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Local Union 825, Affiliated With the v. Mcrand Contracting Co. Inc

June 30, 2011

LOCAL UNION 825, AFFILIATED WITH THE INTERNATIONAL UNION OF OPERATING ENGINEERS, AFL-CIO,
AND THE BOARDS OF TRUSTEES OF THE INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL 825 PENSION FUND, THE IUOE LOCAL 825 WELFARE FUND, THE IUOE LOCAL
825 APPRENTICESHIP TRAINING AND RETRAINING FUND, THE IUOE LOCAL 825 SUPPLEMENTAL EMPLOYMENT BENEFIT FUND, THE IUOE LOCAL 825 SAVINGS FUND, THE IUOE LOCAL 825 ANNUITY FUND, PLAINTIFFS,
v.
MCRAND CONTRACTING CO. INC.,
BIL-JIM CONSTRUCTION, INC., BIL-JIM CONSTRUCTION, INC., II AND LAURA J. JOHNSON, DEFENDANTS.



The opinion of the court was delivered by: Pisano, District Judge.

NOT FOR PUBLICATION

OPINION

Before the Court is a motion for partial summary judgment filed by Plaintiffs the Boards of Trustees of the International Union of Operating Engineers Local 825 Pension Fund, Welfare Fund, Apprenticeship Fund, Supplemental Employment Benefit Fund, Savings Fund and Annuity Fund ("Funds") (together, "Plaintiffs") against Defendants McRand Contracting Co., Inc. ("McRand") and Bil-Jim Construction ("Bil-Jim").*fn1 McRand and Bil-Jim oppose the motion. Also before the Court is a cross-motion for partial summary judgment filed by Defendant Laura J. Johnson against Plaintiffs. Plaintiffs oppose that motion. For the following reasons, the Court will grant Plaintiffs‟ motion in part and deny it in part. The Court will grant Ms. Johnson‟s cross motion.

I. BACKGROUND

Since Bil-Jim was established as a construction company in 1965, it has never entered into a collective bargaining agreement with any union, including Local Union 825 ("Local 825"), affiliated with International Union of Operating Engineers. Presently, Bil-Jim remains a non-union company. To compete for and perform union work in the public sector, one of the owners of Bil-Jim established McRand as a union sister company in 1975. McRand subsequently entered into a collective bargaining agreement with Local 825 (the "CBA"). The CBA provides that McRand must pay contributions to the Funds, which are multi-employer employee benefit plans as described in Sections 3(3) and 3(37) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1002(3) and 1002(37), based on the weeks and hours its employees work each month. For over thirty years, Bil-Jim and McRand performed construction work as a "double-breasted" operation, wherein the companies often used mixed crews of union and non-union employees on their projects. The nature of this collaboration was open and notorious.

On September 19, 2007, Plaintiffs filed their Complaint against McRand and Bil-Jim, alleging that the "double breasted" nature of their operation violated the terms of the CBA. Specifically, Plaintiffs claim that a recent audit of McRand revealed that the companies were operating as a single entity, and that they were using non-union employees to perform work covered by the CBA. Accordingly, Plaintiffs claim that Bil-Jim should have been paying contributions to the Funds for that work. Defendants respond that Local 825 and the Funds were aware of the "double-breasted" operation for over thirty years, and thus their argument that such an arrangement violated the terms of the CBA is disingenuous.

Plaintiffs submitted the instant motion for partial summary judgment on July 9, 2010, stating that there are no disputed facts and claiming that the companies owe the Funds for not contributing based on covered work performed by Bil-Jim employees. Defendants responded to the motion and filed a cross-motion for partial summary judgment on September 7, 2010, claiming that past practice shows Plaintiffs‟ argument is disingenuous and seeking dismissal of Laura J. Johnson because Plaintiffs failed to provide evidence of her personal liability. On October 20, 2010, the Court heard oral argument on the motion. The Court has also held numerous settlement conferences on the matter, but the parties have failed to reach an agreement.

II. STANDARD OF REVIEW

To prevail on a motion for summary judgment, the moving party must establish "that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The district court must determine whether disputed issues of material fact exist, but the court cannot resolve factual disputes in a motion for summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).

In determining whether a genuine issue of material fact exists, the court must view the facts in the light most favorable to the non-moving party and extend all reasonable inferences to that party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986); Stephens v. Kerrigan, 122 F.3d 171, 176-77 (3d Cir. 1997). The moving party always bears the initial burden of demonstrating the absence of a genuine issue of material fact, regardless of which party ultimately would have the burden of persuasion at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986). Once the moving party has met its opening burden, the non-moving party must identify, by affidavits or otherwise, specific facts showing that there is a genuine issue for trial. Id. at 324. Thus, the non-moving party may not rest upon the mere allegations or denials of its pleadings. Id. "[T]he plain language of Rule 56[] mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322.

Once the moving party has demonstrated to the court the absence of a material fact at issue, the Supreme Court has stated that the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts...." Matsushita, 475 U.S. at 586-87 (citations omitted). In other words, "[i]f the evidence [submitted by the non-moving party] is merely colorable ... or is not significantly probative ... summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted).

The Supreme Court has specifically recognized that "[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupportable claims or defenses, and [ ] that [the rule] should be interpreted in a way that allows it to accomplish this purpose." Celotex, 477 U.S. at 323-24. Thus, "[w]hen the record is such that it would not support a rational finding that an essential element of the non-moving party's claim or defense exists, summary judgment must be entered for the moving party." Turner v. Schering-Plough Corp., 901 F.2d 335, 341 (3d Cir. 1990).

III. DISCUSSION

A. Section 515 ...


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