Northwest Administrators, Inc. v. Ace Paving Co., Inc, No. 2:2010cv01069 - Document 26 (W.D. Wash. 2011)
Court Description: ORDER granting 14 Plaintiff's Motion for Summary Judgment by Hon. James P. Donohue.(MD)
Download PDF
<![CDATA[
Northwest Administrators, Inc. v. Ace Paving Co., Inc Doc. 26 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF WASHINGTON AT SEATTLE 8 9 10 11 12 NORTHWEST ADMINISTRATORS, INC., Plaintiff, v. Case No. 10-cv-1069-JPD ORDER GRANTING PLAINTIFF’S MOTION FOR SUMMARY JUDGMENT 13 14 ACE PAVING CO., INC., a Washington corporation, 15 Defendant. 16 17 I. INTRODUCTION AND SUMMARY CONCLUSION 18 Plaintiff Northwest Administrators, Inc. (“Northwest”) moves the Court for summary 19 judgment against defendant Ace Paving Co., Inc. (“Ace”). Dkt. 14. Ace opposes the motion. 20 Dkt. 19. After careful consideration of Northwest’s motion, Ace’s opposition, and the balance 21 of the record, the Court GRANTS Northwest’s motion for summary judgment. 22 II. BACKGROUND 23 The relevant facts of this case, as set forth by Northwest’s briefs and supporting 24 documents, are uncontroverted by Ace. Northwest is the authorized administrative agent and 25 assignee of the Washington Teamsters Welfare Trust (“WTWT”) and the Western Conference 26 Teamsters Pension Trust (“WCTPT,” and collectively, “the Trusts”). The Trusts are employee ORDER PAGE - 1 Dockets.Justia.com 1 benefit plans established by the Washington Teamsters Welfare Trust Agreement and 2 Declaration of Trust (the “WTWT Trust Agreement”) and the Western Conference of 3 Teamsters Pension Trust Agreement and Declaration of Trust (the “WCTPT Trust 4 Agreement”). Dkt. 16, Exs. A and B. The Trusts are both governed by § 302(c)(5) of the 5 Labor Management Relations Act of 1947 and the Employee Retirement Income Security Act 6 of 1974 (“ERISA”). See 29 U.S.C. § 186(c)(5); 29 U.S.C. § 1001 et seq., as amended (1988). 7 The Trusts provides medical, dental, vision, time loss, death, and pension benefits to eligible 8 employees. Dkt. 16 at 2-3 (Ditter Decl.). See also id., Ex. A. at 5 (purpose of the WTWT); id., 9 Ex. B at 4-5 (purpose of the WCTPT). 10 Employers bound by a 2007-2012 collective bargaining agreement (“CBA”) with a 11 local Teamsters union, the International Brotherhood of Teamsters Local 589 (“Local 589”), 12 are required to remit monthly contributions to the Trusts at specified rates “for each 13 compensable man hour of Teamsters employed by such Employers in work contained under 14 the terms of this Agreement.” See id., Ex. E at § 7.2.1. The CBA also requires employers to 15 make their required contributions to the Trust “on or before the tenth (10th) day of the month 16 following the month in which the hours were worked. . . .” Id. Ace is such an employer. 17 Ace became bound to the terms of the CBA as well as the WTWT Trust Agreement 18 when it entered into a Heavy Construction Compliance Agreement (the “Compliance 19 Agreement”) with Local 589 on July 28, 2003.1 See id. at 4 (Ditter Decl.); id., Ex. C (the 20 Compliance Agreement). In addition, by signing an Employer-Union Certification Agreement 21 22 23 24 25 26 1 The Compliance Agreement provides that Ace is bound by any “successive collective bargaining agreements” to a 2003-2007 CBA, which in this case is the Teamsters 2007-2012 Building, Heavy and Highway Construction Labor Agreement. Id., Ex. C. Although the Compliance Agreement states that Ace is bound by the Teamsters Construction Industry Welfare Trust (“TCIWT”) Agreement, it also provides that Ace is a party to agreements entered into by TCIWT’s “successors in trust.” Id. Following a merger effective January 1, 2010, the WTWT became the TCIWT’s successor trust and the WTWT Trust Agreement became the TCIWT Agreement’s successor trust agreement. See id. at 4 (Ditter Decl.). ORDER PAGE - 2 1 (the “E-U Agreement”) on January 19, 2001, Ace agreed to be bound by the WCTPT Trust 2 Agreement. See id. at 4-5 (Ditter Decl.); id., Ex. D (the E-U Agreement). Ace 3 acknowledges that it is a party to the above-described agreements, and is obligated to remit 4 contributions to the Trusts by the tenth day of each month following work by its eligible 5 Teamster employees. See id. at 8 (Ditter. Decl.); Dkt. 19 at 1-2. 6 Pursuant to the WTWT Trust Agreement, a participating employer who makes 7 delinquent contributions is required to pay “liquidated damages of 20% of the amount of 8 Employer contributions due on such date following the date on which Employer contributions 9 became delinquent[.]” Dkt. 16, Ex. A at 8. In addition, the WTWT Trust Agreement provides 10 that employers must pay interest for the delinquent contributions, and “reimburse the Trust 11 Fund for all of its costs, including . . . all reasonable attorneys’ fees incurred by the Trust Fund 12 in connection” with the collection of the employer’s delinquent payments. Id. Similarly, the 13 WCTPT Trust agreement requires employers to pay 20% of the amount of delinquent 14 contributions as liquidated damages, interest on any late contributions, and attorneys’ fees and 15 costs related to the collection of the delinquent contributions. See id., Ex. B at 6. Thus, the 16 CBA, Compliance Agreement, E-U Agreement, and Trust Agreements collectively require Ace 17 to promptly and fully report and pay monthly contributions to the Trust Funds, or else be held 18 liable for liquidated damages in the amount of 20% of the delinquent contributions, plus 19 interest, attorneys’ fees, and costs. 20 Ace acknowledges that its contributions to the WTWT and WCTPT for work 21 performed in April through June 2010 were not timely paid under the Trust Agreements. See 22 Dkt. 19 at 2. The delinquent contributions to Northwest for these employment periods totaled 23 $63,788.62. See Dkt. 15, Exs. A and B (Azus Decl.); Dkt. 25, Ex. G. On June 29, 2010, 24 Northwest initiated this action against Ace to recover the total amount of delinquent 25 contributions, as well as liquidated damages, interest, attorneys’ fees, and costs. See Dkt. 1 at 26 3-4; Dkt. 16 at 10 (Ditter Decl.). Ace paid Northwest the full amount of delinquent ORDER PAGE - 3 1 contributions in three installments in July 2010. See Dkt. 15 at 1-2 (Azus Decl.); Dkt. 16 at 10 2 (Ditter Decl.); Dkt. 19 at 2; Dkt. 25, Ex. G. 3 On February 10, 2011, Northwest filed a motion for summary judgment seeking 4 $12,757.72 in liquidated damages, as well as $204.46 in interest, and reasonable attorneys’ fees 5 and costs. See Dkt. 16 at 10 (Ditter Decl.). Ace does not challenge Northwest’s calculations 6 of damages.2 Dkt. 19. Ace contends, however, that the liquidated damages provisions of the 7 Trust Agreements constitute unenforceable penalties under state and federal common law, and 8 that liquidated damages may not be awarded under ERISA if there are no unpaid contributions 9 at the time judgment is entered. See Dkt. 19 at 2-4. For the reasons discussed below, the Court 10 finds Ace’s arguments unpersuasive. 11 III. JURISDICTION 12 The parties have consented to this matter proceeding before the undersigned United 13 States Magistrate Judge pursuant to 28 U.S.C. § 636(c). See Dkt. 11 at 3. The Court has 14 exclusive jurisdiction over this action pursuant to 29 U.S.C. §§ 1132(e)(1) and (f). Venue is 15 proper because the Trust Funds are administered in this district. 29 U.S.C. § 1132(e)(2). 16 IV. DISCUSSION 17 A. Summary Judgment Standard 18 Summary judgment is appropriate when, viewing the evidence in the light most 19 favorable to the nonmoving party, there exists “no genuine issue as to any material fact” such 20 that “the moving party is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). A 21 material fact is a fact relevant to the outcome of the pending action. See Anderson v. Liberty 22 23 24 25 26 2 Ace asserts that “the only disputed issue in this case between Ace and Plaintiff is the enforceability of liquidated damages assessed by the Plaintiff under ERISA and Washington State law[.]” Dkt. 19 at 2. Thus, “Ace does not dispute that an award of attorney’s fees is permitted under the statute in this case, regardless of whether there is a judgment on the merits of the claim for unpaid contributions[.]” Id. at 9. However, Ace requests an award of attorneys’ fees under 29 U.S.C. § 1132(g)(1) if the Court finds that “29 U.S.C. § 1132(g)(2) does not apply to this action[.]” Id. at 16. As discussed below, the Court finds that § 1132(g)(2), rather than § 1132(g)(1), governs this case, and therefore Ace is not entitled to attorneys’ fees. ORDER PAGE - 4 1 Lobby, Inc., 477 U.S. 242, 248 (1986). Genuine issues of material fact exist when the evidence 2 would enable “a reasonable jury . . . [to] return a verdict for the nonmoving party.” Id. In 3 response to a summary judgment motion that is properly supported, the nonmoving party may 4 not rest upon mere allegations or denials in the pleadings, but must set forth specific facts 5 demonstrating a genuine issue of fact for trial, and produce evidence sufficient to establish the 6 existence of the elements essential to his case. See Fed. R. Civ. P. 56(e); Celotex Corp. v. 7 Cattrett, 477 U.S. 317, 323 (1986). A mere scintilla of evidence, however, is insufficient to 8 create a factual dispute. See Anderson, 477 U.S. at 252. To defeat a motion for summary 9 judgment, the non-moving party must make more than conclusory allegations, speculations, or 10 argumentative assertions that material facts are in dispute. T.W. Elec. Service, Inc. v. Pacific 11 Elec. Contractors Ass'n, 809 F.2d 626, 630-32 (9th Cir. 1987). 12 B. 13 Ace contends that the liquidated damages provision of the Trust Agreements operate as 14 a penalty, and are therefore unenforceable under state and federal common law. See Dkt. 19 at 15 12-15. To support this argument, Ace cites the Washington Supreme Court’s decision in 16 Walter Implement, Inc. v. Focht, 107 Wn.2d 553, 558-59, 730 P.2d 1340 (1987), and argues 17 that “when [Washington] courts consider the enforceability of a liquidated damages provision 18 the key factor under Washington law is the relation of the liquidated damages clause to 19 potential damages from a breach.” Id. at 13. Ace also cites the Ninth Circuit’s decision in 20 Idaho Plumbers & Pipefitters Health & Welfare Fund v. United Mech. Contractors, Inc., 875 21 F.2d 212, 215 (9th Cir. 1989), as support for the proposition that a liquidated damages 22 provision is void as a penalty under federal common law unless the harm caused by a breach is 23 very difficult or impossible to estimate, and the amount fixed is a reasonable forecast of just 24 compensation for the harm caused. Id. at 14-15. Ace argues that in this case, Northwest has 25 failed to provide “evidence that it has suffered any actual damages that could justify the 26 additional liquidated damages provision. While evidence of actual damages is not necessary to ORDER PAGE - 5 ERISA Governs the Liquidated Damages Clauses of the Trust Agreements 1 collect liquidated damages, such evidence can be used to show that a liquidated damages 2 provision was a justifiable estimate of future damages at the time of the agreement.” Id. at 14. 3 Ace’s reliance upon state and federal common law in this case is unavailing, however, 4 because ERISA governs cases such as this one, where an employer owed contributions to an 5 employee benefit plan at the time the lawsuit was initiated. See 29 U.S.C. § 1144(a) (providing 6 that ERISA “shall supersede any and all State laws insofar as they may now or hereafter relate 7 to any employee benefit plan. . . .”); Egelhoff v. Egelhoff, 532 U.S. 141, 146 (2001) (observing 8 that ERISA’s preemption provision is “clearly expansive”); General Am. Life Ins. Co. v. 9 Castonguay, 984 F.2d 1518, 1521 (9th Cir. 1993) (“ERISA’s preemption clause is one of the 10 broadest ever enacted by Congress, and it preempts even generally applicable laws, not just 11 laws aimed exclusively at employee benefit plans. . . .”) (internal citations omitted). ERISA 12 provides specific remedies for delinquent contributions, including an award of “(A) the unpaid 13 contributions, (B) interest on the unpaid contributions, (C) an amount equal to the greater of— 14 (i) interest on the unpaid contributions, or (ii) liquidated damages provided for under the plan 15 in an amount not in excess of 20 percent (or such higher percentage as may be permitted under 16 Federal or State law) of the amount determined by the court under subparagraph (A), [and] (D) 17 reasonable attorney’s fees and costs of the action, to be paid by the defendant. . . .” 29 U.S.C. 18 § 1132(g)(2). 19 Furthermore, ERISA obligates participating employers to make contributions to a 20 multi-employer trust fund in accordance with the terms of a trust agreement or collective 21 bargaining agreement. See 29 U.S.C. §§ 1102(a), 1103(a), 1145. The language of a written 22 trust agreement defines the rights and obligations of the parties to the trust to the extent they 23 are consistent with ERISA. Id. at § 1145; Santa Monica Culinary Welfare Fund v. Miramar 24 Hotel Corp., 920 F.2d 1491, 1493-94 (9th Cir. 1990) (internal citations omitted). As noted 25 above, the WTWT Trust Agreement and WCTPT Trust Agreement both provide that an 26 employer shall pay liquidated damages of 20% of the amount of the delinquent contributions. ORDER PAGE - 6 1 See Dkt. 16, Ex. A at 8; id., Ex. B at 6. Ace has made no showing in these proceedings that 2 these provisions are somehow inconsistent with ERISA, which also provides for liquidated 3 damages in the amount of 20% of any delinquent contributions. 4 Finally, the Ninth Circuit has held that § 1132(g)(2) is “mandatory and not 5 discretionary.” Northwest Adm'rs Inc. v. Albertson's, Inc., 104 F.3d 253, 257 (9th Cir. 1996) 6 (quoting Operating Eng'rs Pension Trust v. Beck Eng'g & Surveying, Co., 746 F.2d 557, 569 7 (9th Cir. 1984)). Section 1132(g)(2) requires only that: “(1) the employer must be delinquent 8 at the time the action is filed; (2) the district court must enter a judgment against the employer; 9 and (3) the plan must provide for such an award.” Id. See also Idaho Plumbers & Pipefitters 10 Health & Welfare Fund, 875 F.2d at 215 (holding that ERISA’s damages provision was 11 inapplicable because the defendant had paid all contributions owed to the trust before the 12 lawsuit was initiated). 13 Here, the Court finds that all three criteria for a mandatory award under § 1132(g)(2) 14 are satisfied. Ace admits that there were unpaid contributions at the time Northwest filed this 15 lawsuit, and that the Trust Agreements provide for an award of liquidated damages. See Dkt. 16 19 at 2. As discussed in greater detail below, with respect to the final factor, the Ninth Circuit 17 has held that “mandatory fees are available under § 1132(g)(2) ‘notwithstanding the 18 defendant’s post-suit, prejudgment payment of the delinquent contributions themselves.’” 19 Albertson's, 104 F.3d at 258 (quoting Carpenters Amended & Restated Health Benefit Fund v. 20 John W. Ryan Constr. Co., 767 F.2d 1170, 1175 (5th Cir. 1985)). 21 Accordingly, the state and federal common law cases cited by Ace are inapposite, as 22 such law is preempted by ERISA. Ace is obligated to pay liquidated damages as a result of its 23 failure to timely pay contributions to the Trusts, regardless of its financial difficulties. 24 25 26 ORDER PAGE - 7 1 2 C. Liquidated Damages Are Available Pursuant to § 1132(g(2) If Unpaid Contributions Existed at the Time the Lawsuit was Filed Ace argues that ERISA is inapplicable to this case because a judgment for unpaid 3 contributions is a necessary predicate for an award of liquidated damages under § 1132(g)(2). 4 Dkt. 19 at 3. Specifically, Ace asserts that where “there are no remaining ‘unpaid 5 contributions’ to enter a judgment on . . . no judgment may be awarded in favor of the plan for 6 unpaid contributions[.]” Id. at 7. Ace relies upon statutory language providing for an award of 7 liquidated damages “in an action to recover delinquent contributions . . . in which a judgment 8 in favor of the plan is awarded[.]” 29 U.S.C. § 1132(g)(2). Ace also points to statutory 9 language providing that a liquidated damages award may not exceed “20 percent . . . of the 10 amount [of unpaid contributions] determined by the court under subparagraph (A)[.]” Id. 11 § 1132(g)(2)(C)(ii). 12 As Northwest points out, Ace’s arguments are unavailing because the Ninth Circuit has 13 held that an employer is liable for mandatory fees under § 1132(g)(2), including liquidated 14 damages, “notwithstanding the defendant’s post-suit, prejudgment payment of the delinquent 15 contributions themselves.” Albertson’s, 104 F.3d at 258. Significantly, the Ninth Circuit has 16 also expressly rejected defendant’s argument that “a mandatory award under § 1132(g)(2) is 17 improper because the employer voluntarily paid the delinquent contributions . . . thus the 18 district court did not enter judgment against [the employer] relating to those contributions[.]” 19 Id. Instead, the court held that mandatory “[f]ees may be awarded even though there is no 20 judgment on the merits or when the dispute has become moot because relief is otherwise 21 obtained.” Id. (citing Lads Trucking Co. v. Board of Trustees of W. Conference of Teamsters 22 Pension Trust Fund, 777 F.2d 1371, 1375 (9th Cir. 1985)). 23 Indeed, Ace appears to concede that an interpretation of § 1132(g)(2) which authorizes 24 an award of liquidated damages as long as unpaid contributions existed at the time the lawsuit 25 was filed “is arguably the prevailing Ninth Circuit interpretation[.]” Dkt. 19 at 10. 26 ORDER PAGE - 8 1 Nevertheless, Ace posits that Ninth Circuit precedent incorrectly interprets the plain language 2 of § 1132(g)(2). Id. at 9-10. 3 The Court declines Ace’s invitation to interpret § 1132(g)(2) in a manner that is 4 contrary to longstanding Ninth Circuit precedent. In doing so, the Court notes that with the 5 exception of the Sixth Circuit, every Court of Appeals to consider the issue concurs with the 6 Ninth Circuit’s interpretation of § 1132(g)(2). See UAW Local 259 Soc. Sec. Dep't v. Metro 7 Auto Ctr., 501 F.3d 283, 288-89 (3d Cir. 2007) (providing that § 1132(g)(2) remedies apply to 8 all contributions unpaid at the time a suit is filed, even if the debts are partially satisfied before 9 judgment); Operating Eng'rs Local 139 Health Benefit Fund v. Gustafson Constr. Corp., 258 10 F.3d 645, 654 (7th Cir. 2001) (“The interest and liquidated-damages provisions of ERISA 11 apply . . . only to contributions that are unpaid at the date of suit (not the date of judgment, as 12 argued by the defendant).”); Iron Workers Dist. Council v. Hudson Steel Fabricators & 13 Erectors, Inc., 68 F.3d 1502, 1507 (2d Cir. 1995) (“[T]he provisions of § 1132(g)(2)(B) and 14 (C) make reference to unpaid contributions not to establish a limit on qualifying judgments, but 15 rather because the amount of an award of interest or liquidated damages should logically be 16 predicated upon the amount of the unpaid contributions originally at issue, whether or not 17 outstanding at the time of judgment, since that amount correctly measures the damage caused 18 by the delinquency.”). See also Carpenters & Joiners Welfare Fund v. Gittleman Corp., 857 19 F.2d 476, 478 (8th Cir. 1988) (agreeing that “unpaid contributions” accounted for in 20 § 1132(g)(2) means “contributions unpaid at the time suit was filed[.]”). 21 Thus, Ace’s argument that § 1132(g)(2) is inapplicable to this case is unavailing. See 22 Dkt. 19 at 2. Pursuant to the Trust Agreements and § 1132(g)(2), Northwest is entitled to 23 liquidated damages in the amount of $12,757.72, as well as interest and reasonable attorneys’ 24 fees and costs. See Dkt. 15, Ex. G. 25 26 ORDER PAGE - 9 1 V. CONCLUSION 2 For the reasons discussed above, the Court finds no issues of fact regarding 3 Northwest’s entitlement to the total amount of liquidated damages sought in this action for 4 Ace’s delinquent contributions to the WTWT and WCTPT for the April through June 2010 5 employment periods. Accordingly, the Court hereby ORDERS as follows: 6 7 (1) Northwest’s motion for summary judgment, Dkt. 14, is GRANTED. (2) Judgment is awarded in favor of Northwest and against Ace in the following amounts: $12,757.72 for liquidated damages; $204.46 for interest; and reasonable attorneys’ fees and costs. (3) The Clerk is directed to send copies of this Order to counsel for all parties. 8 9 10 11 DATED this 25th day of March, 2011. A 12 13 JAMES P. DONOHUE United States Magistrate Judge 14 15 16 17 18 19 20 21 22 23 24 25 26 ORDER PAGE - 10
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
