Brown -Graves Company v. CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND and HOWARD MCDOUGALL, Trustee

8 Brown-Graves Co. v.
Central States, et al.
No. 99-3039
1298 (6th Cir. 1991). As noted, the district court determined
that until the 1995 audit, Central States did not know of
Brown-Graves’s unusual definition of “casual drivers.”
Furthermore, after Central States became aware of the
problem, it notified Brown-Graves of its claim for
contributions. The elements of laches and estoppel are not
met. As a result, these doctrines do not bar Central States’s
claims for pension contributions on behalf of employees
classified as “casual drivers.”
AFFIRMED.
*The Honorable Sandra S. Beckwith, United States District Judge for
the Southern District of Ohio, sitting by designation.
1
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
ELECTRONIC CITATION: 2000 FED App. 0097P (6th Cir.)
File Name: 00a0097p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
BROWN -GRAVES C OMPANY ,
Plaintiff-Appellant,
v.
C ENTRAL S TATES,
S OUTHEAST AND S OUTHWEST
AREAS P ENSION FUND and
HOWARD M CDOUGALL,
Trustee,
Defendants-Appellees.
;>

1
No. 99-3039
Appeal from the United States District Court
for the Northern District of Ohio at Akron.
No. 96-02300—David D. Dowd, Jr., District Judge.
Submitted: December 13, 1999
Decided and Filed: March 20, 2000
Before: MERRITT and SILER, Circuit Judges;
BECKWITH, District Judge.*

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2 Brown-Graves Co. v.
Central States, et al.
No. 99-3039
_________________
COUNSEL
ON BRIEF: Timothy M. Bittel, David H. Shaffer,
JOONDEPH, SHAFFER & BITTEL, Akron, Ohio, for
Appellant. Albert M. Madden, CENTRAL STATES,
SOUTHEAST & SOUTHWEST AREAS HEALTH &
WELFARE & PENSION FUNDS, Des Plaines, Illinois, for
Appellees.
_________________
OPINION
_________________
SILER, Circuit Judge. Plaintiff, Brown-Graves Company
(“Brown-Graves”), appeals the judgment and award of
attorneys’ fees for defendants, Central States Southeast and
Southwest Areas Pension Fund (“Central States”), in this
Employee Retirement Income Security Act (“ERISA”) case
in which the district court determined that Brown-Graves was
obligated to make contributions to Central States. For the
reasons discussed below, we AFFIRM the district court’s
decision.
BACKGROUND
Brown-Graves employed truck drivers pursuant to a series
of three-year contracts negotiated with Local Union 348 of the
International Brotherhood of Teamsters (“Local 348"). This
appeal concerns whether Brown-Graves was obligated by the
terms of these contracts to pay pension contributions to
Central States on behalf of eight employees who were
classified as “casual drivers.”
The Collective Bargaining Agreement (“CBA”) in effect
from June 23, 1983, to June 23, 1986, makes no mention of
a “casual driver” classification. During this time frame,
Brown-Graves employed casual drivers under an informal
No. 99-3039 Brown-Graves Co. v.
Central States, et al.
7
employees.” As the Eighth Circuit has done, we shall apply
the ordinary meaning to the term “casual employee” where no
other definition is contained in the CBAs and Central States
had no reason to know of the unusual definition used by
Brown-Graves. Consequently, the district court was correct
in ruling that Brown-Graves was contractually obligated to
make contributions on behalf of employees classified as
“casual drivers.”
II. DEFENSE OF LACHES AND ESTOPPEL
Laches consists of two elements: (1) unreasonable delay in
asserting one’s rights; and (2) a resulting prejudice to the
defending party. Meade v. Pension Appeals and Review
Committee, 966 F.2d 190, 195 (6th Cir. 1992). In the present
case, there was no unreasonable delay. As the district court
stated, Central States did not know of the problem with
Brown-Graves’s unusual interpretation of the term “casual
drivers” prior to the 1995 audit. Immediately after the audit,
Central States notified Brown-Graves of its claim for
contributions.
There was also no resulting prejudice to Brown-Graves.
Brown-Graves states that if it had been notified of Central
States’s claim sooner it could have “taken steps to avoid
being sued for the disputed contributions.” However, the only
“steps” Brown-Graves could have taken would have been to
make the contributions. Consequently, the laches defense
fails.
The elements of estoppel are: (1) conduct or language
amounting to a representation of fact; (2) the party to be
estopped must be aware of the true facts; (3) the party to be
estopped must intend that the representation be acted on such
that the party asserting the estoppel has the right to believe it
was so intended; (4) the party asserting the estoppel must be
unaware of the true facts; and (5) the party asserting the
estoppel must detrimentally and justifiably rely on the
representation. Armistead v. Vernitron Corp., 944 F.2d 1287,

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6 Brown-Graves Co. v.
Central States, et al.
No. 99-3039
Given the purpose of written contracts and section 515 of
ERISA, the parties to a collective bargaining agreement
are bound by the terms of their agreement, regardless of
their undisclosed intent. By so holding, we merely
reaffirm a basic rule of contract interpretation. “A
signatory to a contract is bound by its ordinary meaning
even if he gave it an idiosyncratic one; private intent
counts only if it is conveyed to the other party and
shared.” [citation omitted]. Section 515 of ERISA
emphasizes that this is especially true as to third parties
obligated to administer a pension fund according to the
terms of written agreements.
Id. at 1353.
Hartlage Truck Service, Inc. is distinguishable from the
present case and Independent Fruit. In Hartlage, the court
stated:
The CBAs in this case--unlike the collective bargaining
agreements at issue in Independent Fruit--clearly express
the parties’ intent. Hartlage and the Union openly
expressed their agreed understanding of the phrase
“casual employee” in the CBAs. We have no doubt that
the Funds could have easily ascertained the meaning the
parties attributed to that phrase. We need not, therefore,
look to a dictionary definition for guidance as the
Independent Fruit court did. Rather, as required by
section 515, we enforce the terms of the CBAs and
conclude that Taylor, Vorwold, and Vail were casual
employees.
Hartlage Truck Service, Inc., 991 F.2d at 1362. The court
determined that as the parties agreed to a specific definition
of “casual” the ordinary definition was not appropriate.
As in Independent Fruit and unlike Hartlage Truck Service,
Inc., the CBAs involved in the present case do not define
“casual.” Furthermore, Central States had no notice of the
unusual meaning Brown-Graves attached to the term “casual
No. 99-3039 Brown-Graves Co. v.
Central States, et al.
3
arrangement with Local 348. The “casual driver”
classification first appeared in the parties’ CBA covering the
period between June 23, 1986, and June 23, 1989. The
agreement stated that casual drivers were to be hired “without
any fringe benefits.” Successive CBAs entered into by the
parties in 1989 and 1992 contained nearly identical language
concerning the casual driver classification.
In 1995, Central States conducted an audit of Brown-
Graves’s payroll records for the period of December 30, 1990,
through December 25, 1993, to determine whether Brown-
Graves was making pension fund contributions under the
CBA. Following the audit, Central States demanded Brown-
Graves pay more than $30,000 in contributions and interest
allegedly owed on behalf of certain employees classified as
“casual drivers.” In 1996, Brown-Graves commenced suit
seeking a declaratory judgment that there was no contractual
obligation to make pension contributions on behalf of the
casual drivers. Central States filed a counterclaim for
recovery of the disputed contributions plus interest, costs and
attorneys’ fees. Brown-Graves’s denial of an obligation to
contribute to the pension fund from 1986 forward was based
on the provision in the CBA stating that casual drivers will be
hired “without any fringe benefits.”
The district court ruled that Brown-Graves owed
$60,251.94 in pension contributions and interest for
employees hired prior to June 23, 1986. It further ruled that
Brown-Graves owed $47,430.27 in contributions and interest
for the employees hired after June 23, 1986, because those
individuals did not qualify as “casual employees” under the
ordinary dictionary definition of that term.
DISCUSSION
I. EMPLOYER CONTRIBUTIONS
The contracts at issue here did not define the term “casual
driver.” Therefore, this court must decide what test should be
applied to determine whether an employee is within the casual

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4 Brown-Graves Co. v.
Central States, et al.
No. 99-3039
classification. Section 515 of ERISA, 29 U.S.C. § 1145,
governs employer contributions to multi-employer pension
plans:
Every employer who is obligated to make contributions
to a multi-employer pension plan under the terms of the
plan or under the terms of a collectively bargained
agreement shall, to the extent not inconsistent with law,
make such contributions in accordance with the terms
and conditions of such plan or such agreements.
Thus, employers are required to make contributions according
to the terms of their contracts. Central States, Southeast and
Southwest Areas Pension Fund v. Hartlage Truck Service,
Inc. 991 F.2d 1357, 1360 (7th Cir. 1993).
The CBA covering 1983-1986 made no mention of “casual
drivers.” It provided that all new employees “shall be
considered as probationary employees for a period of ninety
(90) calendar days” and that new drivers were not to become
eligible under the plan for thirty days. Brown-Graves claims
it had an informal agreement with Local 348 pertaining to
casuals. Nevertheless, the 1983-1986 CBA was unambiguous
and must be interpreted without any regard to parol evidence.
The subsequent CBAs did contain “casual driver” language,
but did not define the term.
Since June 23, 1986, Brown-Graves classified each new
driver as a “casual driver.” The language in the post-1986
CBAs excluding casual drivers from pension benefits was
unambiguous. However, it did not provide notice to Central
States that Brown-Graves gave the term “casual employee” an
unusual meaning which allowed it to call all new employees
“casual” for indefinite periods of time. Central States would
not have accepted Brown-Graves’s post-1986 CBAs had it
known that Brown-Graves planned to call every newly hired
employee a “casual” for periods up to four years so it could
avoid pension payments. The district court stated that:
No. 99-3039 Brown-Graves Co. v.
Central States, et al.
5
While Central States noted that the post-1986 CBAs
excluded “casual employees” from participation, Central
States accepted the CBAs because there was no
indication in the CBAs that the employer had assigned a
meaning to the term “casual employee” other than the
standard definition of short term, temporary, sporadic
employees which would not violate Central States’ rules.
The Sixth Circuit has not addressed the issue of whether, in
the absence of a definition in the contract, the ordinary
dictionary definition or some other definition should apply to
determine whether or not an employee is “casual.” The
Seventh and Eighth Circuits have addressed the issue. The
Eighth Circuit has concluded that an employer could not
avoid contributions to the pension fund for “casual”
employees by making an agreement with the union to attach
a different meaning from its plain meaning. See Central
States, Southeast and Southwest Areas Pension Fund v.
Independent Fruit & Produce Co., 919 F.2d 1343 (8th Cir.
1990). The Seventh Circuit reached the opposite conclusion.
It held that an employer is required to make contributions to
pension plans only on behalf of those employees as indicated
in the CBAs, and if casual employees are excluded from
benefits in the CBA, then any employee so designated is
excluded from benefit contributions. See Central States,
Southeast and Southwest Areas Pension Fund v. Hartlage
Truck Service, Inc., 991 F.2d 1357, 1360 (7th Cir. 1993).
In Independent Fruit, the employers had negotiated a CBA
which provided that casuals would not be eligible for pension
contributions, but it did not define casuals. Central States
conducted an audit and determined the employer owed
contributions for several employees because the number of
hours they worked indicated that they were not casual
employees. The Eighth Circuit held that the CBAs involved
were not ambiguous and there was nothing in the CBAs
suggesting anything other than the ordinary dictionary
definition of casual was intended. Independent Fruit, 919
F.2d at 1352. The court stated that:

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