UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SECURITY WORKERS HEALTHAND

WELFARE FUND; RUTH ROUSE,

Trustee of the Fund; EUGENE

HARTMAN, Trustee of the Fund;

MYRA MCCOY, Trustee of the Fund;

GREG STROUSE, Trustee of the Fund,

Plaintiffs-Appellants,

No. 00-1538

v.

MID-ATLANTIC SECURITY SERVICES,

INCORPORATED, d/b/a Areawide

Services, Limited; WACKENHUT

SERVICES, INCORPORATED,

Defendants-Appellees.

Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Charles B. Day, Magistrate Judge.

(CA-96-2203-WMN)

Argued: January 24, 2001

Decided: March 28, 2001

Before WILKINS and MICHAEL, Circuit Judges, and

Claude M. HILTON, Chief United States District Judge for

the Eastern District of Virginia, sitting by designation.

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Reversed and remanded by unpublished per curiam opinion.

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COUNSEL

ARGUED: Marc Alan Tenenbaum, SLEVIN & HART, P.C., Wash- ARGUED:

ington, D.C., for Appellants. Jeffrey Peabody Ayres, VENABLE,

BAETJER & HOWARD, L.L.P., Towson, Maryland, for Appellees.

ON BRIEF: Marc H. Rifkind, SLEVIN & HART, P.C., Washington, ON BRIEF:

D.C., for Appellants. Joseph D. Gebhardt, JOSEPH D. GEBHARDT,

P.C., Washington, D.C., for Appellee Mid-Atlantic.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

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OPINION

PER CURIAM:

This case involves the interpretation of a provision in an ERISA

trust agreement that holds a delinquent employer liable to the trustees

of its employees' benefit fund for all reasonable costs incurred in the

collection of a delinquent account. A magistrate judge interpreted this

provision as excluding the fees of an auditor. Finding this interpretation to be in error, we reverse and remand.

Security Workers Health and Welfare Fund, a joint labor management employee benefit fund, provides health and related benefits to

security guards under the Employee Retirement Income Security Act,

29 U.S.C. § 1001 et seq. The Fund was one of the insurance options

for security guards employed by Mid-Atlantic Security Services

(which operated under the name "Areawide Services Limited") pursuant to a collective bargaining agreement between Areawide and the

United Union of Security Guards. The collective bargaining agreement required Areawide to contribute to the Fund based on the number of guards who elected to participate in the Fund's benefit

program. The agreement also required Areawide to provide monthly

reports to the Fund detailing the number of participating employees

and the hours they worked. On July 17, 1996, the Fund brought suit

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in the United States District Court for the District of Maryland after

Areawide failed to make the requisite contributions to the Fund and

failed to submit a monthly report. At around the same time period,

Areawide was purchased by Wackenhut Services.

Areawide did not file a timely answer to the complaint and the district court entered judgment by default against Areawide. However,

the default judgment was later vacated. The parties eventually settled

as to the amount of principal that was due the Fund. The district court

entered partial judgment in the Fund's favor for that stipulated

amount ($32,000). The matter went forward, however, as to the issues

of interest, liquidated damages, attorneys' fees, audit fees, and collection costs. The Fund filed a motion for summary judgment which a

magistrate judge, assigned to hear the case upon the consent of all of

the parties, granted in part. The magistrate judge awarded $58,634.37

in interest, liquidated damages, attorneys' fees, and other costs; this

amount was in addition to the $32,000 judgment that the parties

agreed to for satisfaction of the principal amount owed to the Fund.

The magistrate judge reduced the Fund's request for attorneys' fees

by 50%, denied altogether the Fund's request for auditor fees, and

reduced the amount of taxable costs by $97.14.

At issue in this appeal is the magistrate judge's denial of the fees

for the Fund's auditor, Patrick R. Reid, in the amount of $24,521.25.

Reid had reviewed Areawide's employment records to determine how

much was owed the Fund. Reid was given the documents in question

only after the Fund had obtained an order to compel. Reid also

reviewed documents from Wackenhut. Reid's rate was $90 per hour

for his work and $45 per hour for his assistants' time. The magistrate

judge ruled that Mr. Reid was not utilized by the Fund as an auditor

but as an expert witness. The magistrate judge held that because Reid

was assisting with trial preparation as an expert, the Fund was not

entitled to reimbursement of his fee.

Because this Court is being asked to review the magistrate judge's

ruling on a motion for summary judgment, the matter is reviewed de

novo. See Canada Life Assurance Co. v. Estate of Lebowitz, 185 F.3d

231, 235 (4th Cir. 1999).

Resolution of this issue begins and ends with the interpretation of

a clause in the Fund's Trust Agreement, which Areawide agreed to

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be bound by in its collective bargaining agreement with the union.

Article IX, Section 6 of the Trust Agreement provides in pertinent

part, "[I]n the event that the Trustees place the account in the hands

of legal counsel for collection, the delinquent employer shall be liable

for reasonable attorney fees (with a minimum of $100) and for all reasonable costs incurred in the collection process, including court fees,

audit fees, etc."

Reid's fees are included as "costs incurred in the collection process." "Audit fees" are specifically listed in the clause as an example

of a collection cost. Areawide argues that Reid was really performing

the services of an expert witness and that he was performing tasks

more accurately characterized as litigation support. The magistrate

judge agreed, finding that Reid was hired for purposes of litigation.

Even if this finding is correct, the clause in the agreement clearly contemplates litigation-related expenses. For example, the agreement lists

"court fees" as a recoverable collection cost. Court fees would only

be applicable if the Fund pursued litigation to collect a delinquent

account. There is no requirement, as the magistrate judge found, that

the information uncovered by the auditor be obtained in the ordinary

course of employment, rather than after being retained by counsel.

There is no question that Reid was performing an audit in that he

reviewed Areawide and Wackenhut's employment records to determine how much was owed the Fund. The fact that this task was performed while this matter was in litigation--rather than as part of a

preventative, routine audit--is irrelevant under the plain language of

the agreement in question.

Because the Court concludes that the contract unambiguously

resolves this issue in favor of the Fund, it is not necessary to address

the Fund's further argument that ERISA itself provides for the award

of audit fees. This case is remanded for the consideration of audit fees

consistent with this opinion.

REVERSED AND REMANDED

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