Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-06-55812/USCOURTS-ca9-06-55812-0/pdf.json

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

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

TRUSTEES OF THE SOUTHERN 

CALIFORNIA IBEW-NECA PENSION

TRUST FUND, No. 06-55812

Plaintiff-Appellant, D.C. No.  v. CV-04-10011-FMC

HERMAN FLORES, d/b/a BHF OPINION

Electrical Contractors,

Defendant-Appellee. 

Appeal from the United States District Court

for the Central District of California

Florence Marie Cooper, District Judge, Presiding

Argued and Submitted

February 5, 2008—Pasadena, California

Filed March 27, 2008

Before: Alfred T. Goodwin, Diarmuid F. O’Scannlain, and

William A. Fletcher, Circuit Judges.

Opinion by Judge Goodwin

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COUNSEL

J. David Sackman, Reich, Adell, Crost & Cvitan, Los Angeles, California, for the plaintiff-appellant. 

Marla B. Hendrickson, Tustin, California, for the defendantappellee.

OPINION

GOODWIN, Circuit Judge: 

The Trustees of the Southern California IBEW-NECA Pension Trust Fund (“Trustees”) appeal the district court’s judgment against them in their action to collect delinquent trust

fund contributions from employer Herman Flores. The Trustees contend that the district court erred by holding that the

term “covered employees” in the relevant collective bargaining agreements is ambiguous and by considering extrinsic evidence of the parties’ oral representations. We hold that the

collective bargaining agreements require Flores to make benefit contributions for all electrical workers engaged in project

work. For this reason, we reverse and remand for further proceedings. 

BACKGROUND

In late August 2003, the Los Angeles Unified School District awarded a construction contract to general contractor

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DJM/Borbon for the Commonwealth Avenue and Hoover

Elementary School Safety and Technology Upgrades Project.

Flores, an individual doing business as BHF Electrical Contractors (“BHF”), worked as an electrical subcontractor on the

project. 

On October 1, 2003, Flores signed a Subscription Agreement with Local Union 11 of the International Brotherhood of

Electrical Workers in which he agreed to make pension trust

fund contributions on behalf of his employees. In addition to

the Subscription Agreement, Flores’ obligation to make trust

fund contributions was regulated by a Project Stabilization

Agreement (“PSA”), the Local Union 11 Inside Wiremen’s

Agreement (“IWA”) and other trust agreements. 

Flores began work on the project in October 2003. Sections

4.6 and 4.8 of the PSA obligated Flores to hire all project

workers, excluding his core employees, from the union’s

referral system, unless the referral system did not fulfill Flores’ request within forty-eight hours. In October and November 2003, Flores made several calls to union officials,

requesting union workers. The union did not refer workers

until December 8, 2003. In the meantime, Flores used his own

workforce of nonunion employees for project work. 

Flores made no contributions to the pension trust fund on

behalf of his employees before December 8, 2003. The Trustees later conducted an audit of BHF by comparing the

employer’s monthly payroll reports with its certified payroll.

The audit discovered unpaid contributions for project work

performed before December 8, 2003, by electricians other

than Flores himself. 

The Trustees filed this action against Flores in federal district court to collect delinquent trust fund contributions under

section 301(a) of the Labor Management Relations Act, 29

U.S.C. § 185(a), and section 502(e)(1) of the Employee

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Retirement Income Security Act, 29 U.S.C. § 1132(e)(1). The

district court conducted a three-day bench trial. 

On March 13, 2006, the district court entered judgment in

favor of Flores. The court held that the PSA is ambiguous

because “it never defines the term ‘covered workers’ and

never expressly requires contributions for nonunion workers.”

After considering parol evidence, the district court concluded

that “defendant’s Subscription Agreement was not in effect

and his obligations under the PSA did not arise until December 8, 2003.” 

On May 10, 2006, the district court denied the Trustees’

motion to alter or amend the judgment. This appeal followed.

STANDARD OF REVIEW

We review the interpretation of contract provisions de

novo. Operating Eng’rs Pension Trusts v. B & E Backhoe,

Inc., 911 F.2d 1347, 1351 (9th Cir. 1990) (citing Kemmis v.

McGoldrick, 706 F.2d 993, 996 (9th Cir. 1983)). 

DISCUSSION

The Trustees contend that the district court erred by holding that the term “covered employees” is ambiguous in the

PSA. They argue that the PSA’s language, structure, and purpose unambiguously require Flores to pay benefit contributions for electrical workers engaged in project work, including

the nonunion workers he employed prior to December 8,

2003, and after accepting the contract. We agree. 

[1] Written terms are ambiguous only if multiple reasonable interpretations exist. 11 Samuel Williston & Richard A.

Lord, A Treatise on the Law of Contracts § 30:4 (4th ed.

1999). We interpret written terms in the context of the entire

agreement’s language, structure, and stated purpose. See

Huber, Hunt & Nichols, Inc. v. United Ass’n of Journeymen

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& Apprentices of the Plumbing & Pipefitting Indus., Local 38,

282 F.3d 746, 752 (9th Cir. 2002). Litigants cannot isolate

terms of a collective bargaining agreement in order to create

an ambiguity where none exists. See id. at 753-54.

[2] In this case, the collective bargaining agreements cover

both union and nonunion employees. Section 3.7 of the PSA

extends coverage to “construction craft employees” and provides a detailed list of excluded job classifications. For example, the PSA does not apply to “office or clerical employees,

draftspersons, supervisors, timekeepers, messengers, guards,

inspectors, or any other employees above the classification of

general superintendent.” When a collective bargaining agreement defines covered employees by job classification, it generally covers “all employees within those classifications,

regardless of union membership.” Teamster’s Local 348

Health & Welfare Fund v. Kohn Beverage Co., 749 F.2d 315,

318 (6th Cir. 1984).

[3] The recognition clauses in both the PSA and the IWA

also show that the agreements cover all electrical workers

engaged in project work, regardless of union status. “The

presence in the agreement of a recognition clause designating

the union as the exclusive bargaining agent for all employees

indicates that fringe benefit contributions are required for both

union and non-union members.” Id. (citing Audit Servs., Inc.

v. Rolfson, 641 F.2d 757, 761 (9th Cir. 1981); Manning v.

Wiscombe, 498 F.2d 1311, 1313 (10th Cir. 1974)). 

Section 2.06(a) of the IWA states that “[t]he employer recognizes the Union as the sole and exclusive representative of

all its employees performing work within the jurisdiction of

the Union for the purpose of collective bargaining in respect

to rates of pay, wages, hours of employment and other conditions of employment.” Similarly, section 4.1 of the PSA

broadly defines the relevant collective bargaining unit as “employees engaged in Project Work covered by this Agreement.” The PSA defines “Project Work” as “work performed

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by a Contractor or Subcontractor pursuant to the terms of a

Construction Contract.” These terms yield only one reasonable interpretation: the collective bargaining agreements cover

all of Flores’ electrical workers engaged in project work. 

Flores nevertheless contends that the PSA’s benefits contribution requirement did not take effect until the union processed the relevant paperwork and supplied union workers on

December 8, 2003. He cites section 4.6 of the PSA, which

obligates employers to “hire all covered employees, excluding

core employees,” through the union referral system. He also

relies on section 4.8 of the PSA, which states: 

In the event that any Union’s registration and referral

system does not fulfill the requirements for specific

classifications of covered employees requested by

any Contractor within forty-eight (48) hours (excluding Saturday, Sunday and holidays), that Contractor

may use employment sources other than Union registration and referral services and may employ applicants from any other available source. 

Flores argues that under these provisions his obligation to

make trust fund contributions was conditioned upon actual

referral of union workers. 

[4] The agreements contain no such condition. Sections 4.6

and 4.8 of the PSA do not limit “covered employees” to those

supplied by the union. Rather, these provisions establish the

employer’s separate obligation to hire employees through the

union referral system unless that system does not supply

workers in a timely manner. Neither PSA section 4.11, which

requires employers to contribute benefits, nor the Subscription

Agreement conditions the employer’s obligation to make trust

fund contributions upon actual referral of union workers. 

[5] Flores’ obligations under the PSA arose before his

employees started work on the covered project in October

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2003. Section 1.9 of the PSA unambiguously states: “By

accepting the award of a Construction Contract covered by

this Agreement, whether as a Contractor or Subcontractor, the

Contractor or Subcontractor agrees to be bound by each and

all of the provisions of this Agreement.” Flores also agreed to

be bound by these provisions when he signed the Subscription

Agreement for project work on October 1, 2003. 

[6] The collective bargaining agreements unambiguously

required Flores to make benefit contributions for all electrical

workers engaged in project work, including the nonunion

workers he employed prior to December 8, 2003, but after

accepting the contract. The district court erred by considering

extrinsic evidence that contradicted these unambiguous terms.

See Pace v. Honolulu Disposal Serv., Inc., 227 F.3d 1150,

1157-58 (9th Cir. 2000) (noting that the parol evidence rule

bars admission of extrinsic evidence to contradict unambiguous contract terms). 

Finally, the Trustees contend that the district court erred by

failing to rule on their claim that Flores owes approximately

$893 in unpaid contributions for project work performed after

December 8, 2003, by employees other than ditch-diggers and

Flores himself. The district court made no findings or ruling

on this issue, and the parties have not adequately briefed the

question on appeal. We remand this issue to the district court

for further consideration. 

REVERSED and REMANDED for further proceedings.

Appellant to recover costs.

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