The opinion of the court was delivered by: SHADUR
At this point the cross-motions are fully briefed, with both sides having complied with this District Court's General Rule ("GR") 12(M) and 12(N) (rules designed to facilitate the resolution of Rule 56 motions by highlighting the existence or nonexistence of factual disputes).
For the reasons stated in this memorandum opinion and order, both motions are denied.
Summary Judgment Standards
Familiar Rule 56 principles impose on a party seeking summary judgment the burden of establishing the lack of a genuine issue of material fact ( Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986)). For that purpose this Court is "not required to draw every conceivable inference from the record--only those inferences that are reasonable"--in the light most favorable to the non-moving party ( Bank Leumi Le-Israel, B.M. v. Lee, 928 F.2d 232, 236 (7th Cir. 1991) and cases cited there). Where as here cross-motions are involved, it is necessary to adopt "a dual perspective--one that this Court has often described as Janus-like--that sometimes involves the denial of both motions" ( Camelot Care Ctrs., Inc. v. Planters Lifesavers Co., 836 F. Supp. 545, 545 (N.D.Ill. 1993)).
As the later discussion shows, in this instance that dual perspective does indeed give rise to material issues of fact, precluding summary judgment in either direction. What follows in the Background section is limited to an undisputed version of events, while other facts that fit better into the substantive legal discussion will be included later in this opinion.
In 1970 John Glueckert, Sr. ("John Sr.") purchased an already established funeral home, which he has incorporated as Glueckert Funeral Home, Ltd. (P. 12(N) P1). By 1988 John Sr. was considering becoming a member of an association of like businesses because (among other reasons) he wanted to remain current in developments in the funeral home industry and to keep apprised of governmental regulations affecting the industry. One of the associations he considered was the Funeral Directors Services Association ("FDSA"), a multi-employer association comprising some 250 members (P. 12(N) PP3-4).
On July 8, 1988 John Sr. received a letter from then FDSA Executive Director Moriarty outlining the services that FDSA provided to its members (P. 12(N) P13). And in late 1988 or early 1989 Moriarty met with John Sr. and Glueckert manager John Glueckert, Jr. ("John Jr.") to discuss Glueckert's potential FDSA membership (P. 12(N) PP15-16). John Sr. then filled out a membership application in which Glueckert agreed to be bound by FDSA's Constitution, By-Laws and Rules and Regulations (P. 12(N) PP19-20; P. Ex. N). On March 21, 1989 Moriarty sent John Sr. a letter advising that Glueckert's application had been accepted (P. Ex. O). John Sr. then filled out an FDSA membership record card (P. 12(N) P22; P. Ex. N).
FDSA furnishes a wide variety of services to its members. Those include its running continuing education programs, providing updates as to developments in rules and regulations affecting the funeral home industry and negotiating collective bargaining agreements with the Auto Livery Chauffeurs, Embalmers, Funeral Directors, Apprentices, Ambulance Drivers and Helpers, Taxicab Drivers, Miscellaneous Garage Employees, Car Washers, Greasers, Polishers and Wash Rack Attendants Union, Local No. 727, I.B.T. ("Union") on behalf of FDSA's employer-members (P. 12(N) PP4-11; D. 12(N) P7).
Funds are employee benefit plans within the meaning of ERISA (Section 1002(3)) and are third-party beneficiaries of a series of collective bargaining agreements ("CBAs") entered into between FDSA and Union (D. 12(N) PP2,7-9). Moriarty is a Trustee and fiduciary of Funds, and between 1967 and 1994 he negotiated such CBAs on behalf of FDSA (D. 12(N) PP 5,10).
Before and since Glueckert became an FDSA member there have been (and still are) in force a series of such CBAs between FDSA and Union (D. 12(N) P9). Those agreements, which are stated to be entered into by FDSA on behalf of all of its employer/members, provide that each member is obligated to contribute to Funds if it employs employees who perform certain covered job classifications--such as embalmers, funeral directors and auto livery chauffeurs (D. 12(N) PP10.1-.3, 13, 19).
Glueckert has in fact employed individuals who perform embalming, funeral directing and auto livery chauffeur services (D. 12(N) P23,25), but it has never notified Funds that it employed such individuals and has never made any contributions to Funds during its FDSA membership (D. 12(N) PP14,17,28,). And Funds has never made any request for contributions, nor until September 1994 did it affirmatively inform Glueckert that it may be obligated to pay them. At that time Funds made a demand for payment (P. 12(N) PP47-49, 51-52; John Sr. Aff. P41 ). After learning that FDSA thus wished to bind it to the results of the CBAs, Glueckert resigned from FDSA (P. 12(N) P55).
Before this opinion sets out the relevant law governing this dispute in detail, it must first clear away some cobwebs by dealing with an issue to which Moriarty devotes large portions of his memoranda. Only then can the discussion turn to the truly dispositive issue: whether FDSA had authority (either actual or apparent) to bind Glueckert to CBAs with Union so that Glueckert is obligated to Funds, the third-party beneficiaries of those agreements.
Moriarty Mem. 11 seeks to call to his aid Section 1145
and cases interpreting that section (most notably Central States, S.E. and S.W. Areas Pension Fund ["Central States Fund"] v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1149 (7th Cir. 1989) (en banc)
and Robbins v. Lynch, 836 F.2d 330 (7th Cir. 1988)) to mean that a "pension or welfare fund is like the holder in due course in commercial law. . .entitled to enforce the writing without regard to understandings or defenses applicable to the original parties" ( Gerber Truck, 870 F.2d at 1149) and also that ( id. at 1153):
If the employer simply points to a defect in its formation--such as fraud in the inducement, oral promises to disregard the text, or the lack of majority support for the union and the consequent ineffectiveness of the pact under labor law--it must still keep its promise to the pension plans.
From those premises Moriarty R. Mem. 14 urges that Glueckert is foreclosed from arguing that FDSA had no authority to ...