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Nature of Suit Code: 791
Nature of Suit: Employee Retirement Income Security Act (ERISA)
Cause of Action: 

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PUBLISH 

UNITED STATES COURT OF APPEALS 

TENTH CIRCUIT 

ROBERT F. MAY, as Deputy Manager 

of the Western Conference of 

Teamsters Pension Trust Fund, 

Plaintiff-Appellant, 

v. 

) 

) 

) 

) 

) 

) 

) 

) 

PARKER-ABBOTT TRANSFER AND ) 

STORAGE, INC., a Utah corporation, ) 

Defendant-Appellee. 

) 

) 

FI LED Unfr~ Stites Coon of Appeuls 'r . ent:1 'C' ,1rcmr , 

APR .. 4 1990 

ROBERT L. HOECKER 

Clerk 

No. 87-1333 

Appeal from the United States District Court 

for the District of Colorado 

(D.C. Civil No. 86-K-839) 

Karen L. Yablonski-Toll of McKendree & Toll, Denver, Colorado, for 

Plaintiff-Appellant. 

Jeffrey L. Silvestrini (John 

Segal, Salt Lake City, Utah, 

Straw & Strauss, Denver, 

Defendant-Appellee. 

R. Nelson, also of Cohne, Rappaport & 

and Richard s. Strauss of Hochstadt, 

Colorado, with him on the brief) for 

Before LOGAN, BARRETT and BRORBY, Circuit Judges. 

BRORBY, Circuit Judge. 

Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 1 
Appellant Robert F. May, in his capacity as Deputy Manager of 

the Western Conference of Teamsters Pension Trust Fund (the Fund), 

sued defendant Parker-Abbott Transfer Storage, Inc. (ParkerAbbott) to compel production of Parker-Abbott's payroll records to 

enable the Fund to conduct an audit, and to recover any delinque~t 

contributions revealed thereby. On Parker-Abbott's motion for 

summary judgment, the district court held appellant's entire 

action barred by the doctrine of res judicata. May v. ParkerAbbott Transfer & Storage, Inc., 663 F. Supp. 22 (D. Colo. 1987). 

FACTS 

The Fund is a multi-employer benefit plan governed by the 

Employee Retirement Income Security Act of 1974 (ERISA), 29 u.s.c. 

§§ 1001 et ~· From April 1980 through June 1984 Parker-Abbott 

was party to a collectiv.e bargaining agreement with the 

International Brotherhood of Teamsters, Local No. 222. Under the 

agreement, Parker-Abbott was required to make monthly 

contributions to the Fund for the benefit of its employees. The 

monthly contribution amounts were to be made based on ParkerAbbott' s monthly payroll reports. Also as provided in the 

agreement, Parker-Abbott was to submit the monthly reports to 

appellant and to submit to audits of its books by appellant upon 

demand in order that appellant could ensure the accuracy of the 

monthly reports and payments. 

On March 5, 1984, appellant sued Parker-Abbott in federal 

district court, seeking relief under ERISA, 29 u.s.c. §§ 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 2 
1132(g)(2) and 1145. The complaint alleged that contributions due 

from Parker-Abbott for the months of September and October 1981 

and October 1982 were not paid in a timely manner. Pursuant to 

the collective bargaining agreement, the trust agreement, and the 

pension certifications, the complaint sought liquidated damages 

for these delinquent contributions, together with interest, 

attorneys' fees and costs. R. Vol. I tab 4 ex. A at 3-4. The 

complaint also alleged that from December 1982 to March 1, 1984, 

Parker-Abbott had failed to submit reports or pay any contributions and sought an order compelling Parker-Abbott to complete and 

submit the missing reports and to pay the contributions owed, 

together with liquidated damages, interest, attorneys' fees and 

costs. Id. at 4-5. The complaint noted that the 

amounts owed .•. will be based on the employer's reports 

when submitted. If these reports are inaccurate because 

of errors and omissions in reporting the number of 

collective bargaining unit employees covered, they shall 

not preclude plaintiff from bringing another action for 

contributions ..• and other associated amounts which the 

Trust Fund subsequently learns are outstanding for 

December, 1982 to date. 

Id. at 4. 

The parties' attorneys began settlement negotiations after 

service of the complaint. In May 1984, while settlement 

negotiations were still in process, Parker-Abbott's employees 

voted to decertify the union, and the collective bargaining 

agreement expired by its own terms on June 30, 1984. On September 

19, 1984, the parties agreed to a "Stipulation for Settlement" 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 3 
(the Stipulation). This agreement provided that Parker-Abbott 

would pay to the Fund a total of $9,617.21 in· twelve monthly 

installments; "the total principal amount of $9,075.00 together 

with interest thereon over the term of payments at 11% per annum, 

said principal amount representing the principal owing in the 

amount of $6,975.36, liquidated damages in the sum of $2,033.39 

and costs in the amount of $6ti.25." R. Vol. I tab 4 ex. B ~ 1. 

The $6,975.36 principal figure is exactly equivalent to the 

aggregate of the unpaid contributions for the months December 1982 

through March 1984, or $435.96 for each month, as calculated and 

recorded by Parker-Abbott in its monthly reports. R. Vol. I tab 

13 ~ 7; R. Vol. I tab 6 exs. B and D. 

The settlement agreement was very brief, setting out little 

more than the schedule of payments and stating that, subject to 

the terms of the Stipulation, the "action may be dismissed with 

prejudice." R. Vol. I tab 4 ex. B ~ 3. On September 27, 1984, 

the district court entered an order dismissing the action with 

prejudice subject to Parker-Abbott's compliance with the terms of 

the payment schedule. R. Vol. I tab 4 ex. c. Thereafter, ParkerAbbott timely fulfilled its obligations under the settlement 

agreement. 

In early 1985, the Fund notified Parker-Abbott that it had 

learned of the decertification and termination of the collective 

bargaining agreement and asked for the reports for April, May and 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 4 
June 1984. The Fund also indicated its intention to audit ParkerAbbott 's payroll records for the period December 1982 through June 

1984 and to obtain payment of any amounts revealed to be owing. 

R. Vol. I tab 4 ex. D. Parker-Abbott refused to allow examination 

of its records, asserting that the parties' previous settlement 

covered all claims the Fund might have had against it. R. Vol. I 

tab 4 ex. E. In response, appellant filed the instant action in 

April 1986. The complaint seeks to compel an audit of ParkerAbbott 's payroll records for the period April 1980 through June 

1984, the entire period· of Parker-Abbott's reporting and payment 

obligations to the Fund. R. Vol. I tab 1 at 3. Appellant also 

seeks liquidated damages, interest, attorneys' fees and costs for 

any delinquent contributions revealed by the Fund's audit. Id. at 

4. 

In considering defendant's motion for summary judgment on the 

ground of res judicata, the district court concluded that the key 

question was "whether plaintiff should have raised, in 1984, the 

claims asserted in the instant action." 663 F. Supp. at 23. 

Because the first action was in a state of active litigation when 

the trust agreements expired on June 30, 1984, the district court 

concluded that plaintiff was thereafter on notice, or at least on 

inquiry of notice, of all current claims, and "defendant's 

liability under the trust agreements for the entire period of 

April 1980 to June 1984 should have been litigated in the 1984 

action because the trust agreement relationship terminated at that 

time." Id. at 23-24. The court therefore granted Parker-Abbott's 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 5 
summary judgment motion and this appeal followed. 

ANALYSIS 

In reviewing a summary judgment order, this court must apply 

the same standard employed by the trial court under Fed. R. Civ. 

P. 56(c). Lowell Staats Min. Co. v. Philadelphia Elec. Co., 878 

F.2d 1271, 1274 (10th Cir. 1989). As the facts of this case are 

not in dispute, this court must determine de novo whether the 

substantive law of res judicata was correctly applied. Id.; 

McClain v. Apodaca, 793. F.2d 1031, 1032 (9th Cir. 1986) ("We apply 

a de novo standard of review to questions of res judicata."). 

Res judicata ·is "'a rule of fundamental and substantial 

justice'" that enforces the public policy that there be an end to 

litigation. Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 394, 

401-02 (1981) (quoting Hart Steel Co. v. Railroad Supply Co., 244 

U.S. 294, 299 (1917)). By preventing repetitious litigation, 

application of res judicata avoids unnecessary expense and 

vexation for parties, conserves judicial resources, and encourages 

reliance on judicial action. See Montana v. United States, 440 

U.S. 147, 153-54 (1979). 

Under the doctrine of res judicata or claim preclusion, "a 

final judgment on the merits of an action precludes the parties 

from relitigating issues that were or could have been raised 

in that action." Allen v. Mccurry, 449 U.S. 90, 94 (1980). 

Stated alternatively, "'"a final judgment on the merits bars 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 6 
further claims by parties or their privies based on the same cause 

of action."'" Petromanagement Corp. v. Acme-Thomas Joint Venture, 

835 F.2d 1329, 1335 (10th Cir. 1988) (quoting Brown v. Felsen, 442 

U.S. 127, 131 (1979)). The same rule applies when, as here, a 

suit is dismissed "with prejudice" by consent decree. See, ~' 

Lawlor v. National Screen Serv. Corp., 349 U.S. 322, 324, 327 

(1955). 

In order to determine what constitutes a single "cause of 

action" in any given case, this circuit applies the transactional 

approach of the Restatement (Second) of Judgments§ 24 (1982): 

" (1) When a valid and final judgment rendered in an 

action extinguishes the plaintiff's claim pursuant to 

the rules of merger or bar (see §§ 18, 19), the claim 

extinguished includes all rights of the plaintiff to 

remedies against the defendant with respect to all or 

any part of the transaction, or series of connected 

transactions, out of which the action arose. 

(2) What factual grouping constitutes a 

'transaction', and what groupings constitute a 'series', 

are to be determined pragmatically, giving weight to 

such considerations as whether the facts are related in 

time, space, origin, or motivation, whether they form a 

convenient trial unit, and whether their treatment as a 

unit conforms to the parties' expectations or business 

understanding or usage." 

Quoted in Petromanagement, 835 F.2d at 1335. See also Lowell 

Staats, 878 F.2d at 1274. Under this approach, this circuit also 

recognizes that "a 'contract' is generally considered to be a 

'transaction,' so that all claims of contractual breach not 

brought in an original action would be subject to bar of claim 

preclusion, so long as the breaches antedated the original 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 7 
action." Petrornanagernent, 835 F.2d at 1336 (citing Restatement of 

Judgments§ 62 comment h, at 250 "('All the breaches of a contract 

prior to the commencement of the suit are treated as a single 

cause of action.')"). We continued in Petrornanagernent to provide 

an illustration of the general rule: 

"A sues B for breach of a contract calling for 

delivery of certain appliances, alleging as the breach 

that the appliances did not meet the agreed 

specifications. After judgment for B, A commences a 

second action, this time alleging late delivery of the 

appliances as the breach. The second action is 

precluded." 

835 F.2d at 1336 (quoting Restatement (Second) of Judgments § 25 

comment b, illustration 2, at 210-11). 

Turning to the facts of this case, we conclude that, to the 

extent that appellant seeks to audit the records of Parker-Abbott 

from April 1980 through March 1984 the rights sought to be 

enforced by appellant in his second lawsuit stern from the same 

transaction out of which the original action arose and thus, could 

have and should have been brought in the original action. The 

essential purpose of the one ''contract" underlying this litigation 

(the Trust Agreement) is to provide for proper payment of monthly 

contributions by Parker-Abbott to the Fund. For the performance 

of Parker-Abbott's obligations to be complete, those contributions 

must be both accurately computed and timely paid. The contract 

provides remedies for late contributions and provides the Fund 

with audit powers to ensure that contributions are accurate. 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 8 
However, the existence of these two provisions within the contract 

does not justify two separate trips to the courtroom. 

In this regard, we cannot distinguish between the two 

lawsuits in this case and those presented in the Restatement 

illustration above only the order of the suits is reversed. Here, 

appellant has brought one suit to force the payment of delinquent 

monthly contributions (late delivery), and now brings another 

seeking an audit to ensure the accurate calculation of those 

contributions (or to ensure that the payments meet the agreed 

specifications). To allow the second suit to proceed as framed 

would allow precisely the sort of piecemeal litigation, unnecessary expense, and waste of judicial resources that the doctrine of 

res judicata is designed to prevent. 1 

This court recognizes that consent decrees are of a 

contractual nature and, as such, their terms may alter the 

preclusive effects of a judgment. 18 c. Wright, A. Miller & 

E. Cooper, Federal Practice and Procedure § 4443, at 384 (1981). 

Here however, the Stipulation and the consent judgment are 

absolutely silent as to the settlement's intended res judicata 

1 We acknowledge the great factual similarity between this case 

and I.A.M. Nat. Pension Fund v. Industrial Gear Mfg. Co., 723 F.2d 

944 (D.C. Cir. 1983). There, the D.C. Circuit concluded that the 

plaintiff's second suit to enforce audit rights was not barred by 

claim preclusion. However, that court's analysis did not invoke 

the "transactional" approach of this circuit. Instead, the 

Industrial Gear panel applied a much stricter definition of "cause 

of action" that focuses on whether the "primary right asserted in 

the two cases is the same." Id. at 948. As we have explained, 

our application of the broader transactional approach yields the 

opposite conclusion in this case. · 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 9 
effects. As we noted above, appellant's original complaint sought 

to establish boundaries for the first suit and to reserve certain 

of its rights under the Agreement for subsequent litigation. 

However, those reservations were not expressly carried forward 

into the contractual settlement with appellee. We are not willing 

to supply by inference what the parties have failed to expressly 

provide, especially when that inference would suspend the 

application of this circuit's principles of res judicata. 

By our holding, ·we do not go as far as the district court, 

which barred appellant's attempt to enforce its audit rights even 

as to the months April through June 1984; the period following the 

commencement of the lawsuit and preceding the termination of the 

collective bargaining agreement. As explained above, this circuit 

considers separate claims of contractual breach to constitute a 

single "transaction" only so long as the breaches antedate the 

original action. Parker-Abbott's failure, if any, to accurately 

compute the amounts of contributions made after the inception of 

the lawsuit could not have "antedated" the first lawsuit and thus 

would not come within the scope of our rule. Accordingly, the 

district court's bar of appellant's efforts to audit ParkerAbbott's records for this limited time period is reversed. 

Additionally, appellee's request for fees and costs is denied. 

The judgment of the district court is AFFIRMED in part, 

REVERSED in part, and REMANDED for further proceedings consistent 

with this opinion. 

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Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 10 
No. 87-1333, May v. Parker-Abbott Transfer and Storage, Inc. 

LOGAN, Circuit Judge, dissenting: 

I agree that this circuit has adopted the transactional 

approach of the Restatement (Second) of Judgments to determine 

what constitutes a "cause of action" for res judicata purposes. 

See Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 F.2d 

1329, 1335 (10th Cir. 1988). But that does not convince me that 

the doctrine of res judicata should bar the instant suit. 

The district court in the case before us apparently viewed 

May's 1984 suit against Parker-Abbott as one seeking "proper" 

payments, or at least considered that the cause to require an 

audit, despite May's attempt in the 1984 complaint to reserve it 

for later suit, arose out of the same transaction as the suit to 

require payment. My conclusion that a Trust Fund suit premised on 

the right to prompt payment presents a separate cause of action 

from a suit based on the results of an audit--for accurate 

payment--rests on the judgment that the two kinds of actions arise 

out of separate transactions, in the sense that the facts giving 

rise to each are distinct "in time, space, origin, or motivation," 

see id. at 1335 (quoting Restatement (Second) of Judgments § 24(2) 

(1942)); and that treating them separately conforms to standard 

business practices and expectations. 

What pushes me to view the two actions as separate is 

recognition that the pension fund is a separate and distinct 

entity from both Parker-Abbott and the union representing its 

Appellate Case: 87-1333 Document: 01019569566 Date Filed: 04/04/1990 Page: 11 
employees. It has no independent knowledge with which to verify 

the information the employer supplies in its monthly reports, and 

thus, as I.A.M. National Pension Fund v. Industrial Gear Mfg. Co., 

723 F.2d 944, 948 (D.C. Cir. 1983), stated, "[b]efore the Fund can 

maintain a cause of action alleging inaccurate contributions, it 

must conduct an audit from which it determines that the monthly 

reports are inaccurate." To hold that whenever the Fund believes 

it must sue to prod a lax or recalcitrant employer into submitting 

required reports or making payments shown as due on reports it has 

filed, it must conduct an audit of the employer's wage records or 

forever lose the right to complain of possible omissions or 

inaccuracies in the contributions owed by that employer, imposes 

an unfair burden on pension funds while furthering none of the 

policies behind the doctrine of res judicata. In short, a suit to 

require the employer to report and pay the amounts shown due on 

the reports would seem to arise out of different facts, at a 

different time, and from a different motivation than a suit to 

compel an audit and to recover any deficiencies the audit reveals. 

I cannot meaningfully distinguish this case from Industrial 

Gear, and I would not split the circuits on this issue. 

Therefore, I respectfully dissent. 

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