Laborers Pension Fund et al v. Thos. M. Madden Co. et al

Filing 39

MEMORANDUM Opinion and Order Signed by the Honorable Joan B. Gottschall on 9/21/2011. (ber, )

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

LABORERS’ PENSION FUND and
LABORERS’ WELFARE FUND OF THE
HEALTH AND WELFARE DEPARTMENT
OF THE CONSTRUCTION AND GENERAL
LABORERS’ DISTRICT COUNCIL OF CHICAGO
AND VICINITY, and JAMES S. JORGENSEN,
Administrator of the Funds,
Plaintiffs,
v.
THOS. M. MADDEN CO., an Illinois corporation,
and ROBERT J. MADDEN, JR., individually,
Defendants.

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No. 09 C 7601

Judge Joan B. Gottschall

MEMORANDUM OPINION AND ORDER
Laborers’ Pension Fund, et. al. (“the Fund”) brought this action against Robert J.
Madden, Jr. (“Madden”) and Thos. M. Madden Co. (the “Company”) under the Employee
Retirement Income Security Act (“ERISA”), 29 U.S.C. §§ 1132(e)(1)–(2), 1145 (2006), and the
Labor Management Relations Act as amended (“LMRAA”), 29 U.S.C. § 185 (2006), seeking
recovery of $116,067.77.1 Before the court is the Fund’s motion for summary judgment as to
Madden.
I.

LEGAL STANDARD

“The court shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(a). A dispute of material fact is genuine only if “the evidence is such that a

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Of the sum sought, $94,804.33 represents unpaid contributions and liquidated damages owed by the
Company on its Installment Note, $16,563.44 is unpaid wages owed Union employees, and $4,700 is attorneys’
fees.

reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 248 (1986).

A moving party is entitled to summary judgment if the

nonmovant is unable to point to evidence beyond the pleadings sufficient to establish all essential
elements of the claim. See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). This is so
because “[i]n such a situation, there can be ‘no genuine issue as to any material fact,’ since a
complete failure of proof concerning an essential element of the nonmoving party’s case
necessarily renders all other facts immaterial.” Id. at 322-23. Madden has elected not to respond
to the Fund’s Local Rule 56.1(a)(3) statement. Accordingly, the facts contained in the statement
are deemed admitted. See L.R. 56.1(b)(3)(C) (“All material facts set forth in the statement
required of the moving party will be deemed to be admitted unless controverted by the statement
of the opposing party.”). Even so, the court must view the facts in the light most favorable to
Madden. See Yancick v. Hanna Steel Corp, --- F.3d ----, No. 10-1368, 2011 WL 3319568, at *11
(7th Cir. Aug. 3, 2011) (citing Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir. 2006)). Thus,
Madden’s failure to respond does not relieve the Fund from establishing the propriety of
summary judgment on the undisputed facts. See Raymond v. Ameritech Corp., 442 F.3d 600,
608 (7th Cir. 2006) (“[A] nonmovant’s failure to respond to a summary judgment motion . . .
does not . . . automatically result in judgment for the movant. [The movant retains the] ultimate
burden of persuasion [and must] show it is entitled to judgment as a matter of law.” (citing
Reales v. Consol. Rail Corp., 84 F.3d 993, 997 (7th Cir. 1996), and Wienco, Inc. v. Katahn
Assocs., Inc., 965 F.2d 565, 568 (7th Cir. 1992)).
II.

BACKGROUND

Given the foregoing, the following facts are admitted: The Fund, a multiemployer plan,
is authorized to receive and administer pension, training, and welfare funds for employees of the

Company and other businesses in the same field who are members of the Construction and
General Laborers’ District Council of Chicago and Vicinity (the “Union”). It is also authorized
to collect contributions for several other funds and associations. The Union has an existing
Collective Bargaining Agreement (“CBA”) with the Illinois Road and Transportation Builders
Association (“IRBA”). As a member of IRBA, the Company is obligated to abide by the terms
of the CBA. The terms of the CBA dictate the parameters for the Company’s contributions to
the Fund. The Company was delinquent on its payments to the Fund from January 2006 through
2009. As a result, the Fund sued the Company and Madden on November 30, 2009 seeking
payment of the amounts due from the defendants. In its amended complaint, the Fund (a) alleged
that it had entered into an Installment Note (the “Note”) with the Company on March 18, 2010 to
pay off the Company’s outstanding welfare and pension obligations and resolve this litigation,
(b) claimed, inter alia, that Madden had defaulted on the Guaranty, and (c) claimed that unpaid
wages due pursuant to, inter alia, the Guaranty. At the same time the Note was signed, Madden
signed a Guaranty of Payment and Indemnification Agreement (the “Guaranty”). The Guaranty
indicated that:
Guarantor [Madden] also agrees to be personally liable for all monthly benefit
contributions, union dues and/or wages owed from the Company to the Funds, the
District Council, all ancillary funds, and/or the participants that are due at the time the
Note and Guaranty are entered into and/or incurred and become due and owing for the
duration of the Note, including all interest, liquidated damages, audit costs, attorneys’
fees and costs.
The Company has failed to make payments to the Note, which has a balance of $94,804.33.
An outside accounting firm conducted a wage audit on the Company from June 2009 to
April of 2010. The audit showed that the Company was not paying the proper wage scale and
thus underpaid its employees by $16,563.33. The CBA gives the Fund authority to collect
unpaid wages.

The Fund also claims an expenditure of $4,700 in attorney’s fees incurred during the
course of this litigation that was not already accounted for in the Note. These fees were detailed
by the Fund in an affidavit submitted with its motion for summary judgment. (See ECF No. 35
at 79-87.)
The Company entered Chapter 11 Bankruptcy (since converted to Chapter 7) before the
down payment on the Note could be paid. The Fund appealed to the bankruptcy court to lift the
automatic stay required by 11 U.S.C. § 362. On November 22, 2010, the bankruptcy court did
so, allowing the Fund to liquidate its claim as to the Company and pursue judgment solely
against Madden as an individual.
III.

ANALYSIS

Multiemployer plans are authorized to bring suit as fiduciaries under section 1132(e) of
Title 29 of the United States Code. Line Constr. Benefit Fund v. Allied Elec. Contractors, 591
F.3d 576, 579-80 (7th Cir. 2010). Congress has given these designated collectors of ERISA
funds the right to sue for contributions owed under a CBA. Id. Thus, the Fund is authorized to
bring suit to collect money owed by the Company under the terms of the CBA between IRBA
and the Union.
Moreover, the terms of the Note and Guaranty obligate Defendant Madden to pay the
outstanding balance of the note, as well as any unpaid wages or attorney’s fees. As Madden has
failed to do so, this action can be construed as a simple breach of contract case. Indeed, Madden
does not dispute the Fund’s contention that he owes the money as Guarantor.
A.

Delinquent Contributions
The Fund is thus entitled to summary judgment against Madden for the outstanding

claims on the Note, which amount to $94,804.33.

B.

Unpaid Wages
This court is tasked with adjudicating contract suits between labor and management by

section 301 of the Labor Management Relations Act. 29 U.S.C. § 185. The terms of the
Guaranty hold Madden personally liable for the underpayment of wages as revealed by the audit.
In light of this breach by Madden and his failure to dispute the amount, the Fund is entitled to
summary judgment on its claim of $16,563.44 for back wages.
C.

Attorney’s Fees
Lastly, “[w]hen a trustee of an ERISA benefit plan prevails in an action to recover

delinquent contributions, the district court is required to award ‘reasonable attorney’s fees.’”
Anderson v. AB Painting & Sandblasting, Inc., 578 F.3d 542, 544 (7th Cir. 2009) (quoting 29
U.S.C. § 1132(g)(2)(D)). Because the Fund has prevailed in its ERISA action, because Madden
does not dispute the amount the Fund is claiming in fees, and because the amount appears
reasonable, the Fund is similarly entitled to its $4,700 in claimed attorney’s fees.
IV.

CONCLUSION

For the reasons stated above, the Funds’ motion for summary judgment against Madden
is granted. The Fund is awarded $116,067.77 in unpaid contributions, wages, and attorneys’ fees
and expenses.

ENTER:
_______/s/__________________
JOAN B. GOTTSCHALL
United States District Judge
DATED: September 21, 2011