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Board of Trustees v. Caddo Sheet Metal, LLC

United States District Court, E.D. Virginia, Alexandria Division

June 30, 2015

BOARD OF TRUSTEES, SHEET M WORKERS' NATIONAL PENSION FUND, Plaintiff,
v.
CADDO SHEET METAL, LLC, Defendant.

MEMORANDUM OPINION

LIAM O'GRADY, District Judge.

This matter comes before the Court on cross motions for summary judgment by Plaintiff Board of Trustees, Sheet M Workers' National Pension Fund ("the Fund") (Dkt. No. 34) and Defendant Caddo Sheet Metal, LLC ("Caddo"). Dkt. No. 31. The motions have been fully briefed by the parties. On June 12, 2015, the Court heard oral argument and took the matter under advisement. For the reasons set forth below, Plaintiff's motion will be denied and Defendant's motion will be granted.

I. Background

This controversy arises out of a collective bargaining agreement ("CBA") between Defendant Caddo, a small sheet m construction business, and the local sheet m workers' union in Shreveport, Louisiana. Caddo is owned and operated by Shane Cates and Casey Melton, former sheet m workers who had been dues-paying members of the Sheet M Workers' International Association. The Fund is comprised of individual trustees who are fiduciaries with respect to the Sheet M Workers' National Pension Fund.

On or prior to July 1, 2010, Melton executed the CBA on behalf of Caddo, and Donald LaCroix executed it on behalf of the local sheet m workers' union, Local Union No. 361. Pursuant to Article XVI of the CBA, the CBA term began on July 1, 2010 and expired on June 30, 2013. The CBA required Caddo to pay monthly contributions to the Fund based on the amount of hours that its employees worked, among other obligations. The CBA also incorporated the Fund's Trust Document. The Trust Document contains a provision entitled "Exit Contribution and Surcharges, " which states as follows:

The Trustees [of the Fund] may, in their sole and absolute discretion, impose an "Exit Contribution" (as determined below) on any Employer who has a "Triggering Event" on or after January 1, 2003.... Each Employer agrees to pay an Exit Contribution by continuing to contribute, or continuing to be obligated to contribute, to the Fund on or after January 1, 2003.... A "Triggering Event" occurs when an Employer's Contribution Rate significantly declines (as determined by the Trustees) or the Employer ceases to have an obligation to contribute to the Fund on some or all of its Employees, but is not required to pay any withdrawal liability under Title IV of ERISA as a result thereof.

Def.'s Mem. Supp. Summ. J. ("Def.'s SJ Mot."), Ex. E ("Trust Doc."), Article V, Section 6. According to Caddo, the Trust Document was not provided to Melton or any Caddo representative prior to Caddo's execution of the CBA. The Fund maintains that the Trust Document has been posted on its website at all relevant times, including during the negotiations leading up to the CBA's execution.

On or about December 28, 2012, pursuant to its obligation under Article XVI of the CBA, Caddo mailed a notice to the Fund of its non-renewal of the CBA. The CBA then terminated by its terms on June 30, 2013. Sometime thereafter, the Fund concluded that "on or about July 1, 2013, " Caddo effected a "complete withdrawal" from the Fund. It therefore determined that a "Triggering Event" under the Fund's Trust Document had occurred and assessed Caddo an exit contribution in the amount of $70, 413.92. On February 21, 2014, the Fund sent Caddo a letter notifying it of this assessment. According to Caddo, this was the first time the Trust Document had been "brought to its attention." Def.'s Opp'n, Ex. B, Second Melton Decl. ¶ 21. To date, Caddo has not paid the exit contribution and on July 9, 2014, the Fund filed the instant suit in this Court. Dkt. No. 1.

II. Legal Standard

Because this matter comes before the Court on cross-motions for summary judgment, the Court must "review each motion separately on its own merits" and ensure that it "resolve[s] all factual disputes and any competing, rational inferences in the light most favorable to the party opposing that motion." Rossignol v. Voorhaar, 316 F.3d 516, 523 (4th Cir. 2003) (citations and internal quotation marks omitted). "One of the principle purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses." Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986). Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). As the Supreme Court has explained, "this standard provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986) (emphasis in original). A dispute over an issue of material fact is "genuine" if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248.

III. Analysis

The Fund and Caddo have each moved for summary judgment on the single count of the Complaint - a claim under sections 502(g)(2) and 515 of the Employee Retirement Income Security Act of 1974 (ERISA). Dkt. Nos. 31, 34. The Court finds that resolution of the motions turns on whether Caddo's obligation to pay the exit contribution survived the expiration of the CBA.

To determine whether the exit contribution provision survived the expiration of the CBA, the Court must interpret the CBA "according to ordinary principles of contract law, at least when those principles are not inconsistent with federal labor policy."[1] M & G Polymers USA, LLC v. Tackett, 135 S.Ct. 926, 933 (2015). Relevant here, a "traditional principle" of contract interpretation is that "contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement." Id. at 937 (quoting Litton Fin. Printing Div., a Div. of Litton Bus. Sys., Inc. v. NLRB, 501 U.S. 190, 207 (1991)) (internal quotation marks omitted). This principle, however, "does not preclude the conclusion that the parties intended" certain rights to survive the expiration of the agreement. Id. Both the Fourth Circuit and the Supreme Court have recognized that such an agreement may reflect the parties' "clear intention" or "provid[e] in explicit terms that certain [provisions] continue after the agreement's expiration." Id. (quoting Litton, 501 U.S. at 207); Dewhurst v. Century Aluminum Co., 649 F.3d 287, 292 (4th Cir. 2011) ("Employer obligations and employee rights, under a collective bargaining agreement, do not survive the expiration of the agreement absent a clear intention of the parties." (citation and internal quotation marks omitted)).

First, the Court must look to the contract's language, which if "clear and unambiguous, its meaning is to be ascertained in accordance with its plainly expressed intent." M & G Polymers, 135 S.Ct. at 933 (quoting 11 R. Lord, Williston on Contracts § 30:6, p. 108 (4th ed. 2012) (Williston)); accord Keffer v. H.K. Porter Co., 872 F.2d 60, 62 (4th Cir. 1989) ("[A]s with any contract interpretation, we begin by looking at the language of the agreement for any clear manifestation of the parties' intent."). In this endeavor, the Fourth Circuit has instructed courts to construe contracts as a whole "so that if possible, or so far as possible, they may all harmonize." Potenciano L. Aggarao, Jr. v. MOL Ship Mgmt. Co. Ltd., 675 F.3d 355, 368 (4th Cir. 2012) (citation and internal quotation marks omitted); cf. M & G Polymers, 135 S.Ct. 926, 937-38 (Ginsburg, J., concurring) ("To determine what the contracting parties intended, a court must examine the entire agreement in light of relevant industry-specific customs, practices, usages, and terminology.'" (quoting 11 Williston § 30:4, at 55-58)). "When the intent of the parties is unambiguously expressed in the contract, that expression controls, and the court's inquiry should proceed no further. But when the contract is ambiguous, a ...


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