Unpublished Disposition, 935 F.2d 275 (9th Cir. 1991)

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U.S. Court of Appeals for the Ninth Circuit - 935 F.2d 275 (9th Cir. 1991)

No. 88-15693.

United States Court of Appeals, Ninth Circuit.

Before SCHROEDER and BRUNETTI, Circuit Judges, and BREWSTER,*  District Judge.


Michael Novo, who owns and operates a construction company, filed an action for declaratory judgment against Operating Engineers Local Union No. 3. Novo sought a declaration that he was not bound to the terms of a collective bargaining agreement with the union, or alternatively, that if a valid agreement did exist, it was repudiated by Novo and could not be enforced. The union counterclaimed, seeking to recover some $596,490.07 in unpaid fringe benefits, liquidated damages and interest, unpaid union scale wages, and owner-operator violations. The district court granted summary judgment in Novo's favor, finding that no valid collective bargaining agreement ever existed, following our decision in Operating Engineers Pension Trust v. Gilliam, 737 F.2d 1501 (9th Cir. 1984), which it found to be controlling.

The undisputed facts in this case are not identical to those in Gilliam. In this case Novo himself filled out the forms and had at least some opportunity to look at the documents he was signing. Both cases, however, involve individuals who, pursuant to conversations with a union agent, sought to obtain union membership in order to be an owner-operator on a union construction project. In both cases the individuals were led by union representatives to believe that the documents they signed pertained only to their union membership and ability to operate on the particular job in question, while in fact the documents they executed were collective bargaining agreements binding them as employers to the terms of a collective bargaining agreement covering any future employees that they might have. In both cases several years went by in silence before the union trust funds conducted an audit and sought to impose liability of several hundred thousand dollars in penalties and back payments. In neither case was an employer induced to sign a collective bargaining agreement by false assurances that it would not be enforced. Contrast Southwest Adm'rs, Inc. v. Rozay's Transfer, 791 F.2d 769, 773-75 (9th Cir. 1986) (fraudulent inducement not a defense to action for delinquent contributions), cert. denied, 479 U.S. 1065 (1987); Southern Cal. Retail Clerks Union & Food Employers Joint Pension Trust Fund v. Bjorklund, 728 F.2d 1262, 1266 (9th Cir. 1984) (same). We agree with the district court that this case is closer to Gilliam than to Bjorklund, and that the defense of "fraud in the execution" was properly held to be available to Novo.



Honorable Rudi M. Brewster, United States District Judge for the District of Southern California, sitting by designation


This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3