Opinion
Case No. 2:03-cv-902.
July 20, 2005
OPINION AND ORDER
On October 6, 2003, Plaintiffs, trustees of the Ohio Laborers' Fringe Benefit Programs (the "Funds") governed by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001, et seq., filed a complaint against defendants Akron Insulation Supply, Inc. and Dino Lombardi, individually and as an officer of Akron Insulation Supply. On July 27, 2004, Plaintiffs filed an amended complaint. This action is now before the Court on the parties' cross-motions for summary judgment. For the following reasons, Plaintiffs' and Defendants' motions for summary judgment will be denied.
I.
Summary judgment is not a substitute for a trial when facts material to the Court's ultimate resolution of the case are in dispute. It may be rendered only when appropriate evidentiary materials, as described in Fed.R.Civ.P. 56(c), demonstrate the absence of a material factual dispute and the moving party is entitled to judgment as a matter of law. See Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464 (1962). The moving party bears the burden of demonstrating that no material facts are in dispute, and the evidence submitted must be viewed in the light most favorable to the nonmoving party. See Adickes v. S.H. Kress Co., 398 U.S. 144(1970). Additionally, the Court must draw all reasonable inferences from that evidence in favor of the nonmoving party. See United States v. Diebold, Inc., 369 U.S. 654 (1962). The nonmoving party does have the burden, however, after completion of sufficient discovery, to submit evidence in support of any material element of a claim or defense on which that party would bear the burden of proof at trial, even if the moving party has not submitted evidence to negate the existence of that material fact. See Celotex Corp. v. Catrett, 477 U.S. 317 (1986); Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
II.
The following statement of facts is taken from the amended complaint. The instant action is brought by the trustees of the Ohio Laborers' Fringe Benefit Programs in their fiduciary capacities on behalf of the participants and beneficiaries of the employee benefit trust funds. The Ohio Laborers' Fringe Benefit Programs is an association of three employee benefit trust funds and one labor management cooperative trust. The Funds are obligated by contract to collect contributions for the Laborers' International Union of North America ("LIUNA") Tri-Funds. Defendant Akron Insulation Supply is an employer within the meaning of ERISA, 29 U.S.C. § 1002(5). Defendant Dino Lombardi is the president of Akron Insulation Supply who controls access to its records and is responsible for filing contribution reports.
In January 2002, Mr. Lombardi entered into a collective bargaining agreement with Laborers' Local Union No. 894 on behalf of Akron Insulation Supply. The CBA is entitled "Building Agreement Laborers' Local Union No. 894 Summit, Portage, Medina Counties." As a result of entering into the collective bargaining agreement, Akron Insulation Supply is bound to the Agreements and Declarations of Trust establishing the Ohio Laborers' Fringe Benefit Programs and the LIUNA Tri-Funds. The Agreements and Declarations of Trust obligate Akron Insulation Supply to file monthly contribution reports, permit audits of its financial records, and make monthly contributions to the Ohio Laborers' Fringe Benefit Programs on behalf of all persons employed by Akron Insulation Supply within the trade and territorial jurisdiction of a "laborer" as defined in the collective bargaining agreements.
On October 6, 2003, Plaintiffs filed the instant action claiming that Defendants have failed to make monthly contributions to the Ohio Laborers' Fringe Benefit Programs and the LIUNA Tri-Funds and have refused to permit an audit of Akron Insulation Supply's records. On July 27, 2004, Plaintiffs filed an amended complaint. In the amended complaint, Plaintiffs seek judgment of $36,251.49 in known unpaid fringe benefit contributions for the period January 1, 2002 to October 31, 2002 plus liquidated damages and interest. They seek an undetermined amount for the periods January 1, 2001 to December 1, 2001 and November 1, 2002 to the present. They also seek an audit of Akron Insulation Supply's payroll records for the period January 1, 2001 to December 31, 2001, a mandatory permanent injunction, costs, and attorney fees. It is on the basis of these facts that the cross-motions for summary judgment will be decided.
III.
On May 17, 2005, Defendants filed a motion for summary judgment asserting that: (1) the CBA is not retroactive to cover the year 2001; (2) Plaintiffs do not have jurisdiction under the CBA to recover from Defendants; (3) Defendants are not required to pay fringe benefit contributions for non-union employees; (4) Plaintiffs have not shown that the employees for whom they are attempting to recover fringe benefits are "laborers" as defined by the CBA; and (5) the CBA does not require Defendants to contribute to the fringe benefit funds. This motion is fully briefed.
On May 18, 2005, Plaintiffs filed a motion for summary judgment seeking to recover $35,251.49 in delinquent fringe benefit contributions, $14,676.08 in liquidated damages and interest, and $11,725.00 in attorney fees and costs. Plaintiffs point out they seek a lesser amount in contributions than was stated in the amended complaint after consideration of Mr. Lombardi's statements in his deposition. Also, if the Court grants their motion for summary judgment, Plaintiffs request that the claims for the year 2001 be dismissed. This motion is fully briefed.
The Court will analyze the cross-motions for summary judgment guided by the issues raised by Defendants in their motion for summary judgment.
A. Retroactivity of the CBA
Defendants claim that the CBA is not retroactive to the year 2001 because Mr. Lombardi did not sign it until January 2002. Defendants submit the deposition testimony of Michael L. Rogers, a representative of the union who authored the CBA, to support their contention that the CBA does not apply retroactively. Plaintiffs appear to concede that there still is a question of fact as to the retroactivity of the CBA.
First, the Court concludes that Mr. Rogers's opinion as to the scope of the CBA is not relevant and will not be considered. Here, the Court is concerned with whether Mr. Lombardi and Plaintiffs intended the CBA to be retroactive.
Second, on July 27, 2004, the Court issued an order ruling on a prior motion for summary judgment filed by Defendants which adjudicated the question of whether the CBA is retroactive to cover the year 2001. In that motion, Defendants had argued, among other things, that the collective bargaining agreement Mr. Lombardi signed in January 2002 on behalf of Akron Insulation Supply was not retroactive to cover the year 2001 as Plaintiffs claimed. The Court denied Defendants' motion for summary judgment and concluded that there was a question of fact as to whether the CBA is retroactive.
The Court concludes that there still is a question of fact as to whether the CBA is retroactive in that the parties have not presented the Court with any more evidence than was before it for a ruling on Defendants' prior motion for summary judgment. As set forth more fully in the July 27, 2004 Order, Mr. Lombardi's affidavit testimony and his deposition testimony seem to indicate that he signed the Agreement to preserve his ability to do union work in the Akron area from the end of January 2002 forward. However, Mr. Lombardi does not affirmatively state that he did not intend for the Agreement to be retroactive. But, based on Ms. Cannon's affidavit, it appears that Plaintiffs intended for the January 2002 Agreement to retroactively bind Akron Insulation Supply for the period from May 2001 forward. The documents presented by the parties are silent as to the effective date of the parties' agreement, and there is thus an ambiguity concerning their mutual intention which cannot be resolved on the basis of the current record. Consequently, the Court concludes that there is a question of fact as to whether the Agreement signed on or about January 22, 2002 retroactively bound Akron Insulation Supply for the year 2001. Defendants' motion for summary judgment on this issue will be denied.
B. Plaintiffs' Jurisdiction Under the CBA
Defendants claim that Plaintiffs do not have jurisdiction to recover from them under the CBA. Defendants point to the following language from the CBA:
Jurisdiction: The jurisdiction of this Agreement covers all employees employed by the Construction Employers Association members who have assigned to it their bargaining rights, and any person, firm or corporation who as a Contractor becomes signatory to this Agreement performing work in building construction.
Defs.' Mot. for Summ. J., Ex. 1. Building Agreement at L-3. Focusing on the first portion of the jurisdictional statement, Defendants assert that Akron Insulation Supply is not a member of the Construction Employers Association nor has it assigned its bargaining rights to that organization. However, Plaintiffs, also relying on the above language, point out that the Agreement also covers "any person, firm or corporation who as a Contractor becomes signatory to th[e] Agreement." Plaintiffs state that Akron Insulation Supply is a signatory to the Agreement.
Review of the jurisdictional statement reveals that the CBA covers employees who are employed by members of the Construction Employers Association who have assigned it their bargaining rights as well as to a corporation that becomes a signatory to the Agreement and performs work in building construction. Defendants do not seem to dispute that Akron Insulation Supply is a contractor that performs work in building construction. Also, the evidence before the Court reflects that Akron Insulation Supply is a signatory to the Agreement. Plaintiffs submitted the Acceptance Of Building Agreement Laborers' Local Union No. 894 which is signed by both Mr. Lombardi and the union representative, Mr. Rogers. See Pls.' Mot. for Summ. J., Ex. 3. Through this document, "[t]he undersigned, being additional parties to th[e] Agreement, hereby certify they have read and agreed to accept it and be found [sic] by all terms and provisions thereof." Id. Thus, as a signatory to the Agreement, Defendants are bound by its terms and Plaintiffs have jurisdiction to recover from them based on the Agreement.
C. Requirement To Make Contributions Under the CBA
Defendants claim that the CBA does not require them to make contributions to the Funds. Instead, Defendants claim that they are responsible only for indemnifying the Funds from claims that may later be brought by an employee attempting to recover fringe benefits but for whom Defendants did not make contributions. Defendants have submitted a number of "Affidavits of Non-Laborer Status and Agreement of Indemnification" with names of employees for whom Defendants have not made contributions. See Defs.' Mot. for Summ. J., Ex. 6. On the other hand, Plaintiffs point out that the Agreement requires fringe benefit contributions to be made by the 15th of each month. See Defs.' Mot. for Summ. J., Ex. 1. Building Agreement at L-19.
Review of the Agreement reveals that it does require Defendants to make fringe benefit contributions: "It is further agreed that the Employer hereto will pay such benefits once each month to the applicable Fund Office not later than the 15th of each month following the month wherein the hours are worked" for all employees covered by the Agreement. Id. at L-18 through L-19. The phrase "such benefits" refers to, among other things, fringe benefits as is indicated by the heading to this section of the Agreement. See id. at L-18. Therefore, Defendants are required to make fringe benefit contributions and not simply to indemnify the Funds.
D. Contributions for Non-Union Employees
Defendants claim that the Agreement is not applicable to non-union employees and that Plaintiffs have wrongfully attempted to recover fringe benefit contributions for employees regardless of the particular employee's union status. On the other hand, Plaintiffs claim that Defendants have a contractual obligation to make fringe benefit contributions on behalf of all employees who perform work within the trade jurisdiction of the union. Plaintiffs also point out that all employees within the jurisdiction of the union are required to become union members within eight days of hire.
In support of their position that they are not required to make fringe benefit contributions for non-union employees, Defendants claim that union representatives told Mr. Lombardi that he was not required to have each of his employees who was hired to perform work within the trade jurisdiction of the union join the union within eight days of hire. See Defs.' Mot. for Summ. J., December 31, 2004 Lombardi Aff. ¶ 5. Although the record reflects some dispute as to whether Mr. Lombardi was told this, see Pls.' Resp., Rogers Aff. ¶ 2 and Holland Aff. ¶ 2, it is not material because ERISA precludes oral modification of agreements.See Central States, Southeast and Southwest Areas Pension Fund v. Behnke, Inc., 883 F.2d 454, 459-60 (6th Cir. 1989) (relying on 29 U.S.C. § 1102(a)(1)). Review of the Agreement shows that the provision was not modified in writing. Consequently, Plaintiffs are not bound by the alleged oral modification. See id. Thus, this argument is unavailing.
Turning to the question of whether Defendants are required to make fringe benefit contributions on behalf of all employees who perform work within the trade jurisdiction of the union regardless of their union status, "[a]s a matter of law, collective bargaining agreements may require employers to contribute funds for all employees, not just employees who are members of the union." Trustees of the B.A.C. Local 32 Ins. Fund v. Fantin Enterprises, Inc., 163 F.3d 965, 969 (6th Cir. 1998). Thus, the Court turns to the language of the Agreement to determine what it requires.
In this case, review of the Agreement reveals that Defendants are required to make fringe benefit contributions on behalf of all employees who perform work within the trade jurisdiction of the union. See Defs.' Mot. for Summ. J., Ex. 1. Building Agreement at L-18. Further, all employees hired in laborer classifications are required to become union members within eight days of hire. See id. at L-33.
Similar CBA provisions were addressed in Trustees of the B.A.C. Local 32 Ins. Fund v. Fantin Enterprises, Inc., 163 F.3d 965 (6th Cir. 1998). In Fantin, the CBA also contained a clause requiring the employer to make fringe benefit contributions for each employee performing covered work and a clause requiring employees to become union members within eight days of hire. Consequently, the court held that "[e]mployees covered by the trust agreements are therefore defined by the nature of their work and not their union status." Id. at 970.
Likewise, in the instant action Defendants are required to make fringe benefit contribution on behalf of all employees covered by the Agreement and all of these employees are required to become union members within eight days of hire. Therefore, the Court concludes that the employees upon whose behalf Defendants are required to make fringe benefit contributions are defined by the nature of their work, i.e., whether they are "laborers" within the meaning of the Agreement, and not by their union status. Consequently, Defendants are required to make contributions on behalf on non-union employees.
E. Whether the Employees are "Laborers"
Finally, Defendants claim that Plaintiffs have not shown that the employees for whom they are attempting to recover fringe benefits are "laborers" as defined by the CBA. Defendants assert that they are required to make fringe benefit contributions only for covered employees designated as "laborers." Mr. Lombardi attests that the individuals listed in Plaintiffs' audits were not employed as "laborers" as defined by the Agreement. See Defs.' Mot. for Summ. J., December 31, 2004 Lombardi Aff. ¶ 7. On the other hand, while Plaintiffs do not seem to dispute that Defendants are required to make contributions only for "laborers," Plaintiffs claim that Defendants' records are incomplete and, as a result, the burden shifts to Defendants to show that the employees listed in the audits are not laborers. Plaintiffs' motion for summary judgment seeks relief based on its classification of particular employees as laborers.
29 U.S.C. § 1059 imposes a duty on the employer to maintain adequate records: "every employer shall, in accordance with regulations prescribed by the Secretary, maintain records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees." 29 U.S.C. § 1059(a)(1). Consequently, "an employer's failure to maintain adequate records shifts the burden to the employer to prove that the work performed was covered or not covered."Michigan Laborers' Health Care Fund v. Grimaldi Concrete, Inc., 30 F.3d 692, 696 (6th Cir. 1994). Adequate recordkeeping includes records of hours worked on covered projects, which laborers worked on those projects, and what work was performed. See id. Thus, the first question before the Court is whether Defendants' records are complete.
Plaintiffs claim that Defendants' records are not complete. According to Melissa Seum, an auditor for the Ohio Laborers' Fringe Benefit Programs, she was not provided with any records for the year 2001 and she was not provided with monthly payroll registers for all the employees for the year 2002. See Pls.' Reply, Seum Aff. ¶ 3. Thus, her computations of the amounts owing were based on Ohio workers' compensation reports that Defendants submitted to the Bureau of Workers' Compensation. See id. at ¶ 4. The Court concludes that these statements do not speak to whether Defendants' records are complete but only to whether Plaintiffs received particular records.
The Court now turns to Defendants' explanation of Akron Insulation Supply's records. During his deposition, Mr. Lombardi was asked about Akron Insulation Supply's recordkeeping practices. He explained that "[w]e do keep some records, but I don't know how well kept they are." February 18, 2004 Lombardi Depo. at 44. Apparently, the records Akron Insulation Supply keeps are compiled through review of employee time cards. But, on these time cards, employees are not required to include the project where that employee worked that day or what job he or she performed. See September 14, 2004 Lombardi Depo. at 20. Further, it does not seem that Akron Insulation Supply has a procedure in place for assigning a particular employee to perform a particular job at a particular work site on a given day. See id. at 34. Thus, the only source of information for reporting purposes appears to come from the time cards.
The parties have not submitted copies of the time cards or Defendants' actual records. The only evidence before the Court is the parties' interpretations of these records. For example, before the Court is Plaintiffs' Adjustment Schedules which list Akron Insulation Supply employees who were omitted from Plaintiffs' original report to Defendants and the hours that each of these employees worked. See Defs.' Mot. for Summ. J., Exs. 6-7. Defendants have submitted Affidavits Of Non-Laborer Status And Agreement Of Indemnification which lists employees whom Defendants claim are not "laborers" within the meaning of the Agreement. See id. at Exs. 8.1 through 8.3, 9-11, 1-3. The affidavits show that these workers are classified as "installers." The Court notes that the employees Defendants classify as "installers" and claim are not covered by the CBA appear to be the same employees that Plaintiffs classify in their audit as "laborers" and claim are covered by the CBA.
After review of the evidence before it, the Court concludes that Defendants have not shown that Plaintiffs were provided with records of the hours worked on covered projects, which laborers worked on those projects, and what jobs those laborers performed. Consequently, the Court concludes that Defendants' records are incomplete. Thus, the burden is Defendants' to show that the employees whom Plaintiffs list in the audits did not perform covered work. See Grimaldi Concrete, 30 F.3d at 696.
The CBA includes a list of job classifications that are "laborer" jobs. An employee who performs a laborer job is covered by the CBA at issue and Defendants are required to make fringe benefit contributions on that employee's behalf. "Installer" is not one of the "laborer" job classifications.
According to Mr. Lombardi, there is not a company document that defines the word "installer." See September 14, 2004 Lombardi Depo. at 24. On one hand, he explains that the term is a "generic name for everybody." Id. at 25. As such, apparently an "installer" could be a worker performing a "laborer" job classification. On the other hand, although it is a generic classification, apparently for purposes of Defendants' Affidavits Of Non-Laborer Status And Agreement Of Indemnification, that classification means that the worker is not a "laborer" covered by the CBA and its contribution requirements. Based on the conflicting uses of the term, the Court cannot conclude whether an "installer" is or is not a "laborer."
Further, Plaintiffs have not explained the reasoning behind their determination that "installers" are "laborers" other than their reliance on Ms. Seum's finding to that effect as set forth in a letter written by her and sent to Defendants. See Pls.' Mot. for Summ. J., Ex. 4. Consequently, there is a question of fact as to whether the employees classified as "installers" are "laborers" covered by the CBA. See Illinois Conference of Teamsters Employers Welfare Fund v. Steve Gilbert Trucking, 71 F.3d 1361, 1367 (7th Cir. 1995) (explaining that although the defendant had not come forward with documentary evidence to disprove the plaintiff's findings, the individual defendant's affidavit and deposition testimony had cast doubt on the accuracy of the plaintiff's calculations). Thus, Plaintiffs' and Defendants' motions for summary judgment will be denied.
In sum, the issues remaining for trial include: (1) whether the CBA signed in January 2002 was intended by the parties to be retroactive to cover the year 2001; (2) whether the employees classified as "installers" by Defendants are "laborers" covered by the CBA; and (3) whether Plaintiffs are entitled to a mandatory permanent injunction against Defendants. The parties shall contact the undersigned's deputy clerk within 20 days of the date of this Order to set a trial date.
IV.
Based on the foregoing, Defendants' motion for summary judgment (file doc. #40) and Plaintiffs' motion for summary judgment (file doc. #47) are DENIED.
The parties shall contact the undersigned's deputy clerk within 20 days of the date of this Order to set a trial date.