Opinion ID: 2818736
Heading Depth: 3
Heading Rank: 3

Heading: The 2000 Hour Commitment Letter

Text: Scassa Asphalt next argues that the 2000 Hour Commitment Letter promising to pay benefits for Nick Scassa as the principal operating engineer was executed several days after the short-form Agreement, and the letter lacked consideration. The company contends that, because no contract was ever reached between the parties requiring Scassa Asphalt to contribute 2000 No. 14-3954 Orrand, et al. v. Scassa Asphalt, Inc. Page 14 hours annually for Nick Scassa, it cannot be held liable for those hours. Furthermore, even if the 2000 Hour Commitment Letter formed a contract, the company argues, the letter did not include limitations or instructions governing the manner of termination. Therefore, in the absence of any termination provisions, Scassa Asphalt concludes that the verbal communication to Mike Kramer terminating the company’s relationship with the Union in mid-February 2009 effectively rescinded and terminated the 2000 Hour Commitment Letter. The company also points out that the 2000 Hour Commitment Letter pertained only to Nick Scassa, no other employees would have benefited from the letter, and there is no evidence that the Funds paid any pension or health and welfare benefits for Nick Scassa. As such, Scassa Asphalt contends that the Funds have suffered no damages. We uphold the district court’s ruling that ERISA § 515 preempts the contract defense of lack of consideration. See Behnke, Inc., 883 F.2d at 460–61; Gerber Truck Serv., Inc., 870 F.2d at 1154. The 2000 Hour Commitment Letter was executed in connection with the short-form Agreement and the CBA to which Scassa Asphalt agreed to be bound. Both the short-form Agreement and the CBA required Scassa Asphalt to give notice of termination in writing, which the company failed to do. Thus, the 2000 Hour Commitment Letter remained in force. Finally, the short-form Agreement required Scassa Asphalt to “make contributions . . . as outlined” in the CBA, R. 23-3, Page ID 94, and the CBA mandated payment of benefit contributions “for all hours paid to each employee by the Employer,” R. 24-1, Page ID 143 (emphasis added). Even though Scassa Asphalt agreed to contribute 2000 hours annually for the principal operating engineer, the short-form Agreement and the CBA required benefit contributions on behalf of all employees of the company. Finally, the Funds must pay out benefits “even if the contributions they expected to receive do not materialize,” Gerber Truck Serv., Inc., 870 F.2d at 1151, so there is no merit to the argument that the Fund has suffered no damages as a result of Scassa Asphalt’s failure to pay as promised.