Operating Engineers Local 324 Health Care Plan v. G & W Construction Co.
783 F.3d 1045
| 6th Cir. | 2015Background
- Plaintiffs: Nine multi-employer fringe-benefit trust funds sued G&W Construction and its president Gary Nollar to collect delinquent fringe-benefit contributions under a collective-bargaining agreement and trust agreements.
- Claims: Suit brought under LMRA and ERISA including § 515 to recover contributions for the period "from January 2007."
- Defendants’ pleadings: Answered with affirmative defenses including laches, equitable estoppel, and waiver (no fraud-in-execution or illegality defenses).
- District court: Denied Funds’ Rule 12(f) motion to strike those defenses, then certified that denial for interlocutory appeal under § 1292(b).
- Sixth Circuit action: Considered whether ERISA § 515 bars these equitable defenses and reviewed the Rule 12(f) denial de novo as to legal questions.
- Disposition: Court held laches and equitable-estoppel (based on union or funds conduct) are insufficient defenses as a matter of law and should have been struck; declined to decide waiver and remanded.
Issues
| Issue | Plaintiff's Argument (Funds) | Defendant's Argument (G&W/Nollar) | Held |
|---|---|---|---|
| 1) Can laches be asserted to shorten the statute of limitations in an ERISA § 515 collection action? | Laches should not bar a timely ERISA § 515 suit brought within state contract limitations. | Laches can shorten an otherwise applicable limitations period and bar relief. | Laches cannot bar a suit for monetary contributions timely brought within the applicable limitations period; laches stricken. |
| 2) Is equitable estoppel based on union conduct a valid defense to an ERISA § 515 collection action? | No — § 515 limits defenses and oral/unwritten union practices are immaterial; written documents govern. | Union conduct and prior audits led defendants to reasonably rely that benefits applied only to union members. | Estoppel based on union conduct is barred by § 515 and is insufficient as a matter of law; stricken. |
| 3) Is equitable estoppel based on the funds’ own conduct a viable defense? | Even if theoretically available, defendants cannot show justifiable reliance when written agreements are available. | Defendants relied on the Funds’ prior audit practice and communications in bidding work. | Court did not decide the general availability but held on the pleaded facts reliance was unjustifiable; estoppel stricken. |
| 4) Should the waiver defense be struck? | (Funds) Not expressly developed on appeal. | Defendants asserted waiver as an affirmative defense. | Sixth Circuit declined to address waiver because Funds did not develop argumentation; left for district court. |
Key Cases Cited
- M & G Polymers USA, LLC v. Tackett, 135 S. Ct. 926 (2015) (ERISA plans created by CBAs are governed by written-plan requirements)
- Kaiser Steel Corp. v. Mullins, 455 U.S. 72 (1982) (Congress enacted § 515 to limit unrelated equitable defenses in ERISA collection actions)
- Petrella v. Metro-Goldwyn-Mayer, Inc., 134 S. Ct. 1962 (2014) (laches generally cannot bar legal damages claims brought within a statute of limitations)
- Cent. States, Se. & Sw. Areas Pension Fund v. Behnke, Inc., 883 F.2d 454 (6th Cir. 1989) (oral understandings/practices immaterial in § 515 collection suits)
- Gerber Truck Serv., Inc. v. (Trustees of a Fund), 870 F.2d 1148 (7th Cir. 1989) (policy reasons for limiting defenses in trust-fund collection actions)
- Trustees of Michigan Laborers’ Health Care Fund v. Gibbons, 209 F.3d 587 (6th Cir. 2000) (discussing equitable estoppel against funds and requirements for justifiable reliance)
- Cent. States, Se. & Sw. Areas Pension Fund v. Kraftco, Inc., 799 F.2d 1098 (6th Cir. 1986) (state contract limitations period applies to ERISA collection actions)