Opinion · Court of Appeals for the Ninth Circuit
Operating Engineers Pension Trust v. Charles Minor Equipment Rental, Inc.
766 F.2d 1301
- Type
- Opinion
- Court
- Court of Appeals for the Ninth Circuit
- Jurisdiction
- Federal
- Date
- 1985-07-22
- Topic
- employee-benefits-and-executive-compensation
FARRIS, Circuit Judge: FACTS The Master Labor Agreement between the International Union of Operating Engineers, Local No. 12, and the Southern California General Contractors Association established four trusts and required that employers make fringe benefit contributions to those trusts. In 1972, The Labor Management Adjustment Board, established by the parties to interpret and apply the MLA, adopted a resolution that the contractor shall pay fringe benefit contributions for “each and every” hour worked by the employee, unless an employee is paid by salary or any other method than hourly wages, then the employee shall be presumed to have worked for a minimum of forty (40) hours during each week of such employ-. ment and payment, and the fringe bene*1303fit contributions shall be paid for all such hours.1 Charles Minor Equipment Rental, Inc. is a California corporation bound by the MLA. Charles Minor, the president and sole shareholder of Minor Equipment, owns a piece of heavy construction equipment and rents out his services and the equipment. The work performed by Charles Minor is subject to the MLA and it is undisputed that he is paid by a method other than hourly wages. The Trusts audited Minor Equipment in February 1983 and found that it was reporting the minimum 200 hours per quarter necessary to retain benefits for Charles Minor and that, according to billing invoices, he worked in excess of the hours reported for him.
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OPERATING ENG. PENSION TRUST v. CHARLES MINOR,766 F.2d 1301(9th Cir. 1985)
OPERATING ENGINEERS PENSION TRUST, OPERATING ENGINEERS HEALTH WELFARE
FUND, OPERATING ENGINEERS VACATION-HOLIDAY SAVINGS TRUST AND OPERATING
ENGINEERS TRAINING TRUST, PLAINTIFFS/APPELLANTS, v. CHARLES MINOR EQUIPMENT
RENTAL, INC., DEFENDANT/APPELLEE.
No. 84-6044.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted February 8, 1985.
Decided July 22, 1985.
Page 1302
Albert J. Tomigal, Wilson Clark, Marina Del Rey, Cal., for defendant/appellee.
Before SCHROEDER, FLETCHER and FARRIS, Circuit Judges.
[1] FACTS
[2] The Master Labor Agreement between the International Union of Operating Engineers, Local No. 12, and the Southern California General Contractors Association established four trusts and required that employers make fringe benefit contributions to those trusts. In 1972, The Labor Management Adjustment Board, established by the parties to interpret and apply the MLA, adopted a resolution that the contractor shall pay fringe benefit contributions for "each and every" hour worked by the employee, unlessan employee is paid by salary or any other method than hourly wages, then the employee shall be presumed to have worked for a minimum of forty (40) hours during each week of such employment and payment, and the fringe benefitPage 1303contributions shall be paid for all such hours.1
[3] Charles Minor Equipment Rental, Inc. is a California corporation bound by the MLA. Charles Minor, the president and sole shareholder of Minor Equipment, owns a piece of heavy construction equipment and rents out his services and the equipment. The work performed by Charles Minor is subject to the MLA and it is undisputed that he is paid by a method other than hourly wages.
[4] The Trusts audited Minor Equipment in February 1983 and found that it was reporting the minimum 200 hours per quarter necessary to retain benefits for Charles Minor and that, according to billing invoices, he worked in excess of the hours reported for him. The Trusts filed suit against Minor Equipment pursuant to section 301 of the Labor Management Relations Act,29 U.S.C. § 185(a), and section 502(a)(3) of the Employee Retirement Income Security Act,29 U.S.C. § 1132(a)(3), for $17,923.59 in unpaid fringe benefits, interest, and liquidated damages based upon the difference between the reported hours and the 40-hour presumption.
[5] The trusts contended that the 40-hour presumption was conclusive. The district court, Tashima, J., held 1) thatSapperv. Lenco Blade Inc.,704 F.2d 1069(9th Cir. 1983), controlled and therefore the LMAB resolution created a rebuttable, rather than conclusive, presumption 2) that the Trusts were collaterally estopped from relitigating the issue and 3) that Minor had introduced sufficient evidence to rebut the presumption, although it found that Charles Minor had worked more hours than had been reported to the Trusts. Accordingly, the court awarded the Trusts $4,672.13. It awarded $1,065.00 in attorney's fees, pursuant to29 U.S.C. § 1132(g)(2)(D), rather than the $4,256.25 requested because of the Trusts' counsel's failure to recognize "the binding effect ofLenco Blade."The Trusts appeal. We affirm.
[6] STANDARD OF REVIEW
[7] Questions of law, including the principles of contract interpretation to be applied, are reviewedde novo. InterPetrolBermuda, Ltd. v. Kaiser Aluminum Int'l Corp.,719 F.2d 992, 998 (9th Cir. 1983). The district court's factual findings are reviewed under the clearly erroneous standard.Id.; UnitedStates v. One Twin Engine Beech Airplane,533 F.2d 1106, 1107-08 (9th Cir. 1976). The district court's determination that Minor had introduced sufficient evidence to rebut the 40-hour presumption represents a mixed question involving "the application of law to fact," which we generally reviewde novo. United States v.McConney,728 F.2d 1195, 1200-04 (9th Cir.),cert. denied,___ U.S. ___, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984). Because of the special need for uniform interpretation and enforcement of collective bargaining agreements,see, e.g., Kemmis v.McGoldrick,706 F.2d 993, 996-97 (9th Cir. 1983), we review the court's determination that a contractor has rebutted the LMAB 40-hour presumptionde novo. See Sapper v. Lenco Blade, Inc.,704 F.2d 1069, 1072 (9th Cir. 1983).[8] DISCUSSION
[9] The district court's holding that the 40-hour presumption was rebuttable was based uponSapper v. Lenco Blade, Inc.,704 F.2d 1069(9th Cir. 1983), which it found to be controlling. InLencoBlade,the Trusts brought suit against a contractor-sole employee for insufficient fringe benefit contributions based upon the LMAB 40-hour presumption. The employee took periodic "draws" from Lenco as compensation. Both parties moved for summary judgment and attorney's fees. The district court granted Lenco's motion and awarded it attorney's fees.[10] On appeal, we held that summary judgment was inappropriate and remanded the case.Id.at 1071-72. We found that whether the employee "was paid by aPage 1304`method other than hourly wages'" — so that the 40-hour presumption applied — was disputed. We held that the presumption was rebuttable and found that whether Lenco Blade had rebutted the presumption was at issue. To reach this conclusion, we distinguished three previous decisions relied upon by the Trusts to establish that the presumption was conclusive.See Waggoner v. William Radkovich Co.,620 F.2d 206(9th Cir. 1980);Burke v. Lenihan,606 F.2d 840(9th Cir. 1979);Waggoner v. C D Pipeline Co.,601 F.2d 456(9th Cir. 1979). They were "inapposite . . . because they involved employees whoindisputablyworked forty hours per week." 704 F.2d at 1072. Those cases consider whether an employer must contribute for all the hours worked by a full-time employee who splits his worktime between a position subject to the MLA and a position that is not covered.See Waggoner v. Dallaire,649 F.2d 1362, 1369 (9th Cir. 1981) (interpretingRadkovich, Burke,andC DPipeline).
[11] The Trusts argue thatLenco Blade's interpretation of the LMAB resolution is dicta. This position is premised on limiting the holding to a reversal of the summary judgment because the method of payment was in dispute. In so arguing for a limiting of the holding, however, the Trusts ignore the court's direction that the district court, if it found that Sapper was paid on a basis other than hourly, next determine whether the presumption of forty hours was rebutted. This clear direction to the district court on how to proceed continues to be binding precedent, even if characterized as an alternative holding. It was based on the finding that there was a genuine issue of material fact on the question of whether Lenco had rebutted the 40-hour presumption. Even if it had been undisputed that the employee was paid by a method other than hourly wages, a remand would still have been required to determine whether Lenco had rebutted the 40-hour presumption. Conversely, if the method of payment had been undisputed and we had found the presumption to be conclusive, we could have affirmed the summary judgment without the necessity of a remand.Lenco Blade's interpretation of the LMAB 40-hour presumption is res judicata.See Russell v. C.I.R.,678 F.2d 782, 785 n. 2 (9th Cir. 1982);Dragor Shipping Corp. v. UnionTank Car Co.,371 F.2d 722, 726 (9th Cir. 1967) ("Where an appellate court decision rests on two or more grounds, none can be relegated to the category ofobiter dictum."). That interpretation is "the settled Ninth Circuit rule" on the MLA provision at issue and the district court properly applied it.See Dallaire,649 F.2d at 1369.
[12] Subsequent cases have delineated the inapplicability of theCD Pipelineline of cases relied on by the Trusts to the issue whether the 40-hour presumption can be rebutted for employees who work less than full-time.See Kemmis v. McGoldrick,706 F.2d 993, 997 (9th Cir. 1983) (citingC Dfor the limited proposition that "forfulltimesalaried employees, employers are required to contribute based on 40 hours per week") (emphasis added);see also Dallaire,649 F.2d at 1369.Kemmisis particularly significant because it was decided afterLencoBlade:its narrow reading ofC D Pipelineavoided any conflict withLenco Blade.The only case in which we have addressed the question whether the 40-hour presumption is rebuttable isLenco Blade.The district court did not err in holding that it controls.
[13] The Trusts alternatively contend that, assuming the presumption is rebuttable, Minor failed to produce sufficient evidence to rebut it. The Trusts assert that the presumption can only be rebutted by substantial, specific, and comprehensive evidence relying uponParsons Corp. of California v. Director, Office ofWorkmen's Compensation Programs,619 F.2d 38, 41 (9th Cir. 1980).Parsons Corp.involved a statutory presumption that controlled "in the absence of substantial evidence to the contrary," and therefore is of no assistance in interpreting the LMAB 40-hour presumption.
[14] The district court concluded that Minor's Exhibit 108, a summary of Minor's billing invoices and job tickets prepared byPage 1305Charles Minor's wife, Sheila, and the testimony of Sheila Minor constituted sufficient evidence to rebut the 40-hour presumption. In resolving the ultimate factual issue of how many hours Charles Minor actually worked, the court noted that Minor's Exhibit 108 was "not entirely reliable." Instead, it found that the total number of hours worked by Minor was "accurately reflected" in the Trusts' Exhibit 20B, a month-by-month list of the minimum hours that Charles Minor could have worked, computed by dividing Minor's bank deposits by the maximum hourly rental rate obtained by Minor.2
[15] Because the court found that Minor's evidence was not entirely reliable, the Trusts argue that the court should have found insufficient evidence to rebut the 40-hour presumption. To rebut the presumption the employer need only "present evidence raising a genuine issue."See Casillas v. United States Navy,735 F.2d 338, 343 (9th Cir. 1984);National Industries, Inc. v. RepublicNat'l Life Ins. Co.,677 F.2d 1258, 1266 (9th Cir. 1982);seealsoFed.R.Evid. 301, Notes of Conference Committee, House Rep. No. 93-1597 (if adverse party offers evidence contradicting the presumed fact, the trier of fact cannot presume its existence).
[16] The trial court finding that Minor's evidence did not resolve the ultimate factual issue of the actual number of hours that Minor worked does not contradict its decision that the evidence was sufficient to rebut the presumption that Charles Minor worked 40 hours a week.See Casillas,735 F.2d at 343 (to rebut presumption of discrimination in Title VII action, employer need not "present clear and convincing evidence," nor persuade the trier of fact). Minor worked substantially less than 40 hours a week. The district court's finding of fact that Minor worked less than 40 hours is not clearly erroneous.See Anderson v. City ofBessemer City,___ U.S. ___, 105 S.Ct. 1504, 1512-13, 84 L.Ed.2d 518 (1985).
[17] Minor Equipment characterizes the Trusts' appeal as a frivolous attempt to relitigateLenco Bladeand seeks attorney's fees on appeal. Under29 U.S.C. § 1132(g)(1), we have discretion to award attorney's fees to a prevailing employer in an appeal.Carpenters Southern California Admin. Corp. v. Russell,726 F.2d 1410, 1417 (9th Cir. 1984). Our discretion is guided by the considerations described inHummell v. S.E. Rykoff Co.,634 F.2d 446, 453 (9th Cir. 1980). Those considerations "very frequently suggest that attorney's fees should not be charged against ERISA plaintiffs."Operating Engineers Pension Trust v.Gilliam,737 F.2d 1501, 1505-06 (9th Cir. 1984).
[18] We disagree with Minor's characterization of this appeal as frivolous. In addition to a question ofLenco Blade's preclusive effect, there was the issue of what evidence is required to rebut the 40-hour presumption. The Trusts' counsel were not acting in bad faith.See Russell,726 F.2d at 1415. We make no award of attorney's fees.
[19] AFFIRMED.
[22]C D Pipelineinvolved a salaried employee, Donald J. Stark, who divided his time between work covered by the MLA and work it did not cover. 601 F.2d at 457-58. The district court ruled that Stark's employer, C D, was obligated to pay fringe benefit contributions for only those hours during which he performed work covered by the MLA. This court reversed, holding that the LMAB resolution "require[d] employers to make contributions forallhours worked by employees who performanywork covered by the agreement."Id.at 459 (emphasis added).
[23] However, we did not remand to the district court to determine the total number of hours that Stark worked, even though this information did not appear in the record. Instead, we held that:
Because Stark was asalaried employee,C D was required to make contributions for Starkbased on aminimum of forty hours per week.
[24]Id.(emphasis added). We treated the 40-hour presumption as conclusive inC D Pipeline:we did not provide C D with an opportunity to introduce evidence that Stark worked fewer than 40 hours per week. This interpretation of the 40-hour presumption was a holding inC D Pipeline,since it was necessary to the outcome of the case and controlled the amount of damages that were awarded.
[25] The majority seeks to avoidC D Pipeline's holding first by claiming that inLenco Blade,this court "distinguished"C DPipelineand "held" the 40-hour presumption to be rebuttable in all cases. The majority quotesLenco Blade's statement that our decisions inC D Pipelineand two other cases,Waggoner v.Wm. Radkovich Co.,620 F.2d 206(9th Cir. 1980), andBurke v.Lenihan,606 F.2d 840(9th Cir. 1979), were "inapposite [in resolving theLenco Bladecase] . . . because they involved employees whoindisputablyworked forty hours per week." 704 F.2d at 1072 (emphasis in original). If that were an accurate characterization of the facts inC D Pipeline,this court would have had no need to apply the 40-hour presumption in that case. If Stark indisputably worked 40 hours per week, C D would have been required to make 40 hours worth of contributions for him without ever applying the 40-hour presumption.
[26] However,Lenco Blade's characterization of the facts inCD Pipeline,upon which the majority relies, is not accurate. The decision inC D Pipelinenowhere states or implies that Stark worked 40 hours per week, much less that this fact was undisputed.See generally C D Pipeline,601 F.2d at 457-59. Nor do the other two cases purportedly "distinguished" byLencoBladeindicate that the employees they involved worked 40 hours per week.See generally Wm. Radkovich,620 F.2d at 206-07;Burke,606 F.2d at 841. This court's language inC DPipelineis absolutely clear that it was "[b]ecause Stark was asalaried employee,"and therefore covered by the LMAB presumption, that "C D was required to make contributions for [him] based on a minimum of forty hours per week" — not, as the majority andLenco Bladesuggest, because Stark indisputably worked 40 hours per week. 601 F.2d at 459 (emphasis added).
[27] Furthermore, the majority's attempts to characterizeLencoBlade's statements concerning the LMAB resolution as a holding, rather than dicta, are simply unconvincing. InLenco Blade,the district court had granted summary judgment against the Trusts on their claims for unpaid fringe benefit contributions for Lenco Blade's sole employee and president, Mr. Cuillerier.LencoBlade,704 F.2d at 1071-73. This court concluded that a genuine issue of material fact existed concerning the threshold question of whether Cuillerier was paid hourly wages or on some other basis: if he was paid hourly wages, the 40-hour presumption would not apply. We remanded for a determination on that issue.Id.at 1071-72. The additional statements inPage 1307Lenco Bladeconcerning the 40-hour presumption were not the basis of the remand, and were intended to apply only if the district court made a specific determination — i.e., that Cuillerier was paid on a non-hourly basis — after the case had been remanded. Since these statements were not necessary to the decision inLencoBlade,they were merely advisory, and have no binding or precedential impact in the present case.See United States v. Fruehauf,365 U.S. 146, 157, 81 S.Ct. 547, 553, 5 L.Ed.2d 476 (1961). Because these advisory statements inLenco Bladedirectly contradict our holding inC D Pipeline,we must apply the holding ofC D Pipeline.
[28] The majority is somewhat disingenuous in referring toLencoBlade's interpretation of the 40-hour presumption as "the settled Ninth Circuit rule," and citing our decision inWaggonerv. Dallaire,649 F.2d 1362, 1369 (9th Cir. 1981) for this proposition.Dallaireinvolved completely different issues from those in the present case, and its reference to a "settled Ninth Circuit rule" is an allusion toC D Pipeline,notLencoBlade,which was decided two years afterDallaire. See id.
[29] The majority's problems multiply when it attempts to reconcile its decision with our opinion inKemmis v. McGoldrick,706 F.2d 993(9th Cir. 1983), which was issued a month afterLenco Bladeand did not even refer to that decision.Kemmisinvolved an employee who indisputably worked full-time,id.at 995, and citedC D Pipelinefor the proposition that "[f]or full-time salaried employees, employers are required to contribute based on 40 hours per week."Id.at 997 (citingC D Pipeline).Kemmisthus interpreted the 40-hour presumption as being conclusive, and readC D Pipelineas reaching the same conclusion.
[30] In attempting to reconcileKemmis,the majority appears to concede that bothKemmisandC D Pipelineinterpret the 40-hour presumption as being conclusive, at least in certain cases. However, the majority contends thatKemmislimitsC DPipeline's applicability to cases involvingfull-timeemployees, and states thatC D Pipelineis not applicable "to the issue whether the 40-hour presumption can be rebutted for employees who work less than full-time." Thus, the majority appears to maintain that the LMAB's 40-hour presumption is conclusive for full-time employees, as inC D PipelineandKemmis,but rebuttable for those who work less than full-time, as inLenco Blade.
[31] This proposed interpretation presents several difficulties. First, it directly contradicts the majority's own interpretation ofLenco Bladeas establishing that the 40-hour presumption is rebuttable in all cases. Moreover, nothing inLenco Bladeindicates that that decision was intended to apply only to part-time employees. Second, the majority's interpretation directly contradicts its characterization ofC D Pipeline,which it borrowed fromLenco Blade,as a case that did not even involve application of the 40-hour presumption. Third, the majority's proposed interpretation is completely unsupported by the wording of the LMAB resolution, which draws no distinction between full-time and part-time employees, and only distinguishes between employees paid by hourly wages and those who are not. The majority thus is imposing a distinction upon the parties to the LMAB resolution that they did not intend. Finally, nothing in the record indicates that Charles Minor would not qualify under the majority's definition as a "full-time" employee of Minor Equipment,1so it is possiblePage 1308that even accepting the majority's reading ofC D PipelineandKemmis,the 40-hour presumption would apply in this case.
[32] Given the wording of the LMAB resolution, it is far more reasonable to interpret the reference to "full-time" employees inKemmisas a reflection ofthe specific facts in that case,rather than as an attempt to introduce a new distinction into interpretation of the 40-hour presumption. Moreover, theKemmiscourt's failure even to mentionLenco Bladesuggests that it consideredLenco Blade's statements about the 40-hour presumption to be merely advisory, as contrasted to the controlling precedent inC D Pipeline.
[33] Because our decisions inC D PipelineandKemmisindicate that we have interpreted the LMAB resolution's 40-hour presumption to be conclusive bothbeforeandafterour decision inLenco Blade,I would conclude that we are bound to interpret the presumption as being conclusive in this case. The majority allows a little careless advice inLenco Blade,which is unsupported in any of our other decisions, to distort the facts and the holdings of this circuit's cases. I find that unfortunate. I would require Minor Equipment to pay 40 hours worth of fringe benefit contributions for every week that Charles Minor worked.
- This resolution was adopted to prevent owner-operators who were salaried from only reporting minimum hours needed for eligibility and not making their full contributions to the Trusts. ↩
- The court reduced the figures in the Trusts' exhibit by 5% to account for two-hour move charges that Minor billed to its clients but which were paid out to subcontractors who moved Minor's construction equipment from job to job. This reduction was based on the Minors' testimony concerning move charges. ↩
- The majority nowhere explains the meaning of the term "full-time employee" for purposes of applying the 40-hour presumption under its proposed interpretation. If the term signifies only employees who work 40 hours per week, then under the majority's interpretation, the conclusive presumption essentially is meaningless: it would simply provide that if the Trusts can establish that an employee works 40 hours per week, he will be presumed to work 40 hours per week. Moreover, it would reduce to a truismKemmis's statement that "[f]or full-time salaried employees, employers [must] contribute based on 40 hours per week." 706 F.2d at 997.
Thus, it would be more plausible to interpret the term "full-time employee" in this context as applying to some employees who work less than 40 hours per week. As a result, it is not clear from the record in this case or from the majority's opinion whether Charles Minor should be considered a "full-time" employee. ↩