Unpublished Disposition, 881 F.2d 1083 (9th Cir. 1989)

This case arises from a dispute over contributions which Morning Star Enterprises (Morning Star) allegedly owed to the Montana State Carpenters Health and Welfare Trust (the Trust) in connection with construction work on the Fort Peck Indian Reservation in Montana. The work was performed by non-union Indian employees who would ordinarily be covered by the terms of the collective bargaining agreement (CBA). The fund is subject to the provisions of ERISA.

The district court found that tribal authorities on the Indian reservation directed Morning Star to pay the amount of certain fringe benefit contributions directly to non-union Indian employees rather than to the union trust funds as the CBA required. The court further found that employees of the Montana State Carpenters Union, recognizing the tribe's interference and the uncertainty it created, agreed orally that Morning Star could pay the amounts in question directly to the non-union Indian employees, and that the Trust was thus estopped from attempting to collect the allegedly delinquent payments.¹ 

Under well-established Ninth Circuit law, provisions in a collective bargaining agreement relating to trust fund payments may not be amended orally. Pierce County Hotel Employees & Restaurant Employees Health Trust v. Elks Lodge, 827 F.2d 1324, 1328 (9th Cir. 1987); Waggoner v. Dallaire, 649 F.2d 1362, 1366 (9th Cir. 1981). Similarly, an oral representation cannot serve as the basis for equitable estoppel when a fund seeks to enforce the written trust provisions, at least in the absence of a knowing false representation or concealment of material facts. Dockray v. Phelps Dodge Corp., 801 F.2d 1149, 1155 (9th Cir. 1986); cf. Southwest Administrators, Inc. v. Rozay's Transfer, 791 F.2d 769, 775-76 n. 3 (9th Cir. 1986), cert. denied, 479 U.S. 1065 (1987). Here, there was no finding of fraud, nor were any allegations of fraud ever made. Accordingly, we reverse the decision of the district court that the Trust (and thus Audit Services, Inc.) was estopped from enforcing the terms of the collective bargaining agreement.² 

Morning Star also appeals the district court's denial of its claim for a refund under ERISA Section 403, 29 U.S.C. § 1103(c) (2) (a) (ii) for certain contributions it made to the Trust on behalf of Timothy J. Williams, a supervisor who was ineligible to participate in the Trust plans.³  That section permits an employer to seek a refund for contributions made to a multiemployer plan because of a mistake of law or fact. Here, the district court specifically found that Morning Star knew that Williams was ineligible to participate in the benefit plans, but made the contributions anyway in order to obtain coverage for him.⁴  Moreover, Morning Star has never contended that it did not know that, as a legal matter, an individual who was ineligible to participate in a benefit plan could not receive benefits. Thus, the contributions Morning Star made on behalf of Williams were not made because of either a mistake of law or of fact. Accordingly, Morning Star may not assert a claim for a refund of those contributions under 29 U.S.C. § 1103(c) (2) (A) (ii). See Chase v. Trustees of the Western Conference of Teamsters Pension Trust Fund, 753 F.2d 744, 750 (9th Cir. 1985).

Audit Services is entitled to attorneys' fees in connection with its claim for recovery of the delinquent contributions from Morning Star to the trust. Under 29 U.S.C. § 1132(g) (2), such an award of fees is mandatory. Operating Engineers Pension Trust v. Reed, 726 F.2d 513, 514-15 (9th Cir. 1984). As to the counterclaim, we cannot say that the district court abused its discretion in denying attorneys' fees. 29 U.S.C. § 1132(g) (1). On remand, the district court should determine the appropriate fee award as well as the amount of contributions owed.

The decision of the district court is affirmed in part and reversed in part. The case is remanded to the district court for further proceedings consistent with this disposition. AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.