NO. 93-503 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

JOHN C. HUGHES, as administrative 

manager of the Western Conference 

of Teamsters Pension Trust Fund, 

Plaintiff and Appellant, 

Defendant and Respondent. 

APPEAL FROM: District Court of the Second Judicial District, 

In and for the County of Silver Bow, 

The Honorable James E. Purcell, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Michael C. coil, Angel, Screnar, Coil & Bartlett, 

Bozeman, Montana 

For Respondent: 

John Lynch, Lynch Law Firm, Great Falls, Montana 

Filed: 

Submitted on Briefs: April 28, 1994 

Decided: August 11, 1994 
Justice Karla M. Gray delivered the Opinion of the Court. 

John Hughes appeals from the Findings of Fact, Conclusions of 

Law, and Judgment of the Second Judicial District Court, Silver Bow 

County, awarding unpaid employer contributions to the Western 

Conference of Teamsters Pension Trust Fund (Trust Fund) and 

attorney's fees to Jim Blankenship, doing business as Blankenship 

Construction (Blankenship). We reverse and remand. 

Blankenship entered into a collective bargaining compliance 

agreement with the Joint Council of Teamsters and Teamsters Local 

No. 2 of Butte, Montana, in July, 1976. By entering into the 

compliance agreement, Blankenship agreed to be bound by the terms 

of the Highway and Heavy Construction Labor Contract (Labor 

Contract), a collective bargaining agreement between the Montana 

Contractors Association and the Joint Council of Teamsters. The 

Labor Contract included a schedule governing employer contributions 

to the Trust Fund for every hour an employee worked in a job 

classified in the Labor Contract and designated the Trust Fund as 

the recipient of those contributions. 

The compliance agreement also bound Blankenship to the Trust 

Fund's articles of trust, which were contained in various 

agreements and declarations of trust and governed the 

administration of the Trust Fund, including the collection of 

delinquent contributions. They required the employer to submit 

written reports regarding the wages paid and hours worked by each 

employee and authorized the Trust Fund to audit the employer's 

payroll records to determine if contributions were owing. 

2 
Contemporaneous with the collective bargaining compliance 

agreement, Blankenship entered into an oral agreement with Jim 

Roberts (Roberts), a local Teamsters union representative. This 

oral agreement purported to decrease Blankenship's contribution 

obligations to the Trust Fund by excluding the necessity of 

contributions for employees working on certain types of projects. 

The Labor Contract was amended several times after Blankenship 

entered into the original compliance agreement. Blankenship signed 

additional compliance agreements in 1977 and 1981. 

Shortly after signing the 1981 compliance agreement, 

Blankenship signed an employer-union pension certification. This 

document further bound Blankenship to the Trust Fund's articles of 

trust and specified a procedure for obtaining the Trust Fund's 

consent to a modification of an employer's contribution 

obligations. 

In 1985, the Trust Fund initiated an audit of Blankenship's 

payroll records. The audit revealed that Blankenship was 

delinquent on his contributions for years 1979 through 1986. The 

Trust Fund assessed contribution deficiencies, interest, and 

liquidated damages against Blankenship. Relying on his oral 

agreement with Roberts, Blankenship refused to pay the amounts 

assessed. 

In 1987, John Hughes (Hughes), administrative manager of the 

Trust Fund, filed an action to recover the unpaid contributions. 

Shortly after the action was filed, Blankenship proposed by letter 

to make an offer of judgment in the amount of delinquent 
contributions he agreed were owing under the Labor Contract as 

modified by the oral agreement, as well as penalties and interest. 

The Trust Fund refused the proposal. 

During the trial of the action, the District Court admitted 

evidence of the oral agreement between Blankenship and Roberts 

modifying Blankenship's contribution obligations. Based on this 

evidence, the District Court rescinded the compliance agreements 

and all subsequent agreements based on the parties' mutual mistake 

in believing they could orally modify Blankenship's contribution 

obligations to the Trust Fund. We reversed the District Court on 

appeal and remanded for further proceedings, holding that par01 

evidence of an oral modification to a contract governed by the 

Labor Management Relations Act was inadmissible as a matter of 

federal law. Hughes v. Blankenship (1989) , 239 Mont. 519, 523, 781 

P.2d 1132, 1134. 

Following remand, Blankenship and Roberts discussed, and 

Roberts drafted, a written "memorialization" of the original oral 

agreement; both Roberts and Blankenship signed it. The purpose of 

the memorialization was to facilitate settlement of the case by 

setting forth the conditions under which Blankenship was required 

to contribute to the Trust Fund. The case did not settle. 

The parties agreed that Blankenship owed $8,222 in delinquent 

contributions for work which was not excluded under the terms of 

the memorialization. Blankenship made an offer of judgment in that 

amount plus any costs incurred by the Trust Fund. The Trust Fund 

rejected the offer and the action continued. 
Over the Trust Fund's objection, the District Court admitted 

the memorialization into evidence during the second trial. The 

District Court ultimately concluded that the written 

memorialization was enforceable against the Trust Fund and limited 

 lanke ens hip's contribution obligations pursuant to its terms. It 

awarded the Trust Fund $8,224 in delinquent contributions and 

$13,396 in liquidated damages and interest. In addition, the court 

awarded Blankenship $38,766 in attorney's fees based on the Trust 

Fund's rejection of the first proposal for an offer of judgment. 

Hughes appeals. 

The primary issue before this Court is the enforceability of 

the 1991 written memorialization entered into by Blankenship and 

Roberts. Hughes argues that the memorialization was not 

enforceable because Blankenship and Roberts did not follow the 

mandatory provisions in the Labor Contracts, compliance agreements, 

and pension certification specifying how to make a contribution 

modification binding on the Trust Fund. Blankenship responds that 

the Trust Fund, as a third-party beneficiary of the Labor Contract, 

cannot deny enforceability of the written modification. 

Furthermore, Blankenship asserts that the Trust Fund's attorney 

approved the memorialization for form and content and, because no 

reason for not accepting it was offered, it is enforceable. 

It is clear that state and federal courts have concurrent 

jurisdiction in trust fund collection cases and that federal 

substantive law provides the basis for our decisions. Audit 

Services, Inc. v. Anderson (1984), 211 Mont. 323, 326, 684 P.2d 
491, 493. The interpretation of a collective bargaining agreement 

provision is a question of law. Kemmis v. McGoldrick (9th Cir. 

1983), 706 F.2d 993, 996. we review a district court's 

interpretation of law to determine if it is correct. Colorado 

National Bank of Denver v. Story (1993), 261 Mont. 375, 377, 862 

P.2d 1120, 1122. 

Courts interpret contractual provisions according to the 

plain, ordinary language used by the parties. National Labor 

Relations Board v. Superior Forwarding, Inc. (8th Cir. 1985), 762 

F.2d 695, 697. Here, the Labor Contract in effect during the 1979- 

86 audit period plainly stated that the Trust Fund would rely on 

its terms to "restore or not reduce benefits to Retiring Employees" 

and that the terms could not be modified without the "express 

written consent of the trustees." Furthermore, the plain language 

of the 1981 pension certification signed by Blankenship 

specifically provided that the Trust Fund would not be bound by any 

modification to an employer's contribution obligations unless the 

modification was contained in a complete, signed writing, timely 

submitted to the Trust Fund's area administrative office, and 

accepted by the trustees. These documents were of record in the 

District Court. 

Furthermore, other evidence demonstrated that the 

memorialization did not meet the requirements for binding the Trust 

Fund to a contribution modification under the terms of either the 

Labor Contract or the 1981 pension certification. Greg Thompson, 

supervisor of the contract review and pension accounting department 
for the Trust Fund administrator, testified that the written and 

executed memorialization was never submitted to the administrative 

offices; he had not seen it prior to the time it was given to him 

at trial in 1992. Linda Kuniega, audit supervisor for the Trust 

Fund, testified that her office received an unsigned, undated copy 

of a document with language similar to that in the written 

memorialization in early 1991, but that the Trust Fund did not 

accept the document. 

Blankenship's assertion that the memorialization is 

enforceable because the Trust Fund rejected it for no reason after 

its attorney approved it for form and content is not persuasive. 

William Roberts, the Trust Fund attorney who originally discussed 

the memorialization with Roberts, testified that his discussions 

with Roberts regarding the memorialization focused on settlement of 

the case. His testimony included accounts of several conversations 

during which Roberts was informed that the Trust Fund's area 

manager would recommend acceptance of the written agreement to the 

Trust Fund only if Blankenship agreed to additional conditions 

related to payment of the undisputed amount of delinquent 

contributions, liquidated damages, administrative costs, and 

attorney's fees. He further testified that, although the 

additional conditions were not met, an unsigned copy of the written 

memorialization was eventually provided to him and approved for 

content but that the Trust Fund had never approved it. Although 

this evidence established that the written memorialization was 

approved for content by a Trust Fund attorney, it did not establish 
that a signed memorialization was timely submitted to the Trust 

Fund's area administrative offices and accepted by the trustees as 

required by the Labor Contract or the pension certification. 

We conclude that the written memorialization entered into by 

Blankenship and Roberts in 1991 did not comply with the 

requirements in either the Labor Contract or the pension 

certification for making a contribution modification binding on the 

Trust Fund. We hold, therefore, that the District Court erred in 

concludingthat the writtenmemorialization modifying Blankenship's 

contribution obligations was enforceable against the Trust Fund. 

On remand, the Trust Fund's award for delinquent contributions, 

interest, and liquidated damages must be calculated without regard 

to the 1991 written memorialization. 

Hughes also asserts error in the District Court's denial of 

his motion to amend the findings of fact, conclusions of law, and 

judgment to include a finding that the Trust Fund was entitled to 

audit Blankenship's payroll records forthe period between 1986 and 

Blankenship's withdrawal from the Labor Contract in January, 1988. 

Hughes argues that the record supports the Trust Fund's authority 

to audit Blankenship's records for this period, but that the 

District Court failed to address the issue. Blankenship responds 

that Hughes did not properly raise the issue in the District Court 

and, therefore, it is not properly before us. 

Our review of the record reveals that Hughes raised the audit 

issue in his initial pleading, pretrial brief for the second trial, 

and motion to amend the District Court's findings of fact and 
conclusions of law after the second trial. Because it was raised 

in a motion presented to and ruled on by the District Court, we 

conclude that the issue is properly before us on appeal. See 

Fillback v. Inland Const. Co. (1978), 178 Mont. 374, 382, 584 P.2d 

1274, 1278. We review a district court's decision regarding a 

motion to amend findings of fact and conclusions of law for abuse 

of discretion. Wagner v. Cutler (1988), 232 Mont. 332, 338, 757 

P.2d 779, 783. 

The District Court record clearly supports the Trust Fund's 

right to audit Blankenship's payroll records for the time period 

between 1986 and Blankenship's withdrawal in 1988. The compliance 

agreements and pension certification signed by Blankenship bound 

him to the Trust Fund's articles of trust, which required the 

employer to furnish its payroll records to the Trust Fund for an 

audit when the trustees deemed it advisable for the administration 

of the Trust Fund. Here, the administrator requested Blankenship's 

payroll records to determine whether further contributions were due 

and owing. We hold that the District Court abused its discretion 

in denying the Trust Fund's motion to amend the findings of fact to 

include the Trust Fund's right to complete an audit of 

Blankenship's payroll records from 1986 up to the time of his 

withdrawal. 

Hughes raises an additional issue regarding the District 

Court's award of attorney's fees to Blankenship. The award was 

premised on the court's conclusions that the written 

memorialization was enforceable against the Trust Fund and, 
therefore, that Blankenship is the prevailing party in this action 

because his proposal to make an offer of judgment in the amount of 

the delinquent contributions for all work which was not excluded 

under the terms of the memorialization equalled the amount 

ultimately awarded to the Trust Fund. Based on our holding herein 

that the District Court's conclusion regarding the enforceability 

of the memorialization is erroneous, we vacate the award of 

attorney's fees to Blankenship. 

Reversed and remanded for redetermination of the amount of 

delinquent contributions, interest, and liquidated damages owed by 

Blankenship, entry of an order requiring Blankenship to submit his 

payroll records for 1986 through the time of his withdrawal in 1988 

to the Trust Fund for audit, and further proceedings on the issue 
August 11, 1994 

I hereby certifj that the following certified order was sent by United States mail, prepaid, to the 

following named: 

Michael C. Coil, Esq. 

ANGEL, SCRENAR, COIL & BARTLETT 

125 W. Mendenhall 

Bozeman, MT 59715 

John Lynch, Esq. 

Lynch Law Firm 

P.O. Box 2265 

Great Falls, MT 59403 

ED SMITH 

CLERK OF THE SUPREME COURT 

STATE OF MONTANA