Court Opinion

ID: 2995836
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:22:48.347395+00
Date Added: 2024-06-11T18:01:26.957879
License: Public Domain

In the
 United States Court of Appeals
                  For the Seventh Circuit
                          ____________

Nos. 00-1112 & 00-1975
LABORERS’ PENSION FUND and LABORERS’ WELFARE
FUND OF THE HEALTH AND WELFARE DEPARTMENT OF
THE CONSTRUCTION AND GENERAL LABORERS’ DISTRICT
COUNCIL OF CHICAGO AND VICINITY,
                                 Plaintiffs-Appellees,
                                 v.

BLACKMORE SEWER CONSTRUCTION, INCORPORATED,
                                            Defendant-Appellant.
                          ____________
           Appeals from the United States District Court
       for the Northern District of Illinois, Eastern Division.
              No. 98 C 4909—Ruben Castillo, Judge.
                          ____________
      ARGUED MAY 17, 2001—DECIDED JULY 24, 2002
                    ____________

  Before HARLINGTON WOOD, JR., KANNE and ROVNER,
Circuit Judges.
  ROVNER, Circuit Judge. Blackmore Sewer Construction,
Inc. (hereafter “Blackmore”) employs a shotgun approach in
this appeal of a grant of summary judgment in favor of
Laborers’ Pension Fund and Laborers’ Welfare Fund of the
Health and Welfare Department of the Construction and
General Laborers’ District Council of Chicago and Vicinity
(hereafter “the Funds”). We conclude that all of Blackmore’s
2                                   Nos. 00-1112 & 00-1975

arguments miss the broad side of the barn in this appeal,
and we affirm.

                             I.
  The Funds are large, multi-employer pension, health and
welfare funds. Blackmore was a long-time contributing em-
ployer to the Funds, but in March 1998, Blackmore sud-
denly ceased submitting reports and contributions to the
Funds. The Funds brought suit under Section 515 of the
Employment Retirement Security Act of 1974 (“ERISA”)
and Section 301 of the Labor Management Relations Act
(“LMRA”) to recover unpaid contributions and to force
Blackmore to submit reports on which the Funds relied to
administer their accounts. See 29 U.S.C. § 1145 and 29
U.S.C. § 185. The Funds, acting as an agent for the Con-
struction and General Laborers’ District Council of Chicago
and Vicinity (hereafter “the Union”) also sought recovery of
union dues owed by Blackmore under a collective bargain-
ing agreement with the Union.
  We begin by considering the contracts on which the
Funds base their claims. On August 15, 1991, Blackmore
entered into a collective bargaining agreement (hereafter
“the Agreement”) with the Union. The original term of the
Agreement ran through May 31, 1995, but the Agreement
provided that Blackmore would be bound to successive
agreements unless it provided the Union with notice of its
intent to terminate the Agreement:
    This Agreement shall remain in full force and effect
    through the 31st day of May, 1995 and shall continue
    thereafter unless there has been given not less than
    sixty (60) days nor more than ninety (90) days from the
    expiration date written notice by registered or certified
    mail by either party hereto of the desire to modify and
    amend this Agreement through Negotiations. In the
    absence of such notice the EMPLOYER and the UNION
Nos. 00-1112 & 00-1975                                      3

    agree to be bound by the area-wide negotiated contracts
    with the various Associations incorporating them into
    this Agreement and extending this Agreement for the
    life of the newly negotiated contract.
R. 18, Ex. A, ¶ 9. Blackmore does not dispute that it never
gave this notice, and Blackmore thus became bound to two
successor agreements, one that covered the time period
from June 1, 1995 through May 31, 1998, and one that be-
gan on June 1, 1998 and covered the time period involved
in this case. Although contribution rates changed with the
successive agreements, the duties and obligations of the
participating employers, at least as they relate to this case,
remained the same.
  Each Agreement bound Blackmore to Declarations of
Trust establishing the Funds, and set forth Blackmore’s
contribution obligations into the respective Funds:
    The EMPLOYER agrees . . . to become bound by and be
    considered a party to the Agreements and the Declara-
    tion of Trust creating said Trust Funds as if (he) (it)
    had signed the original copies of the Trust Instruments
    and amendments thereto. . . .
    The EMPLOYER further affirms and re-establishes
    that all prior contributions paid to the Welfare and
    Pension Funds were made by duly authorized agents of
    the EMPLOYER at the proper rates for the appropriate
    periods of time and that by making said prior contribu-
    tions the EMPLOYER evidences the intent to be bound
    by the terms of the Trust Agreement and Collective
    Bargaining Agreements which were operative at the
    time the contributions were made, acknowledging the
    report form to be a sufficient instrument in writing to
    bind the EMPLOYER to the applicable agreements.
R. 18, Ex. A, ¶ 3.
  A master collective bargaining agreement, which was in-
corporated into Blackmore’s shorter memorandum agree-
4                                   Nos. 00-1112 & 00-1975

ment with the Union, established the contribution rates,
and also obligated Blackmore (and other employers) to
produce their books and records to the Funds on request so
that the Funds could determine compliance with the Agree-
ment. Blackmore never terminated its participation in the
Funds, and for six and a half years, it remained a contribut-
ing employer, regularly submitting a monthly contribution
report and paying contributions at the prevailing contrac-
tual rates. With each monthly report, Blackmore signed a
statement further binding itself to the then current collec-
tive bargaining agreement as well as the respective trust
agreements:
    EMPLOYER’S WARRANTY AND ACCEPTANCE:
    The undersigned employer hereby warrants that this
    report accurately states all hours worked by all laborers
    in its employ. In addition, the employer hereby agrees
    to be bound to the terms of the current collective bar-
    gaining agreement executed between the Construction
    and General Laborers’ District Council of Chicago and
    Vicinity and the relevant Multi-Employer Associations.
    Further, the undersigned hereby expressly accepts and
    agrees to be bound by the trust agreements governing
    Laborer’s Pension and Welfare, et al. and accepts all of
    the terms thereof with the intention of providing bene-
    fits to its laborers.
R. 17, Ex. C. Blackmore signed this statement repeatedly,
made contributions and submitted reports as it was obliged
to do under the various agreements. In March 1998, Black-
more ceased submitting reports and contributions.1
  The Funds brought suit on August 7, seeking to audit
Blackmore’s books and records and to recover all delinquen-
cies. The district court characterized the case as a routine

1
  All dates referenced hereafter are in 1998 unless otherwise
noted.
Nos. 00-1112 & 00-1975                                      5

ERISA collection action and, in an Order dated August 17,
set the case on an expedited discovery and trial schedule.
Discovery was to be completed by November 30, and the
parties were to be ready for trial on five days’ notice any
time after November 30. When Blackmore failed to answer
or otherwise plead in a timely fashion, the district court
entered a default judgment in favor of the Funds on October
14. Blackmore subsequently moved to vacate the default,
and the court granted that motion on November 10. The
court again ordered that discovery be closed November 30,
and set a trial date of December 14. On November 19, the
Funds moved for summary judgment on liability only and
sought an order compelling an audit to determine the
amount of the delinquent contributions. Blackmore re-
sponded with a demand for arbitration and a motion to stay
the case pending the arbitration. The court denied the
motion to stay pending arbitration. Blackmore responded to
the motion for summary judgment and served a Request
for Admissions on the Funds on November 25. On Novem-
ber 30, the district court entered judgment in favor of the
Funds on liability and ordered Blackmore to submit to an
audit. Following the audit, the Funds moved for judgment
in a sum certain. Blackmore opposed that motion. On De-
cember 29, 1999, the district court entered judgment in the
amount of $78,106.54, which represented unpaid contribu-
tions and union dues, liquidated damages, interest, costs,
and attorney’s fees. The Funds subsequently sought an ad-
justment to the award of attorney’s fees, which the district
court granted in part. Finally, the district court granted the
Funds’ motion for a turnover order pursuant to a citation
served on the Suburban Bank of Barrington. Blackmore
appeals.

                             II.
  Blackmore raises several challenges to the district court’s
judgment in favor of the Funds. First, Blackmore maintains
6                                   Nos. 00-1112 & 00-1975

that the Funds failed to respond to Requests for Admission
served on the Funds on November 25, and that the Funds’
silence must be construed as an admission of all of the al-
legations contained therein. In an adjunct argument, Black-
more maintains that its Requests for Admission were not
untimely under the District Court’s discovery order because
requests for admission are not items of discovery and thus
were not subject to the court’s discovery cutoff date. Second,
Blackmore contends that the trial court erred in resolving
against Blackmore the question of whether Blackmore had
evidenced an unequivocal intent to be bound by a collective
bargaining agreement negotiated by a trade association of
which Blackmore was not a member and which Blackmore
had not authorized to act on its behalf. Third, Blackmore
faults the district court for relying on the signed monthly
reports which contained a statement binding Blackmore to
future collective bargaining agreements because Blackmore
maintains that it made a mistake of fact in signing these
documents. Fourth, Blackmore posits that the district court
abused its discretion and denied it due process when it
refused to allow Blackmore to respond to the Funds’ motion
for a turnover order. Fifth, Blackmore objects to the amount
of attorney’s fees awarded the Funds, claiming the court
made no finding regarding the reasonableness of the fees
claimed. Finally, Blackmore contends that the contracts in
question were subject to the Federal Arbitration Act.

                             A.
  We will address the issues related to the Requests for
Admission first because many of Blackmore’s arguments
depend on the outcome of these issues. Blackmore served its
Requests for Admission on the Funds on November 25. The
district court had previously set a discovery cutoff date of
November 30 and a trial date of December 14. Federal Rule
of Civil Procedure 36 provides, in relevant part, that mat-
Nos. 00-1112 & 00-1975                                       7

ters set forth in a request for admission are deemed admit-
ted unless “within 30 days after service of the request, or
within such shorter or longer time as the court may allow
or as the parties may agree to in writing, subject to Rule 29,
the party to whom the request is directed serves upon the
party requesting the admissions written answer or objection
addressed to the matter, signed by the party or by the par-
ty’s attorney.” Fed. R. Civ. Pro. 36(a). Rule 29, in turn, pro-
vides:
    Unless otherwise directed by the court, the parties may
    by written stipulation . . . modify other procedures gov-
    erning or limitations placed upon discovery, except that
    stipulations extending the time provided in Rules 33,
    34, and 36 for responses to discovery may, if they would
    interfere with any time set for completion of discovery,
    for hearing of a motion, or for trial, be made only with
    the approval of the court.
Fed. R. Civ. P. 29. The district court found that any discov-
ery served on November 25 was untimely in light of the
November 30 discovery cutoff date. See Transcript of Pro-
ceedings before the Honorable Ruben Castillo, November
30, 1998 (hereafter “Tr.”), at 27-28. The court thus ruled on
the Funds’ motion for summary judgment without consider-
ing the Funds’ failure to respond to Blackmore’s Requests
for Admission.
  Blackmore spends an inordinate amount of time arguing
in its brief that its Requests for Admission are not techni-
cally discovery devices and therefore are not subject to the
discovery cutoff date set by the district court. This is a cur-
ious argument given that Blackmore itself characterized the
Requests for Admission as discovery in its argument before
the district court. Indeed, at the hearing on the Funds’ mo-
tion for summary judgment, Blackmore argued to the dis-
trict court in a circular and frivolous manner that its dis-
covery “was timely served. We’ve received no response be-
8                                       Nos. 00-1112 & 00-1975

cause they haven’t had time to respond.” Tr. at 2-3.2 Black-
more did not argue below that its Requests for Admission
were timely because they were not discovery and not subject
to the discovery cutoff date until it responded to the Funds’
Motion for Judgment in a Sum Certain nearly a year later.
It is improper to now argue that Requests for Admission
filed fewer than 30 days before the trial date, much less the
discovery cutoff date, were timely filed. Blackmore does not
claim that the Funds stipulated in writing to a shorter
response time, and Blackmore points to no order from the
district court allowing Rule 36 Requests for Admission that
would interfere with both a trial date and a discovery cutoff
date, in contravention of Rule 29. Instead, Blackmore asks
us to impose an obligation on a party to respond to a Re-
quest for admissions after judgment had been entered. If we
follow Blackmore’s argument to its ultimate conclusion, the
Funds theoretically would have remained obligated to re-
spond to the Requests for Admission after a trial verdict in
favor of the Funds. No matter whether Rule 36 requests for
admission are discovery or not, Blackmore did not timely
serve them in this case, and the district court was free to
disregard them.

                                 B.
  Blackmore’s argument regarding its lack of “unequivocal
intent” to be bound by any collective bargaining agreement
negotiated after 1995 is perhaps even more curious than
its Rule 36 argument. Blackmore relies on Moriarty v.

2
  We need not decide today whether requests for admission are
a discovery device or should be characterized otherwise. The re-
quests filed here were untimely no matter how they are character-
ized, and the district court did not abuse its discretion in so find-
ing. We note for future consideration that Rule 29 seems to con-
template that requests for admission are a discovery device.
Nos. 00-1112 & 00-1975                                      9

Glueckert Funeral Home, Ltd., 155 F.3d 859, 865 (7th Cir.
1998), for the proposition that an employer may not be held
liable under a collective bargaining agreement unless the
employer expressed an unequivocal intention to be bound
by the group action in collective bargaining. Blackmore cor-
rectly states the general rule that an employer will not be
held to the terms of a collective bargaining agreement nego-
tiated between a union and a multi-employer association
unless the employer has expressed an unequivocal intent to
be bound. Moriarty, 155 F.3d at 865. But Blackmore ignores
our ensuing analysis in Moriarty of what factors will evi-
dence an unequivocal intent to be bound. Signing the final
agreement that has been negotiated certainly qualifies as
conclusive evidence that the employer intended to be bound,
and Blackmore concedes it signed the agreement that bound
it through May 31, 1995. That agreement also bound Black-
more to subsequent area-wide negotiated contracts unless
either party gave notice of its intent to withdraw from the
agreement within sixty to ninety days of the termination
date for the agreement. Blackmore gave no such notice.
Moreover, Blackmore continued to submit contributions and
reports for almost three years after it claims it was no
longer obliged to do so. In Moriarty, we held that an em-
ployer’s intent to be bound can be established from the
employer’s conduct in adhering to the terms of the collective
bargaining agreement. Moriarty, 155 F.3d at 867. “For in-
stance, if an employer has contributed to a fund or has filed
reports declaring that it has done so even if it has not, such
evidence may be considered in determining its intent to be
bound by the agreement.” Id. Here, Blackmore not only filed
reports and submitted contributions, it signed a statement
each month declaring its continued intention to be bound to
the terms of the current collective bargaining agreement. R.
17, Ex. C. In the face of this overwhelming evidence of its
intent to be bound to the collective bargaining agreement,
Blackmore offers self-serving statements that it made a
mistake of fact when it filed its reports and contributions
10                                  Nos. 00-1112 & 00-1975

from 1995 through 1998, and that it never intended to be
bound. Blackmore’s belief that it would not be bound to
agreements it signed and then repeatedly reaffirmed is una-
vailing. A unilateral mistake will relieve a party of its ob-
ligations under a contract only under certain limited cir-
cumstances not present here. See Restatement (Second) of
the Law of Contracts, § 153. No reasonable jury could find
that Blackmore was not bound to agreements it signed, re-
affirmed, and complied with for a period of three years be-
fore discovering its “mistake.” We thus reject Blackmore’s
second and third arguments. The district court was correct
in finding that Blackmore was bound to make the contribu-
tions to the Funds.

                             C.
  Blackmore next maintains that the district court abused
its discretion and denied it due process when it refused to
allow Blackmore to respond to the Funds’ motion for a turn-
over order. The Funds had directed a citation to discover
assets to the Suburban Bank of Barrington where Black-
more had an account. The response to the citation was
signed by an agent of Harris Bank. When the Funds pre-
sented their motion for a turnover order based on this cita-
tion response, Blackmore asked for three weeks to respond
to the motion. Transcript of Proceedings before the Honor-
able Ruben Castillo, March 28, 2000, at 2. The district court
inquired, “What could possibly be the response to this mo-
tion?” Counsel for Blackmore responded:
     Your Honor, I believe there’s some question as to the
     bank. The citation was served on Suburban Bank of
     Barrington in Cook County, and Harris Bank out of
     Lake County responded to it. I haven’t done a full in-
     vestigation, but Mr. Mantynband would like that time
     to respond. In addition . . .
Nos. 00-1112 & 00-1975                                         11

Id.3 The court halted the discussion and granted the turn-
over order. Blackmore now contends that the district court’s
refusal to grant it time to investigate this discrepancy was
an abuse of discretion and a denial of due process. The
Funds respond that Harris Bank owns the Suburban Bank
of Barrington and that Blackmore surely knew this since
Blackmore had an account at that bank. The Funds also
point out that the court’s turnover order was directed to the
Suburban Bank of Barrington, not Harris Bank, and that if
Blackmore had no funds at the Suburban Bank of Bar-
rington, the order would be nullity. The Funds characterize
Blackmore’s request for time to investigate as another
stalling tactic to avoid payment of its obligations. The dis-
trict court apparently agreed.
  Blackmore’s counsel may well have not known at the time
of the hearing that Harris Bank and Suburban Bank of
Barrington are, in all relevant respects, the same entity.
But the ownership of banks is a matter of public record, and
a simple phone call or a quick search of the internet would
have resolved this issue for Blackmore conclusively. We
may take judicial notice of matters of public record, and we
exercise that authority here to note that the Suburban
Bank of Barrington is a branch office of Harris Bank. See
Menominee Indian Tribe of Wisconsin v. Thompson, 161
F.3d 449, 456 (7th Cir. 1998), cert. denied, 526 U.S. 1066
(1999); www.harrisbank.com/personal/loc_ill.html;
www3.fdic.gov/idasp//main.asp. A quick search of the public
record would have shown that absolutely nothing was amiss
in the response to the citation. Although counsel may not
have had a chance to conduct such a search before the hear-
ing in the district court, there is no reason to have failed to
do so before raising this wholly irrelevant issue on appeal.

3
  Mr. Mantynband, the lawyer usually appearing for Blackmore,
was on vacation at the time of this hearing. Another attorney from
his office covered the hearing for Blackmore.
12                                   Nos. 00-1112 & 00-1975

Blackmore has never raised a real question about the ap-
propriateness of the involvement of Harris Bank in respond-
ing to the citation. We are at a loss to understand why
Blackmore vigorously appealed a factual issue that could
have been easily resolved by looking to information readily
available in the public domain. It cannot be gainsaid that
this was information about Blackmore’s own bank. The dis-
trict court’s refusal to grant three weeks to determine what
we determined in a matter of minutes was neither an abuse
of discretion nor a violation of due process.

                              D.
  We can quickly dispose of Blackmore’s fifth argument,
that the district court erred in granting attorney’s fees with-
out making a finding as to the reasonableness of the fees
requested. “ERISA provides for a mandatory award of rea-
sonable attorney’s fees when a plan fiduciary prevails in an
action to collect delinquent contributions.” Moriarty v. Svec,
233 F.3d 955, 963 (7th Cir. 2000), cert. denied, 532 U.S.
1066 (2001) and 533 U.S. 930 (2001); 29 U.S.C. § 1132(g)
(2)(D). We review the district court’s award of fees for abuse
of discretion. Svec, 233 F.3d at 963. Blackmore complains
that the district court made no specific finding relating to
the reasonableness of the fees requested and that the af-
fidavit supporting the award of fees did not address any of
the factors a court should consider in determining whether
fees are reasonable. Blackmore also objects that the district
court declined to hold a hearing on fees as Blackmore re-
quested. The Funds reply that they submitted an affidavit
detailing the fees they charged and Blackmore submitted no
contrary evidence. The Funds also point out that the dis-
trict court reduced certain of the fees requested by the
Funds, finding they were excessive.
  Once again, we are puzzled by the position Blackmore
takes on appeal. After reviewing the December 29, 1999
Nos. 00-1112 & 00-1975                                        13

minute order in which the district court made its first
award of fees, we determined that, in the required appendix
to its opening brief, Blackmore omitted the reverse side of
the page where the district court stated the reasons for its
ruling. See Consolidated Brief and Consolidated Appendix
of Appellant Blackmore Sewer Construction Company, Ex.
3. On reviewing the copy of the order provided in the cer-
tified record on appeal, we note that the district court in
fact made a specific finding as to reasonableness:
    Finally, the Court finds that the requested damages
    and attorneys’ fees are fair and reasonable under the
    circumstances of this case, which involved repeated as-
    sertions of invalid defenses.
Minute Order, December 29, 1999. This finding is certainly
consistent with Blackmore’s behavior on appeal, which in-
volves the repeated assertion of frivolous issues. In light of
the district court’s finding, the Funds’ affidavit, and Black-
more’s complete failure to submit any evidence to the con-
trary, we find the district court did not abuse its discretion
in its award of fees to the Funds. Because Blackmore’s ap-
peal of this issue is frivolous, and because Blackmore failed
to attach the full copy of the district court’s order in the ap-
pendix to its brief as required by Circuit Rule 30, we issue
a rule to show cause why Blackmore should not be sanc-
tioned.4

                               E.
  Finally, Blackmore argues that the district court erred in
refusing to stay the case pending arbitration. The district

4
   Blackmore also objected to the amount of the judgment because
it included contributions for three employees that Blackmore
maintains were excluded from the agreements because they were
teamsters not laborers. Blackmore supplied no factual support for
this claim below or on appeal, and we reject it outright.
14                                   Nos. 00-1112 & 00-1975

court denied Blackmore’s motion to stay the proceedings
and later commented that the demand for arbitration and
motion to stay proceedings were “so far afield as to have
any support in law or in fact as to constitute, I believe, a
sanctionable filing the more I have reflected on that.” Tr. at
23. We share the district court’s frustration. In support of
its claim for arbitration, Blackmore relies on a provision in
the contract between the Union and the association that
relates to resolving disputes concerning the interpretation
or application of the agreement between an employer and
the union. Of course, this dispute is not between the em-
ployer and the union; it is between the Funds, a third party
beneficiary of the contract, and an employer. The Funds are
not parties to the contract under which Blackmore demands
arbitration. In addition to this gaping factual insufficiency,
Blackmore’s demand for arbitration fails for an important
legal reason as well. The Supreme Court held that where
neither trust agreements nor collective bargaining agree-
ments evidence any intent to condition the contractual right
of trustees to seek judicial enforcement of a trust provision
on exhaustion of arbitration procedures contained in col-
lective bargaining agreements, a failure to arbitrate a con-
tribution claim against an employer under the trust agree-
ments cannot bar suits seeking judicial enforcement of the
trust terms against the employer. Schneider Moving &
Storage Co. v. Robbins, 466 U.S. 364, 376 (1984). This rule
has been applied here in the Seventh Circuit in circum-
stances quite similar to the instant case. See Pipe Fitters’
Welfare Fund, Local Union 597 v. Mosbeck Indus. Equip.,
Inc., 856 F.2d 837 (7th Cir. 1988). Blackmore makes no
attempt to distinguish these cases or provide any factual
basis for its claim to arbitrate. We therefore find the district
court was correct to deny Blackmore’s motion to stay the
proceedings pending arbitration.
Nos. 00-1112 & 00-1975                                     15

                            III.
  For all the reasons stated above, we affirm the judgment
of the district court. There is no merit to any of Blackmore’s
arguments. We have selected the most egregious examples
of the frivolity of this appeal, and issue an order to show
cause under Rule 38 why Blackmore should not be sanc-
tioned for filing a frivolous appeal. Blackmore has 14 days
from the issuance of this opinion to respond to the order to
show cause.
                                                  AFFIRMED.

A true Copy:
       Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                    USCA-97-C-006—7-24-02