Brown-Graves Co v. Central States ( 2000 )

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: