Santa Monica Culinary Welfare Fund Charles A. Conine Victor Valenzuela v. Miramar Hotel Corporation

dissenting:

I do not think an employer is bound by the terms of the Trust Agreement if it only makes contributions on behalf of its employees. Under the trust instrument, “employers” include those “who, by contract with the Union, have agreed to be bound by the terms of this Trust Agreement and to make contributions to the Fund.” Thus, employers must both make contributions and agree to be bound by the terms of the Trust Agreement. Here, the collective bargaining agreement contains no reference which binds the employer to the audit terms of the Trust Agreement. Because Miramar never agreed to be bound by the terms of the Trust Agreement “by contract with the Union” it is not required to submit to an audit.

This action arises from a request by the Santa Monica Culinary Welfare Fund (the “Fund”) to audit the payroll records of the Miramar Hotel Corporation (“Miramar”), a contributing employer to the Fund. Mira-mar refused to submit to an audit, claiming that under the collective bargaining agreement its only duty to the Fund was to make the agreed upon contributions. The district court agreed with Miramar and refused the Fund’s request. Because we find that the Fund had the right to audit Mira-mar’s payroll records, we reverse.

I.

The appellants in this action are the Santa Monica Culinary Welfare Fund and two of its trustees, Charles A. Conine and Victor Valenzuela (the “Trustees”). The Fund is a multiemployer employee benefit plan governed by section 302(c)(5) of the Labor Management Relations Act, 1947, 29 U.S.C. § 188 (c)(5), and the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq., as amended (1988). The Fund was created by Local 814 of the Hotel Employees and Restaurants Employees’ Union (“the Union”) for the benefit of designated employees.

As required under ERISA, the Fund was established pursuant to a written Trust Agreement. The Trust…

920 F.2d 1491 59 USLW 2414 , 117 Lab.Cas. P 10,476 , 13 Employee Benefits Ca 1414 SANTA MONICA CULINARY WELFARE FUND; Charles A. Conine; Victor Valenzuela, Plaintiffs-Appellants, v. MIRAMAR HOTEL CORPORATION, Defendant-Appellee. No. 89-55455. United States Court of Appeals, Ninth Circuit. Argued and Submitted June 7, 1990. Decided Dec. 12, 1990. Henry M. Willis (Claude Cazzulino, on brief), Schwartz, Steinsapir, Dohrmann & Sommers, Los Angeles, Cal., for plaintiffs-appellants. Gerald M. Siegel, Santa Monica, Cal., for defendant-appellee. Appeal from the United States District Court for the Central District of California. Before HUG, BOOCHEVER and BEEZER, Circuit Judges. HUG, Circuit Judge: 1 This action arises from a request by the Santa Monica Culinary Welfare Fund (the "Fund") to audit the payroll records of the Miramar Hotel Corporation ("Miramar"), a contributing employer to the Fund. Miramar refused to submit to an audit, claiming that under the collective bargaining agreement its only duty to the Fund was to make the agreed upon contributions. The district court agreed with Miramar and refused the Fund's request. Because we find that the Fund had the right to audit…