Johnson v. Allied Excavating, Inc.
- John Tunheim
- 0:15-cv-03237
- U.S. District Court · District of Minnesota
- 15
In Johnson v. Allied Excavating, Inc., Judge Tunheim granted in part and denied in part summary judgment, rejecting termination, preserving an amount dispute, and finding Jewison liable.
The Funds and their trustees and fiduciaries prevailed on the agreement-termination issue and on Jeffrey Jewison’s personal liability, but the amount of unpaid contributions remains disputed. Allied Excavating and Mr. Jewison remain involved in the case, which was set for trial.
What happened
In Johnson v. Allied Excavating, Inc., three jointly administered employee benefit plans, their trustees, and fiduciaries sought unpaid contributions and related damages from Allied Excavating and its corporate officer, Jeffrey Jewison. Allied had agreements requiring contributions for covered employee work.
The Funds asked the court to decide whether Allied could rely on ending its collective bargaining agreement, how much Allied owed, and whether Jewison was personally responsible. The defendants argued that the agreement ended in March 2015 and challenged parts of the auditor’s calculation.
Judge Tunheim granted the motion in part and denied it in part. He ruled that Allied had not ended the agreement, denied summary judgment on the amount of unpaid contributions because factual disputes remained, and granted summary judgment finding Jewison personally liable for damages under the agreement he signed.
The detailed version
- Johnson v. Allied Excavating, Inc. · No. 0:15-cv-03237
- John Tunheim
- Aug. 8, 2019
Background
The plaintiffs were three jointly administered employee benefit plans, along with their trustees and fiduciaries, referred to collectively as the “Funds.” Allied Excavating, Inc. had collective bargaining agreements with the Union that required it to make monthly contributions to the Funds for employees’ hours worked on covered tasks. Jeffrey Jewison was one of Allied’s corporate officers.
The Funds also relied on a 2002 Welfare Participating Agreement signed by Mr. Jewison. That agreement required Allied to make contributions to the Operating Engineers Local #49 Health and Welfare Fund under the applicable collective bargaining agreement and purported to bind an officer who signed for the employer in an individual capacity.
The Funds selected Allied for an audit in February 2015 and requested payroll and employment records dating back to January 1, 2014. After delays in receiving records, the Funds sued under the federal law governing delinquent contributions to employee benefit plans. An auditor initially calculated $158,462.54 in delinquent contributions and $23,769.38 in liquidated damages. After Allied provided additional documents, the audit removed 2,865 hours and reduced the claimed contributions by $47,000. The opinion does not state a final amount of unpaid contributions.
Issues
The Funds moved for summary judgment on three issues:
- Whether Allied and Mr. Jewison could defend against the contribution claim by arguing that the second collective bargaining agreement ended in March
- 2. Whether the evidence established the amount of unpaid contributions.
- Whether Mr. Jewison was personally liable for unpaid contributions under the Welfare Participating Agreement.
Termination of the collective bargaining agreement
The second collective bargaining agreement stated that it remained in effect through April 30, 2017. It allowed termination or amendment with 60 days’ notice before expiration; otherwise, it would automatically renew for 12 months. The court interpreted that provision as allowing termination in connection with a renewal term, not during the original term.
The defendants relied on conversations with a Union representative, the signing of new agreements for Vortech Hydro Vac, communications suggesting that Allied had been replaced, and the rejection of a contribution from Allied. The court found that this evidence did not show the clear and explicit intent needed to terminate the agreement. The court also stated that the defendants had not shown that termination was an available defense in this type of federal contribution action.
Amount of unpaid contributions
The Funds relied on the audit report. The defendants presented an affidavit from Pamela Jewison and documents supporting their position that some hours were not for work covered by the collective bargaining agreement. They also challenged the auditor’s methodology.
The court found the auditor sufficiently experienced and knowledgeable for the audit to be considered reliable. But it also found that the defendants’ evidence about excluded hours and the audit methodology created a genuine dispute of material fact. Because that dispute could affect the amount owed, the court denied summary judgment on the unpaid-contributions issue. The amount therefore remained for further proceedings.
The court declined to adopt a burden-shifting method at the summary judgment stage, noting that the Eighth Circuit had not addressed whether that method applied there. The court stated that burden shifting would apply at trial.
Mr. Jewison’s personal liability
The Funds argued that Mr. Jewison was personally liable because he signed the Welfare Participating Agreement. The defendants did not dispute the relevant fact, and the court had previously rejected their legal argument concerning his liability. The court granted summary judgment on this issue and held that Mr. Jewison was personally liable for damages arising from the Welfare Participating Agreement.
Disposition
The court ordered that the Funds’ motion for summary judgment was GRANTED in part and DENIED in part:
- The motion concerning termination of the second collective bargaining agreement was GRANTED. - The motion concerning unpaid contributions was DENIED. - The motion concerning Mr. Jewison’s personal liability for unpaid contributions was GRANTED.
The court stated that the case would be placed on its next trial calendar.
Read the full 15-page opinion on CourtListener, the free public archive maintained by the Free Law Project.