The Alaska Contractor - Summer 2008

misrepresentations on to the engineer.
The Alaska Supreme Court affirmed.
Although the contractor had relied
on the Trust’s assurances and only
passed them on to the engineer, the
court found that the contractor was
negligent because it had relied merely
on the verbal telephone statements
of the Trust’s administrator. Said the
court, “one would expect a prudent
employer to have written documentation
concerning fixed matters already
of importance dealing with insurance.”
Further, the court thought that the
contractor should have “taken affirmative
action” to determine what was required
to assure nonunion employees
were covered by the union trust fund.
Simply taking the Trust’s spoken word
for it apparently was not enough. The
court allowed that the contractor’s
position was “a sympathetic one,” but
held that the contractor had a duty “to
take affirmative action to determine
the nature and extent of the healthcare
coverage,” and had failed to meet
that duty.
There are several lessons to be
drawn by this case.
First, contractors should require that
assurances about insurance coverage
from union trust funds be in writing.
Second, contractors should take at
least some affirmative action in verifying
the accuracy of what they are told
by the trust funds.
Third, trust fund trustees should
understand that they and their employees
are not necessarily immune
from liability claims. ERISA preempts
only those state laws that “relate to any
employee benefit plan.” If a state law,
meaning a statute or a judicially created
claim, applies to everyone generally,
such as the tort of negligent misrepresentation,
it is not preempted by the
federal statute. Trust funds can be held
liable for their run-of-the-mill negligence
in dealing with others. Trustees
should assure that their administrators
and employees understand that
they are subject to the normal duties
of reasonable care in conducting their
routine business, which the court held
was similar to that of an insurer.
Robert J. (Bob) Dickson is a partner
of the Anchorage law firm Atkinson,
Conway and Gagnon Inc.