Opinion
CIVIL NO. 01-108-P-H (Consolidated)
September 30, 2002
Marshall J. Tinkle, Esq., David M. Hirshon, Esq., Tompkins, Clough, Hirshon Langer, Portland, ME, for Plaintiff Capozza Tile Company, Inc.
Jeffrey Neil Young, Esq., McTeague, Higbee, MacAdam, Case, Watson Cohen, Topsham, ME, Ira R. Mitzner, Esq., Dickstein, Shapiro, Morin Oshinsky, LLP, Washington, DC, for Consolidated Plaintiff Bricklayers Trowel Trades Int'l Pension Fund.
Jonathan S.R. Beal, Esq., Fontaine Beal, P.A., Portland, ME, Michael A. Feinberg, Esq., Renee Bushey, Esq., Feinberg, Charnas Birmingham, PC, Boston, MA, Beal, Esq., for Defendant Richard N. Joy.
Michael A. Feinberg, Esq., Renee Bushey, Esq., Feinberg, Charnas Birmingham, PC, Boston, MA, for Defendant Bricklayers Allied Craftworkers Local NO. 1 — Northern New England
ORDER AFFIRMING RECOMMENDED DECISION OF THE MAGISTRATE JUDGE
The United States Magistrate Judge filed with the court on April 29, 2002, with copies to counsel, his Recommended Decision on Motions for Summary Judgment and Memorandum Decision on Availability of Jury Trial. Objections to the Recommended Decision were filed by plaintiffs, Trustees of the Bricklayers Trowel Trades International Pension Fund ("Fund"), on May 8, 2002; by Capozza Tile ("Capozza") on May 13, 2002; and by defendant International Union of Bricklayers Allied Craftworkers Local No. 1 — Northern New England ("Local 1") on May 15, 2002. I have reviewed and considered the Recommended Decision, together with the entire record; I have made a de novo determination of all matters adjudicated by the Recommended Decision; and I concur with the recommendations of the United States Magistrate Judge for the reasons set forth in his Recommended Decision, and determine that no further proceeding is necessary.
I add only the following. The Fund argues that it should be treated like a holder in due course and should be able to rely on the signed document in its possession, since it is upon just such documents that it must make actuarial assumptions concerning amounts that it will have to pay and thus amounts that it must collect as premiums. Mem. Supp. of Objections at 4 (Docket No. 55). That argument has some appeal, because Fund trustees have no good way to determine whether the agreements presented to them have been properly entered into. As a result, the cases have routinely denied employers certain fraud defenses, specifically so-called fraud in the inducement defenses, where the employer knew what it was signing but relied perhaps on a union's statements that it would enforce the document differently than written. See, e.g., Agathos v. Starlite Motel, 977 F.2d 1500, 1505-06 (3d Cir. 1992); Central States, Southeast and Southwest Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1153-55 (7th Cir. 1989); Southwest Adm'rs, Inc. v. Rozay's Transfer, 791 F.2d 769, 774-75 (9th Cir. 1986), cert. denied, 479 U.S. 1065 (1987). Capozza, however, is arguing fraud not in the inducement, but in the execution. It says that the document the Fund has and is suing on (a collective bargaining agreement) is not a document that its president signed. (The president says that he was given only a signature page and was told that it dealt only with pension benefits for four employees. A jury may ultimately disbelieve him, but his statement creates a genuine issue of material fact.) Even a holder in due course cannot overcome that kind of defense. U.C.C. § 3-305(b) (1998). The policy arguments the Fund trustees advance still seem to apply (reliance upon the document for actuarial purposes and the difficulties they confront in testing the validity of the collective bargaining agreements they are given), but the common law distinction is recognized in the cases; the courts are willing to enforce a document that a party signed under a misapprehension of what its effect would be, but balk at enforcing a document that the party signed on the misapprehension that it was something different than it actually was. Compare Agathos, 977 F.2d at 1505-06, Gerber, 870 F.2d at 1153-55, and Rozay's Transfer, 791 F.2d at 774-75, with Connors v. Fawn Mining Corp., 30 F.3d 483, 492 (3d Cir. 1992), and Operating Eng'rs Pension Trust v. Gilliam, 737 F.2d 1501, 1504-05 (9th Cir. 1984). Neither ERISA nor the caselaw supports summary judgment for the Fund trustees if I take the factual assertions most favorably to Capozza.
Finally, there is no necessary inconsistency in recognizing personal immunity for the union official while leaving open the preemption issue. The policies at stake in preemption and immunity are not identical.
It is therefore ORDERED that the Recommended Decision of the Magistrate Judge is hereby ADOPTED. The motion of the Fund plaintiffs for summary judgment is DENIED. The motion of defendants Richard N. Joy and Local 1 for summary judgment is GRANTED as to all claims asserted against Joy and otherwise DENIED.
SO ORDERED.