Plaintiffs Central States, Southeast and Southwest Areas
Pension Fund, Loran W. Robbins, Marion M. Winstead, Harold J.
Yates, Robert J. Baker, Howard McDougall, Arthur H. Bunte Jr.,
Earl L. Jennings, Jr. and R.V. Pulliam ("the Fund") sued Ekco
Products, Inc. and American Home Products
Corp. ("Ekco")*fn1 for failure to make contributions
allegedly due to the Fund from February 5, 1969, to the
present.*fn2 Jurisdiction is asserted pursuant to § 301(a) of
the Labor Management Relations Act of 1947, 29 U.S.C. § 185(a)
and § 502(e)(1) of the Employee Retirement Income Security Act
of 1974 ("ERISA"), 29 U.S.C. § 1132. Presently before the Court
are the parties' cross-motions for summary judgment. For
reasons set forth below, the Fund's motion is denied, and
Ekco's motion is granted.
The Fund is a common law pension trust established pursuant
to 29 U.S.C. § 186(c)(5). From at least November 5, 1966, to
the present, Ekco has had a collective bargaining agreement
with Teamster Local No. 714 ("Union"). In the 1966-1969
collective bargaining agreement, Ekco agreed with the Union to
contribute to the Fund in lieu of the company's pension plan.
There was disagreement concerning exactly when Ekco would be
required to make contributions on behalf of new employees. The
Fund sought contributions after thirty days of employment ("the
thirty day rule"), while Ekco sought to contribute after twelve
months of service ("the one year rule"). Controversy over which
of these two rules is applicable has resurfaced and is the crux
of the present matter.
According to the Fund, Ekco was permitted to follow the one
year rule for the duration of the 1966-1969 collective
bargaining agreement, since upon Ekco's admission into the
Fund in April, 1967, the collective bargaining agreement was
not subject to reopening. But compliance with the thirty day
rule starting in 1969 was, according to the Fund, an express
condition of Ekco's admission into the Fund. An "Employer
Agreement" proposed by Ekco and executed by the parties stated
Article 9.3 of the 1966-1969 collective bargaining agreement
contained a clause which incorporated the Pension Plan between
the parties as well as Exhibit A, with the one year rule.
In a letter from the Fund to the Union and Ekco, dated April
21, 1967, Edward J. Murtha declared that
Ekco's representative in these matters, viewed the reference
in Murtha's letter to the thirty day rule as a matter that was
negotiable at the onset of negotiations for the next
collective bargaining agreement.
The 1969-1972 collective bargaining agreement did not
contain the thirty day rule. Rather, the agreement contained
a clause which declared that
[a]ll the terms and conditions of the existing
contract shall remain in full force and effect
except as modified by the attached changes and
improvements in the Agreement.
Article 9.3 of the 1969-1972 agreement was identical to
Article 9.3 in the 1966-1969 agreement. While Article 9.3
states that Exhibit A is attached to the collective bargaining
agreement, Exhibit A was not attached to the Agreement. The
parties have stipulated that Article 9.3 in the 1966-1969
collective bargaining agreement is identical to Article 9.3 in
all subsequent collective bargaining agreements, including the
In 1976, auditors discovered that Ekco had made some
contributions pursuant to the thirty day rule. A Fund auditor
granted credit to Ekco for these contributions. In 1978, the
Fund notified the Union and Ekco that Exhibit A of the
1978-1981 collective bargaining agreement, with its one year
rule, "does not comply with the policies and requirements set
forth" by the Fund. The Fund took no further action until
1980, when it ordered an audit of Ekco. In 1981, Ekco and the
Union entered into a collective bargaining agreement, which
again contained Article 9.3, with its reference to Exhibit A
and the one year rule. The Fund filed this lawsuit in December
In considering motions for summary judgment, we emphasize
that the "party moving for summary judgment has the burden of
clearly establishing the nonexistence of any genuine issue of
fact that is material to a judgment in his or her favor."
Cedillo v. International Association of Bridge & Structural
Iron Workers, Local Union No. 1, 603 F.2d 7, 10 (7th Cir.
1979); any doubts as to the existence of material issues of
fact must be resolved against the moving party. Moutoux v.
Gulling Auto Electric, Inc., 295 F.2d 573, 576 (7th Cir. 1961).
The non-moving party is entitled to all reasonable inferences
that can be made in its favor from the evidence presented,
United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct.
993, 994, 8 L.Ed.2d 176 (1962). Where cross-motions for summary
judgment are involved, courts must rule on each motion
individually, keeping in mind that whether material factual
issues exist is not dependent upon the views of the parties.
10A C. Wright, A. Miller, M. Kane, Federal Practice and
Procedure 2d (1983). The Fund argues that as a result of a
series of transactions and conduct, Ekco contractually agreed
to follow the thirty day rule, and that it breached that
contract. Ekco maintains that it never agreed to comply with
the thirty day rule, and that even if the Fund's claims are
meritorious, they are barred by a statute of limitations,
estoppel and waiver.
Waiver and Estoppel
Ekco claims that even if the Fund had the right to insist
upon adherence to the thirty day rule, it waived this right by
accepting the one year rule from 1969 to 1978, when it first
sought to enforce the thirty day rule. Prior to 1978, the sole
communication Ekco had with the Fund concerning the thirty day
rule was in the course of a 1976 audit, when a Fund auditor
allegedly disclaimed an intention to enforce the thirty day
rule. Additionally, Ekco asserts that the Fund is estopped by
its conduct from attempting to enforce the thirty day rule.
The Fund argues that the 1976 incident was a clerical error,
and that the collective bargaining agreement between the Union
and Ekco never reflected Ekco's intent to follow the one year
The Seventh Circuit has defined waiver as "a voluntary and
intentional relinquishment or abandonment of a known existing
right or privilege, which, except for such
waiver, would have been enjoyed." Buffum v. Chase National
Bank, 192 F.2d 58, 60-61 (7th Cir. 1951), cert. denied,
342 U.S. 944, 72 S.Ct. 558, 96 L.Ed. 702 (1952). Waiver therefore
involves a consideration of the intent of the non-breaching
party. Saverslak v. Davis-Cleaver Produce Co., 606 F.2d 208,
213 (7th Cir. 1979), cert. denied, 444 U.S. 1078, 100 S.Ct.
1029, 62 L.Ed.2d 762 (1980). Accordingly, we must examine
whether the Fund manifested an intent not to require Ekco to
strictly comply with the thirty day rule. Graubremse GMBH v.
Berg Mfg. & Sales Co., 417 F.2d 1201, 1204-05 (7th Cir. 1969).
Silent acquiescence in the elimination of a trademark from a
product has been held to constitute waiver. Saverslak, 606
F.2d at 214. The Court in Saverslak added that the
non-breaching party's acceptance of royalties, as well as its
silence, evinced its intent to relinquish its rights. Id. See
also Graubremse GMBH, 417 F.2d at 1205 (non-breaching party's
acceptance of benefits was inconsistent with reliance upon the
breached contractual requirement; continued performance
manifests an intent to waive the requirement).
Estoppel, on the other hand, focuses upon the effects of an
obligor's conduct on an obligee, and arises when a party's
conduct misleads another to believe that a right will not be
enforced and causes him to act to his detriment in reliance
upon this belief. Saverslak, 606 F.2d at 213. This requires us
to consider whether the Fund misled Ekco to believe that the
thirty day rule would not be enforced and whether Ekco acted in
reliance upon this belief.
The Fund makes a series of arguments against the application
of waiver and estoppel. First, it claims that the absence of
the one year rule in the 1969-1972 collective bargaining
agreement reflected the parties' intent to comply with the
thirty day rule. The fact that Ekco provided the Fund with
monthly billing information, including date of hire and year
to date contributions would not, according to Ekco, allow the
Fund to learn that Ekco violated the thirty day rule. The 1976
audit incident, in which a Fund auditor granted Ekco a credit
for payments which had been made pursuant to the thirty day
rule, was simply an error. The Fund in 1978 notified the Union
and Ekco that the collective bargaining agreement contained
"nonconforming" language (the one year rule); the Fund
explains its lack of further efforts by asserting that it was
relying upon the Union to bring about compliance. The Fund
explains the fact that an audit was not held until 1980 by
asserting that the Fund wished to "wait and see" whether the
Union had been able to achieve compliance with the thirty day
rule. Finally, the Fund accepted a 1981 collective bargaining
agreement despite the fact that it contained identical
references to Exhibit A and the one year rule, because the
Fund preferred to strive for Ekco's voluntary compliance
rather than ejecting Ekco from the Fund.
Assuming arguendo that there is merit in the Fund's assertion
that Ekco breached a contract with it, we believe that the Fund
waived its rights to enforce the thirty day rule. An
examination of its conduct and inaction indicates that it
"intentionally relinquished a known right." Notwithstanding the
Fund's claims, it accepted pension contributions and processed
contribution reports from Ekco from 1969 until 1978.
Every collective bargaining agreement between Ekco and the
Union from 1966 to the present incorporated the one year rule.
In 1976, Ekco received a credit for contributions which had
been made pursuant to the thirty day rule. Only in 1978 did
the Fund begin to take actions evidencing an intent to enforce
the thirty day rule, when it informed the Union and Ekco that
the collective bargaining agreement contained noncomplying
language. The Fund's silent acquiescence from 1968 to 1978 at
some point ripened into an intentional relinquishment of its
right to enforce the thirty day rule. This, as well as the
Fund's acceptance of contributions under the one year rule,
are sufficient to constitute waiver.*fn4 Saverslak, 606 F.2d
Alternatively, the Fund is also estopped from enforcing the
thirty day rule. The Fund's silent acquiescence in the one
year rule and its acceptance of pension fund contributions led
Ekco to believe that the thirty day rule would not be
enforced, and that the one year rule was acceptable to the
Fund. Ekco continued contributing to the Fund, and its
arguments that it may have withdrawn from the Fund or
negotiated other concessions from the Union if it had known
that the Fund would insist upon application of the thirty day
rule are reasonable. Under these circumstances, it would be
unfair to allow the Fund to demand past contributions pursuant
to the thirty day rule.
Accordingly, Ekco's motion for summary judgment is granted;
the Fund's motion for summary judgment is denied. It is so