               NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 09a0792n.06

                                       Case No. 08-1574                                FILED
                                                                                   Dec 16, 2009
                         UNITED STATES COURT OF APPEALS                       LEONARD GREEN, Clerk
                              FOR THE SIXTH CIRCUIT

 LABORERS’ PENSION TRUST FUND -                     )
 DETROIT AND VICINITY, Trustees of;                 )
 LABORERS’ AND POURED CONCRETE                      )
 WORKERS’ INSURANCE FUND, Trustees                  )      ON APPEAL FROM THE
 of; LABORERS’ AND POURED                           )      UNITED STATES DISTRICT
 CONCRETE WORKERS’ INDUSTRY                         )      COURT FOR THE EASTERN
 STEWARD FUND, Trustees of;                         )      DISTRICT OF MICHIGAN
 LABORERS’ ANNUITY FUND - DETROIT                   )
 AND VICINITY, Trustees of; MICHIGAN                )
 LABORERS’ TRAINING FUND, Trustees                  )
 of; LABORERS’ VACATION AND                         )
 HOLIDAY TRUST FUND - DETROIT AND                   )
 VICINITY, Trustees of,                             )
                                                    )
        Plaintiffs-Appellees,                       )
                                                    )
                v.                                  )
                                                    )
 ROCWALL COMPANY,                                   )
                                                    )
        Defendant-Appellant.                        )
                                                    )
 _______________________________________            )
                                                    )
                                                    )

BEFORE: BATCHELDER, Chief Judge; BOGGS and COOK, Circuit Judges.

       ALICE M. BATCHELDER, Chief Judge. In this action brought under the Employment

Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(a)(3) and 1145, the trustees

of various multi-employer fringe benefits plans ( “Funds” or “Plaintiffs”) seek satisfaction from

Rocwall Company (“Rocwall” or “Defendant”) for its subcontractors’ alleged delinquent

contributions. A provision of the collective bargaining agreement (“CBA”) between Rocwall and
Locals 334 and 1076 (collectively, “the Union”) makes Rocwall surety for the contributions of its

subcontractors. Another provision of the CBA sets a 90-day time limit for the Union to make claims

of delinquent contributions. Rocwall filed for summary judgment, claiming the time limit applied

to the Funds as well as the Union. The district court held that the contractual time limit was not a

valid defense that Rocwall could assert against the Funds. We AFFIRM.

                                                 I.

       The following factual summary comes from the district court’s opinion and order denying

Rocwall’s motion for partial summary judgment.

               Plaintiffs are trustees of various multi-employer fringe benefits plans which
       are governed by the Employment Retirement Income Security Act of 1974 (ERISA),
       29 U.S.C. § 1001 et seq. Rocwall is a signatory to the collective bargaining
       agreement (CBA) that was established between the Poured Concrete Wall
       Association (the Association), of which Rocwall is a member, and Locals 334 and
       1076 (collectively known as “the Union”). The CBA required Rocwall’s
       subcontractors to make contributions to the fringe benefits funds that are sponsored
       by the Association and the Union, with Rocwall acting as a surety if, and when, those
       payments are not made. As relevant, twelve Rocwall subcontractors allegedly failed
       to make fringe benefit contributions to Plaintiffs between 2001 and 2005. On July
       17, 2006, Plaintiffs issued an audit for the period of January 2001 through September
       2005, and claimed that Rocwall owed them $256,146.85 because of the failures of
       Rocwall’s subcontractors to make fringe benefits contributions.

               On August 27, 2006, the Union filed a grievance against Rocwall seeking to
       hold it responsible for the delinquent fringe benefits contributions in question.
       Rocwall responded with a timely request for a meeting to discuss the grievance.
       During the exchange, Rocwall and the Union apparently agreed that the contributions
       were subject to Article XIV of the CBA, and that the Union had failed to comply
       with a 90-day notice provision. This apparently led the Union to dismiss its
       grievance. Plaintiffs then filed this lawsuit in May 2007 seeking the known unpaid
       indebtedness of $256,146.85, an order that Defendant submit itself to an audit to
       determine Defendant’s total indebtedness from January 2001 to the present, and
       permission to amend the award to account for the additional amounts that the audit
       would reveal, as well as costs, interest, and attorney fees.

       Rocwall filed a motion for partial summary judgment, arguing that the CBA’s 90-day time


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period for filing claims for back contributions bound the Funds as well as the Union. The district

court denied the motion on the ground that the CBA notice provision was not a valid defense that

Rocwall could assert against the Funds. Rocwall filed a motion for reconsideration, which the

district court denied. Rocwall then filed a motion to certify an interlocutory appeal, which the court

granted. We subsequently granted permission to appeal.

                                                   II.

        We review de novo the district court’s grant or denial of summary judgment. Edgar v. JAC

Prods., Inc., 443 F.3d 501, 506 (6th Cir.2006). 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).

                                                  III.

        Rocwall’s sole argument on appeal is that the district court erred in holding that Rocwall

could not raise the CBA’s notice provision as a defense against the Funds. In denying summary

judgment for Rocwall, the court noted that “there are severe limitations imposed on the availability

of contract defenses in trust fund collection cases such as this one” and held that “there are only three

defenses available to Rocwall: (1) the pension contributions are illegal, (2) the collective bargaining

agreement is void ab initio, as where there is fraud in the execution, and (3) the employees have

voted to decertify the union as their bargaining representative, thus voiding the union’s CBA.”

Because Rocwall had not asserted any of these defenses, the court denied Rocwall’s motion.

        Section 515 of ERISA provides: “Every employer who is obligated to make contributions

to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained


                                                   3
agreement shall, to the extent not inconsistent with law, make such contributions in accordance with

the terms and conditions of such plan or such agreement.” 29 U.S.C. § 1145. We have explained

that “[t]his language was added to ERISA ‘to simplify delinquency collection’ by freeing pension

and welfare funds from defenses that pertain to the unions’ conduct.” Cent. States, Se. & Sw. Areas

Pension Fund v. Behnke, Inc., 883 F.2d 454, 460 (6th Cir. 1989) (quoting Robbins v. Lynch, 836

F.2d 330, 333–34 (7th Cir. 1988)).

       If employers could raise contract defenses pertaining to the union’s conduct, then ERISA-

governed funds would have to get their money from other participating employers or else not be able

to pay all benefits due under their plans. For example, in Behnke we held that “[a] claim that the

union has promised not to collect a payment called for by the agreement is not a good answer to the

trustees’ suit . . . .” Id. Quoting the Seventh Circuit, we explained:

       Multi-employer pension and welfare plans would be in a bind if . . . flaws in the
       formation cut off third-party claims. Plans rely on documents to determine the
       income they can expect to receive, which governs their determination of levels of
       benefits. Multi-employer plans are defined-contribution in, defined-benefit out.
       Once they promise a level of benefits to employees, they must pay even if the
       contributions they expected to receive do not materialize—perhaps because
       employers go broke, perhaps because they are deadbeats, perhaps because they have
       a defense to the formation of the contract. If some employers do not pay, others must
       make up the difference in higher contributions, or the workers will receive less than
       was promised. Costs of tracking down reneging employers and litigating also come
       out of money available to pay benefits. The more complex the litigation, the more
       the plan must spend. Litigation involving conversations between employers and
       local union officials—conversations to which plans are not privy—may be especially
       costly, and hold out especially great prospects of coming away empty-handed . . . .

Id. at 460–61 (quoting Cent. States, Se. & Sw. Areas Pension Fund v. Gerber Truck Svc., Inc., 870

F.2d 1148, 1151 (7th Cir. 1989) (en banc)). Likewise, the Ninth Circuit has observed: “In

recognition of the fact that millions of workers depend upon employee benefit trust funds for their



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retirement security, Congress and the courts have acted to simplify trust fund collection actions by

restricting the availability of contract defenses, which make collection actions unnecessarily

cumbersome and costly.” Sw. Adm’rs, Inc. v. Rozay’s Transfer, 791 F.2d 769, 773 (9th Cir. 1986).

       The rationale of the cited cases is that multi-employer trust funds are entitled to rely on an

employer’s promises to make contributions to the funds, irrespective of any breach or omission by

the union. The funds often are not in a position to know what is going on between the employer and

the union, and the union may have interests that differ from or are inimical to the funds’ interests.

       Here, Rocwall does not argue that the Union is in breach, that the Union made oral promises

contrary to the CBA’s terms, or that the Union tricked it into signing the CBA. Instead, it attempts

to enforce Article XIV of the CBA, which provides in part:

       If such notice [of the subcontractors the Contractor will use] is given, or if the Union
       otherwise acquires actual knowledge that a particular subcontractor is working for
       a Contractor, the Contractor will become surety for and assume all obligations for
       that subcontractor if the subcontractor does not pay all of the wages, fringe benefits
       and other conditions called for by this Agreement so long as the Union files a
       Complaint against the Contractor within ninety (90) days of the day on which the
       wages were due but were not paid or, in respect to fringe benefit contributions, within
       ninety (90) days of the end of the month in which the contributions were due and not
       paid. . . . The obligations of this Article shall be enforced by the Union and those
       claiming by or under this Agreement solely by and under the provisions of Article X,
       Complaints.

(Emphasis added). Under this provision, once the Union has actual knowledge of Rocwall’s using

a particular subcontractor, the Union has just 90 days from the due date of the subcontractor’s

contribution to file a claim that Rocwall is responsible for making the contribution on behalf of the

subcontractor.

       Rocwall’s attempt to enforce the notice provision against the Funds raises the same types of

problems we discussed in Behnke. According to the CBA, Rocwall is to provide a list of its


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subcontractors to the Union, not to the Funds. And absent a list, the Funds usually will have no

reason to know which subcontractors Rocwall is using, and thus have no opportunity to discover

subcontractors’ delinquencies absent an audit. Rocwall’s argument thus makes the Funds dependent

on the Union’s diligence in monitoring Rocwall’s use of subcontractors, placing on the Funds the

very burden that Section 515 was meant to alleviate.

                                              IV.

       Accordingly, we AFFIRM the district court’s judgment denying partial summary judgment

to Rocwall.




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