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United States District Court,

S.D. Indiana,

Indianapolis Division.

BORGWARNER DIVERSIFIED TRANSMISSION PRODUCTS INC., Plaintiff,

v.

UNITED AUTOMOBILE, AEROSPACE, AND

AGRICULTURAL IMPLEMENT WORKERS OF

AMERICA, LOCAL NO. 287; and Gerald Poor;

Willard L. Sloan; Eugene J. Winningham; Bob L.

Bertram; James L. Kelley; Jim Barrett; Larry Bradburn; James A. Clark; John W. Fennimore; Earl F.

Herron; Ralph K. Smith; Larry Terrell; Max Van

Ulzen; Doran C. Kendall; Terry Garriott; Keith

Moses; Don Hobbs; Johnny Massey; and Bobby

Guess; individually and as the representatives of

the defendant class, Defendants.

No. 1:06-cv-058-LJM-TAB.

Sept. 12, 2008.

Kenneth B. Siepman, Kim F. Ebert, Kristin B. Keltner, Ogletree, Deakins, Nash, Smoak & Stewart, Indianapolis, IN, for Plaintiff.

Barry A. Macey, Macey Swanson and Allman, Indianapolis, IN, Jeffrey D. Sodko, International Union, Detroit, MI, for Defendants.

Gerald Poor, Muncie, IN, pro se.

Willard L. Sloan, Luddington, MI, pro se.

Eugene J. Winningham, Jamestown, TN, pro se.

Bob L. Bertram, Burkesville, KY, pro se.

James L. Kelley, Scottsville, KY, pro se.

Jim Barrett, Redkey, IN, pro se.

Larry Bradburn, Muncie, IN, pro se.

James A. Clark, Muncie, IN, pro se.

John W. Fennimore, Selma, IN, pro se.

Earl F. Herron, Selma, IN, pro se.

Ralph K. Smith, Gaston, IN, pro se.

Larry Terrell, Muncie, IN, pro se.

Max Van Ulzen, Muncie, IN, pro se.

Doran C. Kendall, Muncie, IN, pro se.

Terry Garriott, Selma, IN, pro se.

Keith Moses, Albany, IN, pro se.

Don Hobbs, Muncie, IN, pro se.

Johnny Masse, Yorktown, IN, pro se.

Bobby Guess, Muncie, IN, pro se.

ORDER ON DEFENDANT UAW LOCAL 287'S

MOTION FOR JUDGMENT ON PARTIAL

FINDINGS

LARRY J. McKINNEY, District Judge.

*1 This matter is before the Court on defendant's, UAW Local 287 (the “Union”), Motion for

Judgment on Partial Findings pursuant to Rule

52(c) of the Federal Rules of Civil Procedure (“

Rule 52(c) ”). Plaintiff, Borgwarner Diversified

Transmission Products, Inc. (“DTP”), initiated this

lawsuit as a class action under § 502 of the Employee Retirement Income Security Act (“ERISA”),

29 U.S.C. § 1132, and § 301 of the LaborManagement Relations Act (“LMRA”), 29 U.S.C. §

185, seeking a declaration that it was permitted to

unilaterally amend its health insurance plans prior

to the expiration of their term in order to reduce the

level of benefits provided to retirees. The Union

filed this Motion after DTP rested its case in chief

at a bench trial held before the Court on September

9, 2008. The Court has fully considered parties' arPage 1

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guments and, for the reasons discussed below,

GRANTS Defendant's Motion for Judgment on

Partial Findings.

I. FINDINGS OF FACT

The facts as adduced by the Court at trial are

these:

In 2006, DTP modified its ERISA health insurance plan to control health care costs. Pl.'s Tr. Exs.

1, 2; Testimony of Doug Owenby (“Owenby

Test.”). Specifically, the changes aligned retiree benefits with those of current employees by imposing

monthly premiums, increasing annual deductibles,

and increasing the co-pays for drugs. Pl.'s Tr. Exs.

1, 2; Owenby Test. The changes took effect at two

different time periods: (1) on April 1, 2006, for

those who retired after January 1, 1993, and (2) on

October 1, 2006, for those who retired between October 27, 1989, and December 31, 1992. Pl.'s Tr.

Ex. 3. The dispute between the parties stems from

these changes, namely, whether the changes violated the parties' agreement with respect to health

care benefits for retirees.

Since 1989, DTP and the Union have utilized

three separate, concurrently running agreements as

a part of their collective bargaining agreement: (1)

a Labor Agreement, governing wages, hours, working conditions and work rules: (2) a Health Insurance Agreement (“HIA”), governing, among other

things, health insurance benefits for active employees and retirees alike; and (3) a Pension agreement.

Testimony of Richard Nuerge (“Nuerge Test.). The

last HIA to be signed by the parties was the 1989

version (“1989 HIA”). Pl.'s Tr. Ex. 4; Nuerge Test.

Although not signed, full text documents were prepared for the 1992 HIA and 1995 HIA after negotiation by the parties. Pl.'s Tr. Exs. 8, 10; Nuerge

Test. Nineteen hundred and ninety-five was that

last year in which a full text HIA that contained all

provisions of the agreement was prepared. Nuerge

Test.

Article V, Section 6 of the 1989 HIA states:

The Company and Union representatives shall

have no power to add to or subtract from or

modify any of the provisions of this Agreement

or the Plan, nor to change or add to any benefit

provided by said Agreement or Plan, nor to waive

or fail to apply any requirement eligibility for a

benefit under this Agreement or the Plan.

*2 Pl.'s Tr. Ex. 4, at 6. Article XII of the 1989

HIA states:

During the term of this Agreement neither the

Company nor the Union shall demand any change

in this Agreement nor shall either party be required to bargain with respect to this Agreement,

nor shall there be any strike or lockout or other

exercise of economic force or threat thereof by

either party hereto against the other party for the

purpose of effecting or attempting to effect by

use of some other demand or otherwise a change

in or addition to any feature or provision of this

Agreement[.]

Pl.'s Tr. Ex. 5, at 15.

The 1992 HIA and 1995 HIA contained

identical provisions. Pl.'s Tr. Exs. 8, at 4, 14; 10, at

4, 14.

The evidence reflected a practice between the

parties to use the previous HIA as a template, and

then to modify that HIA with any changes that were

negotiated and agreed to at the negotiating table.

Testimony of Regis Trenda (“Trenda”) (“Trenda

Test.”), Nuerge Test. Thus, for the 1992 HIA, the

parties used the 1989 HIA as a template, and modified or added to the 1989 HIA the provisions to

which the parties' agreed at the bargaining table.

Trenda Test.; Nuerge Test. Likewise, for the 1995

HIA, the parties used the 1992 HIA as a template,

and then modified or added to the 1992 HIA the

provisions to which parties agreed at the bargaining

table. Trenda Test.; Nuerge Test The parties continued this process in subsequent negotiations in 1998,

2000, and 2005. Trenda Test.; Nuerge Test. Although the parties never reduced their agreements

in 1998, 2000, and 2005, into a full text HIA, the

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parties used the 1995 HIA as a template and simply

memorialized any changes of the 1995 HIA made at

the bargaining table. Owenby Test.

After the 1998 negotiations, DTP drafted the

BorgWarner Automotive Diversified Transmission

Products Corporation, Muncie Plant & Local 287,

UAW Insurance Highlights of the 1998 Contract

Negotiations (the “1998 Highlights”). Pl.'s Tr, Ex.

12, Testimony of Peter Kohler (“Kohler”) (“Kohler

Test.”). The 1998 Highlights contained a reservation of rights clause that differs from the 1995 HIA.

Pl.'s Tr. Exs. 10 & 12. It states:

Although Borg-Warner Automotive Diversified

Transmission Products Corporation, Muncie Plan

expects and intends to continue the Plan indefinitely, it reserves the right, subject to the terms of

any existing Collective Bargaining Agreement, if

any, between the Company and Union, to modify,

amend, suspend or terminate the Plan or the

Group of Policies in whole or in part, at any time,

and for any reason by action of either its Board of

Directors or a person designated by resolution of

such Board of Directors.

Pl.'s Tr. Ex. 12, at 17. Regis Trenda, former

Corporate Counsel for DTP and drafter of this reservation of rights clause, did not intend to change

the Company's rights with its language. Trenda

Test. Likewise, Pete Kohler, former DTP Manager

of Benefits & Office Services, who ordered his employees to draft the 1998 Highlights, did not intend

for the 1998 Highlights to change the rights of the

Company. Kohler Test.

*3 The 2005 HIA is effective until April 2009.

Pl.'s Tr. Exs. 17-19. Although not in writing, the

terms of the 2005 HIA can be deciphered by examining the 1995 HIA, plus any changes made to

the 1995 HIA during the 1998, 2000, and 2005 negotiations. The undisputed evidence demonstrates

that DTP never proposed to modify the language in

Article V, Section 6, or Article XII in either the

1998, the 2000, or the 2005 negotiations. Trenda

Test.

II. STANDARD

Rule 52(c) provides:

If a party has been fully heard on an issue during

a nonjury trial and the court finds against the

party on that issue, the court may enter judgment

against the party on a claim or defense that, under

the controlling law, can be maintained or defeated only with a favorable finding on that issue.

Fed.R.Civ.P. 52(c).

II. DISCUSSION

Based upon the evidence presented in

Plaintiff's case in chief, the Court finds that the

Union is entitled to judgment on partial findings

pursuant to Rule 52(c). The evidence clearly establishes that, as of 2006, when the changes to the retiree benefits were made, the parties had entered into the 2005 HIA. The 2005 HIA was created

through the parties past practice of using a former

HIA as a template, and then modifying or adding to

the template to reflect the parties agreements at the

bargaining table. Although the 2005 HIA is not

signed and not in writing, “ ‘a collective bargaining

agreement is not dependent on the reduction to

writing of the parties' intention to be bound,’ ...

rather ‘[a]ll that is required is conduct manifesting

an intention to abide and be bound by the terms of

an agreement.’ “ Bricklayers Local 21 of Ill. Apprenticeship & Training Program v. Banner Restoration, Inc., 385 F.3d 761, 766 (7th Cir.2004)

(quoting Gariup v. Birchler Ceiling & Interior Co.,

777 F.2d 370, 373 (7th Cir.1985)).

Here, it is quite clear by the parties' conduct

that they entered into the 2005 HIA, and therefore,

the parties are bound by its terms. See Banner Restoration, 385 F.3d at 766. The 2005 HIA contained

the same Article V, Section 6, and Article XII that

the 1995 HIA contained. Pl.'s Tr. Ex. 10, at 4, 14.

Those provisions prohibit DTP from unilaterally

making changes to retiree benefits during the contract period. Id. DTP relies on the reservation of

rights clause contained in the 1998 Highlights, and

argues that the 1998 Highlights was incorporated

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into the 1998 HIA, and carried forward to the 2000

HIA and 2005 HIA. The 1998 Highlights purports

to allow DTP to make unilateral changes to retiree

benefits subject only to the provisions of the

“Collective Bargaining Agreement.” Pl.'s Tr. Ex.

12. The critical issue, then, is whether the 1998

Highlights was incorporated into the 2005 HIA.

Ultimately, DTP cannot avoid the testimony of

its own witnesses. Both Trenda and Kohler testified

they did not believe the 1998 Highlights changed

the rights of the Company. Trenda Test.; Kohler

Test. Trenda, the drafter of the reservation of rights

clause in the 1998 Highlights, testified that he did

not intend the reservation of rights clause to change

DTP's rights. Trenda Test. Without an intent on the

part of DTP through Trenda to have the 1998 Highlights change DTP's rights, the Court cannot find

the requisite intent of both DTP and the Union “to

abide and be bound by the terms of [the 1998 Highlights].” Banner Restoration, 385 F.3d at 766

(citations omitted); see Walker v. Martin 887

N.E.2d 125, 135 (Ind.Ct.App.2008).

*4 Rather, the Court concludes that only the

2005 HIA governs the parties relationship with respect to retiree health insurance benefits. Article V,

Section 6, and Article XII, make it clear that DTP

could not unilaterally change the retirees' benefits

during the contract period. Because the evidence

establishes that the parties entered into a valid

health insurance agreement, the 2005 HIA, and

DTP unilaterally changed the retirees' benefits,

DTP was in breach of the 2005 HIA and is not entitled to a declaratory judgment that its actions were

lawful.

IV. CONCLUSION

For the reasons stated hearing, Defendant's,

UAW Local 287 (the “Union”), Motion for Judgment on Partial Findings is GRANTED.

IT IS SO ORDERED.

S.D.Ind.,2008.

Borgwarner Diversified Transmission Products Inc.

v. United Auto., Aerospace, and Agr. Implement

Workers of America, Local No. 287

Not Reported in F.Supp.2d, 2008 WL 4274476

(S.D.Ind.)

END OF DOCUMENT

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