The Alaska Contractor - Summer 2008
The Alaska Contractor - Summer 2008
The Alaska Contractor - Summer 2008
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misrepresentations on to the engineer.<br />
<strong>The</strong> <strong>Alaska</strong> Supreme Court affirmed.<br />
Although the contractor had relied<br />
on the Trust’s assurances and only<br />
passed them on to the engineer, the<br />
court found that the contractor was<br />
negligent because it had relied merely<br />
on the verbal telephone statements<br />
of the Trust’s administrator. Said the<br />
court, “one would expect a prudent<br />
employer to have written documentation<br />
concerning fixed matters already<br />
of importance dealing with insurance.”<br />
Further, the court thought that the<br />
contractor should have “taken affirmative<br />
action” to determine what was required<br />
to assure nonunion employees<br />
were covered by the union trust fund.<br />
Simply taking the Trust’s spoken word<br />
for it apparently was not enough. <strong>The</strong><br />
court allowed that the contractor’s<br />
position was “a sympathetic one,” but<br />
held that the contractor had a duty “to<br />
take affirmative action to determine<br />
the nature and extent of the healthcare<br />
coverage,” and had failed to meet<br />
that duty.<br />
<strong>The</strong>re are several lessons to be<br />
drawn by this case.<br />
First, contractors should require that<br />
assurances about insurance coverage<br />
from union trust funds be in writing.<br />
Second, contractors should take at<br />
least some affirmative action in verifying<br />
the accuracy of what they are told<br />
by the trust funds.<br />
Third, trust fund trustees should<br />
understand that they and their employees<br />
are not necessarily immune<br />
from liability claims. ERISA preempts<br />
only those state laws that “relate to any<br />
employee benefit plan.” If a state law,<br />
meaning a statute or a judicially created<br />
claim, applies to everyone generally,<br />
such as the tort of negligent misrepresentation,<br />
it is not preempted by the<br />
federal statute. Trust funds can be held<br />
liable for their run-of-the-mill negligence<br />
in dealing with others. Trustees<br />
should assure that their administrators<br />
and employees understand that<br />
they are subject to the normal duties<br />
of reasonable care in conducting their<br />
routine business, which the court held<br />
was similar to that of an insurer.<br />
Robert J. (Bob) Dickson is a partner<br />
of the Anchorage law firm Atkinson,<br />
Conway and Gagnon Inc.