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Bugher v. Feightner

decided: December 19, 1983.

FORREST BUGHER, ET AL., PLAINTIFFS-APPELLEES,
v.
JACK FEIGHTNER D/B/A FEIGHTNER EXCAVATING COMPANY, DEFENDANT-APPELLANT



Appeal from the United States District Court for the Southern District of Indiana, Indianapolis Division. No. IP 75-523-C -- William E. Steckler, Judge.

Bauer and Wood, Circuit Judges, and Campbell, Senior District Judge.*fn* Bauer, Circuit Judge, concurs in Judge Campbell's majority opinion and also in Judge Wood's concurrence. Wood, Jr., Circuit Judge, concurring.

Author: Campbell

CAMPBELL, Senior District Judge.

This is an appeal brought by defendant Jack Feightner, d/b/a Feightner Excavating Company, from a judgment entered after a nonjury trial. Plaintiffs, the trustees of certain union trust funds, brought this action seeking delinquent contributions allegedly due as the result of a collective bargaining agreement between the defendant and the union. Feightner denied liability, claiming at trial that the multi-employer collective bargaining association which had purportedly signed on his behalf did not have authority to bind him. Feightner also made a timely demand for jury trial, however the district court granted the plaintiffs' motion to strike that demand. A bench trial was held and the trial judge found for the plaintiffs, entering a judgment against the defendant for the delinquent contributions, attorneys' fees, audit fees, costs, and a surcharge. Feightner brings this appeal contending that under the facts of this case he was not bound to the collective bargaining agreement, and that the district court erred in striking his demand for a jury trial.

Plaintiffs' complaint alleged that their claim arose under 29 U.S.C. § 1132, the civil enforcement provision of the Employee Retirement Income Security Act (hereafter "ERISA"), and 29 U.S.C. § 185(a) of the Labor-Management Relations Act. While seeking monetary relief the complaint only requested equitable remedies, i.e., an accounting and a grant of specific performance. Contemporaneously with the filing of his answer, the appellant demanded a jury trial. Prior to trial the appellees filed a Motion to Strike Defendant's Jury Demand and the issue was briefed for the court. The district judge granted the motion noting that plaintiffs had only requested equitable relief and that 29 U.S.C. § 1132(a)(3) only authorized that type of remedy. Feightner has appealed that ruling, noting that under Dairy Queen, Inc. v. Wood, 369 U.S. 469, 8 L. Ed. 2d 44, 82 S. Ct. 894 (1962) the form of remedy requested in the complaint does not control the characterization of the action as legal or equitable for purposes of the Seventh Amendment. Appellant argues that the complaint alleged, in essence, a breach of contract, a claim traditionally enforced in an action at law and thus triable to a jury under the Seventh Amendment. For the reasons stated below, we agree with the appellant.

The claim asserted in the complaint arises solely under federal statutes. The Supreme Court stated in Curtis v. Loether, 415 U.S. 189, 39 L. Ed. 2d 260, 94 S. Ct. 1005 (1974):

The Seventh Amendment does apply to actions enforcing statutory rights, and requires a jury trial upon demand, if the statute creates legal rights and remedies, enforceable in an action for damages in the ordinary courts of law. 415 U.S. at 194.

In analyzing the nature of the rights created by the statutes in issue we must first look to legislative intent and if that is not decisive we must determine whether rights and remedies of that type were traditionally enforced in an action at law or in equity, see Pernell v. Southall Realty, 416 U.S. 363, 375, 40 L. Ed. 2d 198, 94 S. Ct. 1723 (1974).

The Labor-Management Relations Act was enacted in 1947 and was designed to permit the federal courts to create a federal common law of labor contracts, see Textile Workers Union of America v. Lincoln Mills, 353 U.S. 448, 1 L. Ed. 2d 972, 77 S. Ct. 912 (1957). The statute is silent on the issue of the right to jury trial and the legislative history is similarly unenlightening. As a result, the Seventh Amendment issue has generally been resolved on a case-by-case basis through an analysis of the rights and remedies being asserted, see e.g. Minnis v. International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, 531 F.2d 850 (8th Cir.1975) (jury trial in employee action claiming breach of union's duty of fair representation); Nedd v. United Mine Workers of America, 556 F.2d 190 (3d Cir.1977), cert. den. 434 U.S. 1013, 54 L. Ed. 2d 757, 98 S. Ct. 727 (1978) (no jury trial in action by employee-beneficiaries to compel union to collect royalties for pension fund); Cox v. C.H. Masland & Sons, Inc., 607 F.2d 138 (5th Cir.1979) (jury trial in employee's action claiming breach of collective bargaining agreement by employer and breach of duty of fair representation by union).

The status of pensions within the statutory labor scheme was initially defined in Inland Steel Co. v. N.L.R.B., 170 F.2d 247 (7th Cir.1948), cert. den. 336 U.S. 960, 93 L. Ed. 1112, 69 S. Ct. 887 (1949). In that case the court concluded that pensions were a "condition of employment" within the meaning of 29 U.S.C. § 158(a)(5) and thus were mandatory subjects of the collective bargaining process. Thereafter, 29 U.S.C. § 185(a) became the jurisdictional and substantive basis for suits brought by plan trustees and unions to collect delinquent contributions for pension funds, see Lewis v. Benedict Coal Corp., 361 U.S. 459, 4 L. Ed. 2d 442, 80 S. Ct. 489 (1960); Lewis v. Mill Ridge Coals, Inc., 298 F.2d 552 (6th Cir. 1962); Calhoun v. Bernard, 333 F.2d 739 (9th Cir.1964); Huge v. Long's Hauling Co., Inc., 590 F.2d 457 (3rd Cir.1978), cert. den. 442 U.S. 918, 61 L. Ed. 2d 285, 99 S. Ct. 2840 (1979); see also Alvares v. Erickson, 514 F.2d 156, 162-163 fn. 3 (9th Cir.1975). Under those cases the plan trustees are considered to be third party beneficiaries of the collective bargaining agreement between the union and the employer. In that capacity, the trustees can bring an action seeking damages for breach of contract, subject to the defenses of nonperforming promisors recognized at common law, see Kaiser Steel Corp. v. Mullins, 455 U.S. 72 n. 8, 102 S. Ct. 851, 859, 70 L. Ed. 2d 833 (1982). A suit for breach of contract seeking damages was traditionally an action at law and thus triable to a jury under the Seventh Amendment, Scott v. Neely, 140 U.S. 106, 110, 35 L. Ed. 358, 11 S. Ct. 712 (1891); Dairy Queen, supra, 369 U.S. at 477. Therefore, in an action brought for delinquent contributions under 29 U.S.C. § 185(a) either party can properly demand a jury trial.*fn1 Our analysis cannot end here, however, for we must also determine whether ERISA altered the trustees' rights under 29 U.S.C. § 185(a).

In 1974 Congress enacted ERISA which expanded the scope of remedies available to participants, beneficiaries, and fiduciaries of union pension plans. With regard to fiduciaries, the civil enforcement statute provides:

(a) A civil action may be brought --

(2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title [relating to breaches of fiduciary duty];

(3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any ...


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