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Devoll v. Burdick Painting Inc.

filed: September 8, 1994.


Appeal from the United States District Court for the Northern District of California. D.C. No. CV 92-1661 MHP. Marilyn H. Patel, District Judge, Presiding.

Before: Alfred T. Goodwin, Harry Pregerson, and Pamela Ann Rymer, Circuit Judges. Opinion by Judge Goodwin.

Author: Goodwin

GOODWIN, Circuit Judge:

Robert and Patricia DeVoll sued Burdick Painting, Inc., Robert's former employer, and the Bay Area Painters and Tapers Fund ("the Fund"), Robert's former health plan. The DeVolls' complaint set forth three claims: (1) that Burdick discharged Robert for the purpose of interfering with rights protected under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1140; (2) that Burdick breached an enforceable promise to maintain certain medical benefits; and (3) that Burdick and the Fund failed to notify the DeVolls of their right under the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), 29 U.S.C. §§ 1161-67, to continue their medical coverage under the Fund. The district court granted summary judgment in favor of the defendants, and the DeVolls appealed. We have jurisdiction pursuant to 28 U.S.C. § 1291 and we affirm.

I. Background

Robert DeVoll is a house painter by trade. Robert's wife, Patricia, suffers from lupus erythematosus and myasthenia gravis.*fn1 As of August 1990, Robert had been a member of the Bay Area Painters and Tapers Union ("the Union") for nine years, and had been employed by several different union employers during that time. One of the benefits of union membership was that Robert and his wife were provided medical coverage under the Bay Area Painters and Tapers Health Fund.

The Fund is a multiemployer health plan maintained pursuant to a series of collective bargaining agreements between employer associations in Northern California and the Union's parent organization. Under the collective bargaining agreements, signatory employers are required to pay monthly contributions into the Fund. The Fund is jointly administered by employer and union-appointed trustees, and provides medical coverage to the employees of signatory employers.

In July 1990, Robert went to work for one of the signatory employers, Burdick Painting, Inc., owned and operated by George Burdick. The collective bargaining agreement to which Burdick Painting was a party expired on July 15, 1990, and the Union called a strike. The Union and the employer association signed a new collective bargaining agreement shortly thereafter, but Burdick Painting declined to be a party to this agreement.

On August 9, 1990, George Burdick called a meeting of all his employees. At the meeting, Burdick announced his intention to become a nonunion employer. In response to concerns expressed at the meeting, Burdick assured his employees that if they would continue to work for him, they would receive the same level of wages and benefits they previously received as union workers.

Whether Burdick also held an employee meeting to vote on a private health plan is in dispute. Robert DeVoll testified by deposition that he was aware of no such meeting, and that he had been individually approached at his jobsite by John Cintas. Cintas encouraged Robert to enroll in the Kaiser plan, and said nothing when Robert declined for the stated reason that he believed he was still covered under the Union plan.

Counsel for the Fund determined that an impasse in negotiations between Burdick and the Union had been reached no later than November 1, 1990, whereupon the Fund notified George Burdick that it would no longer accept contributions from Burdick Painting. Robert and Patricia DeVoll received no notice, either from Burdick Painting or the Fund, that their medical coverage under the Fund would be terminated.

In January 1991, Patricia DeVoll called the Fund to inquire about coverage prior to seeking treatment at Stanford Hospital. The Fund informed her that the DeVolls' coverage had terminated as of November 1990. Patricia then made a series of phone calls to officials at both Burdick Painting and the Fund protesting the lack of coverage. George Burdick unsuccessfully tried to convince the DeVolls to enroll in the Kaiser plan, and eventually agreed to pay Robert in cash the monthly premium of $306.23 charged by Kaiser.

On March 3, 1991, general manager John Cintas fired Robert. Cintas claimed that Robert was fired both because of a work slowdown and because Robert had performed unsatisfactory work for two different clients. On October 2, 1992, the DeVolls brought this action in ...

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