In the

United States Court of Appeals

For the Seventh Circuit

No. 09-2964

CENTRAL STATES, SOUTHEAST AND

SOUTHWEST AREAS PENSION FUND, et al.,

Plaintiffs-Appellees,

v.

AUFFENBERG FORD, INC.,

Defendant-Appellant.

Appeal from the United States District Court 

for the Northern District of Illinois, Eastern Division.

No. 08 C 1103—Robert W. Gettleman, Judge.

ARGUED OCTOBER 28, 2010—DECIDED MARCH 11, 2011

Before MANION, ROVNER, and SYKES, Circuit Judges.

MANION, Circuit Judge. Central States, Southeast and

Southwest Areas Pension Fund and its trustee, Howard

McDougall (collectively “the Fund”), filed suit against

Auffenberg Ford, Inc. under the Employee Retirement

Income Security Act (“ERISA”), 29 U.S.C. § 1001, in order

to collect unpaid contributions to the Fund. The district
2 No. 09-2964

Under 29 U.S.C. § 1390(a), “[a]n employer who withdraws 1

from a plan in complete or partial withdrawal is not liable to

(continued...)

court granted summary judgment in the Fund’s favor, and

Auffenberg now appeals. Because the terms of the collective bargaining agreement (“CBA”) required Auffenberg

to continue contributing to the Fund, notwithstanding

any oral agreement to the contrary, we affirm.

I.

Auffenberg is an Illinois car dealership employing

workers represented by Local Union 50, a union affiliated

with the International Brotherhood of Teamsters. The

Fund is a multiemployer pension fund in which Auffenberg participated from 1980 to 1997, requiring

Auffenberg to pay contributions on behalf of its

unionized employees. Auffenberg withdrew from the

Fund in 1997, resulting in a “withdrawal liability” of

almost $50,000, which it paid in full.

In 2001, the President of Local 50, John Green, proposed

that Auffenberg re-enter the Fund. Several longtime

employees fell just short of the time needed to qualify for

a higher benefit level, so Auffenberg was interested in

extending its term with the Fund to accommodate them.

Because Auffenberg was worried about the possibility

of again incurring a “withdrawal liability,” it asked to be

eligible for the five-year “free look” exemption that

would allow it to participate in the Fund and withdraw

within five years without liability. In June 2001, after 1
No. 09-2964 3

(...continued) 1

the plan [for withdrawal liability] if the employer . . . had an

obligation to contribute to the plan for no more than . . . the

number of years required for vesting under the plan.”

The relevant language states: 2

All of the terms and provisions of this contract shall be

continued in full force and effect and extended from the

termination date hereof to such time as the parties either

enter into a new Agreement, or Agreement containing

the desired modifications, or terminate further negotiation

in the manner above mentioned.

negotiations between Auffenberg and Local 50, a CBA was

formalized. Apparently, during the negotiations, Auffenberg and John Green orally agreed that Auffenberg’s

obligation to contribute to the Fund would end when the

CBA expired in five years. But this condition was not

memorialized in the CBA; instead, the CBA contained

an “evergreen clause” stating that all the terms and

provisions of the CBA would remain in effect until a

new CBA was negotiated or until negotiations were

terminated. In addition to the CBA, Auffenberg was 2

a party to a Participation Agreement and a Trust Agreement that required Auffenberg to pay contributions to

the Fund in accordance with the terms of the CBA.

In early 2006, Local 50 sought negotiations for a replacement CBA because the 2001 CBA was soon to expire. By this time, John Green of Local 50 had passed away.

Although his replacement, Scott Alexander, was at first

unaware of the alleged 2001 oral agreement, when in-
4 No. 09-2964

formed of it, Alexander orally agreed that Auffenberg

could cease contributing to the Fund as of April 30, 2006,

the day the 2001 CBA expired. In May, Auffenberg’s

lawyer mailed a letter to the Fund, stating that its obligation to contribute to the Fund had ended with the

expiration of the CBA. The Fund replied that the obligation to contribute had not ended. Negotiations for a new

CBA continued during the summer and fall of 2006.

A second letter, now signed by both Auffenberg’s president and Local 50’s representative, was mailed to the

Fund in November 2006; the letter stated that Local 50

and Auffenberg had an understanding that Auffenberg’s

participation in the Fund ended on April 30, 2006,

but that “a written agreement formalizing this understanding had not been finalized.” A third letter to the

same effect was sent to the Fund by Auffenberg’s lawyer

in December 2006.

A new CBA was eventually negotiated, and on

February 10, 2007, the Fund received a copy of this agreement. The Fund accepted the new CBA as ending

Auffenberg’s duty to contribute under the old 2001 CBA,

but it still claimed that Auffenberg was required to pay

contributions for the nine-month period between the

expiration of the 2001 CBA and the entry of the new

CBA, an amount totaling $46,500, not including interest,

fees, and costs. When Auffenberg refused to pay, the

Fund filed suit.

The district court granted summary judgment in the

Fund’s favor, finding that Auffenberg’s oral agreement

reached with Green during the negotiations in 2001 was
No. 09-2964 5

barred by the parol evidence rule and unenforceable in

view of ERISA’s provisions. Auffenberg appeals.

II.

We review de novo a district court’s grant of summary

judgment. Winsley v. Cook Cnty., 563 F.3d 598, 602 (7th

Cir. 2009). In its order granting summary judgment to

the Fund, the district court ruled that the 2001 oral agreement was barred by the parol evidence rule. Auffenberg

does not challenge this ruling on appeal. Instead,

Auffenberg argues that the district court incorrectly

focused on the original oral agreement made between

Auffenberg and Local 50 in 2001. It also claims that the

court neglected to consider the effect of the 2006 discussions between Auffenberg and Local 50’s bargaining

representative, Scott Alexander. In particular, Auffenberg

contends that during the negotiations in 2006, it came

to an oral agreement with Local 50 that it could cease

contributions as of April 30, 2006. Since the Fund was

properly informed of this oral agreement by letter,

Auffenberg claims that the 2006 oral agreement is enforceable and absolved it from the duty of making contributions to the Fund. Auffenberg asserts that since

the district court erred by not considering the effects of

the 2006 agreement, this court should remand the case

to the district court for a determination of this issue.

As a preliminary matter, the Fund argues that

Auffenberg failed to raise this argument below and

thus has waived the opportunity to bring it now on

appeal. The parties presented sufficient evidence before
6 No. 09-2964

the district court about the events in 2006, including the

existence of an oral agreement and the written notices to

the Fund. Therefore Auffenberg has not waived its argument on appeal. The question then is whether an oral

agreement between Auffenberg and Local 50 to end

Auffenberg’s contractual obligations to contribute to

the Fund is enforceable as long as written notice is given.

It is not.

Under ERISA, the terms of employee benefit plans

must be “established and maintained pursuant to a

written instrument.” 29 U.S.C. § 1102(a)(1). Also, the

Labor Management Relations Act (“LMRA”) requires

that “the detailed basis on which such payments are to

be made is specified in a written agreement with the

employer.” 29 U.S.C. § 186(c)(5)(B). In this case, the

written “evergreen clause” of the 2001 CBA required

Auffenberg to continue making contributions to the

Fund after the CBA expired and until such time as

the parties either entered into a new agreement or terminated negotiations. No written agreement modifying

the terms of the CBA was formalized and submitted to

the Fund before February 10, 2007. Instead, Auffenberg

contends that it had an oral agreement with Local

50 during its negotiations in 2006 following the expiration of the 2001 CBA, and that this oral agreement was

sufficient to modify its obligations under the 2001 CBA.

The LMRA and ERISA “prevent[] a court from giving

force to oral understandings between union and

employer that contradict the writings.” Cent. States, Se. &

Sw. Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d
No. 09-2964 7

1148, 1154 (7th Cir. 1989) (en banc) (citing 29 U.S.C.

§ 186(c)(5)(B) and 29 U.S.C. § 1145). Auffenberg attempts

to distinguish this rule by arguing that an oral agreement modifying its obligations under the CBA is enforceable as long as written notice of the oral agreement

is given, as was done here by notifying the Fund by

letter. But not only does Auffenberg’s contention

conflict with our ruling in Gerber Truck, it conflicts with

ERISA’s requirement that “[e]very employee benefit

plan shall be established and maintained pursuant to a

written instrument.” 29 U.S.C. § 1102(a)(1) (emphasis

added).

Auffenberg cites Central States, Southeast & Southwest

Areas Pension Fund v. Behnke, Inc., 883 F.2d 454 (6th Cir.

1989), in support of the proposition that CBAs can be

orally modified as long as written notice is given. But

the Behnke case stands for the opposite proposition: in

Behnke, the court found that an oral CBA was unenforceable because “the LMRA and ERISA require employer

contributions to trust funds on behalf of employees to

be pursuant to detailed written agreements specifying the

employer’s duty to contribute.” Id. at 459 (emphasis

in original). Auffenberg focuses on the binding “interim”

CBA in Behnke, claiming that it was binding because it

was communicated in writing to the pension fund, but

this overlooks the fact that the interim CBA was a

written, and not oral, agreement. See id. at 456-57.

In short, we find no support in either statutory or case

law for the proposition that, as long as written notice

is given, an oral agreement is capable of modifying a
8 No. 09-2964

written agreement requiring employee benefit contributions. Any oral agreement reached in 2006 contradicting

Auffenberg’s written obligations to contribute to the

Fund is unenforceable. We AFFIRM.

3-11-11