The opinion of the court was delivered by: HARRY D. LEINENWEBER
Plaintiffs, Central States, Southeast and Southwest Areas Pension Fund ("Pension Fund"), Central States, Southeast and Southwest Areas Health and Welfare Fund ("Health & Welfare Fund"), and the trustee of both funds, Robert Baker, (hereinafter collectively the "funds"), have brought an action against defendants, Central Transport, Inc. ("Transport") and Central Cartage Co. ("Cartage"), to collect audit-revealed delinquent contributions from both defendants and to enforce a bankruptcy plan of reorganization and a guarantee against Transport. The funds claim that Transport and Cartage are liable for such delinquent contributions under section 515 of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1145.
Plaintiffs are multi-employer funds and third-party beneficiaries to collective bargaining agreements negotiated between participating employers and local unions. The funds provide pension coverage and health benefits to employees covered by the collective bargaining agreements. Transport and Cartage are participating Michigan corporations. Both companies are parties to the National Master Freight Agreement ("NMFA") -- the collective bargaining agreement between the local unions and the participating employers -- and various addenda and contracts that supplement the NMFA.
The funds move the court to grant a motion for summary judgment on three of the four counts of their Second Amended Complaint ("complaint"). With regard to Count I, the funds have moved for summary judgment against both Transport and Cartage. In Count I, the funds seek to collect audit-revealed, delinquent contributions from both defendants. The funds move for summary judgment in Counts III and IV solely against Transport. From Transport only, the funds seek to recover a debt originally incurred by a company that underwent bankruptcy reorganization and subsequently merged with Transport. The funds seek to recover this amount on two alternative theories. In Count III, the funds seek to enforce Transport's guarantee of the delinquent contributions. In Count IV, the funds seek to collect the delinquent contributions directly from Transport as an "employer," as defined by ERISA, and as the principal debtor. Additionally, Transport moves the court for summary judgment against the funds in Counts III and IV. In an Order entered July 17, 1992, this court granted the funds' motion for summary judgment against both defendants on Count II. Count II, therefore, is not at issue in this motion for summary judgment.
The first question the court must consider is whether it has jurisdiction to hear this case. With respect to Count I ("audit-revealed delinquent contributions"), sought from each defendant pursuant to section 515 of ERISA, the court has jurisdiction over this matter as provided in section 502(e)(1) of ERISA (29 U.S.C. § 1132(e)(1)). In pertinent part, section 502(e)(1) provides that "the district courts of the United States shall have exclusive jurisdiction of civil actions under this subchapter brought . . . by a fiduciary." 29 U.S.C. § 1132(e)(1); Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539, 547, 108 S. Ct. 830, 835, 98 L. Ed. 2d 936 (1988) ("the liability created by Section 515 [of ERISA] may be enforced by the trustees of a plan by bringing an action in Federal District Court pursuant to Section 502 [of ERISA]").
The funds assert that jurisdiction under Counts III and IV is proper either under section 502(e)(1) of ERISA, under federal common law pursuant to 28 U.S.C. § 1331, or under the court's supplemental jurisdiction pursuant to 28 U.S.C. § 1367. Complaint at P26. Transport denies such jurisdiction exists. Answer to Second Amended Complaint ("answer") at P26.
The court also properly has original jurisdiction over the guarantee claim. See Laborers' Pension Fund v. Concrete Structures of the Midwest, Inc., 999 F.2d 1209, 1211 (7th Cir. 1993). In Laborers' Pension Fund, a general contractor had agreed to guarantee the payments of its sub-contractor. When the sub-contractor fell behind in its contribution obligations, the pension fund secured a note from the sub-contractor's owner (not the general contractor). Id. After making several payments, the sub-contractor and its owner went bankrupt. Id. The general contractor was obligated by a previous guarantee agreement with the pension funds to make payments for the sub-contractor if the sub-contractor failed to make contributions. Id. The court held that the general contractor was liable for the guarantee under section 515 of ERISA. Id. Despite the fact that the payments sought from the general contractor were pursuant to a guarantee, the court, nevertheless, held that the pension fund had the right to collect "delinquent contributions" under section 515 of ERISA. Id. Because the guarantee claim sought to be enforced by the pension funds was for delinquent contributions, jurisdiction was proper under section 502(e) of ERISA. Id. Like the pension funds in Laborers' Pension Fund, in Count III plaintiffs also seek to enforce a guarantee of delinquent contribution payments. Accordingly, the court has jurisdiction under section 502(e) of ERISA. Id.
Finally, jurisdiction is also proper over Count IV of the complaint. In the employer contribution claim, the funds seek to recover delinquent contributions based on a successor liability theory. See complaint at P41. The Seventh Circuit Court of Appeals has tacitly approved jurisdiction in successor liability cases under section 502 of ERISA. See Upholsterers' Union Pension Fund v. Artistic Furniture, 920 F.2d 1323, 1328 (7th Cir. 1990) (recognizing the statutory authority to recover delinquent contributions under ERISA in a successor liability action). Because jurisdiction lies for claims to recover delinquent contributions on a theory of successor liability, the court has jurisdiction over Count IV of the complaint. Id.
II. Summary Judgment Standard
Summary judgment is appropriate if no issue of material fact exists warranting a trial on the merits. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). No material issue of fact exists for trial if, in viewing the evidence in a light most favorable to the non-moving party, a reasonable jury could not return a verdict in the non-movant's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 2514, 91 L. Ed. 2d 202 (1986). The party moving for summary judgment bears the initial burden of supporting its motion that no genuine issue of material fact exists. Celotex, 477 U.S. at 322, 106 S. Ct. at 2553. If that burden is met, the non-moving party must come forward with specific facts to rebut that showing. The party resisting the motion "may not rest upon mere allegations or denials of his pleadings" to avoid summary judgment. Anderson, 477 U.S. at 255, 106 S. Ct. at 2514. The court will examine the funds' summary judgment motion in a light most favorable to defendants, and will examine Transport's summary judgment motion in a light most favorable to the funds.
III. The Funds' Motion for Summary Judgment Against Transport and Cartage for Audit-Revealed Delinquent Contributions (Count I)
As an initial matter, it should be noted that Transport has incorporated by reference the arguments included in Cartage's Memorandum in Opposition to Plaintiffs' Motion for Summary Judgment. Here, although a majority of the arguments in opposition to summary judgment on Count I are presented in Cartage's memorandum, since Transport incorporated those arguments by reference, the court will refer to them as "defendants'" arguments.
In Count I, the funds seek to recover audit-revealed delinquent contributions from both defendants. The amounts sought in the funds' motion for summary judgment against both Transport and Cartage can be divided into three categories. The funds seek to recover amounts owed for: 1) non-union casual employees; 2) regular employees for vacations, holidays, and sick days; and 3) employees whom defendants argue were "probationary." In an attempt to stave off summary judgment, defendants argue that: 1) the parties to the collective bargaining agreement did not intend contributions to be made for non-union casuals; 2) contributions are linked to productivity and, therefore, amounts are not owed for regular employees for vacations, holidays, and sick days; and 3) certain employees had extended their probation period and, thus, contributions were not owed for those employees. The court will address each of the funds' claims, and defendants' arguments in response to these claims, in turn.
A. Non-Union Casual Employees
The first issue presented in the funds' motion for summary judgment concerns contributions due from defendants for non-union casual employees. In its 1992 decision, the court ruled that the NMFA, on its face, requires contributions on "each casual employee" including non-union employees. Central States SE & SW Areas Pension Fund v. Central Transport, Inc., 1992 U.S. Dist. LEXIS 10768 at *2 (N.D. Ill. 1992) (citing NMFA Art. 3, § 1(e)(2)). The Seventh Circuit Court of Appeals has also found that the NMFA requires contributions for non-union employees. Central States SE & SW Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1150 (7th Cir. 1989) (en banc). Defendants argue that they should have the opportunity to prove that contributions are not required for non-union casual workers. Additionally, defendants contend that they relied on the provisions of a Settlement Agreement ("Settlement Agreement") entered into with Central States to their detriment. Because the court has already addressed these arguments as they relate to the issue of non-union casual employees, in substance, defendants are asking the court to reconsider its 1992 Order.
The court will not do so. Any request for reconsideration of the 1992 decision is procedurally defective. For the court to reconsider that decision, defendants must file a motion to reconsider under Local Rule 12(c) stating with particularity the grounds and relief requested. For this reason alone, the court need not consider defendants' arguments regarding non-union casual employees.
Furthermore, even if defendants' memoranda were to be construed as a motion for reconsideration, the arguments put forth are not substantively persuasive. Motions for reconsideration serve a limited function and will be granted only when
Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990) (quoting Above the Belt, Inc. v. Mel Bohannan Roofing, Inc., 99 F.R.D. 99, 101 (E.D. Va. 1983)) (emphasis added).
The court has not patently misunderstood defendants' argument. The issue before the court in the 1992 motion for summary disposition was whether the NMFA required contributions for non-union casuals. See Central States, 1992 U.S. Dist. LEXIS 10768 at *2. In that motion, defendants argued that the parties did not intend to have contributions made for non-union casuals. Id. The court ruled that the plain meaning of the language required such contributions. Id. As was stated in that ruling, "the court will not disregard the plain meaning of the NMFA to give effect to what the employers now claim is their intent." Id. (citing Robbins v. Lynch, 836 F.2d 330 (7th Cir. 1988)).
Subjective intent is irrelevant to the issue of interpreting the collective bargaining agreement. As third-party beneficiaries to the agreement, the funds are "entitled to enforce the writing without regard to the understandings or defenses applicable to the original parties." Central States SE & SW Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1149 (7th Cir. 1989). The court could not have patently misunderstood the parties because the sole focus of the decision was the plain language of the NMFA. The nature of the decision did not allow for the possibility of a misunderstanding of the parties' intent. The plain language of the document is controlling. Defendants' old argument is again unpersuasive.
Additionally, the decision was not based on issues outside those framed by the adversarial parties. As noted above, the issue then was precisely the same issue presented by the adversaries now, namely: whether the NMFA requires contributions for non-union casuals. The answer, both then and now, is that it does.
With respect to the NMFA language, no facts or law have changed since the time of the 1992 summary judgment decision. The language of the NMFA has not changed since 1992, nor could it have. The language considered by the court was the language as it existed then. Any subsequent changes in that agreement are simply not relevant. Also, the basic rules of contract interpretation are well settled. Where the language is unambiguous, the plain meaning is to be given effect. See Nat'l Fidelity Life Ins. Co. v. Karaganis, 811 F.2d 357, 361 (7th Cir. 1987); Nat'l Diamond Syndicate, Inc. v. UPS, 897 F.2d 253, 256 (7th Cir. 1990) (citing Fields v. Franklin Life Ins. Co., 115 Ill. App. 3d 954, 71 Ill. Dec. 776, 778, 451 N.E.2d 930 (5th Dist. 1983)). Thus, there are no arguments that persuade the court to reconsider its 1992 decision even if defendants had properly requested the court to do so.
In addition to rejecting defendants' argument that the NMFA does not require contributions for non-union casuals in its 1992 decision, the court also rejected defendants' contention that relying on the Settlement Agreement to their detriment was grounds for relief. See Central States, 1992 U.S. Dist. LEXIS 10768; Defendants' Brief in Opposition to Plaintiffs' Motion for Summary Disposition at 12-13 (filed April 27, 1992). Just as defendants failed to show why the court should reconsider its 1992 decision that the NMFA requires contributions for non-union casual employees, defendants have also failed to provide the court with any reason to reconsider its decision with respect to the issue of reliance on the Settlement Agreement. Defendants simply reassert the same argument ...