argued submitted seattle washington: May 5, 1993.
Appeal from the United States District Court for the Western District of Washington. D.C. No. CV-90-1209-CRD. Carolyn R. Dimmick, District Judge, Presiding.
Before: Eugene A. Wright, Arthur L. Alarcon and Robert R. Beezer, Circuit Judges. Opinion by Judge Alarcon.
International Union of Operating Engineers-Employers Construction Industry Pension, Welfare and Training Trust Funds ("Trusts") appeal from the order granting summary judgment in favor of Richard D. Karr, doing business as Alaska Unlimited Company ("AUC"). The Trusts seek reversal of the order dismissing their claims on two grounds. First, the Trusts contend that the doctrine of res judicata is inapplicable to this action, because a claim to recover accurate payments is separate and distinct from a claim to collect delinquent payments for the same time period. Second, the Trusts argue that it would be inequitable to bar an action by an employee benefit trust fund to recover accurate contributions from an employer. The Trusts argue that as a separate entity from both the union and the employer, they had no knowledge of the inaccurate payments at the time they brought the earlier claims for delinquent contributions. We affirm because we conclude that the Trusts' action is barred by the doctrine of res judicata.
PERTINENT FACTS AND PROCEDURAL HISTORY
The Trusts are unincorporated associations operating as employee benefit trust funds under section 302 of the Labor Management Relations Act, 29 U.S.C. §§ 141-187 and the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. §§ 1001-1461. The Trusts were created to provide retirement, medical, and training benefits to eligible employees. Richard D. Karr operates a construction company in Fairbanks, Alaska, and does business as AUC.
From January 1, 1986, through December 31, 1988, AUC and Locals 302 and 612 of the International Union of Operating Engineers ("Union") were parties to a collective bargaining agreement and several Trust Agreements established under ERISA. The Trust Agreements required AUC to file timely reports and to make monthly contributions to each of the Trusts for the benefit of eligible employees. The Trust Agreements granted the Trusts the right to recover liquidated damages, interest, and attorneys' fees incurred in collecting any unpaid contributions from participating employers. They further permitted the Trusts to audit the payroll records of a participating employer "on demand." Under the terms of the Trust Agreements, the employer was required to assume the costs of an audit if it revealed that he or she had failed to comply with the terms of the collective bargaining agreement.
On May 29, 1986, the Trusts filed an action against Karr under section 502(e)(1) and (f) of ERISA, 29 U.S.C. § 1132(e)(1) and (f), and section 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to collect delinquent contributions for the periods May 1, 1985 through September 30, 1985, and November 1, 1985, through May 31, 1986. The Trusts also sought liquidated damages, interest and costs. While that action was pending, the Trusts filed a motion to compel an audit of AUC's payroll records. On June 28, 1988, the district court entered an order granting the Trusts' motion. The Trusts subsequently entered into a settlement agreement with AUC without conducting an audit. In the settlement agreement, AUC agreed to pay the Trusts $51,596.86 in exchange for the dismissal of the action with prejudice. The settlement agreement did not contain a reservation of the right to bring an action for any additional payments disclosed by an audit to be due as a result of the employer's inaccurate payments for the same time period. On August 9, 1988, the district court entered an order dismissing the action with prejudice.
In October, 1987 and again in September, 1988, the Trusts requested Karr to submit to an audit of AUC's payroll records. Karr refused to comply with the first request due to the ongoing litigation in the first action. Karr also refused to comply with the September, 1988 request because the Trusts failed to notify him of their intent to audit, as required in the Trust Agreements.
On March 21, 1989, the Trusts filed a second action against Karr to collect delinquent contributions for July through October, 1988, and to recover liquidated damages, interest, attorneys' fees, and costs. Notwithstanding Karr's refusals to comply with the Trusts' prior requests for an audit, the Trusts did not include a claim in this action to compel an audit of AUC's payroll records.
The parties settled the second action on June 28, 1989. Karr agreed to pay $15,000 to the Trusts in three monthly installments. The Trusts did not reserve the right in the settlement agreement to collect sums that might later be found to be due and owing under the Trust Agreements for the same time period. Karr subsequently made the three installment payments contemplated under the settlement agreement. On July 21, 1989, the district court entered an order dismissing the second action with prejudice.
In 1990, the Trusts attempted to audit AUC for the period January, 1986, through December, 1988. Karr refused to provide the Trusts with complete payroll records with which to conduct the audit. On August 24, 1990, the Trusts filed the present claims to compel an audit of AUC for the period January 1, 1986, through March 21, 1989, and to collect any funds found to be due and owing under the Trust Agreements.
The district court granted summary judgment in favor of Karr. The court determined that the present claim for accurate contributions was barred because it arose out of the same transaction ...