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TEAMSTERS-EMPLOYER LOCAL NO. 945 PENSION FUND v. A

February 24, 1997

TEAMSTERS-EMPLOYER LOCAL NO. 945 PENSION FUND; LOCAL 945 I.B. OF T WELFARE FUND AND LOCAL 945 INTERNATIONAL BROTHERHOOD OF TEAMSTERS, Petitioners,
v.
ACME SANITATION CORP., Defendant.



The opinion of the court was delivered by: LECHNER

 LECHNER, District Judge

 This action arises from a petition ("Petition"), filed by Teamsters-Employers Local No. 945 Pension Fund (the "Pension Fund"), Local 945 I.D. of T. Welfare Fund (the "Welfare Fund") (collectively, the "Funds"), and Local 945, International Brotherhood of Teamsters ("Local 945") (collectively, the "Petitioners"), seeking to confirm an arbitration award entered against defendant, Acme Sanitation Corp ("Acme"). Petitioners allege confirmation is proper pursuant to Section 9 of the Federal Arbitration Act, 9 U.S.C. § 9 ("Section 9"), Section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and Section 502(e) and (f) of the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended 29 U.S.C. § 1132(e) and (f).

 Pursuant to Rule 12N, Appendix N of the General Rules Governing the District of New Jersey, Petitioners filed a motion to confirm the arbitration award ("Motion to Confirm the Arbitration Award"). Acme filed opposition to the Petition and a cross-motion to vacate the arbitration award and dismiss the Petition ("Motion to Vacate the Arbitration Award). *fn1" For the reasons set forth below, the Motion to Confirm the Arbitration Award is denied and the Motion to Vacate the Arbitration Award is granted. The Petition is dismissed without prejudice. The parties are directed to reopen the arbitration proceedings to allow Acme the opportunity to present its defenses.

 Facts

 A. Parties

 1. Local 945

 Local 945 is a labor organization representing employees in an industry affecting commerce within the meaning of Section 301. Petition, P 3. Local 945 has an office and place of business in Wayne, New Jersey. Id.

 2. Pension Fund

 Pension Fund is a trust fund within the meaning of Section 302(c)(5) of the LMRA, 29 U.S.C. § 186(c)(5), and an employee pension benefit plan within the meaning of Section 3(2), (3), and (37) of ERISA, 29 U.S.C. § 1002(2), (2), and (37). Petition, P 4. The Pension Fund is administered in Wayne, New Jersey.

 3. Welfare Fund

 The Welfare Fund is a trust fund within the meaning of Section 302(c)(5) of the LMRA, 29 U.S.C. § 186(c)(5), and an employee welfare benefit plan within the meaning of Section 3(2), (3), and (37) of ERISA, 29 U.S.C. § 1002(2), (2), and (37). Petition, P 5. The Welfare Fund is administered in Wayne, New Jersey. Id.

 4. Acme

 Acme is in the waste disposal industry and is an employer within the meaning of the LMRA and ERISA. Petition, P 6. Acme maintains an office and place of business in Jersey City, New Jersey. Id.

 B. The Collective Bargaining Agreements

 On 1 July 1990, Acme and Local 945 entered into a written collective bargaining agreement ("1990 CBA"). Id., P 7; 1990 CBA, attached as Exhibit 1 to Respondent's Brief. The 1990 CBA was effective from 1 July 1990 through 30 June 1993. Id., P 7; 1990 CBA. In 1993, the 1990 CBA was replaced by a second collective bargaining agreement (the "1993 CBA") (collectively, the "Collective Bargaining Agreements"), which was effective from 1 July 1993 through 30 June 1996. See 1993 CBA, attached as Exhibit 2 to Respondent's Brief.

 The 1993 CBA was negotiated by an association of waste disposal companies called the Solid Waste Management Bargaining Group (the "Bargaining Group"). Id. With the exception of wage increases and several minor revisions not relevant to this Petition, the 1990 CBA and the 1993 CBA were identical.

 Pursuant to Article 15 of the Collective Bargaining Agreements ("Article 15"), Acme agreed to contribute funds on behalf of its bargaining unit employees into the Pension Fund and the Welfare Fund. Petition, P 7. These contributions financed retirement, medical and other related benefits that are available to the Funds' participants and beneficiaries. See 1990 CBA, Article 15, at 12-13; 1993 CBA, Article 15, at 12-13. Acme agreed to maintain records of these contributions. See 1990 CBA, Article 16, at 13-14; 1993 CBA, Article 16, at 13. In addition, Acme agreed to make those records available to representatives of Local 945 or the Funds for inspection. Id.

 The Collective Bargaining Agreements also required disputes between Local 945 and Acme to be resolved through a formal grievance procedure, culminating in arbitration, if necessary. See 1990 CBA, Article 26, at 20; 1993 CBA, Article 26, at 18. The procedure required a grievance to be presented to various representatives of Acme and Local 945 in an effort to negotiate a settlement acceptable to both parties. See 1990 CBA, Article 26, P A, at 20-21; 1993 CBA, Article 26, P A, at 18. If the grievance could not be resolved between the parties, either Acme or Local 945 could submit the matter to binding arbitration for a resolution. Id.

 In the event that arbitration became necessary, a list of nine proposed arbitrators was to be obtained from the Federal Mediation and Conciliation Service or, if both parties agreed, from the New Jersey State Board of Mediation ("Board of Mediation"). See 1990 CBA, Article 26, P B(5), at 18-9; 1993 CBA, Article 26, P B(5), at 18-19. Acme and Local 945 would alternate striking the names of proposed arbitrators from the list. The last remaining arbitrator would preside over the dispute. Id.

 The Collective Bargaining Agreements also required the grievance and arbitration procedure to be the "sole and exclusive" method to resolve disputes between Acme and Local 945:

 
The grievance and arbitration procedure above set forth shall be the sole and exclusive means for the determination of all disputes, complaints, controversies, claims or grievances whatsoever, including a claim based upon an alleged breach of this Agreement. Neither party nor any individual employee shall constitute an action or proceeding in a court of law or equity, state or Federal, or before an administrative tribunal, other than to compel arbitration, as provided in this Agreement, or with respect to the award of an arbitrator. This provision shall be [a] complete defense to, and also grounds for a stay of any action or proceeding instituted contrary to the Agreement.

 1990 CBA, Article 26, P B(6); 1993 CBA, Article 26, P B(6).

 C. The Funds

 As indicated, Acme was required, through the Collective Bargaining Agreements, to contribute to the Welfare Fund and the Pension Fund. See Article 15 of the 1990 CBA; Article 15 of the 1993 CBA. The trustees of the Welfare Fund and the trustees for the Pension Fund (collectively, the "Trustees") issued respective declarations of trust (the "Welfare Declaration of Trust" and the "Pension Declaration of Trust"). See Welfare Declaration of Trust, attached as Exhibit 14 to Respondent's Brief; Pension Declaration of Trust, attached as Exhibit 15 to Respondent's Brief. The specific terms of the Welfare Declaration of Trust or the Pension Declaration of Trust were not referenced in the Collective Bargaining Agreements. See Article 15 of the 1990 CBA; Article 15 of the 1993 CBA.

 The Welfare Declaration of Trust provided, in relevant part:

 
The Trustees may compel and enforce the payment contributions in any manner which they may deem proper. The failure of any Employer to make contributions when due shall not relieve any other Employer from its duties or obligations hereunder. Any Employer who fails to make contributions shall be obligated to pay, in addition to said contributions, all expenses and costs of collection that may be incurred by the Trustees, including reasonable attorney's fees, and they shall be obligated to pay such interest or delinquency charges, if any, contained and described in the collective bargaining agreement between the Employer and the Union.

 See Welfare Declaration of Trust at 8. The Welfare Declaration of Trust is dated 29 March 1976 and encompassed "collective bargaining agreements heretofore negotiated by [Local 945] ... and various Employers pursuant to which there was established this health and welfare fund for the purpose of providing and maintaining benefits for employees covered by said collective bargaining agreements...." Id. at 1.

 The Pension Declaration of Trust, provided, in relevant part:

 
Section 4. Default in Payment. Non-payment by an Employer of any contributions when due shall not relieve any other Employer of his obligation to make payments. In addition to any other remedies to which the parties may be entitled, an Employer in default for ten (10) working days past the due date and set forth in the collective bargaining agreement, may be required, at the discretion of the Trustees, to pay such rate of interest as the Trustees may fix on the monies due to the Trustees from the date when the payment was due to the date when payment is made, together with all expenses of collection incurred by the Trustees, including reasonable attorneys' fees. The Trustees may take any action necessary to enforce payment of the contributions due hereunder, including, but not limited to, proceedings at law or in equity.

 See Pension Declaration of Trust at 11. The Pension Declaration of Trust stated, "This Agreement and Declaration of Trust is made and entered into the day of , 1961...." Id. at 1. The Pension Declaration of Trust encompassed Local 945 "and the various Employers who are parties to the Collective bargaining agreements ... who are ...


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