BOARD OF TRUSTEES OF GLASSWORKERS & INDUSTRY HEALTH/SECURITY TRUST FUND v. BOOTH GLASS CO.
v.
BOOTH GLASS CO., a Washington corporation, Contractor's Registration No. BOOTHGC9730B (hereafter referred to as the Employer) and AMERICAN STATES INSURANCE CO., Bond 6240415 (hereafter referred to as the Surety), Respondents.
Court of Appeals of Washington, Division One.
Counsel for Appellant(s), Michael Howard Korpi, McKenzie Rothwell Barlow & Korpi, PS, 500 Union St Ste 700, Seattle, WA, 98101-2396.
Counsel for Respondent(s), William Bernard Bauman, Attorney at Law, 601 Pioneer Bldg, 600 1st Ave, Seattle, WA, 98104-2216.
Thomas Kent Windus, Livengood, Fitzgerald & Alskog, PLLC, Po Box 908, Kirkland, WA, 98083-0908.
UNPUBLISHED OPINION
PER CURIAM.
Pension fund trustees appeal the summary judgment dismissal of their complaint against Booth Glass Company for breach of a collective bargaining agreement. Because a genuine issue of material fact remains for trial as to whether the new owner of Booth Glass impliedly agreed to be bound by a collective bargaining agreement signed by the previous owner, we reverse and remand for trial.
FACTS
In October 2006, the Board of Trustees of the Glassworkers and Industry Health & Security Trust Fund, Western Glaziers Retirement Trust Fund, and Puget Sound Northwest Glaziers & Glassworkers Apprenticeship and Training Trust Fund ("the Trusts") filed a complaint for breach of a collective bargaining agreement against Booth Glass Company and its surety American States Insurance Company. According to the complaint, "American States Insurance Company issued Bond No. 6240145 to Booth Glass Co., Inc. in the amount of $12,000 effective February 26, 2004."
The Trusts attached an excerpt from a 1999 collective bargaining agreement between Booth Glass and the International Brotherhood of Painters & Allied Trades District Council No. 5, Glaziers & Glassworkers Local No.188 ("the Union"). The Trusts alleged that Booth Glass failed to make monthly contributions between February 2006 through October 2006 for employees for whom benefit contributions were owing under the agreement. The Trusts sought a money judgment of liquidated damages, interest, attorney's fees and costs.
In February 2008, the Trusts moved for summary judgment in the amount of $11,347.68 in addition to attorney's fees and costs. The Trusts presented collective bargaining agreements between Booth Glass and the Union signed by Booth Glass on September 24, 1999 and March 22, 2004. Each contract contains an "evergreen clause" providing that the agreements would automatically renew unless either party gives notice of intent to modify or terminate the agreement at least 60 days before an anniversary date. A declaration of the Union Business Representative Doug Wagner stated that Booth Glass did not give notice of its intent to modify or terminate either contract. The Trusts also presented the declaration of Kyle Whittlemore, the auditor who calculated the amounts owing to the Trusts based on hours worked by Booth Glass employee Kevin Edds from May to August 2006.
In response, Booth Glass and American States submitted a joint declaration and argument of defense counsel and Jeff Clearwater, the owner of Booth Glass. The document states that (1) the 1999 agreement was signed by the former owner of Booth Glass; (2) Clearwater became the new owner of Booth Glass in September 2003; (3) Clearwater signed the March 2004 agreement covering "In-Shop Production Workers"; (4) Booth Glass did not participate in negotiations for, nor sign, a new collective bargaining agreement covering commercial glassworkers that became effective on July 1, 2004; (5) Booth Glass continued to make contributions to the Trusts between July 1, 2004 and February 2006 solely to avoid penalties and interest that would accrue while it negotiated its own contract with the Union; (6) Booth Glass began winding down its business in February 2006 and closed in October 2006; and (7) Booth Glass hired Kevin Edds in May 2006 to perform only residential work. Based on these facts, the defendants argued: (1) the July 1, 2004 contract covering commercial employees superseded the 1999 contract; (2) Booth Glass was not bound by the 2004 commercial workers contract because Clearwater refused to sign it; and (3) even if Booth Glass was bound by the contract covering commercial workers, Edds's residential work would not have been covered.
In reply, the Trusts argued that because Booth Glass never sent the Union notice of intent to terminate the 1999 agreement, which covered both commercial and residential workers, the company was bound by the agreement as to all bargaining unit employees during the term of the 2004 contract. Also, because Booth Glass continued to make contributions to the Trusts for the 19-month period between July 2004 and January 2006, the company adopted the 2004 successor contract by its conduct.
In March 2008, the trial court denied the Trusts' motion for summary judgment. The defendants then moved for summary judgment based on the following facts and arguments: (1) Clearwater did not sign the 1999 agreement; (2) the 2004 contract covering commercial work superseded the 1999 agreement; (3) the Union terminated the 1999 agreement by negotiating a new contract with other employers and asking Clearwater to sign it; (4) Clearwater did not sign the 2004 agreement and expressly disavowed it; and (5) if Booth Glass adopted the 2004 contract, the 1999 contract was superseded and no contract obligated the company to make contributions for residential workers.
In response, the Trusts argued that two separate agreements that the Union entered with other employers, effective July 2004, covering commercial workers and residential workers, respectively, did not supersede the 1999 agreement between Booth Glass and the Union. Because Booth Glass did not notify the Union of an intent to modify or terminate the 1999 agreement before its July 1, 2004 anniversary date and continued to make contributions to the Trusts after that date, the evergreen clause in the 1999 agreement should be enforced. The trial court granted the defendants' motion for summary judgment and dismissed the case.
The Trusts appeal.[1]
ANALYSIS
We review a summary judgment order de novo, performing the same inquiry as the trial court. Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 (2002). Summary judgment is appropriate where there are no genuine issues of material fact for trial and the moving party is entitled to judgment as a matter of law. CR 56(c); Sheehan v. Central Puget Sound Regional Transit Authority, 155 Wn.2d 790, 797, 123 P.3d 88 (2005).
The Trusts argue that Booth Glass was obligated to continue making contributions through 2006 for all bargaining unit employees, commercial and residential, under the 1999 agreement and by operation of its evergreen clause. American States argues on appeal that when Jeff Clearwater purchased Booth Glass in September 2003, he did not assume the debts of the selling corporation and was therefore not bound by the 1999 collective bargaining agreement.[2] Before the trial court, the defendants contended that Clearwater paid the contributions to the Trusts only to avoid penalties and interests and intended to negotiate his own contract and then request reimbursement.
But, as American States admits, a purchasing corporation can be liable for the debts of the selling corporation if the purchaser expressly or impliedly agrees to assume liability. Hall v. Armstrong Cork, Inc., 103 Wn.2d 258, 692 P.2d 787 (1984). As the Trusts point out, it is undisputed that after Clearwater purchased the assets of Booth Glass, he continued to make contributions to the Trusts as provided in the 1999 contract from the time of the purchase in September 2003 through its original expiration date of June 30, 2004, and then continued to make contributions until January 2006.[3] Also, the record reflects that (1) Clearwater signed a collective bargaining agreement covering in-shop production workers of Booth Glass with the same Union in March 2004; (2) Clearwater admitted that he corresponded with the Union on behalf of Booth Glass regarding negotiations for a successor contract to the 1999 agreement in 2005; and (3) Clearwater never notified the Union of an intent to terminate the 1999 agreement under which Booth Glass was making contributions. This evidence is sufficient to create a genuine issue of material fact as to whether Booth Glass impliedly agreed to assume the obligations of the 1999 collective bargaining agreement. We therefore reverse the trial court's summary judgment order and remand for trial.
We also reject American States' contention that the 1999 agreement cannot be extended to any residential work in 2006 because the residential portion of the collective bargaining agreement was terminated on July 31, 2003. To support this theory, American States relies on a letter dated May 31, 2006, from the Trusts' attorneys to Booth Glass stating, "It is our understanding from the Trust office that your residential account, No. 19001 was terminated on July 31, 2003." But the 1999 contract provides the contract may be terminated only if either party gives notice of intent to modify or terminate the agreement. The company collecting the employer's contributions on behalf of the Trusts is not a party to the 1999 collective bargaining agreement and its internal account management decisions cannot terminate the contract.
To the extent the trier of fact finds that Booth Glass impliedly agreed to be bound by the 1999 contract, the evergreen clause, in addition to the continuing contributions between July 1, 2004 and January 2006, could obligate the company to make contributions for Kevin Edds's residential work in 2006. See, e.g., Central States, Southeast and Southwest Areas Pension Fund v. Gerber Truck Service, Inc., 870 F.2d 1148, 1150, 1156 (7th Cir 1989) (where collective bargaining agreement would automatically renew year to year in the absence of written notice of withdrawal, employer's statement that he would not sign a new agreement did not terminate the existing contract); Trustees of B.A.C. Local 32 Insurance Fund v. Fantin Enterprises, 163 F.3d 965 (6th Cir. 1998) (existence of later multi-employer collective bargaining agreement to which defendant employer was not a party does not terminate prior agreement as to that employer where evergreen clause obligated employer until terminated as provided in agreement); Laborers' Pension Fund v. Blackmore Sewer Construction, Inc., 298 F.3d 600, 606 (7th Cir. 2002) (employer's intent to be bound by a collective bargaining agreement can be established by employer's conduct in adhering to the terms of the agreement as well as employer's failure to give notice of intent to withdraw); Operating Engineers Local 139 Health Benefit Fund v. Gustafson Construction Corp., 258 F.3d 645, 649 (7th Cir. 2001) (where employer was party to contract with evergreen clause uncomplainingly paid fund contributions at higher rates contained in successor agreement, such conduct demonstrated that employer acquiesced in modification of original contract, despite employer's failure to sign successor contract).
The Trusts and American States both request attorneys' fees on appeal under RAP 18.1. Because American States has not prevailed, we deny its request for fees. Because the issues between the parties are as yet unresolved, the Trusts' claim for attorneys' fees will abide the result on remand. If the Trusts ultimately prevail, the trial court shall determine a reasonable award of fees in connection with the Trusts' successful prosecution of this appeal.
Reversed and remanded.
COX and LAU, JJ.
[1] Only American States, the surety for Booth Glass, has responded.
[2] On appeal, American States refers to the purchaser as Poverty Bay Investments, LLC d/b/a Booth Glass Co. The record reflects that the defendants identified Jeff Clearwater as the purchaser and owner of Booth Glass Co. as of September 2003.
[3] Although the parties do not discuss the issue in detail on appeal, it appears from the record that contributions made after July 1, 2004 were at the rates established by the 2004 collective bargaining agreement.
