Dakota County District Court File No. C8-03-6267.
Considered and decided by Shumaker, Presiding Judge; Lansing, Judge; and Forsberg, Judge.*fn1
The trustees of an employee-benefit trust fund may enforce an employer's obligation to contribute to the fund through a mechanics' lien action against real property improved through the labor of the employees.
The opinion of the court was delivered by: Lansing, Judge
This appeal from the district court's entry of summary judgment in favor of the trustees of an employee-benefit trust fund presents the question of whether the trustees may file a mechanics' lien statement on behalf of union employees. Because the trustees are acting as the representatives of the employees and effectively stand in their shoes, we conclude they may file the claim, and we affirm the district court's ruling.
Spectrum Investment Group, LLC, the owner of real property in Eagan, employed a subcontractor, Peak Mechanical, Inc. to make improvements on the property. Peak then employed the pipefitters and plumbers of four different, local unions to furnish the required labor from November 2001 through January 2002.
The terms and conditions of the employment were governed by the applicable collective bargaining agreements, to which Peak, by virtue of its membership in Minnesota Mechanical Contractors Association (MMCA), was a party. These agreements incorporated a trust agreement between Twin City Pipes Trades Service Association, Inc. (TCPT), MMCA, the Plumbing Heating Cooling Contractors Association (PHCC), and the Pipe Trades local unions. The trust agreement provides that TCPT, a non-profit corporation, is responsible for the administration of two trusts: the Twin City Pipe Trades Pension Trust and the Twin City Pipes Trades Welfare Fund. A board of trustees, composed in part of MMCA, PHCC, and the local unions, administers the trusts and TCPT.
The trust agreement provides that TCPT is the representative of the union employees in any "legal proceeding, including the filing of mechanics liens on any property where Employees of a delinquent Employer have furnished labor, and for the additional purpose of acting as such representative in any court foreclosure proceeding to enforce payment of the lien." The collective bargaining agreement conjunctively provides that if an employer defaults in making the required contributions to the trust, "the trustees..., acting on behalf of the Union members or beneficiaries of the funds, may take any legal action as they, in their sole discretion may determine, in order to effect collection of the amounts of wages or other payments which are in default."
Despite its obligations under the collective bargaining agreement, Peak failed to make the required contributions to the employee-benefit trust fund, amounting to a sum of $62,947.45. In an effort to enforce Peak's obligations, TCPT filed mechanics' lien statements against Spectrum as the owner of the property that received the improvements. In both the initial lien statements as well as the amended statements, TCPT indicated that it was the lien claimant for the unpaid benefits. The statements specified that the amount of the lien was "due and owing to the lien claimant for labor performed or skill, material or machinery furnished to the land." The lien statements did not identify the unions or the employees that actually performed the labor on the property.
Spectrum disputed the validity of the liens, and TCPT sought judicial foreclosure. Both parties moved for summary judgment, and Spectrum asserted that TCPT could not claim the lien in its own name without designating the individual employees who performed the work. The district court concluded TCPT had standing to sue on behalf of the union employees ...