Court Opinion

ID: 2708985
Source: CourtListenerOpinion
Date Created: 2014-08-05 15:09:18.103913+00
Date Added: 2024-06-11T13:04:17.494946
License: Public Domain

NONPRECEDENTIAL  DISPOSITION  
                              To  be  cited  only  in  accordance  with  Fed.  R.  App.  P.  32.1

                         United States Court of Appeals
                                          For  the  Seventh  Circuit
                                          Chicago,  Illinois  60604  
                                           Argued  October  4,  2013  
                                           Decided  January  22,  2014  
  
  
                                                        Before  
  
                                     FRANK  H.  EASTERBROOK,  Circuit  Judge  
  
                                     ILANA  DIAMOND  ROVNER,  Circuit  Judge  
  
                                     ANN  CLAIRE  WILLIAMS,  Circuit  Judge  
  
  
Nos.  13-­‐‑1625  &  13-­‐‑2215                                              Appeals   from   the   United  
                                                                             States   District   Court   for   the  
CENTRAL  STATES,  SOUTHEAST  AND  SOUTHWEST                                  Northern   District   of   Illinois,  
AREAS  PENSION  FUND,  et  al.,  
                                                                             Eastern  Division.  
       Plaintiffs-­‐‑Appellees,                                                
                  v.                                                         No.  11  C  6263  
                                                                             Charles  P.  Kocoras,  Judge.  
WINGRA  STONE  COMPANY,  
     Defendant-­‐‑Appellant.  
  

                                                         Order  
       
     The  dispute  in  this  case  concerns  the  required  rate  of  contributions  to  a  pension  fund  
that  has  more  than  40  schedules  of  contributions  and  benefits.  The  parties  concur  that  a  
set  of  agreements  requires  Wingra  Stone  Co.  to  contribute  at  either  the  Schedule  17B  
rate  (which  the  Fund  uses  for  most  private  construction  work)  or  the  Schedule  18  rate  
(which  the  Fund  uses  for  most  public  heavy  and  highway  construction  work).  Until  
2003  Wingra  used  the  Schedule  17B  rate  when  its  employees  spent  all  day  on  private  
projects  and  the  Schedule  18  rate  otherwise.  
       

                                                                                                                         
Nos.  13-­‐‑1625  &  13-­‐‑2215                                                                         Page  2  

     An  agreement  that  the  parties  call  the  2003  Addendum  appears  to  preserve  Wingra’s  
right  to  continue  this  practice.  (One  paragraph  reads:  “Pension  contributions  on  days  
where  employees  work  portions  of  their  shifts  under  both  Agreements  shall  be  the  
hourly  contribution  rate  per  the  applicable  contribution  class  in  effect.  On  days  where  
only  private  work  is  performed,  the  applicable  daily  rate  may  be  used.”)  After  this  
agreement  took  effect,  however,  Wingra  started  making  all  contributions  at  the  Sched-­‐‑
ule  18  rate.  Wingra  says  that  this  change  reflects  a  clerical  error;  the  Fund  says  that  the  
2003  Addendum  required  it.  The  2003  Addendum  was  replaced  by  a  2006  Addendum,  
which  omitted  the  second  sentence  we  have  quoted;  Wingra’s  practice  did  not  change.  
       
     The  2006  Addendum  has  an  evergreen  clause,  providing  for  automatic  annual  re-­‐‑
newal  unless  one  party  gives  timely  notice  of  a  desire  to  amend  or  terminate  the  agree-­‐‑
ment.  Teamsters  Local  695  sent  such  a  notice  on  March  19,  2008,  demanding  changes  to  
the  2006  Addendum.  Negotiations  went  nowhere,  no  new  text  was  adopted,  and  
Wingra  continued  to  contribute  for  all  hours  at  the  Schedule  18  rate.  But  in  June  2009  
Wingra  began  to  use  the  Schedule  17B  rate  for  days  on  which  employees  worked  exclu-­‐‑
sively  on  private-­‐‑sector  projects.  On  February  4,  2011,  Wingra  sent  a  letter  withdrawing  
from  the  2006  Addendum  as  of  April  30,  2011.  
       
     This  suit  by  the  Fund  seeks  to  recover  from  Wingra  the  difference  between  the  
Schedule  17B  and  Schedule  18  contribution  rates  for  the  period  from  June  2009  through  
April  2011.  With  interest,  the  dispute  comes  to  about  $80,000.  (The  Fund  also  sought  to  
recover  a  shortfall  for  2011–12  caused  by  Wingra’s  failure  to  use  the  contribution  rates  
as  revised  in  2011;  Wingra  concedes  that  it  owes  what  the  Fund  demanded  for  that  pe-­‐‑
riod.)  The  district  court  entered  summary  judgment  for  the  Fund.  2013  U.S.  Dist.  LEXIS  
28068  (N.D.  Ill.  Feb.  26,  2013).  
       
     The  district  court  decided  that  Wingra  remained  bound  by  the  2006  Addendum,  de-­‐‑
spite  the  Union’s  letter,  which  under  the  Addendum’s  terms  led  to  its  termination,  be-­‐‑
cause  with  every  monthly  check  making  pension  payments  Wingra  reaffirmed  its  legal  
obligation  to  make  payments  under  the  2006  Addendum  and  several  other  agreements.  
Wingra  calls  this  certification  language  boilerplate,  which  it  is,  but  that  does  not  make  it  
a  nullity.  See  Moriarty  v.  Larry  G.  Lewis  Funeral  Directors  Ltd.,  150  F.3d  773  (7th  Cir.  1998).  
But  it  also  does  not  help  the  Fund.  Wingra  has  never  denied  that  it  must  make  pension  
contributions  on  all  hours  its  employees  work.  The  question  is:  at  which  schedule?  The  
monthly  certifications  do  not  address  that  subject.  
       
     The  district  court  also  concluded  that  Wingra  had  ratified  the  2006  Addendum  by  
continuing  to  perform  under  it  after  Local  695  sent  its  letter.  Again,  however,  this  does  
not  resolve  the  dispute—which  concerns  the  rate  of  payment,  not  Wingra’s  obligation  to  
Nos.  13-­‐‑1625  &  13-­‐‑2215                                                                    Page  3  

contribute.  If  the  2006  Addendum  specified  the  use  of  Schedule  18  for  all  hours,  then  
adhering  to  the  2006  Addendum  following  the  termination  notice  might  be  important.  
Yet  the  2006  Addendum  does  not  identify  the  applicable  schedule.  All  it  says  is  that  
“[p]ension  contributions  on  days  where  employees  work  portions  of  their  shifts  under  
both  Agreements  shall  be  the  hourly  contribution  rate  per  the  applicable  contribution  
class  in  effect.”  What  class  is  that?  What  happens  on  days  when  employees  work  exclu-­‐‑
sively  under  a  private-­‐‑sector  collective  bargaining  agreement?  The  answers  must  lie  in  
some  other  document.  
      
    The  Fund  says  that  two  other  agreements,  which  the  parties  call  the  Participation  
and  Trust  Agreements,  require  Wingra  to  use  Schedule  18  for  all  contributions.  Yet  until  
the  2003  Addendum—which  does  not  call  for  one  schedule  for  all  contributions—
Wingra  had  used  different  schedules  for  public  and  private  work,  without  protest  by  
the  Union  or  the  Fund.  Wingra  adopted  a  one-­‐‑schedule  approach  in  2003,  but  that  can-­‐‑
not  be  attributed  to  the  2003  Addendum,  which  has  a  sentence  (which  we  have  quoted)  
disclaiming  a  one-­‐‑schedule  system.  Wingra’s  explanation  of  administrative  error  may  
or  may  not  be  right,  but  it  does  not  matter  because  Wingra  is  not  asking  for  a  refund  of  
any  amounts  paid  before  June  2009.  
      
    The  Fund’s  appellate  brief  does  not  point  to  any  specific  language  in  the  Participa-­‐‑
tion  and  Trust  Agreements  requiring  Wingra  to  use  Schedule  18  for  all  hours  its  em-­‐‑
ployees  work.  If  Wingra’s  pre-­‐‑2003  practice  of  using  both  Schedule  17B  and  Schedule  18  
(depending  on  the  public  or  private  nature  of  the  job)  did  not  modify  the  Participation  
and  Trust  Agreements  to  entrench  a  two-­‐‑schedule  approach,  then  Wingra’s  practice  of  
using  only  Schedule  18  between  2003  and  June  2009  did  not  modify  any  of  the  agree-­‐‑
ments  to  entrench  a  one-­‐‑schedule  approach.  
      
    This  means  that  the  Fund  can  prevail  only  by  showing  through  extrinsic  (parol)  evi-­‐‑
dence  that  one  or  more  of  the  multifarious  agreements  adopts  a  one-­‐‑schedule  approach,  
despite  the  absence  of  language  prescribing  that  outcome.  The  district  court  could  not  
resolve  the  suit  on  such  a  ground  on  summary  judgment,  however,  because  each  side  
offers  extrinsic  evidence  in  its  favor.  Perhaps  the  district  court  will  conclude  that  the  
dispute  is  not  material.  If  so,  then  Wingra  is  entitled  to  prevail—for  none  of  the  docu-­‐‑
ments  expressly  requires  it  to  use  Schedule  18  across  the  board.  If  there  is  material  parol  
evidence  on  both  sides,  however,  a  trial  will  be  required  to  sort  this  out.  Lawyers  for  
both  sides  said  at  oral  argument  that  they  do  not  want  a  trial,  but  the  judiciary  cannot  
use  that  stance  to  resolve  the  dispute  in  favor  of  one  side  rather  than  the  other—though  
the  parties  could  agree  to  a  bench  trial  on  stipulated  facts  or  settle  their  controversy  in  
light  of  this  order’s  analysis.  
      
Nos.  13-­‐‑1625  &  13-­‐‑2215                                                                  Page  4  

     It  should  be  clear  from  what  we  have  said  that  Wingra’s  use  of  the  Schedule  18  rate  
between  2003  and  2009  is  not  itself  extrinsic  evidence  that  controls  the  meaning  of  the  
2003  or  2006  Addendum—any  more  than  Wingra’s  use  of  both  Schedule  17B  and  
Schedule  18  before  2003  is  extrinsic  evidence  establishing  Wingra’s  entitlement  to  do  so  
for  the  indefinite  future.  Even  when  the  meaning  of  legal  documents  can  be  affected  by  
post-­‐‑signing  conduct,  ambiguous  conduct  such  as  Wingra’s  is  not  conclusive.  The  dis-­‐‑
trict  judge  erred  in  thinking  that  Wingra’s  pre-­‐‑2003  payment  practice  should  be  ignored  
and  the  2003–09  payment  practice  treated  as  if  it  had  amended  the  contracts.  These  con-­‐‑
tracts  must  be  enforced  according  to  their  language  and  negotiating  history;  the  remand  
is  only  for  the  purpose  of  allowing  that  history  to  be  considered.  
       
     The  judgment  is  affirmed  to  the  extent  it  requires  Wingra  to  pay  at  the  correct  rate  
for  2011–12.  Otherwise  the  judgment  is  vacated,  and  the  case  is  remanded  for  proceed-­‐‑
ings  consistent  with  this  order.