Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_02-cv-04599/USCOURTS-cand-3_02-cv-04599-3/pdf.json

Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 29:1145 E.R.I.S.A.

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

LARRY TOTTEN, et al.,

Plaintiffs,

 v.

R.G. CONSTRUCTION, et al.,

Defendants.

 /

No. C 02-04599 JSW

ORDER GRANTING MOTION

FOR JUDGMENT ON THE

PLEADINGS, OR IN THE

ALTERNATIVE, FOR SUMMARY

JUDGMENT IN FAVOR OF

THIRD PARTY DEFENDANT

Now before the Court is the motion of third party defendant, Northern California

District Council of Laborers (“District Council”) for judgment on the pleadings pursuant to

Federal Rule of Civil Procedure 12(c), or, in the alternative, for summary judgment pursuant to

Federal Rule of Civil Procedure 56(c). Having carefully reviewed the parties’ papers and

considered their arguments and the relevant legal authority, and good cause appearing, the

Court hereby GRANTS the District Council’s motion for summary judgment. The Court finds

the present motion appropriate for decision without oral argument and hereby VACATES the

hearing set for December 16, 2005. See Civil L.R. 7-1(b). 

BACKGROUND

Third party complainant, R.G. Construction, brought a third party complaint for

declaratory relief against District Council in an effort to clarify its obligations to Plaintiffs Larry

Totten, as Chairman, and Jose Morena, as Co-Chairman, of the Board of Trustees for the

Case 3:02-cv-04599-JSW Document 58 Filed 12/13/05 Page 1 of 6
United States District Court

For the Northern District of California

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28 1 The Court DENIES District Council’s motion to strike the declaration of third

party complainant, Rudy E. Gonzalez, on the basis that the declaration was late-served. 

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Laborers and Welfare Trust Fund of Northern California; Laborers Vacation-Holiday Trust

Fund for Northern California; Laborers Pension Trust Fund for Northern California; and 

Laborers Training and Retraining Trust Fund for Northern California (collectively “Plaintiffs”). 

Plaintiffs initiated the action in order to recover unpaid contributions allegedly owed by

defendants/third party complainants, R.G. Construction and Rudy E. Gonzalez, under two

collective bargaining agreements: the Laborers Asbestos Removal Agreement and the

Laborers’ Lead Paint Removal Agreement (collectively, the “CBAs”). Plaintiffs contend that

on March 23, 1995, defendants/third party complainants became signatories on the CBAs and

have failed to make contributions to the funds. R.G. Construction contends that it is not bound

by the CBAs on the ground that, by virtue of having been intoxicated at the time, Gonzalez was

legally incapacitated and/or fraudulently induced into signing the CBAs. (See Declaration of

Rudy E. Gonzalez in opposition to plaintiff’s motion for summary judgment dated December

23, 2004 (“Gonzalez Decl.”), ¶ 8.)1

Third party defendant District Council moves for judgment on the pleadings, or in the

alternative, for summary judgment on the basis that R.G. Construction has failed to exhaust the

contractual remedies providing for arbitration as required by the CBAs and is therefore barred

from seeking declaratory relief from this Court. Further, District Council moves for judgment

on the basis that R.G. Construction has provided no evidence of material fact establishing that

the agreements are void due to fraud.

The Court will address the specific facts relevant to this motion as they are pertinent to

the analysis.

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United States District Court

For the Northern District of California

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 The Court also DENIES the request by third party complainant, R.G. Construction,

to take judicial notice of the declaration as the materials therein are not capable of accurate

and ready determination by resort to resources whose accuracy cannot be reasonably

questioned. See Fed. R. Evid. 201. The Court further overrules the objections to evidence

submitted by District Council. The Court finds, however, notwithstanding consideration of

the evidence submitted in the declaration, the District Council is entitled to summary

judgment. In addition, the Court GRANTS District Council’s motion to strike lines 19-21 of

the opposition brief as impertinent and scandalous matter, without sufficient evidentiary

support, pursuant to Federal Rule of Civil Procedure 12(f).

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ANALYSIS

The Court finds that the evidence submitted by R.G. Construction, although indeed latefiled on District Council, is properly before the Court and therefore, construes the pending

motion as a motion for summary judgment.2

A. Legal Standard on Motion for Summary Judgment.

A principal purpose of the summary judgment procedure is to identify and dispose of

factually unsupported claims. Celotex Corp. v. Cattrett, 477 U.S. 317, 323-24 (1986). 

Summary judgment is proper when 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 judgment as a matter of law.” Fed. R.

Civ. P. 56(c). 

A party moving for summary judgment who does not have the ultimate burden of

persuasion at trial, must produce evidence which either negates an essential element of the nonmoving party’s claims or show that the non-moving party does not have enough evidence of an

essential element to carry its ultimate burden of persuasion at trial. Nissan Fire & Marine Ins.

Co. v. Fritz Cos., 210 F.3d 1099, 1102 (9th Cir. 2000). A party who moves for summary

judgment who does bear the burden of proof at trial, must produce evidence that would entitle it

to a directed verdict if the evidence went uncontroverted at trial. C.A.R. Transp. Brokerage Co.,

Inc. v. Darden, 213 F.3d 474, 480 (9th Cir. 2000). 

Once the moving party meets its initial burden, the non-moving party must go beyond

the pleadings and by its own evidence “set forth specific facts showing that there is a genuine

issue for trial.” Fed. R. Civ. P. 56(e). In order to make this showing, the non-moving party

must “identify with reasonable particularity the evidence that precludes summary judgment.” 

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Keenan v. Allan, 91 F.3d 1275, 1279 (9th Cir. 1996). It is not the Court’s task to “scour the

record in search of a genuine issue of triable fact.” Id. (quoting Richards v. Combined Ins. Co.,

55 F.3d 247, 251 (7th Cir. 1995). If the non-moving party fails to make this showing, the

moving party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 323. An

issue of fact is “genuine” only if there is sufficient evidence for a reasonable fact finder to find

for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49 (1986). A

fact is “material” if it may affect the outcome of the case. Id. at 248. “In considering a motion

for summary judgment, the court may not weigh the evidence or make credibility

determinations, and is required to draw all inferences in a light most favorable to the nonmoving party.” Freeman v. Arpaio, 125 F.3d 723, 735 (9th Cir. 1997).

B. Federal Law Requires Arbitration of Dispute.

The CBAs both clearly provide for arbitration of “any dispute concerning the

interpretation or application of [the agreements], other than a jurisdictional dispute.” (See Third

Party Complaint, Ex. 1, Section XV; Ex. 2, Section XV.) The Ninth Circuit has held that when

a CBA contains a “customary arbitration clause acts of repudiation and other acts of termination

must be submitted to arbitration.” Camping Construction Co. v. District Council of Iron

Workers, 915 F.2d 1333, 1338 (9th Cir. 1991), (citing Brotherhood of Teamsters & Auto Truck

Drivers Local No. 70 v. Interstate Distributor Co., 832 F.2d 507, 511 n.4 (9th Cir. 1987)). In

addition, the court held that general arbitration clauses in CBAs are broad enough to cover

disputes over termination. Id. (“[w]hen a collective-bargaining agreement contains the usual

broad arbitration clause, a dispute over contract termination is arbitrable.”) Arbitration of a

labor dispute is only denied where it is clear that the arbitration clause cannot be interpreted to

permit arbitration of the dispute. United Steelworkers v. Warrior & Gulf, 363 U.S. 574, 582-83

(1960) (arbitration denied only where it can be said “with positive assurance that the arbitration

clause is not susceptible of an interpretation which cover the asserted dispute.”). Furthermore,

any doubts regarding arbitrability “should be resolved in favor of arbitration.” Id. at 583. 

The language of the arbitration provision in the two CBAs signed by Rudy Gonzalez

clearly provides that any dispute concerning the interpretation or application of the agreement

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shall be subject to arbitration. The determination whether R.G. Construction properly

terminated the agreement is subject to arbitration. Having failed to bring a grievance before the

District Council in arbitration, the claim for declaratory relief is dismissed.

C. Allegation of Fraud is Subject to Arbitration.

R.G. Construction and Gonzalez contend that the allegations in the third party complaint

state a cause of action for fraud and that such a cause of action is not subject to arbitration. 

R.G. Construction contends that it has alleged that Gonzalez was intoxicated at the time he

signed the CBAs, that he was induced to sign, and that therefore the contracts are invalid. On

this basis, they contend that where a party contests the making of the contract containing an

arbitration provision, it cannot be compelled to arbitrate the threshold issue of the existence of

the agreement to arbitrate. (Opp. at 6-7.) 

However, in order to state a claim for fraud in the execution of the CBAs, R.G.

Construction must demonstrate that it reasonably believed that the documents Gonzalez signed

were something other than collective bargaining agreements. See, e.g., Illinois Conference of

Teamsters and Employers Welfare Fund v. Steve Gilbert Trucking, 71 F.3d 1361, 1365-66 (7th

Cir. 1995) (holding that in order to assert the defense of fraud in the execution of a collective

bargaining agreement, the contractor would have to establish that he did not know that he was

signing a collective bargaining agreement); see also Operating Engineers Pension Trust v.

Gilliam, 737 F.2d 1501, 1504-05 (9th Cir. 1984) (same). R.G. Construction has submitted

evidence to this Court indicating that Gonzalez was aware that the documents he signed on

March 23, 1995 were indeed CBAs. (See, e.g., Gonzalez Decl., ¶¶ 8, 9.) There is evidence

evincing Gonzalez’s knowledge that the documents he signed were in fact collective bargaining

agreements. 

Furthermore, the evidence before the Court indicates that subsequent to the signing of

the agreements, Gonzalez ratified the previous agreement by signing a Letter of Understanding

on March 29, 1995 which indicated that the parties had previously entered into a collective

bargaining agreement. (See id., ¶ 10, Ex. C.) There is no evidence in the record indicating that

Gonzalez was also intoxicated or otherwise legally incapacitated six days later when he ratified

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the parties’ previous agreement. In addition, the allegations in the third party complaint refer to

the employment of union members under the CBAs after their execution and R.G. Construction

admitted that it employed laborers and made contributions to Plaintiffs’ Trust Funds on their

behalf. (See id., ¶¶ 17, 18, 23, 32, 33.) Subsequent ratification of the agreement similarly

compels dismissal of the claims for fraud in the execution. Trustees of Flint Michigan

Laborers’ Pension Fund v. In-Puls Construction Co., 835 F. Supp. 972, 975 (E.D. Mich. 1993). 

CONCLUSION

For the foregoing reasons, the District Council’s motion for summary judgment is

GRANTED. Claims against District Council by defendants/third party complainants, R.G.

Construction and Rudy Gonzalez, are dismissed for failure to exhaust contractual remedies

under the CBAs. 

 R.G. Construction’s request to stay the entire action pending the outcome of arbitration

is RESERVED in order to give Plaintiffs an opportunity to respond. Although the stipulation

granting a stay of this action pending determination of the third party complaint indicated that

the “parties agree that a determination of the validity of the underlying contract and/or its

termination needs to be decided before the issue of this case can be properly and fully

adjudicated,” Plaintiffs must be afforded the opportunity to object to a continued stay of this

matter. Plaintiffs are HEREBY ORDERED to file a written response to R.G. Construction’s

request to stay the entire action pending the outcome of arbitration by no later than January 13,

2006. Failure to file a response shall result in a continued automatic stay of this action.

IT IS SO ORDERED.

Dated: December 13, 2005 

JEFFREY S. WHITE

UNITED STATES DISTRICT JUDGE

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