930 F. 2d 26 - Audit Services Inc v. Martel Construction Inc

MEMORANDUM*

Martel Construction appeals the district court's summary judgment against it requiring Martel to pay delinquent contributions to employee benefit trust funds. The panel has jurisdiction of the timely appeal. 28 U.S.C. Sec. 1291. We affirm.

As assignee of certain employee benefit trust funds' claims for delinquent contributions and liquidated damages, Audit Services filed this collection action against Martel Construction ("Martel") under the Employee Retirement Income Security Act (ERISA). 29 U.S.C. Secs. 1001-1461. Audit Services argues that Martel has wrongfully withheld contributions due under collective bargaining agreements signed by Martel. The agreements required Martel to pay contributions into the trust funds for all hours worked by all of its employees, union or non-union. Martel did so until the Crow Tribal Employment Rights Office ("TERO") required Martel to pay benefits directly to all of its non-union Indian employees doing work on the Crow Reservation in south-central Montana. Not wanting to make double contributions for non-Union Indian employees doing work on the reservation, Martel stopped contributing to the trust funds for the hours worked by these employees when it began paying benefits directly to them. In 1986, a payroll audit revealed that Martel owed $85,353 in delinquent contributions, liquidated damages, interest, and audit fees. This action followed.

The district court granted summary judgment for Audit Services. The court held that the collective bargaining agreements clearly required Martel to make contributions for all hours worked by all employees, including non-union Indian employees doing work on the reservation, and that no Crow Tribal Resolution instructed otherwise.

This court reviews the grant of summary judgment de novo. United Steelworkers of Am. v. Phelps Dodge Corp., 865 F.2d 1539, 1540 (9th Cir.), cert. denied, 110 S.Ct. 51 (1989). Summary judgment is appropriate when "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).

Crow Tribunal Resolution 84-62, passed by the Crow Tribal Council in 1984, established a "right to work" law prohibiting employment discrimination against non-union Indians doing work on the reservation. There is no dispute that the Crow Tribal Council, as a sovereign entity, had power to pass the resolution, see Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 137 (1982), or that the resolution is authorized by federal labor law. 29 U.S.C. Sec. 164(b) (state or territorial "right to work" laws not pre-empted by NLRA); cf. Retail Clerks Int'l Ass'n v. Schermerhorn, 373 U.S. 746, 757 (1963) (affirming that states can prohibit union-security contracts under Sec. 14(b) of the NLRA). The Crow TERO subsequently required that Martel pay non-union Indians' benefits directly to the Crow Tribe. Audit Servs., Inc. v. Martel Construction, No. CV-86-96-BV-WDM, Deposition of William Martel, Ex. 4, March 18, 1985 TERO Letter to Martel Construction (D.Mont. April 3, 1987). The present dispute concerns the effect of Resolution 84-62, and the subsequent requirement established by the TERO, on the employee benefit plans established in the collective bargaining agreements.

Martel argues that Resolution 84-62 and the TERO letter nullified its obligation under the collective bargaining agreements to pay benefits into the trust funds for non-union Indian employees doing work on the reservation. It argues that paying the benefits twice would result in excessive costs for work on the reservation over costs for work performed elsewhere. Nevertheless, however valid the TERO's requirement may be that Martel pay benefits directly to the Crow Indians doing work on the reservation, that requirement alone does not excuse Martel from its clear obligation under the collective bargaining agreement to pay into the trust funds for all hours worked by all employees, on or off the reservation. See Brogan v. Swanson Painting Co., 682 F.2d 807, 809 (9th Cir.1982) ("The contractor's cash payment of equivalent benefits to non-union employees does not, however, in itself, excuse the contractor's obligation to contribute to the trust funds."); Audit Servs., Inc. v. Rolfson, 641 F.2d 757, 761 (9th Cir.1981) ("The payment of cash to nonunion employees, however well-intentioned such payment may have been, does not excuse the obligation to make contributions to the funds.").

Because there are no genuine issues of material fact, we AFFIRM the district court's grant of summary judgment in favor of Audit Services. Audit Services is entitled to attorney fees on this appeal. 29 U.S.C. Sec. 1132(g)(2); Operating Eng'rs Pension Trust v. Cecil Backhoe Serv., Inc., 795 F.2d 1501, 1508 (9th Cir.1986) (award of attorney fees on appeal to successful trust funds in ERISA collection actions is mandatory). Audit Services is directed to submit its request and documentation for attorney fees to the Ninth Circuit.