Court Opinion

ID: 2972811
Source: CourtListenerOpinion
Date Created: 2015-09-22 16:54:17.485453+00
Date Added: 2024-06-11T11:37:38.303613
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                        File Name: 05a0666n.06
                         Filed: August 5, 2005

                                      No. 03-6431

                       UNITED STATES COURT OF APPEALS
                            FOR THE SIXTH CIRCUIT

SOUTHERN ELECTRICAL HEALTH FUND;                    )
CAROLINAS ELECTRICAL WORKERS                        )
RETIREMENT FUND; NATIONAL ELECTRICAL                )
BENEFIT FUND; CAROLINAS ELECTRICAL                  )
WORKERS JOINT APPRENTICESHIP &                      )
TRAINING FUND; ATLANTIC COAST CHAPTER -             )
NECA; INTERNATIONAL BROTHERHOOD OF                  )
ELECTRICAL WORKERS HEALTH AND                       )
WELFARE FUND; UNITED STATES, for use of;            )
NATIONAL EMPLOYEE BENEFIT FUNDS; and                )
COMMITTEE ON POLITICAL ACTION,                      )
                                                    )
     Plaintiffs-Appellees,                          )
                                                    )
v.                                                  )   On Appeal from the United States
                                                    )   District Court for the Middle
HERITAGE MUTUAL INSURANCE COMPANY;                  )   District of Tennessee
JOHN W. CATES,                                      )
                                                    )
     Defendants-Appellees,                          )
                                                    )
DONNA KELLEY and JOE KELLEY, d/b/a K.T.E.           )
ELECTRIC; K.T.E. ELECTRIC, INC.,                    )
                                                    )
     Defendants/Third Party Plaintiffs              )
     Cross Claim Defendants-Appellees,              )
                                                    )
v.                                                  )
                                                    )
JOHN W. CATES CONSTRUCTION COMPANY,                 )
INC.,                                               )
                                                    )
     Third party Defendant/Cross Claim Plaintiff-   )
     Appellant.                                     )
                                                    )
No. 03-6431
Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

Before:        BOGGS, Chief Judge; COOK, Circuit Judge; and BEER, District Judge.*

               BOGGS, Chief Judge. This commercial dispute pits a collection of employee

welfare benefit and pension plans (the “plaintiffs”) against a construction company, John W. Cates

Construction Company (“Cates Construction”), and its owner, John W. Cates (“Mr. Cates”). In the

middle lies a second company, K.T.E. Electric (“K.T.E.”), and its owners, who took on subcontracts

on two construction projects for Cates Construction. After a bench trial, the district court awarded

the plaintiffs relief under the Miller Act. It further found that Mr. Cates and Cates Construction

were in contempt of an injunction that the court had previously entered and that Mr. Cates, as a

fiduciary under ERISA, was liable for payments owed by K.T.E. to the plaintiffs. Because Cates

Construction and Mr. Cates’s arguments on appeal are unconvincing and/or waived due to failure

to raise the argument below, we affirm the district court.

                                                 I

                                                 A

       The facts leading to the present dispute are less complex than the litigation that resulted.

Plaintiffs are several employee welfare benefit and pension plans that dispense benefits to unionized

workers. The workers’ employers contribute funds for these benefits to collection trust accounts,

which then distribute money to the various plans. K.T.E. is a Tennessee Corporation that specializes

       *
        The Honorable Peter H. Beer, United States District Judge for the Eastern District of
Louisiana, sitting by designation.

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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

in electrical subcontracting projects. Its primary employees are a married couple: Donna Kelley,

the President of the company, and Joe Kelley, the company’s Vice-President. K.T.E. was one of the

employers that contributed to the relevant funds.

       Cates Construction, which is owned and operated by Mr. Cates, is a Kentucky corporation

that performs general contractor work. It was awarded the contract to construct dormitories at Pope

Air Force Base in North Carolina. It also received the contract to build two buildings at Fort

Campbell, Kentucky/Tennessee. Cates Construction obtained payment and performance bonds for

these projects from Heritage Mutual Insurance Co. (“Heritage Mutual”), another party to the present

dispute. Cates Construction eventually entered into subcontracts with K.T.E. to do the electrical

work on both sites. Prior to the start of construction on the first contract, the dormitory project at

Pope AFB, K.T.E. expressed concern that the scope of the project and its distance from K.T.E.’s

headquarters would extend the company beyond its financial means. To appease K.T.E.’s concern,

Cates Construction amended its standard contract to include that “Cates Construction to be [sic]

responsible for handling all monies, paying all invoices incurred under the sub-contract including

payroll for KTE. Payroll to be payed [sic] weekly. . . . KTE is responsible for submittals and submit

[sic] them in a timely fashion.”

       With this agreement in place, K.T.E. began the electrical work on the dormitories at Pope

AFB (“Pope AFB project”) sometime in February or March 1999. The parties worked out a process

in which K.T.E. would submit monthly invoices to Cates Construction for the contributions due the

employee benefit plans for the work done during the month, i.e., the payments K.T.E. owed the

plaintiffs. Cates Construction would then pay the invoice amount to K.T.E., which would pass the

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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

sum on to a collection trust account, which, in turn, would distribute the funds among the plaintiffs

in this case.

        Apparently pleased with the arrangement at Pope AFB, Cates Construction awarded a similar

subcontract to K.T.E. to provide electrical construction services on its projects at Ft. Campbell.

Work commenced on these projects in October 1999. The parties engaged in the same behavior

concerning benefits payments as they did at Pope AFB, the only difference being that K.T.E.’s

eventual payments went to a different collection account trust.

        Problems began in December 1999 when K.T.E. did not send a payment to cover the

employee benefits from that month’s labor at the Pope AFB Project. The collection account trust

did not receive any further payments from K.T.E. until July 2000. During this period, the

relationship between Cates Construction and K.T.E. drastically changed. Joe Kelley, Vice-President

of K.T.E., and Mr. Cates first discussed the missing payments in early April 2000. By May 3, 2000,

the conversation had shifted to K.T.E.’s general financial problems and the prospect of selling

K.T.E. to Cates Construction. Soon after the May 3rd meeting, the two companies entered into a

closer arrangement.     K.T.E. closed its previous office and operated solely out of Cates

Construction’s offices. K.T.E. closed its checking account, only to open a new account at the bank

used by Cates Construction. Mr. Cates listed himself as the President of K.T.E. for this account and,

at least initially, he was the account’s sole signatory. At all times, the checks for this account were

in the hands of Cates Construction employees or Mr. Cates himself. Though Cates Construction

never bought K.T.E., the district court concluded that Cates Construction and its owner took

financial control of the company following the May 3, 2001 meeting.

                                                 -4-
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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

       Despite this change in control, the collection account trust was still not receiving payments

from K.T.E. The company did not make payments it owed for the work done on the Pope AFB

Project for the period from December 1999–February 2000 until sometime in July 2000. K.T.E.

never made payments for the work done from March–August 2000. According to the district court,

these payments, with interest, come to $145,256.68. Similar problems arose concerning the Ft.

Campbell Projects; K.T.E. failed to send payments for September and October 2000. The district

court calculated that these payments, with interest, totaled $42,911.20.

       While the plaintiffs were not receiving payments, the evidence suggests Mr. Cates was

redirecting funds out of K.T.E. to another company, U.S. Rental, a wholly owned subsidiary of Cates

Construction. Mr. Cates sent $34,000 to U.S. Rental without any invoice explaining the cause for

the payment. Cates Construction eventually closed the K.T.E. checking account, transferring the

balance to U.S. Rental.

                                                 B

       The present case began when some of the current plaintiffs sued Donna and Joe Kelley in

May 2000 for the failure to make payments for the work done on the Pope AFB project, alleging that

the Kelleys’ conduct violated the Employee Retirement Income Security Act of 1974 (“ERISA”),

29 U.S.C. §§ 1001–1461, specifically 29 U.S.C. § 1145.1 Because the Kelleys had not responded

to the complaint, the plaintiffs secured a default judgment and a “temporary injunction” against them

in August 2000. The temporary injunction called for the Kelleys to pay already-due contributions

       1
        In January 2002, the plaintiffs amended their complaint to include K.T.E. as a party.

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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

for work done on the Pope AFB projects and to pay future payments as they arose. Donna and Joe

Kelley finally answered the complaint in March 2001. At that time, they also filed a third-party

complaint against Cates Construction seeking the contractual remedy of indemnification. The next

month, Cates Construction filed an answer and a cross-claim against the Kelleys and K.T.E. for

breach of contract.

       In March 2001, various plaintiffs began two other suits against Cates Construction, the

Kelleys, and Heritage Mutual by filing complaints alleging that these parties were liable for missing

payments under the Miller Act, 40 U.S.C. §§ 3131-3133 (formerly 40 U.S.C. §§270a-270d). The

first suit concerned the payments owed for work done on the Ft. Campbell project. The second,

which was originally filed in the Eastern District of North Carolina, dealt with the missing payments

for work done at the Pope AFB project. An additional suit was filed on February 14, 2002, alleging

that Mr. Cates was personally liable for breach of his fiduciary obligations under ERISA for the

missing payments at the Pope AFB project.

       One day later, on February 15, 2002, plaintiffs moved to consolidate these four cases. In

November of that year, after the close of discovery, the plaintiffs, Kelleys, and K.T.E. reached a

settlement, disposing of all claims made against the Kelleys or K.T.E. by the plaintiffs. A few days

later, Mr. Cates, Cates Construction, and Heritage Mutual all moved for summary judgment, as did

the plaintiffs. The district court denied the motions.

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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

       In preparation for trial, the parties filed a pre-trial order. The plaintiffs and K.T.E. made

clear that the contents of the order supplanted the pleadings.2 They alleged that Cates Construction

was in contempt under the “temporary injunction” because Cates and K.T.E. acted as joint

employers during the period (March–August 2000) in which K.T.E. was delinquent in sending

payments concerning the Pope AFB Project. Plaintiffs continued to assert Miller Act liability

against Cates Construction and Heritage Mutual for K.T.E.’s lack of payments on the Pope AFB

project and the Fort Campbell projects.

       Following a five-day bench trial, plaintiffs were awarded what can only be described as a

clean sweep. The district court found Cates Construction in contempt of the “temporary injunction”

originally issued against K.T.E. The district court also found that, under the Miller Act, Plaintiffs

could recover from Cates Construction and Heritage Mutual the totals of K.T.E.’s delinquent

payments from both the Pope AFB project and the Fort Campbell projects. Additionally, the district

court held that Mr. Cates was liable as a fiduciary under ERISA. Finally, as to the breach of contract

and indemnity claims between Cates Construction and K.T.E., the district court dismissed them as

barred by the arbitration clause in the contracts between those two parties. Mr. Cates, Cates

Construction, and Heritage Mutual have timely appealed.

                                                 II

       2
        The order makes equally clear that Mr. Cates, Cates Construction, and Heritage Mutual did
not agree. Ibid.

                                                -7-
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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

        The district court found the appellants (or some subset thereof) liable for violations of the

Miller Act, contempt of an injunction, and failure to act as a fiduciary under ERISA. As appellants

challenge all three theories of liability before this court, our analysis is divided accordingly.

                                                   A

        The Miller Act requires general contractors on federal construction sites to post payment

bonds. United States ex rel. Interstate Mech. Contractors, Inc. v. Int’l Fid. Ins. Co., 200 F.3d 456,

459 (6th Cir. 2000). These bonds allow individuals supplying labor or materials to a construction

project to seek redress without filing a lien on the government facility. See ibid. The Miller Act

also allows a party whose exclusive dealings have been with a subcontractor to seek compensation

from the general contractor’s bond, so long as proper notice is provided. J.D. Fields & Co. v.

Gottfried Corp., 272 F.3d 692, 696 (5th Cir. 2001); see 40 U.S.C. §3133(b)(2) (“A person having

a direct contractual relationship with a subcontractor but no contractual relationship, express or

implied, with the contractor furnishing the payment bond may bring a civil action on the payment

bond on giving written notice to the contractor . . . .”). This right is not limited to individual

laborers; the Supreme Court has found that employee welfare and trust funds can qualify to seek

payment under the bond. See United States ex rel. Sherman v. Carter, 353 U.S. 210, 219-20 (1957)

(allowing trustees of benefit fund to seek relief under the Miller Act); United States ex rel. Int’l Bhd.

of Elec. Workers, Local Union 692 v. Hartford Fire Ins., 809 F. Supp. 523, 525-26 (E.D. Mich.

1992) (applying Carter in post-ERISA context).

        However, a party seeking to collect from the general contractor’s bond must provide notice.

The Seventh Circuit has summarized the requirements as “(1) notice must be given within 90 days

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Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

of the sub-subcontractor’s last work; (2) the notice must ‘stat[e] with substantial accuracy the

amount claimed’; and (3) the notice must include ‘the name of the party to whom the material was

furnished or supplied or for whom the labor was done or performed.’” United States ex rel. S & G

Excavating, Inc. v. Seaboard Surety Co., 236 F.3d 883, 884 (7th Cir. 2001) (alteration in original)

(quoting former 40 U.S.C. § 270b(a), now § 3133(b)). On appeal, Cates Construction and Heritage

offer two challenges to the district court’s conclusion that Cates Construction had sufficient notice

of the delinquent payments: the first concerns whether the district court appropriately denied their

motion for summary judgement; the second is the district court’s factual conclusion after trial that

these defendants had notice of the amount claimed to be owed for the Pope AFB and Ft. Campbell

projects.

       It is a well-established rule in our court that “[a] party may not create a factual issue by filing

an affidavit, after a motion for summary judgment has been made, which contradicts her earlier

deposition testimony.” Reid v. Sears, Roebuck & Co., 790 F.2d 453, 460 (6th Cir. 1986) (citing

Biechele v. Cedar Point, Inc., 747 F.2d 209, 215 (6th Cir. 1984)); accord In re Best, 109 F. App’x

1, 10 (6th Cir. 2004). Appellants point to a supplemental affidavit filed by Joe Kelley that discussed

how his company, K.T.E., informed Cates Construction that payments had to be made on the two

construction projects. However, this affidavit, which is consistent with Joe Kelley’s deposition

testimony, does not contradict previous affidavits filed by Joe Kelley.

       In his first affidavits that were filed with plaintiffs’ motion for summary judgment, Joe

Kelley averred that he provided notice, in the form of numerous invoices, to Cates Construction

about delinquent payments. In his deposition, which was held after motions for summary judgment

                                                  -9-
No. 03-6431
Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

had been filed by both sides, opposing counsel elicited testimony that Joe Kelley did not personally

deliver any invoices to Cates Construction. During that questioning, it became clear that the

invoices were sent by one of Joe Kelley’s employees. In a supplemental affidavit, Joe Kelley

reiterated that it was one of his employees that sent the invoices. Assuming the rule in Reid applies

with equal force to affidavits concerning statements made in previous affidavits, we cannot conclude

that the rule would apply here. The critical issue is whether Joe Kelley’s deposition and

supplemental affidavit testimony contradicted his initial affidavits. Reid, 790 F.2d at 460; Biechele,
747 F.2d at 215. Joe Kelley’s subsequent statements only clarify or elaborate on how he and his

company provided notice to Cates Construction. Only in the strictest of logical senses can it be said

that an employee delivering the invoices contradicts the notion that he, as the vice-president of the

company, provided notice to Cates Construction.           Therefore, nothing about Joe Kelley’s

supplemental affidavit makes improper the district court’s denial of appellants’ motion for summary

judgment.

       This leads us to appellants’ second allegation of error concerning liability under the Miller

Act. Appellants argue that the district court erred in calculating the total amount of damages due

to plaintiffs because Cates Construction and Heritage Mutual can only be held liable for delinquent

payments for work done on K.T.E.’s Pope AFB project and Ft. Campbell projects. They posit that

such an amount is impossible to ascertain. The district court clearly disagreed and determined the

amount of money owed for the Pope AFB project and the Ft. Campbell projects. Appellants

therefore present an error of fact, which we review for clear error. Under the “clearly erroneous”

standard, we reverse the district court only when we are “‘left with the definite and firm conviction

                                                - 10 -
No. 03-6431
Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

that a mistake has been committed.’” Bank of Lexington & Trust Co. v. Vining Sparks Sec., Inc., 959
F.2d 606, 609 (6th Cir. 1992) (quoting Anderson v. City of Bessemer City, 470 U.S. 564, 573

(1985)).

       Upon review of the record, we are left with no such conviction. Appellants rely on K.T.E.’s

monthly payroll reports, which were sent to plaintiffs and reveal only the total number of hours

worked by an employee and do not distinguish between work done on Cates Construction projects

and work done on other projects. This document is not enough to create a firm conviction that the

district court made a factual error because, in part, an employee could have only been assigned to

one site for the period in question. Moreover, other evidence shows that Cates Construction was

given notice about the amounts owed. Cates Construction’s accounts payable register listed the

exact amounts due to plaintiffs for work done on the Pope AFB project. K.T.E. also submitted

invoices stating the amounts due for work done at Pope AFB. Mr. Cates himself testified that his

company received bills from K.T.E. concerning the work done for the two projects. He further

testified that the bills differentiated one project from another, were reviewed by a Cates Construction

project manager, and then approved by him. Though the record before us does not contain

documents showing the exact amounts owed for the Ft. Campbell projects, there is no evidence

directly suggesting that the amount of work done at Ft. Campbell is unascertainable. Given that

such reports are in the record for the other project and Mr. Cates testified that he received bills for

both, we cannot say that we have a “definite and firm conviction” that the district court erred in

ascertaining the amount owed for the Ft. Campbell projects. For these reasons, appellants have

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No. 03-6431
Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

shown no grounds for reversing the district court’s conclusion that they are liable under the Miller

Act.

                                                    B

        The district court also held Mr. Cates and Cates Construction in contempt of the “temporary

injunction” it entered against K.T.E. On the eve of trial, the district court issued a pre-trial order that

set out the various parties’ theories of liability and defenses. In that order, plaintiffs and K.T.E.

refined their theories of liability and agreed that the order supplanted their pleadings. Of particular

relevance to this appeal, plaintiffs alleged that, during the relevant period, Cates Construction and

K.T.E. were operating as joint employers.           As a joint employer, plaintiffs claimed, Cates

Construction should also be held in contempt for violations of the “temporary injunction” for failure

to make benefits contributions for work done at Pope AFB. Appellants now argue that the district

court erred in allowing plaintiffs to alter their theory.

        Mr. Cates and Cates Construction erroneously assert that a party must file a motion for leave

of the court to amend its pleadings. However, Federal Rule of Civil Procedure 15(a), its sole

authority for this argument, “does not set forth any specific procedure for obtaining leave to amend.”

6 Charles Alan Wright, Arthur Miller, & Mary Kay Kane, Federal Practice & Procedure § 1485 (2d

ed. 1990). This failure to require a specific procedure is consistent with Rule 15(a)’s admonition

that “leave to amend a pleading ‘shall be freely given when justice so requires.’” R.S.W.W., Inc. v.

City of Keego Harbor, 397 F.3d 427, 440 (6th Cir. 2005) (quoting Fed. R. Civ. P. 15(a)). While

leave to amend is usually sought via a motion, it may also be requested in open court. Wright,

Miller & Kane, supra, § 1485; see also PR Diamonds v. Chandler, 364 F.3d 671, 699 (6th Cir. 2004)

                                                  - 12 -
No. 03-6431
Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

(discussing district court’s requirement based on local rules that motion for leave to amend be done

by motion). The key concern is whether the opposing party is given notice and, therefore also, the

opportunity to voice any objections. See Wright, Miller & Kane, supra, § 1485 (noting courts have

found oral notice sufficient in such circumstances). Appellants were given the opportunity to state

their objections to the amendments, and they did so. While this court has twice held that district

courts did not abuse their discretion in denying requests for leave to amend made only in responses

to motions to dismiss, PR Diamonds, 364 F.3d at 698-99; Begala v. PNC Bank, Ohio, Nat’l Ass’n,

214 F.3d 776, 783-84 (6th Cir. 2000)), cert. denied 531 U.S. 1145 (2001), the present context is

clearly different. The district court did not err in allowing plaintiffs to supplement their pleadings

via the pre-trial order.

        Cates Construction and Mr. Cates further allege that, even if plaintiffs could request leave

to amend without filing a motion, the district court abused its discretion in granting plaintiffs’

request. While this court is more regularly called on to review a district court’s denial of leave to

amend, e.g., Inge v. Rock Fin. Corp., 388 F.3d 930, 937 (6th Cir. 2004), we also review a district

court’s decision to grant leave to amend for abuse of discretion. Vanderbilt Univ. v. DiNardo, 174
F.3d 751, 758 n.3 (6th Cir. 1999); accord Sec. Ins. Co. of Hartford v. Kevin Tucker & Assocs., Inc.,

64 F.3d 1001, 1008 (6th Cir. 1995). “Rule 15 reinforces the principle that cases should be tried on

their merits rather than the technicalities of pleadings, and therefore assumes a liberal policy of

permitting amendments.” Inge, 388 F.3d at 937 (quotation marks, citations, and alterations omitted).

Accordingly, this court has previously cautioned that “[d]elay by itself is not sufficient reason to

deny a motion to amend. Notice and substantial prejudice to the opposing party are critical factors

                                                - 13 -
No. 03-6431
Southern Elec. Health Fund, et al v. Heritage Mut. Life Ins., et al

in determining whether an amendment should be granted.” Wade v. Knoxville Utils. Bd., 259 F.3d
452, 458-59 (6th Cir. 2001) (alteration and emphasis added).

        Thus, our inquiry cannot be limited to only the extent of plaintiffs’ delay, but rather also

must examine the prejudice that delay caused Cates Construction. Much of this case centers on the

relationship between Mr. Cates, Cates Construction, and K.T.E. That relationship was the basis of

the complaint extending ERISA fiduciary liability to Mr. Cates.3 It was also the basis for the

arguments advanced in K.T.E.’s answer and third-party complaint in the original action in which

the injunction was issued. Neither Cates Construction nor Mr. Cates could seriously contend that

the relationship between them and K.T.E. was not a core subject of litigation. In fact, that

relationship was the subject of extensive discovery. Cf. id. at 459 (finding prejudice when plaintiff

requested leave to amend that would have added new theories of liability requiring retaking of

depositions and new, additional discovery). Because Cates Construction was not prejudiced by the

plaintiffs’ request for leave to amend, we hold that the district court did not abuse its discretion in

granting that request.

        Mr. Cates and Cates Construction properly raise one other objection to holding them liable

for contempt.4 They argue that they could not be held in contempt because they did not know the

amounts K.T.E. owed for the Pope AFB project, which are the only contributions subject to the

injunction. As discussed in part II.A, supra, however, the exact amounts due for K.T.E.’s work on

        3
        That complaint was for the last case filed in the district court before the cases were
consolidated.
        4
         As will be discussed in part III, infra, appellants raise several issues for the first time before
this court. Some of these new issues relate to the “temporary injunction” issued by the district court.

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the Pope AFB are found in Cates Construction’s accounts payable register. Thus, appellants have

shown no error in the district court’s decision to hold them in contempt of the injunction.

                                                  C

       Appellants also argue that the district court erred in finding that Cates Construction and

K.T.E. were joint employers. While plaintiffs asserted that the two companies were joint employers

in arguing that Cates Construction could be held in contempt of the injunction, the district court only

relied on a finding of joint-employer status in finding Mr. Cates personally liable as an ERISA

fiduciary. We review the district court’s conclusion for clear error. See Int’l Longshoremen’s Ass’n,

Local Union No. 1937 v. Norfolk S. Corp., 927 F.2d 900, 902-03 (6th Cir.) (noting that whether two

companies are acting as a joint employer is a factual issue and, ultimately, concluding that the

district court’s determination was clearly erroneous), cert. denied, 502 U.S. 804 (1991); see also

Boire v. Greyhound Corp., 376 U.S. 473, 481 (1964) (question of status as joint employer is

“essentially a factual issue”). Under this standard, reversal of the district court is inappropriate

unless we have “‘a definite and firm conviction that a mistake has been committed.’” Bank of

Lexington & Trust, 959 F.2d at 609 (quoting Anderson, 470 U.S. at 573 (1985) (internal citations

omitted)).

       The factors to be considered in a determination of joint employer status are “the interrelation

of operations between the companies, common management, centralized control of labor relations,

and common ownership.” Int’l Longshoremen’s Assn., 927 F.2d 900 at 902; see also Mich. State

Painter’s Ins. Fund v. Ron Simmons Painting, Inc., 875 F. Supp. 417, 421 (E.D. Mich. 1995)

(applying standard to ERISA context). While Mr. Cates never owned both K.T.E. and Cates

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Construction, he exercised full financial control over K.T.E. during the relevant period. The two

companies worked closely together; they shared office space and K.T.E. was working extensively

on Cates Construction projects. Moreover, the only labor relations that occurred during the period

relevant to this dispute were payments to unionized employees and their pension funds. These

payments were made (or not made) at the direction of Mr. Cates. On these facts, we cannot

conclude that the district court clearly erred in concluding that Cates Construction and K.T.E. were

joint employers during the relevant period. Thus, appellants have not given us reason to disturb the

district court’s holding concerning Mr. Cates’s personal liability as an ERISA fiduciary.

                                                 III

       Appellants raise a number of other issues. They assert that various imperfections in the

district court’s “temporary injunction” render it invalid and, therefore, that they cannot be bound by

it. Specifically, they assign error to the district court’s apparent failure to consider whether or not

plaintiffs should have to post a security bond for the injunction. Moltan Co. v. Eagle-Picher Indus.,

Inc., 55 F.3d 1171, 1176 (6th Cir. 1995); Roth v. Bank of the Commonwealth, 583 F.2d 527, 539

(6th Cir. 1978), cert granted, 440 U.S. 944, and cert. dismissed, 442 U.S. 925 (1979). They also

claim that the “temporary injunction” should be construed as a temporary restraining order and not

as a preliminary injunction. In addition, Cates Construction assigns error to the district court’s

dismissal of its breach of contract claims against K.T.E. on the basis of the contract’s arbitration

clause. Cates Construction argues that K.T.E. waived its right to assert arbitration by unfairly

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delaying assertion of that right. Gen. Star Nat’l Ins. Co. v. Administratia Asigurarilor de Stat, 289
F.3d 434, 438 (6th Cir. 2002).

       However, our review of the record below indicates that these issues were never raised before

the district court. “This court has repeatedly held that it ‘will not consider arguments raised for the

first time on appeal unless our failure to consider the issue will result in a plain miscarriage of

justice.’” United States v. Ninety-Three Firearms, 330 F.3d 414, 424 (6th Cir. 2003) (quoting In re

Hood, 319 F.3d 755, 760 (6th Cir. 2003)). Consistent with that principle, we do not pass on the

merits of these errors other than to demonstrate that our refusal to consider them does not result in

a miscarriage of justice. Potential procedural errors in the creation of the injunction do not make

it a plain miscarriage of justice to hold parties, who otherwise would be in contempt of the

injunction, liable for such behavior. In addition, it was not a plain miscarriage of justice to dismiss

for lack of jurisdiction Cates Construction’s breach of contract claims against K.T.E. because the

company can institute arbitration proceedings concerning these claims should it wish to do so.

       Thus, having found no merit in any of appellant’s assignments of error, we affirm the

judgment of the district court.

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