Court Opinion

ID: 2969330
Source: CourtListenerOpinion
Date Created: 2015-09-22 15:46:51.542307+00
Date Added: 2024-06-11T11:43:22.377086
License: Public Domain

RECOMMENDED FOR FULL-TEXT PUBLICATION
8     Brown-Graves Co. v.                       No. 99-3039                     Pursuant to Sixth Circuit Rule 206
      Central States, et al.                                            ELECTRONIC CITATION: 2000 FED App. 0097P (6th Cir.)
                                                                                    File Name: 00a0097p.06

1298 (6th Cir. 1991). As noted, the district court determined
that until the 1995 audit, Central States did not know of       UNITED STATES COURT OF APPEALS
Brown-Graves’s unusual definition of “casual drivers.”
Furthermore, after Central States became aware of the                             FOR THE SIXTH CIRCUIT
problem, it notified Brown-Graves of its claim for                                  _________________
contributions. The elements of laches and estoppel are not
met. As a result, these doctrines do not bar Central States’s
                                                                                                   ;
claims for pension contributions on behalf of employees
                                                                                                    
classified as “casual drivers.”                                  BROWN-GRAVES COMPANY,
                                                                                                    
                                                                         Plaintiff-Appellant,
                                                                                                    
    AFFIRMED.
                                                                                                    
                                                                                                       No. 99-3039
                                                                            v.
                                                                                                    
                                                                                                     >
                                                                 CENTRAL STATES,                    
                                                                 SOUTHEAST AND SOUTHWEST 
                                                                                                    
                                                                                                    
                                                                 AREAS PENSION FUND and
                                                                                                    
                                                                 HOWARD MCDOUGALL,
                                                                                                    
                                                                 Trustee,
                                                                         Defendants-Appellees. 
                                                                                                    
                                                                                                  1
                                                                       Appeal from the United States District Court
                                                                        for the Northern District of Ohio at Akron.
                                                                   No. 96-02300—David D. Dowd, Jr., District Judge.
                                                                                 Submitted: December 13, 1999
                                                                              Decided and Filed: March 20, 2000
                                                                        Before: MERRITT and SILER, Circuit Judges;
                                                                                BECKWITH, District Judge.*

                                                                    *
                                                                     The Honorable Sandra S. Beckwith, United States District Judge for
                                                                the Southern District of Ohio, sitting by designation.

                                                                                                  1
2    Brown-Graves Co. v.                        No. 99-3039      No. 99-3039                        Brown-Graves Co. v.         7
     Central States, et al.                                                                         Central States, et al.

                    _________________                            employees.” As the Eighth Circuit has done, we shall apply
                                                                 the ordinary meaning to the term “casual employee” where no
                        COUNSEL                                  other definition is contained in the CBAs and Central States
                                                                 had no reason to know of the unusual definition used by
ON BRIEF: Timothy M. Bittel, David H. Shaffer,                   Brown-Graves. Consequently, the district court was correct
JOONDEPH, SHAFFER & BITTEL, Akron, Ohio, for                     in ruling that Brown-Graves was contractually obligated to
Appellant. Albert M. Madden, CENTRAL STATES,                     make contributions on behalf of employees classified as
SOUTHEAST & SOUTHWEST AREAS HEALTH &                             “casual drivers.”
WELFARE & PENSION FUNDS, Des Plaines, Illinois, for
Appellees.                                                             II. DEFENSE OF LACHES AND ESTOPPEL
                    _________________                               Laches consists of two elements: (1) unreasonable delay in
                                                                 asserting one’s rights; and (2) a resulting prejudice to the
                        OPINION                                  defending party. Meade v. Pension Appeals and Review
                    _________________                            Committee, 966 F.2d 190, 195 (6th Cir. 1992). In the present
                                                                 case, there was no unreasonable delay. As the district court
   SILER, Circuit Judge. Plaintiff, Brown-Graves Company         stated, Central States did not know of the problem with
(“Brown-Graves”), appeals the judgment and award of              Brown-Graves’s unusual interpretation of the term “casual
attorneys’ fees for defendants, Central States Southeast and     drivers” prior to the 1995 audit. Immediately after the audit,
Southwest Areas Pension Fund (“Central States”), in this         Central States notified Brown-Graves of its claim for
Employee Retirement Income Security Act (“ERISA”) case           contributions.
in which the district court determined that Brown-Graves was
obligated to make contributions to Central States. For the         There was also no resulting prejudice to Brown-Graves.
reasons discussed below, we AFFIRM the district court’s          Brown-Graves states that if it had been notified of Central
decision.                                                        States’s claim sooner it could have “taken steps to avoid
                                                                 being sued for the disputed contributions.” However, the only
                     BACKGROUND                                  “steps” Brown-Graves could have taken would have been to
                                                                 make the contributions. Consequently, the laches defense
   Brown-Graves employed truck drivers pursuant to a series      fails.
of three-year contracts negotiated with Local Union 348 of the
International Brotherhood of Teamsters (“Local 348"). This         The elements of estoppel are: (1) conduct or language
appeal concerns whether Brown-Graves was obligated by the        amounting to a representation of fact; (2) the party to be
terms of these contracts to pay pension contributions to         estopped must be aware of the true facts; (3) the party to be
Central States on behalf of eight employees who were             estopped must intend that the representation be acted on such
classified as “casual drivers.”                                  that the party asserting the estoppel has the right to believe it
                                                                 was so intended; (4) the party asserting the estoppel must be
  The Collective Bargaining Agreement (“CBA”) in effect          unaware of the true facts; and (5) the party asserting the
from June 23, 1983, to June 23, 1986, makes no mention of        estoppel must detrimentally and justifiably rely on the
a “casual driver” classification. During this time frame,        representation. Armistead v. Vernitron Corp., 944 F.2d 1287,
Brown-Graves employed casual drivers under an informal
6      Brown-Graves Co. v.                         No. 99-3039    No. 99-3039                       Brown-Graves Co. v.        3
       Central States, et al.                                                                       Central States, et al.

    Given the purpose of written contracts and section 515 of     arrangement with Local 348.              The “casual driver”
    ERISA, the parties to a collective bargaining agreement       classification first appeared in the parties’ CBA covering the
    are bound by the terms of their agreement, regardless of      period between June 23, 1986, and June 23, 1989. The
    their undisclosed intent. By so holding, we merely            agreement stated that casual drivers were to be hired “without
    reaffirm a basic rule of contract interpretation. “A          any fringe benefits.” Successive CBAs entered into by the
    signatory to a contract is bound by its ordinary meaning      parties in 1989 and 1992 contained nearly identical language
    even if he gave it an idiosyncratic one; private intent       concerning the casual driver classification.
    counts only if it is conveyed to the other party and
    shared.” [citation omitted]. Section 515 of ERISA                In 1995, Central States conducted an audit of Brown-
    emphasizes that this is especially true as to third parties   Graves’s payroll records for the period of December 30, 1990,
    obligated to administer a pension fund according to the       through December 25, 1993, to determine whether Brown-
    terms of written agreements.                                  Graves was making pension fund contributions under the
                                                                  CBA. Following the audit, Central States demanded Brown-
Id. at 1353.                                                      Graves pay more than $30,000 in contributions and interest
                                                                  allegedly owed on behalf of certain employees classified as
   Hartlage Truck Service, Inc. is distinguishable from the       “casual drivers.” In 1996, Brown-Graves commenced suit
present case and Independent Fruit. In Hartlage, the court        seeking a declaratory judgment that there was no contractual
stated:                                                           obligation to make pension contributions on behalf of the
                                                                  casual drivers. Central States filed a counterclaim for
    The CBAs in this case--unlike the collective bargaining       recovery of the disputed contributions plus interest, costs and
    agreements at issue in Independent Fruit--clearly express     attorneys’ fees. Brown-Graves’s denial of an obligation to
    the parties’ intent. Hartlage and the Union openly            contribute to the pension fund from 1986 forward was based
    expressed their agreed understanding of the phrase            on the provision in the CBA stating that casual drivers will be
    “casual employee” in the CBAs. We have no doubt that          hired “without any fringe benefits.”
    the Funds could have easily ascertained the meaning the
    parties attributed to that phrase. We need not, therefore,      The district court ruled that Brown-Graves owed
    look to a dictionary definition for guidance as the           $60,251.94 in pension contributions and interest for
    Independent Fruit court did. Rather, as required by           employees hired prior to June 23, 1986. It further ruled that
    section 515, we enforce the terms of the CBAs and             Brown-Graves owed $47,430.27 in contributions and interest
    conclude that Taylor, Vorwold, and Vail were casual           for the employees hired after June 23, 1986, because those
    employees.                                                    individuals did not qualify as “casual employees” under the
                                                                  ordinary dictionary definition of that term.
Hartlage Truck Service, Inc., 991 F.2d at 1362. The court
determined that as the parties agreed to a specific definition                           DISCUSSION
of “casual” the ordinary definition was not appropriate.
                                                                             I. EMPLOYER CONTRIBUTIONS
  As in Independent Fruit and unlike Hartlage Truck Service,
Inc., the CBAs involved in the present case do not define           The contracts at issue here did not define the term “casual
“casual.” Furthermore, Central States had no notice of the        driver.” Therefore, this court must decide what test should be
unusual meaning Brown-Graves attached to the term “casual         applied to determine whether an employee is within the casual
4      Brown-Graves Co. v.                        No. 99-3039    No. 99-3039                       Brown-Graves Co. v.        5
       Central States, et al.                                                                      Central States, et al.

classification. Section 515 of ERISA, 29 U.S.C. § 1145,            While Central States noted that the post-1986 CBAs
governs employer contributions to multi-employer pension           excluded “casual employees” from participation, Central
plans:                                                             States accepted the CBAs because there was no
                                                                   indication in the CBAs that the employer had assigned a
    Every employer who is obligated to make contributions          meaning to the term “casual employee” other than the
    to a multi-employer pension plan under the terms of the        standard definition of short term, temporary, sporadic
    plan or under the terms of a collectively bargained            employees which would not violate Central States’ rules.
    agreement shall, to the extent not inconsistent with law,
    make such contributions in accordance with the terms            The Sixth Circuit has not addressed the issue of whether, in
    and conditions of such plan or such agreements.              the absence of a definition in the contract, the ordinary
                                                                 dictionary definition or some other definition should apply to
Thus, employers are required to make contributions according     determine whether or not an employee is “casual.” The
to the terms of their contracts. Central States, Southeast and   Seventh and Eighth Circuits have addressed the issue. The
Southwest Areas Pension Fund v. Hartlage Truck Service,          Eighth Circuit has concluded that an employer could not
Inc. 991 F.2d 1357, 1360 (7th Cir. 1993).                        avoid contributions to the pension fund for “casual”
                                                                 employees by making an agreement with the union to attach
   The CBA covering 1983-1986 made no mention of “casual         a different meaning from its plain meaning. See Central
drivers.” It provided that all new employees “shall be           States, Southeast and Southwest Areas Pension Fund v.
considered as probationary employees for a period of ninety      Independent Fruit & Produce Co., 919 F.2d 1343 (8th Cir.
(90) calendar days” and that new drivers were not to become      1990). The Seventh Circuit reached the opposite conclusion.
eligible under the plan for thirty days. Brown-Graves claims     It held that an employer is required to make contributions to
it had an informal agreement with Local 348 pertaining to        pension plans only on behalf of those employees as indicated
casuals. Nevertheless, the 1983-1986 CBA was unambiguous         in the CBAs, and if casual employees are excluded from
and must be interpreted without any regard to parol evidence.    benefits in the CBA, then any employee so designated is
The subsequent CBAs did contain “casual driver” language,        excluded from benefit contributions. See Central States,
but did not define the term.                                     Southeast and Southwest Areas Pension Fund v. Hartlage
                                                                 Truck Service, Inc., 991 F.2d 1357, 1360 (7th Cir. 1993).
  Since June 23, 1986, Brown-Graves classified each new
driver as a “casual driver.” The language in the post-1986         In Independent Fruit, the employers had negotiated a CBA
CBAs excluding casual drivers from pension benefits was          which provided that casuals would not be eligible for pension
unambiguous. However, it did not provide notice to Central       contributions, but it did not define casuals. Central States
States that Brown-Graves gave the term “casual employee” an      conducted an audit and determined the employer owed
unusual meaning which allowed it to call all new employees       contributions for several employees because the number of
“casual” for indefinite periods of time. Central States would    hours they worked indicated that they were not casual
not have accepted Brown-Graves’s post-1986 CBAs had it           employees. The Eighth Circuit held that the CBAs involved
known that Brown-Graves planned to call every newly hired        were not ambiguous and there was nothing in the CBAs
employee a “casual” for periods up to four years so it could     suggesting anything other than the ordinary dictionary
avoid pension payments. The district court stated that:          definition of casual was intended. Independent Fruit, 919
F.2d at 1352. The court stated that: