Opinion
Case No. 02-00074-CV-W-HFS
November 25, 2002
ORDER
Before the court is defendant Lonnie Crowell Masonry, Inc.'s ("LCM") motions for leave to file a third-party complaint, and for partial summary judgment. The instant action was commenced by the filing of a complaint on January 24, 2002 by trustees Steve Mullen and Jeffrey Chaikin, trustees of multiemployer employee benefit plans, BAC Local Union 15 Pension Fund; BAC Local Union 15 Welfare Fund; Kansas City Bricklayer Employees Vacation Plan; BAC Local Union 15 Apprenticeship and Training Fund (sometimes referred to as "the Plaintiff Funds", or collectively referred to as "plaintiffs"). The complaint alleges violations of the Employment Retirement Income Security Act of 1974 ("ERISA") specifically 29 U.S.C. § 1132, ERISA section 502, and 29 U.S.C. § 1145, ERISA section 515, and plaintiffs seek, among other things, payment of allegedly delinquent employer contributions to employee benefit plans.
Background
The Plaintiff Funds are separate entities established pursuant to the Labor Management Relations Act, as amended, Section 302, 29 U.S.C. § 186; and each of the Plaintiff Funds are employee benefit plans pursuant to 29 U.S.C. § 1002. On June 6, 1968, a collective bargaining agreement ("CBA") was entered into between the Builders Association of Missouri ("the Association"), and Local Union No. 15 of the Bricklayers, Masons and Plasterers International Union ("the Union"). The Plaintiff Funds are located in Kansas City, Missouri. Defendant Lonnie Crowell Masonry, Inc. ("LCM") is a corporation with its principal place of business in Dardanelle, Arkansas. Jurisdiction is proper over the parties pursuant to 29 U.S.C. § 185(a).
In mid-2000, Lonnie Crowell, President of LCM ("Crowell"), contracted with general contractor Elan Construction to provide certain masonry materials and labor for the construction of a Costco Wholesale store in Kansas City, Missouri ("the Kansas City Costco project"). According to Crowell he hired non-union labor, and when they arrived to work on the project, other unionized trades walked off the job in protest. This activity halted construction at the site. Plaintiffs dispute the occurrence of a protest, and assert that the Union did not engage in a protest regarding the union membership of LCM or any other employer at the site; therefore, there was not a halt to construction at the site.
On September 8, 2000, after negotiations with the Union, Crowell, signed an untitled memorandum agreement ("the Memorandum") which stated that Larry Sedlacek, representing LCM, met with Steve McClanahan, representing the Union, in the presence of Dale Nyberg and Wade Veronelly, who represented Elan Construction. At that meeting it was agreed, among other things, that LCM would hire six (6) second year masons at $13.02 per hour plus $7.80 per hour in contractor contributions. The Memorandum was signed by Crowell and McClanahan. According to Crowell, this Memorandum was the brain-child of James Woolery, an agent and representative of the Union, who approached him during the walkout at the construction site and proposed that LCM and the Union enter into an agreement encompassing only the Kansas City Costco project in order to appease the Union. Crowell asserts that Woolery assured him this would be a "one-job" agreement.
Also, on September 8, 2000, Crowell, purportedly at the Union's urging, signed a Stipulation in which "the undersigned employer" agreed to be bound by the CBA in force between the Union and the Association. This Stipulation was signed by Crowell for LCM, McClanahan for the Union, and representatives of the Plaintiff Funds. According to Crowell, he signed the Stipulation in reliance on representations made by McClanahan and Woolery that the Stipulation was in furtherance of the Memorandum.
Crowell states, and plaintiffs do not dispute, that in conformity with the Memorandum, LCM paid the contributions of the six (6) second year masons sent by the Union for LCM's use on the Kansas City Costco project. However, the parties dispute whether those payments concluded LCM's obligation to the Union. LCM states that plaintiffs are now suing to recover contributions for every mason sent by LCM to work on construction projects within the geographical jurisdiction of the union since September 8, 2000. This would include two other projects where LCM provided masonry work, a Costco store in Lenexa, Kansas and a high school in Stilwell, Kansas.
Article II of the CBA states that the jurisdiction of the agreement extends to and includes the following counties of Kansas: Wyandotte, Atchison, Brown, Doniphan, Franklin, Johnson, Leavenworth and Miami. And, in Missouri, the counties of Cass, Clay, Henry, Jackson, Johnson, Lafayette, Platte, and Ray, and portions of Carroll and Bates counties.
The Complaint alleges that LCM has not complied with the Stipulation which incorporated the CBA provisions regarding mandatory employee contributions to be paid by an employer. Essentially, the complaint seeks an order directing an accounting of LCM's books and records to determine the total number of hours worked and paid to employees covered under the CBA; judgment against LCM for those contributions not paid by LCM; judgment against LCM for liquidated damages; and judgment against LCM for the accrued interest on unpaid fringe benefit contributions.
Third-Party Complaint
LCM seeks leave to bring a third-party claim against the Union for fraudulent misrepresentation, fraudulent concealment, and negligent misrepresentation. LCM claims that Crowell signed the Memorandum in reliance on false misrepresentations by McClanahan and Woolery that they, as agents and representatives of the Union, possessed authority to bind the Union to a one-job agreement and a contribution rate of $7.80 per hour for only the six second year masons who worked on the Kansas City Costco project. LCM claims that McClanahan and Woolery had a duty to disclose their lack of authority, but instead, chose to conceal this fact. LCM further claims that the Union, through the acts of McClanahan and Woolery, then fraudulently abrogated the terms of the Memorandum by subsequently inducing Crowell to sign the Stipulation which incorporated the CBA, on the false pretense that the Stipulation was in furtherance of the Memorandum. Finally, LCM alleges that McClanahan failed to exercise reasonable care in communicating the scope of his actual authority, and he also alleges that the Union had a pecuniary interest in LCM' s inducement to be bound by the CBA which would require union dues to be paid to the Union. As a result of this alleged fraud and negligence, LCM complains that it could be forced to suffer damages in the amount of $8.95 per hour for all masons provided by LCM who worked on all projects in the jurisdictional areas defined in the CBA for the period of September 8, 2000 through the present.
Plaintiffs do not allege a specific dollar amount. Rather, plaintiffs seek an accounting in order to determine the number of hours worked and/or paid to employees times the hourly amounts due under the CBA.
Therefore, LCM seeks indemnification from the Union for any judgment entered against it on the claims asserted by plaintiffs; rescission of the Memorandum and Stipulation incorporating the CBA; punitive damages against the Union; and its costs and attorney fees incurred in defending against plaintiffs and in prosecuting the Union.
Federal Rule of Civil Procedure 14(a) provides that a defending party may implead a third party "who is or may be liable to him for all or part of the plaintiff's claim against him." Notwithstanding the purpose behind Rule 14(a), LCM may not be entitled to the relief it seeks. Section 515 of ERISA, essentially provides that an employer who is obligated to make contributions to a multiemployer plan under the terms of, among other things, a CBA, shall, to the extent not inconsistent with law, make said contributions pursuant to the terms of the CBA. 29 U.S.C. § 1145;Central States v. Independent Fruit Produce. Co., 919 F.2d 1343, 1347 (8th Cir. 1990). In looking at prior cases which dealt with this section of ERISA, the Court of Appeals found it clear that Congress intended section 515 to simplify actions, to collect delinquent contributions, avoid costly litigation, and enhance the actuarial planning necessary to the administration of multiemployer pension plans.Central States v. Independent Fruit Produce. Co., 919 F.2d at 1347-48; citing, Central States, Southwest Southwest Areas Pension Fund v. Gerber Truck Serv., 870 F.2d 1148, 1152 (7th Cir. 1989). Section 515 places the pension fund in a better position, analogous to that of a holder in due course or a receiver of a failed bank — "entitled to enforce the writing without regard to understandings or defenses applicable to the original parties." Central States v. Independent Fruit Produce Co., 919 F.2d at 1348. "If it means nothing else, section 515 means that . . . suit [by a trustee] cannot be thwarted by defenses not apparent from the face of the Agreement." Central States v. Independent Fruit Produce, Co., at 1349.
The purpose of this rule is to promote judicial efficiency by eliminating the necessity for the defendant to bring a separate action against a third individual who may be secondarily or derivatively liable to the defendant for all or part of the plaintiffs original claim.Southwest Administrators. Inc. v. Rozay's Transfer, 791 F.2d 769, 777 (9th Cir. 1986).
Because a pension fund is not a party to the CBA, it would normally be a third-party beneficiary. As a third party beneficiary, however, the pension fund would be subject to "any contract defense which the promisor could assert against the promisee if the promisee were suing on the contract." It is these contract defenses — for example, fraud in the inducement, oral side agreements or course of performance — that are most likely to breed litigation. Central States v. Independent Fruit Produce Co., 919 F.2d 1343, 1348 (8th Cir. 1990).
The courts of appeal have been unanimous in so holding. See, eg., Berry v. Garza, 919 F.2d 87, 89-90 (8th Cir. 1990) (rejecting defense based on lack of majority status); Benson v. Brower's Moving Storage, 907 F.2d 310, 314-15 (2nd Cir. 1990) (rejecting defenses of abandonment of contract and lack of majority representation). The rule appears to be similar to that applied to written obligations to failed banks.
In circumstances similar to the facts at bar, a district court denied a defendant employer's motion for leave to file a third-party complaint against a union for rescission of the CBA or, alternatively, for indemnification and for fraud. Southwest Administrators. Inc. v. Rozay's Transfer, 791 F.2d 769 (9th Cir. 1986). The employer in Rozay's asserted the same defense as LCM at bar, fraud in the inducement. However, the court held that it would not be an abuse of discretion to deny an application for impleader where it would disadvantage the existing action. Southwest Administrators, Inc. v. Rozay's Transfer, 791 F.2d at 777. Moreover, to grant such an application would be inconsistent with the purposes of ERISA in providing a streamlined and simplified procedure for employee benefit trust funds to collect delinquent contributions.Id.
Here, LCM asserts that Crowell was fraudulently induced into signing the Memorandum, purported to reflect an understanding between Crowell, McClanahan and Woolery that: (1) the agreement concerned only the Kansas City Costco project (a "one-job" agreement); (2) that LCM would be required to pay contributions in the amount of $7.80 per hour; and (3) that those contributions would be paid on behalf of only the six second year masons sent by the Union to work on that project. LCM also claims that Crowell was then fraudulently induced into signing the Stipulation incorporating the CBA on the misrepresentation that the Stipulation was in furtherance of the Memorandum. Indeed, LCM's claim that Crowell would not have signed either document if he had known the representations were false, is the classic definition of fraud in the inducement. Southwest Administrators, Inc. v. Rozay's Transfer, 791 F.2d at 774; See 12 Williston on Contracts § 1488, at 332 (3d ed. 1970). Nevertheless, such fraudulent inducement is not the type of defense that can be maintained against a trust fund's collection action Id.; see also Central States, Southwest Southwest Areas Pension Fund v. Gerber Truck Serv., 870 F.2d 1148, 1150-51 (7th Cir. 1989) (rejecting defense based on oral agreement between parties not to enforce the written terms of the CBA as to some employees); Robbins v. Lynch, 836 F.2d 330, 333-34 (7th Cir. 1988) (rejecting as defense claim that union had agreed not to collect a payment called for by the agreement).
Similarly unavailing is LCM's claim of fraud in the execution. According to LCM, it justifiably relied on McClanahan' s false representations of authority, and it was not within the fair or reasonable reach of LCM to know that neither representative had authority to bind the Union. 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 Administrators, Inc. v. Rozay's Transfer, 791 F.2d 769, 774 (9th Cir. 1986). Contrary to LCM's contentions, it had ample opportunity to obtain knowledge of the essential terms of both the Memorandum and Stipulation, for the terms were clearly expressed in both documents. That part of the Memorandum indicating that LCM agreed to pay contributions in the amount of $7.80 on behalf of the six second year masons simply reflects the agreement between the parties as to those six employees. There is nothing in the Memorandum to indicate that this amount would be attributable to all other employees provided by LCM. And, there is a glaring absence of any language limiting the agreement to only the Kansas City Costco project. Likewise, the Stipulation notes that the employer's signature constitutes its agreement to be bound by the CBA, there is no mention of the purported agreement asserted by LCM, and there is no language indicating that it is in furtherance of the Memorandum. Thus, it begs the question as to how Crowell could have read these two documents and subsequently claim they embodied the terms now asserted. In an Affidavit, Crowell states that he is the President of LCM and that for eight years he has been in the business of bidding for contracts to perform masonry work on construction projects. He contends he then contracts with temporary staffing agencies to provide the necessary masonry labor and expertise. With such an extensive background in the construction business, it is highly unlikely that Crowell could claim ignorance of the substantive and procedural provisions of the industry, including those embodied in a CBA.
In sum, courts recognize only two defenses to a collection action: that the pension contributions are themselves illegal or that the CBA is void. Central States v. Independent Fruit Produce, Co., 919 F.2d at 1349). LCM has failed to establish either of those two defenses here, and the defenses of fraud raised would impermissibly complicate this action to collect delinquent contributions. Consequently, LCM's motion to file a third party claim against the Union is denied.
Although certiorari was denied in Rozay's Transfer, the decision was subsequently disagreed with by the U.S. District Court of Maine. InCapozza Tile Co., Inc. v. Joy, 2002 WL 771126, the employer argued fraud in the execution in that the CBA which the Fund sued on was not the document signed by the president of the company. According to the president, he was given only a signature page and was told that it dealt only with pension benefits for four employees. The court found that although a fact-finder could disbelieve him, his statement created a genuine issue of material fact. Capozza Tile Co., Inc. v. Joy, 2002 WL 771126 (D.Me. September 30, 2002). I will follow the appellate law cited above.
Summary Judgment as to Employer Status
Standard of Review
Summary judgment is appropriate if the record "show[s] 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." See Fed.R.Civ.P. 56(c);Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-50 (1986). A genuine issue for trial exists if, based on the record as a whole, a reasonable jury could find in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. at 248. The inquiry performed is the threshold inquiry of determining whether there is a need for a trial — whether, in other words, there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party. Anderson v. Liberty Lobby, Inc., at 250.
If the moving party meets its burden, the burden shifts to the nonmoving party to come forward with "specific facts showing that there is a genuine issue for trial." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). It is not sufficient for the nonmoving party to present evidence that is conclusory or speculative, with no basis in fact. Id. In order for a motion for summary judgment to be defeated, the nonmoving party must resist the motion by making a sufficient showing on every element of its case on which it bears the burden of proof Smith v. Torchmark Corp., 82 F. Supp.2d 1006 (W.D.Mo. 1999). In making its determination, the court must resolve all ambiguities and draw all reasonable inferences in favor of the non-movant. Anderson v. Liberty Lobby, Inc., 477 U.S. at 255.
Summary procedures are appropriate where the issues for resolution are primarily legal rather than factual. Smith v. Torchmark Corp., 82 F. Supp.2d at 1008; citing, Parmenter v. Federal Deposit Insurance Corp., 925 F.2d 1088, 1092 (8th Cir. 1991). Issues of fact must be material to a resolution of the dispute between the parties; where the only disputed issues of fact are immaterial to the resolution of the legal issues, summary judgment is appropriate. Smith v. Torchmark, 82 F. Supp.2d at 1008; citing, Get Away Club, Inc. v. Coleman, 969 F.2d 664, 666 (8th Cir. 1992). In ruling on a motion for summary judgment, the Court does not decide material fact issues, rather it determines whether or not they exist. Smith, 82 F. Supp.2d at 1008; citing, Parmenter, 925 F.2d at 1092.
Analysis
LCM contends that, pursuant to the Memorandum, it paid the agreed upon contributions for the six second year masons provided by the Union to work on the Kansas City Costco project. LCM also contends that any other workers it provided to work on the other two jobs, i.e. the Lenexa Costco project and the Kansas Stilwell High School, were employed by temporary staffing agencies, Trendsetter and AMS Staffing. Thus, LCM seeks partial summary judgment on the issue as to whether it is obligated to pay contributions for the workers assigned to the last two projects. Conversely, plaintiffs seek recovery of contributions for every mason LCM provided to work on construction sites within the geographical jurisdiction of the Union since September 8, 2000. There appears to be no dispute that this basically includes the Kansas City Costco project, the Lenexa Costco project, and the Kansas Stilwell High School.
It is noted that, in their opposing papers, plaintiffs do not dispute that LCM paid the agreed upon payments for the six second year masons provided to work on the Kansas City Costco project.
LCM asserts that "employee" is not defined in the CBA. Plaintiffs do not dispute this assertion, but note that the Amended Agreement and Declaration of Trust define "employee" as "any person who is employed by an employer as defined herein. . . ." (Plaintiffs' Exhibit 2: Art. IV. Sec. 3). However, even if in agreement with this definition, the parties still disagree as to whether the persons provided by LCM to work on various construction projects can be construed as the "employees" of LCM. To determine whether the masons in question were employees of LCM under ERISA, we look to the common law of agency. Alford v. U.S., 116 F.3d 334, 336 (8th Cir. 1997); citing, Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992). In Nationwide, the Supreme Court held that a common-law test, enumerating a number of factors, should be considered when construing the meaning of an "employee" under ERISA. Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318 (1992). "In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished." Nationwide Mutual Insurance Co. v. Darden, 503 U.S. at 323-24; quoting, Community for Creative Non-Violence v. Reid, 490 U.S. 730, 751-52 (1989). "Among the other factors relevant to this inquiry are the skill required; the source of the instrumentalities and tools; the location of the work; the duration of the relationship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits; and the tax treatment of the hired party." Id. "[s]ince the common-law test contains `no shorthand formula or magic phrase that can be applied to find the answer, all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.'" Berger Transfer v. Central States, 85 F.3d 1374, 1378 (8th Cir. 1996); quoting, Nationwide, 503 U.S. at 324.
The term "employee" as used in ERISA incorporates traditional agency law criteria for identifying master-servant relationships. Where a statute containing that term does not helpfully define it, this court presumes that Congress means an agency law definition unless it clearly indicates otherwise. Nationwide Mutual Insurance Co. v. Darden, 503 U.S. at 318; quoting, Community for Creative Non-Violence v. Reid, 490 U.S. 730, 739-40 (1989).
In applying these factors to the present case, LCM through its motion papers and the affidavit of Crowell, defines itself as a construction subcontractor (one might consider this a form of broker — obtaining jobs and turning them over to others). It recites that it is a small operation comprised of Crowell and three office employees. In his affidavit Crowell avers that once he successfully bids on a construction project, he then contracts with temporary staffing agencies to provide the labor. Materials are ordered from suppliers near the construction site, and delivered by the suppliers directly to the site. According to Crowell, Trendsetter provided the labor for the Kansas City Costco project, and AMS Staffing provided the labor for the Lenexa Costco project. Pursuant to the contracts entered with Trendsetter and AMS Staffing, those agencies reserved the right of direction and control over all of the employees, and retained the right to hire, fire, discipline and reassign the employees. The contracts also indicate that the agencies assumed responsibility for the payment of salaries to the employees, and the payment of payroll taxes, and all federal, state or local taxes. Additionally, the agencies provided workers' compensation insurance and employee benefits. And, the agencies assumed responsibility for compiling and filing compensation claims.
The affidavits of both Crowell and Sedlacek describe their relationship as one of long duration in which Sedlacek, although initially employed by Trendsetter and then AMS Staffing, worked as a foreman for LCM on the projects. Based on this enduring relationship, Crowell preferred Sedlacek to be the foreman on the jobs. Although Crowell sometimes visited the site, Sedlacek was responsible for the day-to-day operation, including how and when the job would be done. LCM only required that the job be completed in accordance with its agreement with the general contractor. According to Sedlacek, a number of masons traveled with him to sites around the country, and if additional labor was needed, he hired locally. Potential employees filled out applications which Sedlacek then sent to the agency for final approval. Sedlacek was solely responsible for the day-today operation, including start and end time, days off, and all other worker issues and problems. Sedlacek averred that he and the masons received their paychecks and W-2 forms from the agencies. The agencies also provided Sedlacek and the masons with the option of obtaining health insurance and participation in the 401(k) plan.
Finally, as to the necessary level of skill, Sedlacek averred that masonry techniques required time and experience to master, requiring an apprenticeship period of several years before becoming a qualified journeyman mason. Also, that the masons who worked on the projects at issue brought their personal tools. LCM only supplied large equipment such as concrete mixers and scaffolding.
In rebuttal, plaintiffs contend that there is evidence tending to show that LCM enjoyed an employer/employee relationship with the masons who worked on the projects, and where such a relationship was not apparent, the evidence shows that Sedlacek was employed by LCM and acted as its agent in securing the other masons (as he did in the negotiations regarding Costco in Kansas City). In support of this argument, plaintiffs submit the Trendsetter Agreement which refers to LCM as a co-employer with Trendsetter. But the contract is entitled "Client Service Agreement", and LCM is defined in the agreement as "Client". Moreover, in exchange for all of the services provided by Trendsetter, LCM was only required to pay a fee, and furnish auto liability insurance and general liability insurance. Finally, under the Miscellaneous section of the agreement where both parties agree to report employee accidents to each other, Trendsetter expressly refers to the workers as "TRENDSETTER employees assigned to CLIENT". Arguably the reference to co-employers is insufficient to show that LCM was an employer. Schwieger v. Farm Bureau Ins. Co. of NE, 207 F.3d 480, 483 (8th Cir. 2000); quoting, Nationwide Mutual Insurance Co. v. Darden, 503 U.S. 318, 324 (1992) (there is "no shorthand formula or magic phrase that can be applied to find the answer," and therefore "`. . . all of the incidents of the relationship must be assessed and weighed with no one factor being decisive.'")
According to the agreements, LCM was required to pay Trendsetter an amount equal to the gross payroll of all employees listed with Trendsetter, as well as a service fee which was calculated by multiplying the gross payroll by the fee percentage rate of 20.50% see Attachment A, pg. 1, 8. LCM was required to pay AMS Staffing the sum of 21.50% for all labor provided for work completed see Attachment B, Art. 5.
Plaintiffs next argue that even if the contracts themselves cannot be construed to define LCM as an employer, Sedlacek was employed by LCM, and hired other masons on behalf of LCM. The support for this argument is the affidavit of McClanahan who avers that Sedlacek represented himself as an employee and head foreman of LCM. According to McClanahan, Sedlacek also discussed issues relating to LCM joining the Union and signing the International Agreement so that it would have access to bricklayers throughout the country; however, McClanahan admits that such an agreement was never signed. McClanahan's affidavit in opposition to summary judgment contains no specific facts showing that Sedlacek was employed by LCM, other than a "representation" was made. Sedlacek admitted in his affidavit that as a foreman, part of his duties included determining the size of the workforce needed to complete the work on time. As such, he worked with Crowell and negotiated the use of union masons on the Kansas City Costco project. In sum, plaintiffs argue that Sedlacek exercised authority over the workers "on behalf of the leasing agencies or LCM." In other words, plaintiffs argue that if Sedlacek was not employed by one, then he was employed by the other. However, it is not generally sufficient for the non-moving party to present evidence that is conclusory or speculative, with no basis in fact. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986).
Assuming arguendo that Sedlacek is a key (or the key) to the puzzle presented his occasional work for competitors of defendant could be significant. Berger Transfer, supra, 85 F.3d at 1380.
Plaintiffs' production of the 1099 showing LCM as the payer of Alfredo Rodriguez seems inconclusive on whether LCM employed the masons. In its response to plaintiffs' request for production of documents, LCM provided the 1099 on one individual, Mr. Rodriguez, who performed masonry work on one of the projects at issue. When a problem arose with his social security number, AMS Staffing refused to pay him, therefore, LCM paid him.
Further, plaintiffs argue that, contrary to LCM's assertion, the masons who worked on the projects were not highly skilled. McClanahan averred that the projects did not require highly specialized bricklayer work, rather, all the work could be performed by bricklayers possessing second year apprentice skills. McClanahan further averred that it was the standard in the industry for bricklayers and masons to use their own personal tools. Even accepting plaintiffs' view, the issue of skill alone is not enough to find a genuine issue as to whether the workers were employed by LCM.
Alternatively, plaintiffs assert that there is a genuine issue of material fact as to whether LCM entered into a subcontract with an employer, which was prohibited by Art. XII of the CBA. Plaintiffs do not argue this point, but merely make mention of it as a final point in their opposing papers. cf., Chicago Painters and Decorators Pension v. Karr Brothers, Inc., 755 F.2d 1285, 1287 (7th Cir. 1985) (even though the complaint was poorly drafted, the alleged violations under both section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185 (1976), and section 502 of ERISA were present, thereby giving the opposing party notice of the substance of the allegations). It can be argued that a party to a contract would presumably try to comply with its terms. The basic contention in this case, however, somewhat weakens the presumption.
The facts in this case are presented in somewhat superficial manner, and both sides rely on self-serving documentation and affidavits. As to the applicable law, in its reply brief (page 4) defendant asks the court to reject Eighth Circuit "joint employment" cases in favor of a Third Circuit case that it argues is more persuasive, in light of changes in rulings by the National Labor Relations Board. See NLRB v. Browning-Ferris Ind., 691 F.2d 1117 (3rd Cir. 1982). My duty is, however, to follow Eighth Circuit law, not some supposition that the Eighth Circuit may change prior rulings. Moreover, the agency issue which needs resolution is presumably federal common law, not necessarily influenced by Labor Act concepts. Nationside Mut. Ins. Co. v. Darden, 503 U.S. 318, 323 n. 3 (1992).
This is one of those cases where, even if it may be surmised that the papers filed somewhat favor defendant, if taken at face value, caution suggests that the matter be resolved in court, after a full hearing, and after the pertinent witnesses have been examined in the courtroom.Roberts v. Browning, 610 F.2d 258, 536 (8th Cir. 1979). In denying summary judgment, I assume that a hearing by the court should be confined to the issue of whether defendant is the employer or a co-employer or joint employer of the workmen on the Kansas projects — and that a hearing can be scheduled after a brief round of discovery.
Accordingly, it is hereby
ORDERED that LCM's motion seeking leave to file a third party complaint (ECF doc. 36) is DENIED. It is further
ORDERED that LCM's motion for summary judgment (ECF doc. 44) is DENIED.
It is further
ORDERED that the parties propose an agreed discovery schedule within 21 days of this ruling.