 2003, at the rates set forth in the 2000-2003 CBA and from June 1, 2003, through June 13, 2003, at the rates set forth in the 2003-2006 CBA.*fn8 See Plaintiffs' Statement of Material Facts at ¶ 5. Using these rates, Plaintiffs assert that Defendants owe the Funds a total of $27,827.30: $13,942.46 in contributions, see id. at ¶ 5, Exhibits "C," "D;" $2,788.49 in liquidated damages; $9,781.35 in interest; $1,000 in attorney's fees; and $150 in court costs, see Plaintiffs' Statement of Material Facts at ¶ 7. In response, Defendants assert that Defendant Buchanan Inc. is at most liable for unpaid contributions to the Funds calculated using the rates set forth in the 2000-2003 CBA because Plaintiffs failed to request changes to the Agreement as that Agreement required.*fn9

Courts must strictly enforce the terms of a collective bargaining agreement when the terms are unambiguous. See Contempo Design, Inc. v. Chicago & Northeast Ill. Dist. Council of Carpenters, 226 F.3d 535, 546 (7th Cir. 2000) (citing Young v. North Drury Lane Prods., 80 F.3d 203, 205 (7th Cir. 1996)) (other citations omitted) (finding that the district court had correctly concluded that, because neither party had provided written notice prior to the expiration of the 1993 collective bargaining agreement, the automatic renewal provision went into effect and the parties became bound to the 1995 collective bargaining agreement). Moreover, although an "employer who fails to sign an agreement and evinces no intention to be bound is not required to make contributions," Bldg. Serv. 32B-J Pension Fund v. Vanderveer Estates Holding, LLC, 127 F. Supp. 2d 490, 493 n.1 (S.D.N.Y. 2001) (citing Moglia v. Geoghegan, 403 F.2d 110, 118 (2d Cir. 1968)), a "party to [a ] prior written agreement is bound to [an] unsigned successor agreement when it manifests an intention to remain bound thereto." Id. (citing Brown v. C. Volante Corp., 194 F.3d 351 (2d Cir. 1999)). Finally, "'[b]oth § 302(c)(5)(B) and general principles of contract law permit an employer to adopt a collective bargaining agreement by a course of conduct plus a writing . . . a signature at the bottom of the collective bargaining agreement itself is unnecessary.'" Brown v. C. Volante Corp., 194 F.3d 351, 355 (2d Cir. 1999) (quoting Moriarty v. Larry G. Lewis Funeral Dirs. Ltd., 150 F.3d 773, 777 (7th Cir. 1998)).

Defendant Buchanan Inc. admits that it was a signatory to the 2000-2003 CBA, which by virtue of its evergreen clause automatically renewed when it expired on April 30, 2003, unless one of the parties terminated it. Since there is no evidence that either party notified the other that it intended to terminate the 2000-2003 CBA, that Agreement automatically renewed upon its expiration, and, therefore, remained in effect during May 2003. See Defendants' Mem. of Law at 2. Thus, because Defendant Buchanan Inc. was a signatory to the 2000-2003 CBA, it remained bound to its terms upon its renewal.

Moreover, although Defendant Buchanan Inc. argues that it never signed a new agreement with Plaintiffs, Defendant Buchanan Inc. is bound to the 2003-2006 CBA because it manifested an intent to be bound by that agreement. Plaintiffs' evidence demonstrates that Defendant Buchanan Inc. implemented the new rates by paying the increased union wages to its employees. See Plaintiffs' Statement of Material Facts at Exhibit "B;" Plaintiffs' Reply Mem. at 2. In addition, although Defendant Buchanan Inc. argues that Plaintiffs instructed union employees to quit and did not provide him with manpower, the certified payroll reports and calculations that Plaintiffs submitted indicate that from April 7, 2003, through June 15, 2003, Defendant Buchanan Inc. employed union employees and deducted union dues from their wages. See Plaintiffs' Statement of Material Facts at Exhibits "B" & "C."

Alternatively, Defendant Buchanan Inc. argues that it should not be bound to the rates in the 2003-2006 CBA because Plaintiffs failed to request changes to the 2000-2003 CBA. Article One of the 2000-2003 CBA provides that [n]o changes in this Agreement shall be made prior to the termination date, unless mutually agreed upon by both parties. This Agreement shall be renewed automatically from year to year after the termination date. If any party wants to change this Agreement, he must notify the other party in writing at least three (3) months prior to the termination date.

See Plaintiffs' Statement of Material Facts at Exhibit "A" at Art. 1 (emphasis added).

The 2000-2003 CBA terminated by its terms on April 30, 2003. The change in hourly rate did not take effect until June 1, 2003, as part of the 2003-2006 CBA. Defendant Buchanan Inc.'s interpretation of this rate change as a change to the 2000-2003 CBA is clearly in error. Moreover, even if the Court were to construe this hourly rate change as a change to the terms of the 2000-2003 CBA, Defendants would still be bound to this new rate under the 2003-2006 CBA because Defendant Buchanan Inc. paid its ...


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