Case Name: OPERATING ENGINEERS PENSION TRUST, Operating Engineers Health & Welfare Fund, Operating Engineers Vacation-Holiday Savings Trust and Operating Engineers Training Trust, Plaintiffs/Appellants, v. CHARLES MINOR EQUIPMENT RENTAL, INC., Defendant/Appellee
Court: United States Court of Appeals for the Ninth Circuit
Jurisdiction: United States
Decision Date: 1985-07-22
Citations: 766 F.2d 1301
Docket Number: No. 84-6044
Parties: OPERATING ENGINEERS PENSION TRUST, Operating Engineers Health & Welfare Fund, Operating Engineers Vacation-Holiday Savings Trust and Operating Engineers Training Trust, Plaintiffs/Appellants, v. CHARLES MINOR EQUIPMENT RENTAL, INC., Defendant/Appellee.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 766
Pages: 1301–1308

Head Matter:
OPERATING ENGINEERS PENSION TRUST, Operating Engineers Health & Welfare Fund, Operating Engineers Vacation-Holiday Savings Trust and Operating Engineers Training Trust, Plaintiffs/Appellants, v. CHARLES MINOR EQUIPMENT RENTAL, INC., Defendant/Appellee.
No. 84-6044.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Feb. 8, 1985.
Decided July 22, 1985.
Fletcher, Circuit Judge, dissented and filed opinion.
Wayne Jett, Brian Ray Hodge, Jett, Clifford & Laquer, Los Angeles, Cal., for plaintiffs/appellants.
Albert J. Tomigal, Wilson Clark, Marina Del Rey, Cal., for defendant/appellee.
Before SCHROEDER, FLETCHER and FARRIS, Circuit Judges.

Opinion:
FARRIS, Circuit Judge:
FACTS
The Master Labor Agreement between the International Union of Operating Engineers, Local No. 12, and the Southern California General Contractors Association established four trusts and required that employers make fringe benefit contributions to those trusts. In 1972, The Labor Management Adjustment Board, established by the parties to interpret and apply the MLA, adopted a resolution that the contractor shall pay fringe benefit contributions for "each and every" hour worked by the employee, unless
an employee is paid by salary or any other method than hourly wages, then the employee shall be presumed to have worked for a minimum of forty (40) hours during each week of such employ-. ment and payment, and the fringe bene fit contributions shall be paid for all such hours.
Charles Minor Equipment Rental, Inc. is a California corporation bound by the MLA. Charles Minor, the president and sole shareholder of Minor Equipment, owns a piece of heavy construction equipment and rents out his services and the equipment. The work performed by Charles Minor is subject to the MLA and it is undisputed that he is paid by a method other than hourly wages.
The Trusts audited Minor Equipment in February 1983 and found that it was reporting the minimum 200 hours per quarter necessary to retain benefits for Charles Minor and that, according to billing invoices, he worked in excess of the hours reported for him. The Trusts filed suit against Minor Equipment pursuant to section 301 of the Labor Management Relations Act, 29 U.S.C. § 185(a), and section 502(a)(3) of the Employee Retirement Income Security Act, 29 U.S.C. § 1132(a)(3), for $17,923.59 in unpaid fringe benefits, interest, and liquidated damages based upon the difference between the reported hours and the 40-hour presumption.
The trusts contended that the 40-hour presumption was conclusive. The district court, Tashima, J., held 1) that Sapper v. Lenco Blade Inc., 704 F.2d 1069 (9th Cir.1983), controlled and therefore the LMAB resolution created a rebuttable, rather than conclusive, presumption 2) that the Trusts were collaterally estopped from relitigating the issue and 3) that Minor had introduced sufficient evidence to rebut the presumption, although it found that Charles Minor had worked more hours than had been reported to the Trusts. Accordingly, the court awarded the Trusts $4,672.13. It awarded $1,065.00 in attorney's fees, pursuant to 29 U.S.C. § 1132(g)(2)(D), rather than the $4,256.25 requested because of the Trusts' counsel's failure to recognize "the binding effect of Lenco Blade." The Trusts appeal. We affirm.
STANDARD OF REVIEW
Questions of law, including the principles of contract interpretation to be applied, are reviewed de novo. InterPetrol Bermuda, Ltd. v. Kaiser Aluminum Int'l Corp., 719 F.2d 992, 998 (9th Cir.1983). The district court's factual findings are reviewed under the clearly erroneous standard. Id.; United States v. One Twin Engine Beech Airplane, 533 F.2d 1106, 1107-08 (9th Cir.1976). The district court's determination that Minor had introduced sufficient evidence to rebut the 40-hour presumption represents a mixed question involving "the application of law to fact," which we generally review de novo. United States v. McConney, 728 F.2d 1195, 1200-04 (9th Cir.), cert. denied, — U.S. -, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). Because of the special need for uniform interpretation and enforcement of collective bargaining agreements, see, e.g., Kemmis v. McGoldrick, 706 F.2d 993, 996-97 (9th Cir.1983), we review the court's determination that a contractor has rebutted the LMAB 40-hour presumption de novo. See Sapper v. Lenco Blade, Inc., 704 F.2d 1069, 1072 (9th Cir.1983).
DISCUSSION
The district court's holding that the 40-hour presumption was rebuttable was based upon Sapper v. Lenco Blade, Inc., 704 F.2d 1069 (9th Cir.1983), which it found to be controlling. In Lenco Blade, the Trusts brought suit against a contractor-sole employee for insufficient fringe benefit contributions based upon the LMAB 40-hour presumption. The employee took periodic "draws" from Lenco as compensation. Both parties moved for summary judgment and attorney's fees. The district court granted Lenco's motion and awarded it attorney's fees.
On appeal, we held that summary judgment was inappropriate and remanded the case. Id. at 1071-72. We found that whether the employee "was paid by a 'method other than hourly wages' " — so that the 40-hour presumption applied — was disputed. We held that the presumption was rebuttable and found that whether Lenco Blade had rebutted the presumption was at issue. To reach this conclusion, we distinguished three previous decisions relied upon by the Trusts to establish that the presumption was conclusive. See Waggoner v. William Radkovich Co., 620 F.2d 206 (9th Cir.1980); Burke v. Lenihan, 606 F.2d 840 (9th Cir.1979); Waggoner v. C & D Pipeline Co., 601 F.2d 456 (9th Cir.1979). They were "inapposite . because they involved employees who indisputably worked forty hours per week." 704 F.2d at 1072. Those cases consider whether an employer must contribute for all the hours worked by a full-time employee who splits his worktime between a position subject to the MLA and a position that is not covered. See Waggoner v. Dallaire, 649 F.2d 1362, 1369 (9th Cir.1981) (interpreting Radkovich, Burke, and C & D Pipeline).
The Trusts argue that Lenco Blade's interpretation of the LMAB resolution is dicta. This position is premised on limiting the holding to a reversal of the summary judgment because the method of payment was in dispute. In so arguing for a limiting of the holding, however, the Trusts ignore the court's direction that the district court, if it found that Sapper was paid on a basis other than hourly, next determine whether the presumption of forty hours was rebutted. This clear direction to the district court on how to proceed continues to be binding precedent, even if characterized as an alternative holding. It was based on the finding that there was a genuine issue of material fact on the question of whether Lenco had rebutted the 40-hour presumption. Even if it had been undisputed that the employee was paid by a method other than hourly wages, a remand would still have been required to determine whether Lenco had rebutted the 40-hour presumption. Conversely, if the method of payment had been undisputed and we had found the presumption to be conclusive, we could have affirmed the summary judgment without the necessity of a remand. Lenco Blade's interpretation of the LMAB 40-hour presumption is res judicata. See Russell v. C.I.R., 678 F.2d 782, 785 n. 2 (9th Cir.1982); Dragor Shipping Corp. v. Union Tank Car Co., 371 F.2d 722, 726 (9th Cir.1967) ("Where an appellate court decision rests on two or more grounds, none can be relegated to the category of obiter dictum."). That interpretation is "the settled Ninth Circuit rule" on the MLA provision at issue and the district court properly applied it. See Dal-laire, 649 F.2d at 1369.
Subsequent cases have delineated the inapplicability of the C & D Pipeline line of cases relied on by the Trusts to the issue whether the 40-hour presumption can be rebutted for employees who work less than full-time. See Kemmis v. McGoldrick, 706 F.2d 993, 997 (9th Cir.1983) (citing C & D for the limited proposition that "for full-time salaried employees, employers are required to contribute based on 40 hours per week") (emphasis added); see also Dal-laire, 649 F.2d at 1369. Kemmis is particularly significant because it was decided after Lenco Blade: its narrow reading of C & D Pipeline avoided any conflict with Lenco Blade. The only case in which we have addressed the question whether the 40-hour presumption is rebuttable is Lenco Blade. The district court did not err in holding that it controls.
The Trusts alternatively contend that, assuming the presumption is rebuttable, Minor failed to produce sufficient evidence to rebut it. The Trusts assert that the presumption can only be rebutted by substantial, specific, and comprehensive evidence relying upon Parsons Corp. of California v. Director, Office of Workmen's Compensation Programs, 619 F.2d 38, 41 (9th Cir.1980). Parsons Corp. involved a statutory presumption that controlled "in the absence of substantial evidence to the contrary," and therefore is of no assistance in interpreting the LMAB 40-hour presumption.
The district court concluded that Minor's Exhibit 108, a summary of Minor's billing invoices and job tickets prepared by Charles Minor's wife, Sheila, and the testimony of Sheila Minor constituted sufficient evidence to rebut the 40-hour presumption. In resolving the ultimate factual issue of how many hours Charles Minor actually worked, the court noted that Minor's Exhibit 108 was "not entirely reliable." Instead, it found that the total number of hours worked by Minor was "accurately reflected" in the Trusts' Exhibit 20B, a month-by-month list of the minimum hours that Charles Minor could have worked, computed by dividing Minor's bank deposits by the maximum hourly rental rate obtained by Minor.
Because the court found that Minor's evidence was not entirely reliable, the Trusts argue that the court should have found insufficient evidence to rebut the 40-hour presumption. To rebut the presumption the employer need only "present evidence raising a genuine issue." See Casillas v. United States Navy, 735 F.2d 338, 343 (9th Cir.1984); National Industries, Inc. v. Republic Nat'l Life Ins. Co., 677 F.2d 1258, 1266 (9th Cir.1982); see also Fed.R.Evid. 301, Notes of Conference Committee, House Rep. No. 93-1597 (if adverse party offers evidence contradicting the presumed fact, the trier of fact cannot presume its existence).
The trial court finding thp,t Minor's evidence did not resolve the ultimate factual issue of the actual number of hours that Minor worked does not contradict its decision that the evidence was sufficient to rebut the presumption that Charles Minor worked 40 hours a week. See Casillas, 735 F.2d at 343 (to rebut presumption of discrimination in Title VII action, employer need not "present clear and convincing evidence," nor persuade the trier of fact). Minor worked substantially less than 40 hours a week. The district court's finding of fact that Minor worked less than 40 hours is not clearly erroneous. See Anderson v. City of Bessemer City, — U.S. -, 105 S.Ct. 1504, 1512-13, 84 L.Ed.2d 518 (1985).
Minor Equipment characterizes the Trusts' appeal as a frivolous attempt to relitigate Lenco Blade and seeks attorney's fees on appeal. Under 29 U.S.C. § 1132(g)(1), we have discretion to award attorney's fees to a prevailing employer in an appeal. Carpenters Southern California Admin. Corp. v. Russell, 726 F.2d 1410, 1417 (9th Cir.1984). Our discretion is guided by the considerations described in Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir.1980). Those considerations "very frequently suggest that attorney's fees should not be charged against ERISA plaintiffs." Operating Engineers Pension Trust v. Gilliam, 737 F.2d 1501, 1505-06 (9th Cir.1984).
We disagree with Minor's characterization of this appeal as frivolous. In addition to a question of Lenco Blade's preclusive effect, there was the issue of what evidence is required to rebut the 40-hour presumption. The Trusts' counsel were not acting in bad faith. See Russell, 726 F.2d at 1415. We make no award of attorney's fees.
AFFIRMED.
. This resolution was adopted to prevent owner-operators who were salaried from only reporting minimum hours needed for eligibility and not making their full contributions to the Trusts,
. The court reduced the figures in the Trusts' exhibit by 5% to account for two-hour move charges that Minor billed to its clients but which were paid out to subcontractors who moved Minor's construction equipment from job to job. This reduction was based on the Minors' testimony concerning move charges.