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Teamsters Pension Trust Fund of Philadelphia and Vicinity and Teamsters Health and Welfare Trust Fund of Philadelphia and Vicinity and Schaffer v. John Tinney Delivery Service Inc.

April 12, 1984

TEAMSTERS PENSION TRUST FUND OF PHILADELPHIA AND VICINITY AND TEAMSTERS HEALTH AND WELFARE TRUST FUND OF PHILADELPHIA AND VICINITY AND SCHAFFER, JR., CHARLES J.,
v.
JOHN TINNEY DELIVERY SERVICE, INC., A/K/A JOHN TINNEY DELIVERY SERVICE AND TINNY, JOHN. TEAMSTERS PENSION TRUST FUND OF PHILADELPHIA AND VICINITY, TEAMSTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY AND CHARLES J. SCHAFFER, JR., APPELLANTS



Appeal From the United States District Court For the Eastern District of Pennsylvania.

Hunter, Weis, Circuit Judges, and Dumbauld,*fn* District Judge.

Author: Hunter

Opinion OF THE COURT

HUNTER, Circuit Judge:

1. Appellants, the Teamsters Pension Trust Fund of Philadelphia and Vicinity, and the Teamsters Health and Welfare Trust Fund of Philadelphia and Vicinity (the "Trust Funds" or "Funds"), brought suit in federal court to recover employee benefit contributions owed to the Funds by John Tinney Delivery Service, Inc. ("Tinney"). The district court granted the Trust Funds summary judgment as to all contributions due between October 30, 1976 and March 31, 1979, but ruled against the Funds on their claim for contractual and statutory liquidated damages. The district court denied the Trust Funds summary judgment on claims arising after March 31, 1979, ruling that those claims were beyond the scope of the original litigation. The Funds appeal from the adverse rulings; no cross-appeals have been taken. We will affirm in part and reverse in part, remanding the case for further proceedings.

I.

2. Beginning at least as far back as 1973, defendant Tinney has been party to a series of collective bargaining agreements with Teamsters Local 107. These agreements, known as the National Master Freight Agreements, are negotiated every three years. One agreement ran from April 1, 1973 to March 31, 1976, and another from April, 1976 to March, 1979. A third is alleged to have existed from April, 1979 to March, 1982. Under these agreements, Tinney was obligated to contribute a certain amount to the Trust Funds for every hour or day worked by all employees, "regular, probationary, extra, part-time and casual."

3. In April, 1979, the Trust Funds audited Tinney's payroll books and records. This audit revealed a delinquency of $43,448.30, stemming from Tinney's refusal to make contributions on behalf of its "non-regular" employees. Tinney argued that because such employees rarely work long enough or consistently enough to become eligible to receive benefits from the Trust Funds, the contract provisions requiring contributions on their behalf were unconscionable and contrary to public policy.

4. The Trust Funds brought this action on November 9, 1979, seeking a broad range of remedies including actual damages suffered during the pendency of the litigation, liquidated damages, attorney's fees and costs, and injunctive relief.*fn1 The parties prepared and submitted to the court an extensive Stipulation of Facts. They stipulated to the existence and terms of the 1973-76 and 1976-79 National Master Freight Agrements, and to the dollar amounts claimed to be owed through March 31, 1979.*fn2

5. On September 29, 1980, the Trust Funds moved for summary judgment based on the stipulated facts. The relief they requested was significantly more limited than that requested in the original complaint, although the motion was not denominated a motion for partial summary judgment. Cf. Fed. R. Civ. P. 56(d). Because the stipulation only covered payments due through March, 1979, the Trust Funds requested liquidated and actual damages only through that date, and asked for no injunctive relief at all.

6. Tinney also moved for summary judgment, asking the court to rule that the contract provision requiring contributions for non-regular employees was unconscionable and unenforceable. In addition, Tinney opposed any award of liquidated damages, and interposed the three-year statute of limitations contained in Pennsylvania's Wage Payment and Collection Law ("WPCL"), Pa. Stat. Ann. tit. 43, § 260.9a(g) (Purdon Supp. 1983), as a bar to contributions due before November, 1976.

7. Complicating matters significantly, the law of employer liability for unpaid contributions underwent an important change within days of the parties' cross-motions. On September 26, 1980, President Carter signed into law the Multiemployer Pension Plan Amendments Act of 1980 ("MPPA"). Pub. L. No. 96-364, 94 Stat. 1295 (1980). This new statute, an amendment to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq. (1982), greatly strengthened the rights and remedies available to employee trust funds in actions brought against delinquent employers under ERISA. In particular, the 1980 amendments provide for prejudgment interest on all unpaid contributions, and for liquidated damages of up to 20 percent. MPPA § 306(b), 29 U.S.C. § 1132(g) (1982). On October 16, 1980 the Trust Funds moved the court for leave to amend their complaint to incorporate the rights and remedies newly available under the MPPA.

8. On June 10, 1981, the district court rules on the parties' cross-motions for summary judgment, granting and denying each in part. Of greatest importance to the parties, though not appealed here, the court rejected Tinney's unconscionability defense and ordered Tinney to pay the amount stipulated to be due through March, 1979. The court split on the subsidiary issues, granting the Funds attorney's fees and costs but denying them liquidated damages, and adopting the three-year WPCL statute of limitations. The Trust Funds appeal the court's rulings on the limitations period and liquidated damages.

9. The district judge never ruled on the Trust Funds' motion to amend their complaint, declaring that his June 10 order granted the Trust Funds all the relief to which they were entitled, under the new law as under the old. The Trust Funds contend on appeal that the judge should have granted them to leave to amend and, ...


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