Board of Trustees v. L.B.S. Construction Co., Inc

In Board of Trustees v. L.B.S. Construction Co., Inc., 148 N.J. 561, 691 A.2d 339 (1997), the Court addressed a factually different situation and specifically noted that the Bond Act "is neutral on the question of fringe benefits," 148 N.J. at 577, 691 A.2d 339, and left open the issue of whether the Act or the Bond permitted a claim by a party other than the obligee, including a claim for fringe benefits. Id. at 578, 691 A.2d 339. In L.B.S. the Supreme Court addressed claims pursuant to two different bonds issued by sureties for two different entities. As to each of the entities, the union pension funds were parties to a collective bargaining agreement, one with Gran Construction, a general contractor and the other with L.B.S. Construction, also a general contractor. Each of the general contractors, thus, was a party to the collective bargaining agreement with the unions and was also the party posting the surety bond covering labor and materials. The significance is important, for it is in this context that the Court commented that fringe benefits may be understood by the contracting parties to be included within the term "wages." In that context, the significant fact, however, is that the unions and the contractor who posts the Bond are direct signatories to the agreement which has given rise to the claim for unpaid fringe benefits. That direct relationship, however, is lacking in the matter before this court and it is this more attenuated relationship which creates the distinction in the legal right of the parties. Indeed, the Court in L.B.S. recognized the significant issue that we now face in this dispute, raising at the end of the L.B.S. opinion the series of rhetorical questions concerning bond coverage in situations more similar to the one before this court. It was in that context that the Court specifically left open the issue of whether a union which was not also a party to a collective bargaining agreement with the obligee on the Bond might nonetheless qualify under the Bond or within the Bond Act as a beneficiary. Id. at 578, 691 A.2d 339.