Court Opinion

ID: 8976712
Source: CourtListenerOpinion
Date Created: 2022-11-27 11:05:55.260951+00
Date Added: 2024-06-11T17:10:35.058526
License: Public Domain

A. LEON HIGGINBOTHAM, Jr., Chief Judge,1
concurring in part and dissenting in part.
I join in Parts I, II and IV of the majority’s opinion and concur in Part III to the extent that it suggests that “[ujnder Pennsylvania tolling principles, the statute is tolled until ‘plaintiffs knew or using reasonable diligence should have known of the claim.’” Maj.Op. at 46, citing Urland v. Merrell-Dow Pharmaceuticals, 822 F.2d 1268, 1272 (3d Cir.1987). However, I dissent in Part III and in Part V to the extent that the majority holds that tolling of the statute of limitations is not appropriate for the consumer service employees (CSE’s) who were never reported on the monthly invoices.
I concur with the majority that the statute of limitations has not been tolled in those instances where the number of CSE’s or baggers were in fact included on the monthly invoices forwarded to the Trust Funds. Thus, I agree that when the number of CSE’s exceeded the ten-percent limit imposed by Article 29 of the collective bargaining agreement, the Funds could not recover for the contract breaches as to those employees who were listed on the invoices. Obviously, the trustees could have discovered that there were a number of CSE’s in excess of the ten-percent limit by comparing the total number of employees to the number of CSE’s listed on the invoices in a given month.
However, no reading of the invoices would give the trustees information on the CSE’s who were never listed. One of the goals of Article 29 was to limit the number of employees who could be excluded from health, legal or pension benefits. Appellant’s Brief at 4. The Funds’ underlying concern is that, by failing to report accurately the number of CSE’s, Vic’s Market concealed the actual number of its employees entitled to benefits provided by the Funds and thereby withheld making contributions to the Funds for those eligible employees. Under the majority’s ruling, Vic’s Market could successfully circumvent the intent of Article 29 by deliberately concealing or negligently failing to report an accurate number of CSE’s on the monthly invoices.
The Funds discovered the number of CSE’s never reported on the monthly invoices when an audit, covering thirty-one months of the contract, was conducted. The audit of September 1987 uncovered an average of twenty-two CSE’s per month whose numbers were never listed on the invoices forwarded to the Trust Funds.2 This translates to approximately 682 instances when CSE’s were never reported by Vic’s Market. As to those 682 instances where appellee either deliberately concealed or negligently failed to report to the Funds the number of CSE’s in their workforce, I find no basis in law or policy to immunize Vic’s Market for those contract breaches.3
I.
The facts of the cases upon which the majority relies are so dissimilar from the facts of this case that the precepts announced in those cases offer, at most, marginal insight into the issues here. The majority relies primarily on Urland v. Merrell-Dow Pharmaceutical, 822 F.2d 1268 (3d Cir.1987), as the major precedent for their result. In Urland, a child and her parents brought suit against a manufacturer of a drug that the mother ingested during her pregnancy, alleging that the ingestion of the drug caused the child’s birth *49defects. The family in Urland, had immediate notice of a defect when the child was born on February 8, 1972, with part of her left arm missing. However, the lawsuit was not filed until October 7, 1981.
At the outset it should be noted that Urland involved a jury’s finding on the diligence issue.4 The jury was given the following interrogatory:
Have Mr. and Mrs. Urland proved by a preponderance of the evidence that neither of them knew, or exercising reasonable diligence should have known, before October 7, 1979, that Benedictin was an operative cause of Julie Beth Urland’s birth defect as alleged in their complaint?
Id. at 1272. The jury answered “no.” Consistent with the jury’s verdict, the district court entered judgment in favor of Merrell-Dow. On appeal the majority concluded:
We find no reversible error. We stress that in this case, the district court did not decide in favor of Merrell-Dow’s statute of limitations defense on a pre-trial motion. Instead, the issue was fairly presented to a jury, which decided the relevant factual question adversely to the Urlands.
Id. at 1276 (emphasis added).
In contrast to Urland, where a jury decided the relevant factual questions, in this case, the district court determined prior to trial that there were no facts for the jury to decide. We are now reviewing the district court’s summary judgment order to determine whether there is a disputed issue of a material fact. Ettinger v. Johnson, 556 F.2d 692 (3rd Cir.1977). At a minimum, I submit that there are sufficient disputed material facts for which this case should be remanded.
In Urland, this court affirmed the district court’s judgment in favor of Merrell-Dow’s statute of limitations defense, focusing on one issue — whether the parents knew or should have known “that Benedic-tin was an operative cause of the birth defect.” Id. at 1272.
The majority in Urland noted that:
it is clear that the interview with the reporter [and Mrs. Urland] took place in September 1979, that at the time of the reporter’s phone call Mrs. Urland became aware of the Florida trial alleging a connection between Benedictin and birth defects, and that this information revived her suspicion about Benedictin being a possible cause of Julie’s birth defects.
Id. at 1271.
Unlike Urland, where there was one defect known — the left arm missing — we are dealing now with the equivalent of 682 separate defects that were unknown to the trustees because material information was withheld. The Urlands knew of the missing left arm and of its possible connection with Benedictin, but here, there is no evidence that the Funds knew of the 682 instances where the employer failed to list the proper number of CSE’s on the monthly invoices. The majority concludes that the Funds did not exercise “reasonable diligence” because of its failure to discover the concealed more than de minimis breaches. Maj.Op. Typescript at 10-11. With all due respect, I submit that the majority’s position expands the diligence precepts far beyond the inherent logic of any Pennsylvania case which has precluded the tolling of the statute of limitations.
Another principal case relied on by the majority is Berardi v. Johns-Manville Corp., 334 Pa.Super. 36, 43, 482 A.2d. 1067 (1984), where the court held “[i]t is clear that decedent knew he had asbestosis prior to two years before filing suit.” Id. 482 A.2d at 1071. I submit that Berardi is relevant as to those instances where the number of CSE’s were listed on the invoices and where the invoices indicated that the employer had more than the permissible ten-percent limit of CSE’s. The statute is not tolled for those instances. However, to use the language of Berardi, it certainly is not “clear” that prior to the audit, the *50trustees knew of the 682 instances of breaches involving employees whose numbers were never reported. The majority concludes that the Funds were on notice of the concealed breaches each month that the figures supplied by Vic’s Market showed that the ten-percent ceiling was exceeded. I disagree, for such a conclusion imposes an inordinate burden on the Funds, at least for those employees who were never reported and therefore never known.
In Byrnes v. DeBolt Transfer, Inc., 741 F.2d 620 (3d Cir.1984), this court reversed a district court’s holding that the statute of limitations was not tolled in an action brought by a pension fund to recover unpaid employer contributions. We noted that “the district court merely cite[d] several recent cases that discuss[ed] the Pennsylvania law of tolling in cases having little in common with the case at bar.” Id. at 626 (emphasis added). Byrnes instructs that before adopting a statute of limitations defense, the court must carefully scrutinize pension fund cases, which rely on the employer’s self-reporting and honesty. In Byrnes, we noted that
the district court should examine the rationale of Seymour and Bugher, together with applicable Pennsylvania law to determine whether DeBolt’s breach of the duty to make accurate reports and contributions under a self-reporting system itself tolled the limitations period, irrespective of any fraud until the Funds should reasonably have learned of the breach.5
Id. In the case at bar, the Funds relied on Vic’s Market to report accurately the CSE’s in its workforce. However, the appellee breached the trust and confidence the Funds placed in the employer to report accurately the CSE’s and to pay contributions required by the agreement. The Funds did not become aware of the breaches until the audit was conducted.
Perhaps the ethical norm of today’s commercial world is sinking so fast that one should presume that one’s business colleague is a thief, a fraud, or one whose word you cannot trust. Perhaps we have descended to the point that a savvy business person or trustee should assume that an employer will breach her reporting obligations and withhold critical material facts. Though that may be the approaching norm in the market place for business and labor relations, I do not think this court should legitimize that decadent standard. The majority imposes a standard of diligence that suggests that even when an employer deliberately conceals or negligently fails to report relevant information involving contributions to a pension fund, trustees of the fund must assume or know the facts that the employer failed to report. Trustees, like judges, are not omniscient. I have not found a single Pennsylvania case which has been as restrictive in imposing a statute of limitations as is the majority’s holding. I do not believe that Pennsylvania courts ever intended to give a wrongdoer who has withheld material information the advantage the majority gives to Vic’s Market.
I do not think that our appellate court should make a finding that trustees of a pension fund should be sufficiently omniscient to know of an employer’s failure to report accurately the number of its employees excluded from benefits provided by the Funds. The factual situation here, does not support the imposition of a summary judgment that precludes tolling the statute of limitations for the 682 instances that were never reported. The Funds should be given an opportunity to show whether Vic’s Market deliberately concealed or negligently failed to report the number of its employees who were CSE’s to circumvent the intent of Article 29 and whether the Funds used reasonable diligence to ascertain these breaches.
For the foregoing reasons, I concur with the majority’s conclusion that tolling is not appropriate for the CSE’s reported on the *51monthly invoices. However, I dissent from the majority’s conclusion that tolling is not appropriately applied to those employees for whom appellee failed to report or deliberately concealed. Accordingly, I would reverse the district court as to those employees.

. The Honorable A. Leon Higginbotham, Jr., became Chief Judge on January 16, 1990.

. See Appellants’ Brief at 16. While there may be some disagreement as to whether the appellants' figure of an average of twenty-two unreported instances per month is accurate, the ap-pellee does not dispute this figure in its brief. If there is disagreement as to the actual number, the conflict should be resolved at trial with appropriate judicial fact finding thereafter.

. It does not make sense to merge reported breaches and unreported breaches as if they were the same. In addition, each failure to report was a separate breach giving rise to a separate claim. See A. Corbin, 4 Corbin On Contracts § 951 at 824, § 956 at 843 (1951).

. The court bifurcated the issues, presenting the statute of limitations issue to the jury as a threshold matter. Urland, 822 F.2d at 1270.

. Seymour v. Hull & Moreland Engineering, 418 F.Supp. 190 (C.D.Cal.1976), modified on other grounds, 605 F.2d 1105 (9th Cir.1979) (trustees of health and welfare pension funds brought, suit against an employer obligated under a collective bargaining agreement to make payments by means of a self-reporting system); Bugher v. Consolidated X-Ray Service Corp., 515 F.Supp. 1180, aff’d, 705 F.2d 1426 (5th Cir.1983) (same).