Michigan Electrical Employees Pension Fund v. Encompass Electric & Data, Inc. (556 F. Supp. 2d 746, 2008)

Opinion and Order

PAUL L. MALONEY, District Judge.

Granting the Plaintiffs’ Motion for Summary Judgment as to the Federal Claims; Declining Jurisdiction over the State-Law Claim

This is an action for pension, medical, and other employee fringe-benefit contributions and other relief under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1131 et seq. (“ERISA”); the Labor Management Relations Act, as amended, 29 U.S.C. § 185 et seq. (“LMRA”); and the Michigan Building Contract Fund Act, M.C.L. § 570.151 et seq. (“MBCFA”). The plaintiffs have filed a motion for summary judgment. For the reasons that follow, the court will grant summary judgment on Count I (Data’s failure to pay delinquent contributions); Count II (Telecom’s liability for said contributions as alter ego of Data); and the portion of Count III which claims that Price and Glanz breached their fiduciary duties under ERISA and thus are personally liable for Data/Telecom’s CBA obligations. The court will deny the plaintiffs’ motion (without prejudice) as moot as to any claim that Price and Glanz should be held personally liable on additional grounds, such as piercing the corporate veil of Data and/or Telecom. Having disposed of all the federal claims, the court will follow our Circuit’s usual practice and decline supplemental jurisdiction over the plaintiffs’ MBCFA claim (a portion of Count III).

The court will retain jurisdiction and keep the case open in order to determine the amount of the defendants’ liabilities.

As to the grant of summary judgment to the plaintiffs on Count I, the court determines that defendant Encompass Electric & Data, Inc. (“Data”) entered into a valid, enforceable, written contract when defendant James K. Price, Jr., in his role as Data’s President, signed letters of assent that required Data to adhere to three collective-bargaining agreements (“CBAs”). First, even if the court accepted Price’s allegation that he was not given and did not read the CBAs before signing the letters, that would not prevent the formation or enforcement of the contract under these circumstances. Second, even if the court accepted Price’s allegation that the union’s business manager orally represented that Data would not be required to adhere to those CBAs for a period of time, such an oral representation cannot affect a modification of the written contract under our Circuit’s ERISA law. Third, as a matter of law, under published Sixth Circuit precedent interpreting ERISA and LMRA, customary state contract-law defenses such as waiver and estoppel are not available in an action to collect employee benefits due under the express terms of a written CBA (or a writing that incorporates or binds a party to a CBA). Fourth, the court determines that those CBAs required Data to make the benefit contributions calculated by the plaintiffs for the period October 10, 2003 through December 2004, and that Data did not make said contributions. Fifth, the court determines that the CBAs require the defendants to make Data’s records and defendant Encompass Electric & Telecom, Inc. (“Tele-com”)'s records available to the plaintiffs so they can conduct an audit and ascertain whether Data/Telecom has additional liabilities from December 2004 onward.

As to the grant of summary judgment to the plaintiffs on Count II, the court determines that defendant Encompass Electric & Telecom, Inc. (“Telecom”) is the alter ego of Data and, during any period when they existed and operated simultaneously, formed a “single enterprise” or “double-breasted employer” with Data.

As to the grant of summary judgment to the plaintiffs on Count III, the court determines that Price and Glanz were ERISA fiduciaries and breached their ERISA fiduciary duties by failing to make the benefit contributions and reports required by the CBAs on behalf of Data and Telecom, rendering them personally liable for those liabilities of Data and Telecom.

In light of this disposition, the court will not consider whether Price and Glanz might also be held personally liable for those same obligations under the federal piercing-the-corporate-veil doctrine and/or “due to their failure to maintain the corporate status of EED,” see Comp. ¶ 35. Nor will the court consider the state-law claim embedded in Count III, which the plaintiffs may attempt to pursue in state court if they wish.

BACKGROUND

The Parties

The plaintiffs — the Michigan Electrical Employees’ Pension Fund, the Michigan Electrical Employees Health Plan, the National Electrical Benefit Fund, the National Electrical Annuity Fund, the Lansing Electrical Joint Apprenticeship and Training Committee Trust, and the Lansing Labor-Management Cooperation Fund (collectively “the Fund) — were established through a collective-bargaining process and are administered pursuant to the Labor Management Relations Act of 1947, codified at 29 U.S.C. § 186 et seq., as amended (“LMRA”) and the Employee Retirement Income Security Act of 1974, codified at 29 U.S.C. § 186 et seq., as amended (“ERISA”).” Am. Comp. ¶ 1.

Data was formed on September 4, 2003, had its principal place of business in Grand Ledge, Michigan, and conducted business as an electrical contractor in the Lansing, Michigan area. See Defs.’ Opp’n, Ex A (Affidavit of James K. Price dated Feb. 27, 2008 (“Price Aff.”)) ¶ 9. When Data was formed, it employed defendant James K. Price (“Price”) as President and defendant Glanz as Secretary. Id. Data operated out of Price’s home, used Glanz’s cellular telephone as its business line, and primarily used tools, and a van, already owned by Price and Glanz. Id.

Data filed a certificate of dissolution with the State of Michigan in June 2005, Am. Comp. ¶ 2, so by operation of law it was dissolved at that time. Data took its last new work order on May 20, 2005, see Opp’n Ex H (Data’s “job book”), and after Data’s dissolution “[a]ll project owners for whom Telecom submitted bids or performed work were clearly notified in writing that the bids were submitted and the work was being performed by Telecom.” Opp’n Ex A (Price Aff.) ¶ 22.

Defendant Telecom is also a corporation that did business in the construction industry and had its principal place of business in Grand Ledge, Michigan, and it remains intact. Am. Comp. ¶ 3; see also Ans. ¶ 3 (admitting that Telecom is a Michigan corporation with a registered office in Grand Ledge but refusing to state where its principal place of business is).

Price and Glanz both do business as Data and Telecom, and they are both shareholders in Data. Am. Comp. ¶¶4-5. Data is no longer in existence and no longer conducting business, but Price and Glanz were shareholders and officers of Data before its June 2005 dissolution. Ans. ¶ 4.

The Alleged Contract

In the fall of 2003, Price contacted IBEW Local 665 business manager Bill Patrick (“Patrick”) to inform him that he and Glanz had formed Data. Price Aff ¶ 4. Patrick advised Price to sign onto the Local’s collective bargaining agreements (“CBAs”) so that Data would not have problems with the union. Id. According to the defendants, Price expressed concern that Data could not afford to pay union wages and benefits and remain competitive, and Patrick responded that Data would not be required to pay union wages and benefits until Data “got on its feet.” Price Aff ¶ 5; see also Defs.’ Opp’n (Deposition of James K. Price dated Jan. 17, 2008 (“Price Dep.”)) 36:4-14.

On October 10, 2003, Price signed three letters of assent in his role as president of Data. The first letter of assent provided, in pertinent part,

In signing this letter of assent, the undersigned firm does hereby authorize [the] Michigan Chapter, Lansing Division, Nat’l Electrical Contractors Assoc as its collective bargaining representative for all matters contained in or pertaining to the current and any subsequent approved RESIDENTIAL labor agreement between the MI Chapter, Lansing Div, Nat’l Electrical Contractors Assoc and Local Union 665, IBEW In doing so, the undersigned firm agrees to comply with, and be bound by, all of the provisions contained in said current and subsequent approved labor agreements. This authorization, in compliance with the current approved labor agreement, shall become effective on the 10th day of Oct., 2003. It shall remain in effect until terminated by the undersigned employer giving written notice to the MI Chapter, Lansing Div, Nat’l Electrical Contractors Assn and to the Local Union at least one hundred fifty (150) days prior to the then current anniversary date of the applicable approved labor agreement.

The Employer agrees that if a majority of its employees authorize the Local Union to represent them in collective bargaining, the Employer will recognize the Local Union as the NLRA Section 9(a) collective bargaining agent for all employees performing electrical construction work within the jurisdiction of the Local Union on all present and future jobsites.

In accordance with Orders issued by the United States District Court for the District of Maryland on October 10, 1980, in Civil Action HM-77-1302, if the undersigned employer is not a member of the National Electrical Contractors Association, this letter of assent shall not bind the parties to any provision in the above-mentioned agreement requiring payment into the National Electrical Industry Fund, unless the above Orders of Court shall be stayed, reversed on appeal, or otherwise nullified.

Am. Comp. Ex. A (or Defs.’ Opp’n Ex. G) at 1.

The second letter of assent appears substantively identical to the first, except that it authorizes NECA to be Data’s collective-bargaining representative as to all matters contained in or pertaining to the current and subsequently approved “Sound & Communications” labor agreement between NECA’s Lansing Division and Local 665. Am. Comp. Ex. A (or Defs.’ Opp’n Ex G) at 2. The third letter of assent appears substantively identical to the first, except that it authorizes NECA to be Data’s collective-bargaining representative as to all matters contained in or pertaining to the current and subsequently approved “Inside” labor agreement between NECA’s Lansing Division and Local 665. Am. Comp. Ex. A (or Defs.’ Opp’n Ex G) at 2. IBEW Local 665’s Business Manager, William L. Patrick, signed each of the three letters on behalf of the Union on an unspecified date, and each of the three letters bears a stamp reading “APPROVED International Office — I.B.E.W. OCT 21 2003 Edwin D. Hill President.” Am. Comp. Ex. A (or Defs.’ Opp’n Ex G) at 1-3.

The Fund contends that by Price signing these three letters of assent, Data became a party to the Residential, Sound & Communications, and Inside collective bargaining agreements (“CBAs”) then in effect, and subsequently entered into, between NECA and the Union, as well as the trust agreements incorporated by reference into the CBAs. Am. Comp. ¶¶ 6-7. The defendants’ answer admits only that Data signed “certain collective bargaining agreements.” Ans. ¶¶ 6-7.

The defendants allege that Price was never shown any of the three CBAs to which the letters of assent bound Data. Price Aff ¶ 7. They further allege that the Local’s business manager, Patrick, agreed to evaluate the status of Data at the end of 2004 to determine whether Data could remain a union contractor; if not, Patrick allegedly assured him, the relationship between Data and the Local would cease. Price Aff ¶¶ 5-6.

The Benefits Dispute

The Fund contends that the CBAs obligated Data to make contributions to plaintiffs towards the medical, pension, and other benefits of Data employees who performed work covered by the CBAs, to file reports, and to let the plaintiffs periodically inspect and audit Data’s payroll and work records. Am. Comp. ¶¶ 8 & 12.

Data’s corporate status was officially dissolved in June 2005, and the defendants allege that it no longer conducts business or maintains a principal place of business. Ans. ¶ 2; see also MSJ, Ex. K (Certificate of Dissolution signed by Price and filed on June 9, 2005 with the Michigan Dep’t of Labor & Economic Growth, Bureau of Commercial Services). The Fund insists that Data was not relieved of its CBA obligations by Price’s May 2005 letter stating that Data had “closed its doors.” Am. Comp. ¶ 9. Price testified that he and Glanz dissolved Data because the cost of its CBA obligations made its bids uncompetitive, and he admitted that the desire to eliminate the expense of the CBA obligations was at least one of the reasons for forming Telecom:

Q. Okay. To make things a little easier on our report we will refer to Encompass Electric & Data [Data] simply as Data, and Encompass Electric & Telecom [Telecom] simply as Telecom. Okay?

A. Okay.

Q. I understand that Data [Data] closed its doors and dissolved approximately on June 9, 2005. Is that true?

A. Yes.

Q. Why did the company close?

A. Financially we were, we could not make the union program work for us.

Q. Could you explain a little more what you mean by that?

A. The structure of the union, the wage and benefit package, we could not compete.

Q. The cost of Telecom paying the obligations under the collective bargaining agreement were [sic] too high and made your bids uncompetitive, is that what you’re saying?

A. Yes, for our company. Yes.

Q. Is that also why you formed the Telecom company?

A. I think that’s one of the reasons.

Q. What are the other reasons?

A. I guess to be more competitive in the market.

Q. Is Telecom a union contractor?

A. No.

MSJ Ex. B at 5:4 to 6:4 (omitting question that characterized Telecom as “successor” to Data, and defense counsel’s objection thereto); see also id. at 7:10-12.

Count 1 alleges that Data failed to pay employee-benefit contributions that were required under the CBAs to which the letters bound it. The Fund calculates that Data’s delinquent contributions for the period October 2003 through December 2004 amount to nearly $58,000, including contractual late charges or liquidated damages. Am. Comp. ¶ 15. Specifically, the Fund’s audit determined that Data was

liable for the following unpaid employee benefits under the CBAs:

Fund Amount Due Assessments Total Due

Health Care $30,946.32 $5,990.62 $36,936.94

Pension $ 7,418.92 $1,422.31 $ 8,840.68

NEAP $ 3,791.92 $ 758.38 $ 4,550.30

NEBF $ 425.59 $ 85.11 $ 510.70

JATC $ 1,542.53 $ 370.20 $ 1,912.73

LMCC $ 581.48 $ 0.00 $ 581.48

NLMCC $ 38.56 $ 0.00 $ 38.56

Dues $ 3,085.07 $ 0.00 $ 3,085.07

AMF $ 578.23 $ 0.00 $ 578.23

$ 848.15 NEAP & NEBF Interest:

$8,626.62 $57,882.84 TOTALS: $48,408.07 MSJ Ex. C or Defs.’ Opp’n Ex F (Dec. 21, 2006 Posb-Audit Letter from Fund Payroll Auditor Steven K. Homer to Data) (boldface in original); see also MSJ Ex. J (May 17, 2006 letter requesting audit and June 3, 2005 letter noting Data’s initial lack of cooperation with said request). The defendants have not lodged any specific objection to the Fund’s Oct. 2003 — Dec. 2004 audit.

The Fund explains that it cannot determine the amount of Data’s delinquent contributions for the period January 2005 through the present (if any) until the defendants submit the applicable records for inspection and audit. Am. Comp. ¶ 17.

It is undisputed that Data did not pay any fringe-benefit contributions at any time during its existence. The defendants maintain, however, that this is because Price’s “oral agreement” with Patrick modified the written contract (the letters of assent) so as to permit Data not to make such contributions until and unless Data indicated that it could afford to do so. See Defs. Opp’n at 2 (“Consistent with Data’s verbal agreement with Local 665, Data never submitted any monthly payroll reports nor did it pay any fringe benefit contributions, dues, or union scale wages while in business.”) (emphasis added). The defendants cite Price’s deposition testimony that Data never submitted monthly contribution reports to the union, and in fact “[njever submitted any other piece of paper work to the union” after signing the letters of assent. See Price Dep at 36:20-24. The defendants also cite Price’s claim that the local never requested that Data submit monthly contribution reports or pay any fringe-benefit contributions, nor did the local even explain how much Data should pay or how it should pay. See Price Aff ¶ 7 and Price Dep at 39:12-18 (“Q. * * * But you did not pay any contributions to the fringe benefit funds based on those hours of work because you say that there was a verbal agreement with Mr. Patrick that the company didn’t have to? A. That and we would have had no idea of what to pay or who to pay. We never received any other paperwork or anything from the union hall.”).

The Fund responds that

[w]hether or not such a[n oral] commitment was ever made by Mr. Patrick is ultimately irrelevant to the resolution of this lawsuit. Agreements, such as this one, under which employers commit to make contributions on behalf of their employees to fringe benefit funds, occupy a special status under law — such agreements must be in writing and cannot be orally modified.

These restrictions initially stem from Section 302(a) of the LMRA, 29 USC § 186(a), which prohibits, with certain exceptions, an employer from contributing funds to various employee representatives. One of these exceptions, applicable here, is § 302(c)(5)(B) of the LMRA, which permits payments to and from a trust fund for the benefit of employees, provided that such payments are made in accordance with a written agreement with the employer. 29 USC § 186(c)(5)(B).

As a result of the requirement that employer contribution to trust funds must be made pursuant to a written agreement, the courts have concluded that such agreements must be enforced as written and cannot be orally modified.

Fund’s Reply at 3 (citing Central States Pension Fund v. Behnke, 883 F.2d 454, 459-60 (6th Cir.1989) and Kemmis v. McGoldrick, 706 F.2d 993, 996 (9th Cir.1983)).

The Relationship Between Data (Dissolved June 2005) and Telecom (Still Doing Business)

Count 2 alleges that although Data was the signatory on the letters of assent, Tele-com is also jointly and severally liable for delinquent contributions pertaining to employees of both Data and Telecom because the two companies “have been operating as a single integrated enterprise and/or together constitute a joint employer, and/or are the alter ego of one another, and/or function as a double-breasted employer ....” Am. Comp. ¶ 22.

To substantiate this claim, the Fund alleges that Data and Telecom have had common employees, common management and supervision, common control of labor relations, similar working conditions, similar job classifications and job functions, have performed the same or similar services for customers in the same geographical area, and shared common operations. Am. Comp. ¶ 20. The Fund further alleges that Data sought to improperly avoid liability for such contributions by having work covered by the CBAs done by employees who were nominally on Telecom’s payroll instead of its own payroll. Am. Comp. ¶21. The defendants deny that Data was an alter ego of Telecom; they emphasize that Data was a separate entity from Telecom and therefore not liable for any of the latter’s obligations under the CBAs. Ans. ¶¶ 10 & 19-22 & 36.

The defendants allege that Price told the local orally in December 2004 that Data was closing, see Price Aff ¶ 12, and that Price faxed written notice of the same to the local on May 16, 2005, see Price Aff. ¶ 12 and Defs.’ Opp’n Ex. C. The defendants claim that Price signed the necessary paperwork to dissolve Data on December 10, 2004 but did not actually file that paperwork with the State of Michigan until June 2005, “when Data’s operations were fully closed down”; during the intervening months, Data “completed existing jobs, collected outstanding accounts, and paid outstanding bills, and eventually, closed its bank account.” Defs.’ Opp’n at 3 (citing Price Aff ¶ 14); see also Defs.’ Opp’n. Ex. D (June 9, 2005 Certificate of Dissolution for Data).

According to the defendants, Price, Glanz, and Price’s wife Gloria, formed the new company, Telecom, in December 2004, but did not begin operations until after Data was dissolved in June 2005. Defs.’ Opp’n at 4 (citing Price Aff ¶ 15 and Price Dep. at 11 & 13). The defendants insist that the two companies had “no overlapping operations.” Defs.’ Opp’n at 4 (citing Price Dep. at 11 & 13). During the same period when Price and Glanz were winding down Data’s operations, they took steps in preparation for the formal creation of Telecom: they opened a new bank account for Telecom in January 2005, purchased a “Yellow Book” telephone-directory listing for Telecom, and printed various corporate forms for Telecom. See Price Aff. ¶ 16 and Defs.’ Opp’n Ex. E (Telecom corporate forms).

The defendants emphasize that the Fund did not demand any CBA benefit contributions from the defendants until a letter dated January 30, 2006, which was more than seven months after Data officially dissolved. Price Aff. ¶ 19 and Defs.’ Opp’n Ex. F (letter).

Price & Glanz’s Roles with Data (Dissolved June 2005) and Telecom (Still Doing Business)

Count 3 claims that Price and Glanz breached their fiduciary duties under ERISA and the Michigan Building Contract Fund Act, M.C.L. § 570.151 et seq. (“MBCFA”). Am. Comp. ¶¶ 29-31. Specifically, it alleges that as officers and shareholders of Data and Telecom, Price and Glanz made personal use of fringe-benefit funds accrued by Data and Tele-com employees — instead of remitting those funds to the trust fund the plaintiffs had created for that purpose pursuant to the MBCFA — and refuse demands that they pay those funds into the trust. Am. Comp. ¶¶ 24-28 and 32. The Fund contends that Price and Glanz are individually liable for the fringe-benefit funds not paid into the trust because they violated their fiduciary duties. Am. Comp. ¶ 33. Price and Glanz deny that they received any funds that were subject to an MBCFA employee benefit trust or that they were required to make payments into any such trust, Ans. ¶¶ 24-33, and they contend that the Fund has “not identified any specific funds for which a fiduciary duty or trust attached,” Defs.’ Opp’n at 5.

Count 4 claims that Price and Glanz are individually liable for Data’s debts, namely its delinquent benefit trust payments, due to their failure to maintain Data’s corporate status. Finally, the Fund claims that Price and Glanz are also individually liable for Telecom’s debts due to their failure to maintain Data’s corporate status because the two entities constituted a “double-breasted” single employer (i.e., Telecom is Data’s alter ego). Am. Comp. ¶¶ 35-36. The defendants respond that the Fund does “not ... identify any incidences of commingled assets, or other indicators that Data was treated as anything other than a separate entity by Price and Glanz,” Defs.’ Opp’n at 5.

PROCEDURAL HISTORY

The Fund filed the complaint in February 2007 and the case was assigned to the Honorable Richard Alan Enslen. In March 2007, all defendants except the dissolved Data were served, and all four defendants filed a joint answer; the defendants did not contest jurisdiction or venue in their answer or otherwise, see Am. Comp. ¶¶ 10 & 11. The defendants assert twelve affirmative defenses. Among other things, they contend that the Fund’s claims are barred by its dissolution and termination of operations in June 2005; that the Fund’s attempt to hold Data liable for Telecom’s CBA obligations is barred by the fact that the two entities were not alter egos; and that the Fund’s attempt to hold Price and Glanz liable is barred because there is no basis for piercing the corporate veil of Telecom or Data. Ans. at 8-9.

Judge Enslen held a case management conference and issued a scheduling order in May 2007. In August 2007 the case was reassigned to this Judge, who issued an amended case management order in January 2008. In January 2008, the Fund moved for leave to amend the complaint to add a fifth defendant, Gloria Price. The motion was referred to Magistrate Judge Carmody for disposition pursuant to 28 U.S.C. § 636(b)(1)(A); after receiving opposition and reply briefs and hearing oral argument on March 3, 2008, the Magistrate Judge denied leave to amend, without opinion, for the reasons stated on the record at said hearing.

On January 31, 2008 the Fund moved for summary judgment. The defendants filed a timely opposition brief on February 28, 2008, and the Fund filed a timely reply brief on March 17, 2008.

LEGAL STANDARD: SUMMARY JUDGMENT

Summary judgment is proper if the “ ‘pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Conley v. City of Findlay, 266 Fed.Appx. 400, 405-06 (6th Cir.2008) (quoting Fed. R. Civ. P. 56(c)). The movant has the burden of proving the absence of genuine issues of material fact and its entitlement to judgment as a matter of law. Id. at 403-04 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)).

The court must accept the non-movant’s factual allegations, ACLU v. NSA, 493 F.3d 644, 691 (6th Cir.2007) (concurrence) (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)), cert. denied, — U.S. ——, 128 S.Ct. 1334, 170 L.Ed.2d 59 (2008), and view the evidence in the light most favorable to the non-movant, giving it the benefit of all reasonable inferences. Fox v. Eagle Dist. Co., Inc., 510 F.3d 587, 592 (6th Cir.2007) (Griffin, J.).

A moving party without the burden of proof need show only that his opponent cannot sustain its burden at trial. Morris v. Oldham Cty. Fiscal Ct, 201 F.3d 784, 787 (6th Cir.2000); see also Minadeo v. ICI Paints, 398 F.3d 751, 761 (6th Cir.2005). A moving party that has the burden of proof, however, faces a “substantially higher hurdle.” Arnett v. Myers, 281 F.3d 552, 561 (6th Cir.2002); see also Cockrel v. Shelby Cty. Sch. Dist., 270 F.3d 1036, 1056 (6th Cir.2001). “Where the moving party has the burden — the plaintiff on a claim for relief or the defendant on an affirmative defense — his showing must be sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party.” Calderone v. U.S., 799 F.2d 254, 259 (6th Cir.1986) (citation omitted). Our Circuit has emphasized that the party with the burden of proof “must show the record contains evidence satisfying the burden of persuasion and that the evidence is so powerful that no reasonable jury would be free to disbelieve it.” Arnett, 281 F.3d at 561 (citation omitted). Accordingly, summary judgment in favor of the party with the burden of persuasion “is inappropriate when the evidence is susceptible of different interpretations or inferences by the trier of fact.” Hunt v. Cromartie, 526 U.S. 541, 553, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999).

DISCUSSION

There Is No Genuine Issue as to Whether Data was Bound by the CBAs: It Was

The Parties’ Arguments

The defendants admit that Price, in his role as president and shareholder of Data, signed the letters of assent binding Data to the CBAs. The defendants do not contend that the letters of assent or the CBAs were invalid or unenforceable, nor do they deny that the CBAs required Data to make contributions for employee medical benefits, pension contributions, and other employee benefits and programs, of the type and in the amount alleged by the Fund. Instead, the defendants argue that the local’s business manager orally modified the letters of assent to provide for an indefinite deferment of Data’s obligation to comply with the CBA’s requirements to file reports, submit to audits, and make employee-benefit contributions. See Defs.’ Opp’n at 7.

Alternately, the defendants contend that the Fund waived its right to demand compliance with those CBA terms because it failed to provide copies of the CBA to the defendants until this litigation started, failed to demand audits or reports, and failed to demand benefit contributions until January 30, 2006 — which was over seven months after Data was officially dissolved (June 9, 2005), over eight months after Price gave written notice that Data would be dissolved (May 16, 2005), at least thirteen months after Price allegedly orally informed the Fund that Data would be closing (sometime in December 2004), and more than two years and two months after Price signed the letters of assent on Data’s behalf (October 10, 2003).

The Fact that Price signed the Letters of Assent without Receiving the CBAs Does Not Render the Letters Unenforceable

Because the letters of assent expressly incorporated the CBAs by reference and obligated the parties to abide by them, the court must read the letters and the CBAs together and give effect to all the documents. See North Pointe Dealings, Inc. v. Argo Int’l, Inc., 2008 WL 192287, *5 (E.D.Mich. Jan.23, 2008) (“When a written document refers to a separate document for additional contract terms, the court must read the writings together ....”) (citing Wonderland Shopping Ctr. Venture Ltd. P’ship v. CDC Mortgage Capital, Inc., 274 F.3d 1085, 1092 (6th Cir.2001) (citing Forge v. Smith, 458 Mich. 198, 580 N.W.2d 876 (1998))).

The defendants complain, however, that Price was never given a copy of the CBAs before signing the letters of assent that obligated Data to abide by them. Indeed, Price alleges that the Fund did not provide him with the CBAs until it initiated this lawsuit, well after Data was officially dissolved and no longer conducting business. Because the defendants are opposing summary judgment, the court must accept as true their allegation that Price was not given the CBAs to review before he signed the letters of assent on Data’s behalf.

Even so, that does not provide a basis for concluding that no contract was formed because there was no meeting of the minds or otherwise. Under Michigan law, “[p]arties generally have a duty to read a contract and know what they are signing.” Ideare Media Corp. v. Hettinger & Hettinger, P.C., 2007 WL 2572000, *3 (W.D.Mich. Sept.4, 2007) (citing, inter alia, Stopczynski v. Ford Motor Co., 200 Mich.App. 190, 503 N.W.2d 912, 913 (1993) (per curiam) (P.J. Cavanagh, MacKenzie, Griffin)).

As a necessary prelude to reading all contract documents, ordinary diligence and common sense should lead a person to obtain a copy of all documents that will define the parties’ rights and duties before he decides whether to enter into the contract. This is particularly true where, as here, the person is signing a contract that may well affect the very survival of a company that he founded, capitalized, and depends on for his livelihood. See Campbell v. Upjohn Co., 498 F.Supp. 722, 730 (W.D.Mich.1980) (in dispute over merger agreement, court rejected Campbell’s explanation that he relied on other party’s oral assurance that he would receive a certain payment even though such payment was not guaranteed by the written agreement) (“Above all and before all else, Campbell should have read the Agreement. A reasonable person must be charged with knowledge of a document with its magnitude and import. * * * Surely a person should be expected to apprise himself of the contents of an agreement he signed and helped to negotiate, and which sold out his interest in a company he helped to build.”), aff'd, 676 F.2d 1122 (6th Cir.1982).

If Price signed the letters of assent without seeing the CBAs, that was a voluntary choice, and he alone is to blame if the CBAs imposed too onerous a burden on Data. See Mishawaka Woolen Mfg. Co. v. Stanton, 188 Mich. 237, 154 N.W. 48, 52 (1915) (“It was claimed that the reservation of title was fraudulent because it was in fine print, and the attention of the purchaser was not called to it. * * * [But h]e should have read it, and if he did not do so, he alone is to blame. ”) (emphasis added).

The court notes that Price has not alleged that he asked for the CBAs and the union refused to provide them, unreasonably delayed in providing them, or otherwise prevented him from reading them. Cf. Prose v. Sun & Ski Marina, 2004 WL 2827197, *2 (Mich.App. Dec.9, 2004) (“[DJefendant asserts that plaintiff had a duty to read the contract [for purchase of] and cannot invalidate it on the ground that he failed to do so. * * * [PJlaintiff s assertion that he was tricked into signing the purchase contract because he thought it was merely confirming price and delivery is another attempt to contradict his deposition testimony that he signed the contract on or about November 1, 1990, and that defendant did not prevent him from reading it. ”) (emphasis added).

The court also notes that Price has not alleged that the CBAs were too long, complicated, unclearly phrased, or finely printed to comprehend even if he had obtained copies to review before signing the letters. Under the circumstances of a transaction between commercial entities (not a consumer and a commercial entity), such a complaint would likely be of no avail under Michigan common law anyway. Nor does it matter that Price might have found the CBAs difficult to comprehend; he could have demanded time to consult an attorney for an explanation of their terms. See H.H. King Flour Mills Co. v. Bay City Baking Co., 240 Mich. 79, 214 N.W. 973, 975 (1927) (“[I]t is claimed that the contract was a long one, printed on both sides of a single sheet in extremely small type; that it was complex, difficult of understanding, and unreasonable; and that it was not explained to him; that because thereof he is not bound by its terms. * * * We think the claim without merit. Defendant could and should have read it, and, if not understandable, obtained its explanation before signing.”); Royal Property Group, LLC v. Prime Ins. Syndicate, Inc., 267 Mich.App. 708, 706 N.W.2d 426, 438 n. 11 (2005) (“Notably, the trial court dismissed with prejudice the count for fraud .... The trial concluded that Royal failed to show that it reasonably could have relied on Prime’s alleged (emphasis added); misrepresentations [regarding the scope of an insurance contract] considering that Royal could have read the policy. Royal did not appeal the trial court’s decision in this regard ....”) (emphasis added).

In short, Price’s failure to obtain and read the CBAs does not support the notion that there was no meeting of the minds. See First Mercury Syndicate, Inc. v. Telephone Alarm Sys., Inc., 849 F.Supp. 559, 564 (W.D.Mich.1994) (McKeague, J.) (“Under Michigan law, an insured is obligated to read his ... policy.... The insured is thus presumed to have read the policy and is held to knowledge of its terms and conditions. Proof of actual knowledge of, or of an actual ‘meeting of the minds’ on each provision ... is not prerequisite to its enforcement.”) (emphasis added). Michigan common law obligated Price to read the letters of assent and the incorporated CBAs before signing; if he did not, he and Data are nonetheless charged with knowledge of the CBAs’ terms and are bound by them. “[WJhere additional terms are made part of a written contract by reference, the parties are bound by those terms even if they have never seen them.” Irwin Seating Co. v. IBM Corp., 2007 WL 2351007, *9 (WD.Mich. Aug.15, 2007) (Bell, C.J.) (citing, inter alia, Ginsberg v. Myers, 215 Mich. 148, 183 N.W. 749, 750 (1921)). Cf. Casey v. Auto Owners Ins. Co., 273 Mich.App. 388, 729 N.W.2d 277, 283 (2006) (“It is well established that an insured is obligated to read his ... policy.... Consistent with this obligation, if the insured has not read the policy, he or she is nevertheless charged with knowledge of the terms ....”) (footnotes omitted), app. denied, 478 Mich. 866, 731 N.W.2d 746 (2007); Rory v. Continental Ins. Co., 473 Mich. 457, 703 N.W.2d 23, 42 n. 82 (2005) (“ “[A]n insured’s failure to read his ... contract has never been considered a valid defense.” ”) (citations omitted).

Finally, the court notes that a district court in our circuit has already applied these contract-law principles in a very similar context, i.e., against a party that signed a document incorporating a CBA and then later complained that it had not read the CBA. In Laborers’ Pension Trust Fund v. Sidney Weinberger Homes, Inc., 872 F.2d 702 (6th Cir.1988) (per curiam) (Nelson, Boggs, D.J.Enslen), a general-contractors association and a laborers union had a CBA in effect from 1978-1980. In July 1979, the owner of Weinberger Homes signed a document binding his company to the 1978-80 CBA. Weinberger Homes, 872 F.2d at 704. A year later, in July 1980, the owner signed an interim document binding his company to the Supplemental 1980-82 CBA. Id. The 1980-1982 CBA contained a “roll-over” clause that extended the CBA for an additional two years (until 1984) unless one party or the other specifically disclaimed the extension. Id.

Weinberger contended that it should not be bound by the 1980-82 CBA’s rollover clause because it had never seen, let alone signed, that CBA. Weinberger Homes, 872 F.2d at 705. The district court disagreed and held that because Weinberger had signed the 1980 interim document which incorporated and bound it to the 1980-82 CBA, it was bound by the latter’s rollover clause and therefore by the resultant 1982-84 CBA. Id. Because Weinberger failed to challenge this determination by the district court, our Circuit simply let that aspect of the district court’s decision stand without further comment. See id. This part of the Weinberger Homes, therefore, is merely a district court decision, not a holding by our Circuit. While this court is not bound by the district court’s decision in Weinberger Homes, see Liebisch v. HHS, 1994 WL 108957, *2 (6th Cir. Mar.30, 1994) (“District court opinions have persuasive value only and are not binding as a matter of law.”), it finds the reasoning apposite and persuasive under the Michigan precedents discussed above. Accord Operating Engineers Pension Trust v. Cecil Backhoe Serv., Inc., 795 F.2d 1501, 1505 (9th Cir.1986) (“Parties to collective bargaining agreements are conclusively presumed to have equal bargaining strength .... A party who signs a contract is bound by its terms regardless of whether he reads it or considers the legal consequences of signing it.”).

Therefore, if the letters of assent otherwise constitute a valid, enforceable contract, the fact that Price did not read the incorporated CBAs and fully understand their scope before he signed the letters, is no obstacle to enforcement of the letters.

Legal Standard: Oral Modification of a Written Contract under Michigan Law

Michigan law holds that a written contract may be modified orally or in writing. Modem Living, LLC v. Wheatley, 2007 WL 3170523, *2 (Mich.App. Oct.30, 2007) (citing Chatham Super Markets, Inc. v. Ajax Asphalt Paving, Inc., 370 Mich. 334, 121 N.W.2d 836 (1963)). The modification must be by mutual consent. Modem Living, 2007 WL 3170523 at *2 (citing Adell Broadcasting Corp. v. Apex Media Sales, Inc., 269 MichApp. 6, 708 N.W.2d 778 (2005)). “ ‘The mutuality requirement is satisfied where a modification is established through clear and convincing evidence of a written agreement, oral agreement, or affirmative conduct establishing mutual agreement to waive the terms of the original contract.’” Modern Living, 2007 WL 3170523 at *3 (quoting Quality Prods. & Concepts Co. v. Nagel Precision, Inc., 469 Mich. 362, 666 N.W.2d 251, 258 (2003)).

Oral Modification of a Written Contract Governing ERISAJLMRA Employee Benefits

However, this court is not free to apply Michigan common law, because the Sixth Circuit has held that LMRA and ERISA must be read to prohibit oral modification of a written agreement that expressly specifies the extent of an employer’s obligation to make benefit contributions.

In Central States S.E. and S.W. Areas Pension Fund v. Behnke, Inc. {“Behnke”), 883 F.2d 454 (6th Cir.1989). a trucking firm named Behnke, Inc. (“Behnke”) was party to a series of written CBA negotiated between employers and local unions affiliated with the International Brotherhood of Teamsters (“the union”). Id. at 456. From 1950 to 1982, Behnke contributed to numerous employee-benefit funds as required by the CBAs. On March 31, 1982, the then-existing CBA expired and negotiations commenced for a new one. Meanwhile Behnke and the union executed a written Fringe Benefit Interim Agreement. Under the written agreement, Behnke was obligated to make certain contributions from April 1, 1982 through April 1, 1985 or the date that the new full CBA was executed (whichever was earlier). Id. at 456-57. Negotiations over a new full CBA dragged on, and Behnke expressed concern about the rising cost of healthcare benefits. Id. at 457.

In late 1982, Behnke and the union orally agreed on a new CBA, which was never reduced to writing. This 1982 oral CBA specified how much more Behnke would pay in 1983-84 and 1984-85 for healthcare insurance premiums and for wages. Behnke, 883 F.2d at 457.

In June 1983, Behnke and the union executed a written Participation Agreement that specified Behnke’s 1982-83 and 1983-84 healthcare-insurance contribution rates. The PA provided that for 1984-85, Behnke’s rate would be “whatever rate was necessary to maintain the plan.” Behnke, 883 F.2d at 457. The PA also bound Behnke to the Central States Trust. Agreement, which obligated Behnke to contribute at the rates specified in the applicable CBA while negotiations continued towards a new CBA. Id. Accordingly, Behnke contributed to the union’s trust fund, and the union paid benefits to Behnke out of that fund through April 1984. Id.

In April 1984, Behnke contacted the union regarding healthcare benefits for 1984-85. A union representative incorrectly told Behnke that he would be required to pay an amount that was higher than that called for by the oral CBA. Without the union’s consent, Behnke switched to a healthcare insurance carrier which offered lower premiums than the carrier that Behnke had been using (and which the union preferred to continue using). Behnke, 883 F.2d at 457. In May 1984, Behnke notified the union that he was discontinuing contributions to its trust fund because its medical carrier’s premiums were too high; the union responded by suspending benefits and payments to Behnke’s employees out of that fund. Id. at 457-48. (Behnke proceeded to maintain a comparable health and welfare benefits policy by directly paying the carrier that he preferred. Id. at 458.)

The union sued Behnke under ERISA and LMRA to recover delinquent employee pension, healthcare, and welfare contributions for April 1984 through November 1985, and the district court entered judgment for the union. Behnke, 883 F.2d at 458. The Sixth Circuit affirmed, holding:

Behnke’s claims hinge on the effect, under ERISA, of the 1982-85 oral CBA between Behnke and the Union because the terms of the employee benefit plan under the oral CBA conflict with the explicit written terms of the plan under the Interim, Participation, and Trust Agreements. That is, the oral CBA gave Behnke the option to change carriers in years two and three, while the written agreements commit Behnke to continuing] its contributions to Central States during, and potentially beyond, those years. The district court concluded that the written agreements determined the duration of Behnke’s obligation to contribute to Central States and that, to the extent that the oral CBA limited that obligation, the oral CBA violated national policy and was legally unenforceable.

The problem with Behnke’s reliance on the oral CBA regarding its obligation to make contributions to Central States, however, is that the LMRA and ERISA require employer contributions to trust funds on behalf of employees to be pursuant to detailed written agreements specifying the employer’s duty to contribute. See McHugh v. Teamsters Pension Trust Fund, 638 F.Supp. 1036 (E.D.Pa.1986) (Fund trustees not bound by alleged oral understandings between union and management; employee benefit plan agreements, by law, must be writtenf,] and oral modifications or sup-plementations are invalid) (citing ERISA, 29 U.S.C. § 1102(a)(1), and LMRA 29 U.S.C. § 186(c)(5)(B)); Straub v. Western Union Tel. Co., 851 F.2d 1262 (10th Cir.1988) (ERISA precludes oral modification).

Accordingly, but for the other written agreements between Behnke and the Union, the provisions of the oral CBA providing for payments to Central States in year one and again, following negotiations with employees, in year two while reserving the right to negotiate the logistics and carrier for future (third-year) health and welfare payments, would be unenforceable as written and in violation of the LMRA and ERISA.

Behnke, 883 F.2d at 458, 459-60. See, e.g., Board of Trustees of Ohio Carpenters’ Pension Fund v. Kovco Carpentry, 2006 WL 3742266, *2-3 (N.D.Ohio Dec.15, 2006) (employer Kovco argued “that it does not now owe those amounts because a union representative allegedly made some sort of oral agreement with Kovco, an agreement which did not comport with the express terms of the CBA. * * * Of course, no union representative would have the authority to modify the terms of the CBA.”) (citing Behnke, 883 F.2d at 459).

The rule prohibiting reliance on or enforcement of oral agreements that vary the benefit provisions of a written CBA can also work against an employee. For example, in Robbins v. Int’l Bthd. of Teamsters, 2006 WL 1752388 (W.D.Mich. June 23, 2006) (Miles, J.), a union local permitted Robbins to be an active, dues-paying member, and the employer agreed to make pension contributions to the plaintiff Fund on his behalf. Id. at *3. Both the employer and the union local told Robbins that he was entitled to participate in the pension plan by virtue of his membership in the local. Id. at *4. The Trustees of the pension fund, however, ultimately determined that during the period August 1993 through July 1998, Robbins was primarily employed as a mechanic, not a driver, and so was not eligible for pension fund participation under the express terms of the CBA. Id. at *2. When Robbins died, the amounts paid to his wife did not reflect the pension-fund contributions that the employer had made on his account during the contested five-year period, and Robbins’ wife sued the pension fund under ERISA to recover the additional pension amount. Id. at *1-2. Judge Miles of this court upheld the pension fund’s determination. Following Behnke, as well as persuasive authorities from other circuits, Judge Miles explained why Robbins’ wife could not compel the payment of the additional pension benefits even if both the fund and her late husband’s employer wished her to receive them:

Section 515 of ERISA provides,

Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 U.S.C. § 1145 (emphasis added). Section 515 binds the parties to a collective bargaining agreement to the terms of the agreement regardless of their undisclosed intent or understandings.... Behnke, 883 F.2d [at] 463 (where plan had never been apprised of agreement between employer and the union, it was entitled to assume that employer was following the stated terms of the written plan); Bakery & Confectionery Union v. New World Pasta, 309 F.Supp.2d 716, 723-24 (D.Md.2004) (citing Bakery & Confectionery Union v. Ralph’s Grocery Co., 118 F.3d 1018, 1021 (4th Cir.1997)). In addition, ERISA imposes a fiduciary duty on plan administrators to discharge their duties “in accordance with the documents and instruments governing the plan insofar as such documents and instruments are consistent with [ERISA].” 29 U.S.C. § 1104(a)(1)(D).

Thus, under ERISA, undisclosed “side agreements” that deviate from the terms and conditions of a plan or [CBA] are not binding upon the trustees of the plan. Central States, S.E. & S.W. Areas v. Transport, Inc., 183 F.3d 623 (7th Cir.1999) (finding that under ERISA the employer was bound by the terms of a[CBA], despite a second agreement between the employer and the union altering the terms of the [CBA]); McGowan v. NJR Service Corp., 423 F.3d 241, 245-46 (3rd Cir.2005) (explaining that the statute dictates that the rights of the parties are governed by the documents on file with the Plan, and not by outside private agreements between beneficiaries and participants).

No matter how well-meaning their motivation, [employer] Yerington and Local 7 could not bind the Defendant pension fund to treat Mr. Robbins as a “special case” and permit him to be covered by the [CBA] when he would not otherwise qualify under the terms of the plan. See Egelhoff v. Egelhoff ex rel. Breiner, 532 U.S. 141, 147, 121 S.Ct. 1322, 149 L.Ed.2d 264 (2001) (noting the statutory command of § 1104(a)(1)(D) that an ERISA fiduciary must administer the plan “in accordance with the documents and instruments governing the plan”).

Robbins, 2006 WL 1752388 at *5 (paragraph breaks added).

In any event, whether the rule announced in Behnke benefits employee, employer, or union trust fund in a given case, this court is obliged to follow the rule. As a matter of law under Behnke, the parties here could not orally modify the letters of assent so as to eliminate, reduce, or vary Data’s obligation to pay the benefits expressly guaranteed by the written CBAs. See, e.g., citing Behnke; Trustees for the Upper Plumbers’ & Pipefitters’ Health & Welfare Fund v. Frazer, 2006 WL 1008992, *5 (W.D.Mich. Apr.13, 2006) (Greeley, M.J.) (“A union representative’s oral modifications to the terms of a[CBA] may not be relied upon or enforced by an employer.”).

Has the Fund Waived its Right to Demand Data’s Performance under the CBAs? Should the Fund Be Estopped from Demanding Data’s Performance under the CBAs?

Alternatively, the defendants contend that even if the alleged oral assurance did not validly modify the written contract, the fund waived its right to demand benefit contributions by failing to demand such payment for over two years. See Defs.’ Opp’n at 9 (quoting Quality Prods. & Concepts Co. v. Nagel Precision, Inc., 469 Mich. 362, 666 N.W.2d 251, 260 (2003) (“[W]hen a course of conduct establishes by clear and convincing evidence that a contracting party, relying on the terms of the prior contract, knowingly waived enforcement of those terms, the requirement of mutual agreement has been satisfied.”)).

Similarly, the defendants contend that even if the alleged oral assurance of the local’s business manager did not validly modify the written contract, the assurance should equitably estop them from demanding compliance with the CBA’s benefit provisions. The defendants argue that

Local 665, through Patrick, induced Price into signing the Letters of Assent by promising that Data would not be obligated to pay union scale wages or fringe benefit contributions until data “got on its feet.” Based on that promise, Price signed the Assent Agreements. Price and Glanz relied no that promise, and decided to close Data when it became clear that Data could not get “on its feet.” * * *

With no known outstanding debts, Price and Glanz shut Data down and chose to start a new company. Had Price and Glanz known that Plaintiffs would attempt to ignore the terms of their [oral] deal with Data and seek payment of fringes on Data’s old work, Price and Glanz may have chosen to seek employment with another company instead of continuing Data or forming Telecom after Data ceased operations. Starting a new company that Plaintiffs would drag into this dispute would not have been their choice. Plaintiffs should now be estopped from seeking payment from any of the Defendants.

* * *

In reliance on this promise, the officers of Data decided to close down Data pri- or to any contributions being due to Plaintiffs or demanded by Plaintiffs. In further reliance, Price, Glanz, and Gloria Price formed a new company, Telecom, without any suggestion that Plaintiffs would seek payment from either Data, Telecom, or themselves individually. * * * Justice requires that Plaintiffs be estopped from going back on their promise to Defendants.

Defs.’ Opp’n at 22-28.

In response to the defendants’ waiver and estoppel arguments, the Fund relies on Sixth Circuit published precedent applying ERISA section 515. That section provides,

Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

29 U.S.C. § 1145. As our Circuit has explained,

Congress has enacted Section 515 in order to permit multiemployer plans to rely upon the terms of the collective bargaining agreements and plans as written, thus permitting] trustees of plans to recover delinquent contributions efficaciously, and without regard to issues which might arise under labor-management relations law. * * * The fund thus stands much like a holder in due course in commercial law who is entitled to enforce the writing without regard to understandings or defenses applicable to the original parties.

Bakery and Confectionery Union & Indus. Int’l Health Benefits & Pension Funds v. New Bakery of Ohio, 138 F.3d 955, 959 (6th Cir.1998). See, e.g., Pipefit-ters Local 6S6 Defined Pension Benefit Fund v. L & R Servs., Inc., 2007 WL 1814680, *6 (E.D.Mich. June 20, 2007) (in an action to recover delinquent fringe-benefit contributions that employers owed under a CBA, the employers “as a matter of law” could not raise fraud in the inducement or fraud in the execution of the document by which they agreed to be bound by the CBAs) (citing Behnke, 883 F.2d at 460).

In the earlier decision which held that parties may not orally modify an employer’s ERISA/LMRA benefit obligations, our Circuit explained why an employer may not invoke any state-law contract or equitable defenses to avoid such obligations either:

The contribution and payout amounts and systems are predicated on the trust’s receipt of full payment on behalf of covered employees, Robbins v. Lynch, 836 F.2d 330 (7th Cir.1988). In Lynch, the Seventh Circuit explained why trust funds are entitled to enforce employers’ written obligations to contribute notwithstanding an employer’s proffered defense to that contractual obligation:

Funds must assume that all participants in a plan are following the stated terms; no other approach permits accurate actuarial computations and proper decisions about which claims to pay. Just as the Federal Deposit Insurance Corp. is not bound by undisclosed promises of insured banks, so pension funds get the benefit of the written terms of agreements. Section 1145 of ERISA requires employers to make all pension contributions “not inconsistent with law”. This language was added to ERISA “to simplify delinquency collection” by freeing pension and welfare funds from defenses that pertain to the unions’ conduct. A claim that the union has promised not to collect a payment called for by the agreement is not a good answer to the trustees’ suit — although it might be a ground on which to obtain damages from the local union.

Id. at 333-34 (citations omitted). Moreover, in the recent case of Central States, Southeast & Southwest Areas Pension Fund v. Gerber Truck Service, Inc., 870 F.2d 1148 (7th Cir.1989), the en banc court elaborated on why otherwise valid defenses to contract formation, such as fraud in the inducement, oral promises not to enforce written agreements, etc., cannot cut off the fund’s claims:

Multi-employer pension and welfare plans would be in a bind if ... flaws in the formation cut off third-party claims. Plans rely on documents to determine the income they can expect to receive, which governs their determination of levels of benefits. Multi-employer plans are deflned-contribution in, defined-benefit out. Once they promise a level of benefits to employees, they must pay even if the contributions they expected to receive do not materialize — perhaps because they employers go broke, perhaps because they are deadbeats, perhaps because they have a defense to the formation of the contract. If some employers do not pay, others must make up the difference in higher contributions, or the workers will receive less than was promised. Lynch, 836 F.2d at 333.

Costs of tracking down reneging employers and litigating also come out of money available to pay benefits. The more complex the litigation, the more the plan must spend. Litigation involving conversations between employers and local union officials — conversations to which plans are not privy — may be especially costly, and hold out especially great prospects of coming away empty-handed ....

Id. at 1151.

Behnke, 883 F.2d at 460-61.

Accordingly, the court holds that the defendants may not use the doctrines of waiver and estoppel, or any other state-law defenses to contract formation or enforcement that might otherwise apply, to avoid compliance with its audit, reporting, and benefit payment obligations under the CBAs that were incorporated into the letters of assent. See, e.g., Trustees of BAC Local 32 Ins. Fund v. Caloia, 261 F.Supp.2d 814, 820 (E.D.Mich.2003) (granting summary judgment to plaintiff multiemployer plans in ERISA action to recover delinquent benefit contributions and to compel further audits to ascertain additional liabilities; “That there may have been an oral agreement which purported to limit the applicability of the CBA is of no consequence. Thus, [employerj’s promissory estoppel claim fails.”).

There Is No Genuine Issue as to the Amount Owed for Oct. 2003 — Dec. 2004

The defendants have not meaningfully disputed the accuracy of the audit that was conducted by the Fund and summarized in its December 21, 2006 post-audit letter, reproduced at MSJ, Ex. C, whether by identifying conceptual defects in its techniques or errors in its calculations.

Accordingly, the court determines that there is no genuine issue as to whether Data owes at least $57,882.84 in unpaid benefit contributions for the period October 2003 through December 2004: it does. (That amount does not account for any additional late-payment charges or interest required by the CBA or by statute and accruing after the date of said audit, nor does it include any costs and attorney fees to which the Fund may be entitled.)

No Genuine Issue: Data & Telecom Were Alter Egos/Single Enterprise

The Fund contends that Data and the later-formed company, Telecom, were alter egos of one another. Similarly, to the extent that Data and Telecom existed simultaneously for any period of time, the Fund contends that they constitute a “double-breasted” operation, i.e., that they were actually a single employer although nominally separate. See Yolton v. El Paso Tenn. Pipeline Co., 435 F.3d 571, 587 n. 12 (6th Cir.) (“‘Increasingly, the term [alter ego] also is applied to so-called double-breasted operations to determine whether two or more coexisting employers performing the same work are in fact one business, separated only in form.$7’ ”) (quoting NLRB v. Fullerton Transfer & Storage Ltd., Inc., 910 F.2d 331, 336 (6th Cir.1990)), cert. denied, — U.S. - & -, 127 S.Ct. 554 & 555, 166 L.Ed.2d 410 (2006). The similarities between Data and Telecom were certainly not, as the defendants assert it, “superficial.” See Opp’n at 12.

Preliminarily, it is federal common law, not Michigan common law, which governs the alter ego determination in an ERISA dispute. As our Circuit has held,

“[w]hether a company or individual is responsible for the financial obligations of another compa