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Gilbertson Draglines, Inc. v. Operating Engineers Health and Welfare Trust Fund for Northern California

March 9, 2010

GILBERTSON DRAGLINES, INC., PLAINTIFF,
v.
OPERATING ENGINEERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, ET AL., DEFENDANTS.
OPERATING ENGINEERS HEALTH AND WELFARE TRUST FUND FOR NORTHERN CALIFORNIA, ET AL., COUNTER-CLAIMANTS,
v.
GILBERTSON DRAGLINES, INC. COUNTER-DEFENDANT.



The opinion of the court was delivered by: Morrison C. England, Jr. United States District Judge

MEMORANDUM AND ORDER

Through the present action, Plaintiff Gilbertson Draglines, Inc. ("Gilbertson Draglines" or "Plaintiff") asks the Court to determine that it is not bound to the terms of a collective bargaining agreement that Defendants, a group of Union employee benefit plans, claim created an obligation on Plaintiff's part to make contributions for Union fringe benefits. Defendants, in turn, filed their own Counterclaim for unpaid benefits at the time they answered Gilbertson's Complaint. Both sides now move for summary judgment. Jesse Gilbertson, Plaintiff's principal, claims that because he never assented to the terms of the Union agreements at issue, his company cannot be bound by the terms of the Union Master Agreement, as incorporated within the so-called "short-form" agreement signed by Mr. Gilbertson. Defendants, on the other hand, claim that the Union agreements are binding on Plaintiff as a matter of law, and that Gilbertson is accordingly liable for the contributions at issue. As set forth below, the Court concludes that triable issues of fact prevent it from granting either Plaintiff's or Defendants' Motion.

BACKGROUND

In March of 1996, Jesse Gilbertson, who at all times relevant to this litigation was a properly-licensed contractor, purchased a piece of heavy equipment known as a Northwest Dragline Shovel. Mr. Gilbertson, the sole proprietor of Gilbertson Dragline Service, an unincorporated entity, proceeded to use the shovel in various grading and dredging operations. He was not a Union member.

Sometime in 1999 or early 2000, Mr. Gilbertson was approached by Cal-Neva Construction for assistance on a job installing and removing rock barriers. That job, however, specified the use of Union contractors. According to Jesse Gilbertson, while he did not want to become a signatory Union contractor, he was informed by a Cal-Neva employee, Russell Turner, that he could become an "owner-operator" member of the Operating Engineers Local Union No. 3 ("Union"), not bound by the Union contract. Gilbertson Decl., ¶ 4. Turner called the Union's offices in Yuba City, California, and an agent told both him and Mr. Gilbertson that Gilbertson could indeed sign up as an owner-operator member if he supplied proof that he owned his dragline shovel. Id.

It is undisputed that Mr. Gilbertson went to the Yuba City Union hall on May 11, 2000, where he eventually spoke with a Local No. 3 business agent. Gilbertson claims he specifically told the agent that he did not want to become a Union member bound by the terms of the Master Agreement. He claims the agent acknowledged that request and asked him to sign papers described as routine for new members desiring owner-operator status. Id. at ¶ 5. Based on that representation, Gilbertson claimed he signed two agreements, the so-called "short form" agreement, and an "order to bill", without reading the documents. See Exs. A and B to the Gilbertson Decl. Gilbertson was asked to indicate on the "order to bill" that he was an "owner-operator", and to confirm that he was the only operator on payroll.

Gilbertson Decl. at ¶¶ 5-6. He claims that the agent wrote "no bill" on the form to assure him that he would not be billed for fringe benefits. Id. at ¶ 6.

According to Jesse Gilbertson, after providing the business agent with a copy of the bill of sale for the dragline shovel, he left the Union office after being there less than ten minutes.

He claims he was not given copies of either the owner-operator agreement, the order to bill, or any other Union document. Id. Gilbertson states that his initial Union dues were paid by Cal-Neva, but that he has continued to pay his Union dues ever since. Id. at ¶ 7.

Defendants, for their part, have presented evidence suggesting a starkly different course of events. According to the Declaration of Travis Tweedy, who has been employed in various capacities since 1998 by the Operating Engineers Local Union No. 3 office in Yuba City, the Union's policy and procedure in assisting an individual to become an owner-operator would include the following:

a. orally inform the contractor applicant that they must show proof of ownership of the equipment they intend to operate as an owner-operator;

b. orally inform the contractor applicant that they must enter into an Independent Northern California Construction Agreement with the Union (commonly referred to as a "short-form agreement" or "owner-operator agreement");

c. orally inform the contractor applicant that the Independent Northern California Construction Agreement incorporates the Master Agreement;

d. orally inform the contractor applicant that under the terms of agreement, he must join the Union and remain a member of the Union in good standing (i.e., meaning pay his Union dues) in order to be eligible to elect not to go on the payroll of the Individual Employer that hires the owner-operator and to elect to not pay fringe benefits to the various Trust Funds for himself;

e. orally inform the contractor applicant that under the terms of the agreement, if an owner-operator currently or in the future employs any other person other than himself to perform Operator work, the owner-operator must ...


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