Opinion
No. 36787-4-II.
July 22, 2008.
Appeal from a judgment of the Superior Court for Pierce County, No. 05-2-12122-5, Ronald E. Culpepper, J., entered March 6, 2007.
Affirmed by unpublished opinion per Quinn-Brintnall, J., concurred in by Houghton and Bridgewater, J.
UNPUBLISHED OPINION
Northwest Plumbing Pipefitting Industry Health, Welfare Vacation Trust, Washington State Plumbing Pipefitting Industry Pension Plan, Local 26 Supplemental Pension Plan, Local 26 JATC Educational Development Trust, MCI Fund, and Plumber Pipefitters National Pension Plan are jointly-administered, multi-employer union-management employee benefit trust funds (collectively "the Trusts"). The Trusts appeal the trial court's grant of summary declaratory judgment in favor of Leo Finnegan Construction Company, Inc. (Finnegan), arguing that our Supreme Court's decision in International Brotherhood of Electrical Workers, Local Union No. 46 v. Trig Electric Construction Co., 142 Wn.2d 431, 13 P.3d 622 (2000), cert. denied, 532 U.S. 1002 (2001), should be overturned. The Trusts sought direct review of this issue but our Supreme Court denied their request. Because Trig Electric is a binding decision of our Supreme Court, we must apply it and affirm.
FACTS
Factual Background
Finnegan is a general contractor registered with the State of Washington; its principal place of business is in Pierce County. Finnegan contracted with the City of Tacoma to act as the prime contractor on the Tacoma Police Department headquarters building located at 3701 S. Pine Street, Tacoma, Washington ("the Project"). As required by state law, Finnegan procured a public works payment bond from Fidelity and Deposit Co. of Maryland and Zurich American Insurance Co. to pay sums due certain claimants in the event of payment default. Former RCW 39.08.010 (1989). In addition, the City of Tacoma withheld a retainage on the Project. Former RCW 60.28.010(1) (1986).
Former RCW 39.08.010 states in relevant part:
Whenever any . . . body acting for the state or any county or municipality or any public body shall contract with any person or corporation to do any work for the . . . municipality, or other public body, city, town, or district, such . . . body shall require the person or persons with whom such contract is made to make, execute, and deliver to such . . . body a good and sufficient bond, with a surety company as surety, conditioned that such person or persons shall faithfully perform all the provisions of such contract and pay all laborers, mechanics, and subcontractors and materialmen, and all persons who supply such person or persons, or subcontractors, with provisions and supplies for the carrying on of such work, which bond in cases of cities and towns shall be filed with the clerk or comptroller thereof, and any person or persons performing such services or furnishing material to any subcontractor shall have the same right under the provisions of such bond as if such work, services or material was furnished to the original contractor.
Former RCW 60.28.010(1) states in relevant part:
Contracts for public improvements or work, other than for professional services, by the state, or any county, city, town, district, board, or other public body, herein referred to as "public body", shall provide, and there shall be reserved by the public body from the moneys earned by the contractor on estimates during the progress of the improvement or work, a sum not to exceed five percent, said sum to be retained by the state, county, city, town, district, board, or other public body, as a trust fund for the protection and payment of any person or persons, mechanic, subcontractor or materialman who shall perform any labor upon such contract or the doing of said work, and all persons who shall supply such person or persons or subcontractors with provisions and supplies for the carrying on of such work. . . . Every person performing labor or furnishing supplies toward the completion of said improvement or work shall have a lien upon said moneys so reserved.
On March 22, 2004, Finnegan subcontracted part of the project to Chapman Mechanical, Inc. (Chapman) under which Chapman agreed to furnish and construct the mechanical portion of the Project. Chapman hired its own employees and was required under certain collective bargaining agreements between Chapman and the Plumbers Pipefitters United Association Local 26 to pay monthly employee benefit contributions to the Trusts based on the hours Chapman's employees worked. The Trusts are created under the Labor Management Relations Act, § 302(c), 29 U.S.C. § 186(c), and governed by the Employee Retirement Income Security Act (ERISA), § 514(a), 29 U.S.C. § 1144(a).
Between June and November 2004, Chapman performed in accordance with the terms of its contract with Finnegan. But during that time period, Chapman failed to pay the required benefit contribution for work its employees performed on the project. In November 2004, Chapman went out of business, demobilized its tools and equipment, and abandoned the Project. Procedural History
In December 2004, the Trusts filed a lien notice against Finnegan's payment and performance bond, asserting claims for the unpaid benefit contributions due for work performed on the Project under the collective bargaining and trust agreements. The Trusts filed amended lien notices on April 12, 2005, and July 15, 2005. The Trusts claimed that they were owed a total of $76,149.25. The amount was broken down as follows:
Unpaid Contributions: $57, 703.06 Liquidated Damages: $11, 540.62 Interest: $ 5,244.49 Audit Fees: $ 1,561.08 Attorney Fees: $ 100.00
In September 2005, Finnegan filed a declaratory judgment action, seeking an order that the Trusts had no enforceable claims against its public works bond or retainage funds. The Trusts filed a notice of removal to the United States District Court for the Western District of Washington, asserting that original federal jurisdiction existed under ERISA and the federal Declaratory Judgment Act. Finnegan moved to remand for lack of subject matter jurisdiction. The district court granted Finnegan's motion and remanded the matter to the Pierce County Superior Court. See Leo Finnegan Constr. Co. Inc. v. Nw. Plumbing Pipefitting Indus. Health, Welfare Vacation Trust, No. 3:05-CV-05673-RBL, 2005 WL 3348918 (W.D. Wash. Dec. 8, 2005).
On remand, the trial court granted Finnegan a summary declaratory judgment, finding that Finnegan and its surety bore no state law liability to the Trusts for payment of benefits contributions owed by Chapman because such claims were "preempted by ERISA," and "therefore invalid pursuant to [Puget Sound Electrical Workers Health Welfare Trust Fund v.] Merit [Co., 123 Wn.2d 565, 572-73, 870 P.2d 960 (1994)], and Trig Electric." Clerk's Papers at 66. In Trig Electric, our Supreme Court held that ERISA preempts union claims under state public works lien statutes. 142 Wn.2d at 437-38.
ERISA provides "the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." ERISA, § 514(a), 29 U.S.C. § 1144(a).
The Trusts appealed to our Supreme Court, asking it to overrule its decision in Trig Electric in light of the United State Supreme Court's reasoning in New York State Conference of Blue Cross Blue Shield Plans v. Travelers Insurance Co., 514 U.S. 645, 115 S. Ct. 1671, 131 L. Ed. 2d 695 (1995), and other recent federal and California state decisions. But our Supreme Court declined to review the matter and transferred it to this court.
RAP 4.2(a) provides:
A party may seek review in the Supreme Court of a decision of a superior court which is subject to review as provided in Title 2 only in the following types of cases:
(1) Authorized by Statute. A case in which a statute authorizes direct review in the Supreme Court.
(2) Law Unconstitutional. A case in which the trial court has held invalid a statute, ordinance, tax, impost, assessment, or toll, upon the ground that it is repugnant to the United States Constitution, the Washington State Constitution, a statute of the United States, or a treaty.
(3) Conflicting Decisions. A case involving an issue in which there is a conflict among decisions of the Court of Appeals or an inconsistency in decisions of the Supreme Court.
(4) Public Issues. A case involving a fundamental and urgent issue of broad public import which requires prompt and ultimate determination.
(5) Action Against State Officer. An action against a state officer in the nature of quo warranto, prohibition, injunction, or mandamus.
(6) Death Penalty. A case in which the death penalty has been decreed.
Washington's inferior federal courts have criticized Trig Electric as inconsistent with federal preemption jurisprudence following Travelers. Moreover, there is a split of national authority on whether, after Travelers, ERISA preempts liens such as those at issue here. Nevertheless, we lack the authority to change the law or the ability to explain our Supreme Court's adherence to the analysis in Merit. See Trig Electric, 142 Wn.2d at 437-38. As a result, under our Supreme Court's controlling decision in Trig Electric, the Trusts cannot seek contributions from Finnegan for employee benefits owed by its insolvent subcontractor, Chapman, under Washington's lien statutes.
In these cases, the federal courts relied on the Ninth Circuit's decision in Southern California IBEW-NECA Trust Funds v. Standard Industrial Electric Co., 247 F.3d 920 (9th Cir. 2001), to hold that ERISA does not preempt public works lien statutes similar to the ones at issue here. See Bd. of Trustees of Cement Masons Plasterers Health Welfare Trust v. GBC Nw. LLC, No. C06-1715-C, 2007 WL 1306545 (W.D. Wash. May 3, 2007); Leo Finnegan, 2005 WL 3348918; Ironworkers Dist. Council of Pac. Nw. v. George Sollit Corp., No. C01-1668C, 2002 WL 31545972 (W.D. Wash. Sept. 4, 2002).
See, e.g., Betancourt v. Storke Hous. Investors, 31 Cal. 4th 1157, 1161, 8 Cal. Rptr. 3d 259, 82 P.3d 286 (2003) (holding that ERISA does not preempt state mechanic's liens); but see Plumbing Indus. Bd., Plumbing Local Union No. 1 v. E.W. Howell Co., 126 F.3d 61, 68 (2d Cir. N.Y. 1997) (holding that ERISA preempted New York's lien laws because it is an alternative enforcement mechanism for ERISA rights).
Because this issue is dispositive, we do not reach the remaining issues in this case. Attorney Fees
The Trusts ask this court to award it attorney fees under RAP 18.1(b) but, because they are not the prevailing party on appeal, we do not award it any attorney fees.
A majority of the panel having determined that this opinion will not be printed in the Washington Appellate Reports, but will be filed for public record pursuant to RCW 2.06.040, it is so ordered.
HOUGHTON, P.J. and BRIDGEWATER, J., concur.