Chicago Regional Council of Carpenters Pension Fund et al v. Schal Bovis, Inc.
MEMORANDUM Opinion and Order. Signed by the Honorable Manish S. Shah on 3/31/2017: Defendant's motion for attorney's fees and to modify the court's earlier fee award to plaintiffs, 100 , is denied in part and granted in part. It is denied with respect to defendant's motion for attorney's fees. It is granted insofar as the earlier fee award to plaintiffs is vacated, and plaintiffs shall file an amended fee petition. The amended fee petition (with revised damages, penalties, and costs calculations) shall be filed by 4/21/17. Defendant shall respond to the fee petition by 5/5/17, and plaintiff may reply by 5/19/17. [For further detail see attached order.] Notices mailed. (psm, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
CHICAGO REGIONAL COUNCIL OF
CARPENTERS PENSION FUND, et al.,
No. 11 CV 0992
Judge Manish S. Shah
SCHAL BOVIS, INC.,
MEMORANDUM OPINION AND ORDER
Plaintiffs are four carpenter union fringe benefit funds. They brought an
action under the Employee Retirement Income Security Act and the Labor
Management Relations Act against defendant, a general contractor and a signatory
to collective bargaining agreements, for failing to make payments to the funds for
work performed by nonunion labor. After Judge Coleman granted plaintiffs’ partial
motion for summary judgment on the issue of defendant’s liability for four claims of
unpaid fringe benefit contributions, I assessed damages and interest for the unpaid
contributions, and I awarded plaintiffs’ attorneys’ fees. Both parties appealed the
final order. The Seventh Circuit reversed the grant of summary judgment as to two
claims of unpaid fringe benefit contributions and remanded the case for further
proceedings. Defendant now moves for reasonable attorney’s fees and to modify the
earlier fee award to plaintiffs. For the following reasons, that motion is denied in
part and granted in part.
Since 1983, defendant has been a party to several collective bargaining
agreements with the Chicago Regional Council of Carpenters. Through this original
agreement and a later agreement that was effective from 2005 to 2008, defendant
became a party to several trust agreements that created fringe benefit funds for the
subcontractors for “jurisdictional work” if the subcontractors had not signed the
agreement. The agreement defined “jurisdictional work” in broad terms: it
encompassed carpenter’s work, but it did not include work done by other unions in
the Building Trades. If defendant hired non-signatories to perform carpenter’s
work, the agreement obligated defendant to track the hours worked by the
subcontractor and to pay the funds fringe benefit contributions for each of those
An audit of defendant’s books from 2006 through 2007 led plaintiffs to
demand from defendant eight million dollars in unpaid fringe benefit contributions,
liquidated damages, and interest for thirty-six claims of work by non-signatory
subcontractors. Plaintiffs pursued eight of those claims against defendant by
bringing this action. Shortly thereafter, plaintiffs withdrew four claims. Defendant
filed a motion for summary judgment, arguing that it was not liable to plaintiffs for
unpaid contributions in the four remaining claims (Monda Window & Door, Edward
Don & Company, Timothy Wright, and Canac). Defendant argued it was entitled to
a judgment on the Monda Window & Door and the Edward Don & Company claims
because those subcontractors performed non-jurisdictional work, which was
permissible under the agreement. Defendant noted that plaintiffs exempted other
similar claims against defendant when the work involved other trade unions,
meaning it was non-jurisdictional work under the agreement. Judge Coleman
rejected those arguments and held that defendant did not present enough evidence
about the exemptions to lead to the conclusion that plaintiffs exempted those
subcontractors because of the contractual language rather than because of
individualized accommodations. See  at 1.1
With respect to the Timothy Wright and the Canac claims, defendant argued
that it should not be held liable because plaintiffs received the required fringe
benefit contributions from both subcontractors. Even though Timothy Wright was
unable to officially complete a union agreement because it did not secure a bond,
defendant argued that Timothy Wright became a signatory through its conduct of
making fringe benefit contributions to the funds. Defendant also argued that Canac
was effectively the same employer as Qualifit, a union signatory, and since Qualifit
made fringe benefit contributions to the funds, defendant could not be liable. Those
arguments were rejected. See  at 1.
The parties submitted competing briefs on the issue of damages. Plaintiffs
calculated the amount of damages by taking one-third of the total amount of money
defendant paid the subcontractors (a common approach for estimating the cost of
labor) and multiplying that amount by the fringe benefit rate for the applicable time
period. These calculations were presumed correct because defendant maintained
Bracketed numbers refer to entries on the district court docket.
substandard records. See Chicago Dist. Council of Carpenters Pension Fund v.
Reinke Insulation Co., 347 F.3d 262, 264 (7th Cir. 2003). I relied on plaintiffs’
calculations except for when there was other evidence in the record that provided a
more precise accounting. I concluded that defendant was liable to plaintiffs for
unpaid fringe benefit contributions in the following amounts: $12,449.25 for the
Monda Window & Door claim; $8,910.00 for the Edward Don & Company claim;
$7,161.00 for the Timothy Wright claim; and $129,225.50 for the Canac claim. I also
held defendant liable to plaintiffs for $102,799.90 in double interest; for $2,849.04 in
auditor’s fees; and for $49,226.44 in attorneys’ fees and costs that plaintiffs accrued
through its pre-suit investigation and post-suit efforts, see Montanez v. Simon, 755
F.3d 547, 555 (7th Cir. 2014); BCS Servs., Inc. v. BG Investments, Inc., 728 F.3d
633, 642 (7th Cir. 2013). See ; .
Defendant appealed the grant of summary judgment with respect to the
Edward Don & Company claim and the Canac claim. Plaintiffs cross-appealed the
calculation of damages for the Canac claim. The Seventh Circuit reversed because:
(1) the Edward Don & Company claim was non-jurisdictional work, as shown by the
terms of the agreement and defendant’s evidence that it was the existing practice of
the Sheet Metal Workers union to install stainless steel kitchen equipment; and (2)
it was an error of law to conclude that defendant could not rely on the singleemployer doctrine solely because its contract was with Canac and not Qualifit, and
that doctrine shielded defendant from being held liable for violating the agreement
by assigning work to Canac. Chicago Reg’l Council of Carpenters Pension Fund v.
Schal Bovis, Inc., 826 F.3d 397 (7th Cir. 2016), cert. denied, 137 S. Ct. 819 (2017).
As a result of this holding, plaintiffs were not entitled to any damages from
defendant on the Canac claim and therefore, plaintiffs’ issue on appeal was
rendered moot. Id. at 400. The Seventh Circuit remanded the case for further
proceedings and defendant filed this motion.
Defendant’s Attorney’s Fees
Section 1132 of the Employee Retirement Income Security Act empowers
plaintiffs to bring an action against defendant to recover unpaid fringe benefit
contributions. It also permits a court to award attorney’s fees in two distinct
scenarios. See 29 U.S.C. § 1132(g).2 Under § 1132(g)(1), a court may use its
discretion to decide if reasonable fees and costs should be awarded “to either party”
in any action under § 1132, except for the type of action described in (g)(2).
Section 1132(g)(2) applies to actions to enforce § 1145, which governs delinquent
contributions to multiemployer plans.3 Under § 1132(g)(2), a court “shall award the
Section 1132(g) provides: “(1) In any action under this subchapter (other than an action
described in paragraph (2)) by a participant, beneficiary, or fiduciary, the court in its
discretion may allow a reasonable attorney’s fee and costs of action to either party. (2) In
any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section
1145 of this title in which a judgment in favor of the plan is awarded, the court shall award
the plan—(A) the unpaid contributions, (B) interest on the unpaid contributions, (C) an
amount equal to the greater of—(i) interest on the unpaid contributions, or (ii) liquidated
damages provided for under the plan in an amount not in excess of 20 percent (or such
higher percentage as may be permitted under Federal or State law) of the amount
determined by the court under subparagraph (A), (D) reasonable attorney’s fees and costs of
the action, to be paid by the defendant, and (E) such other legal or equitable relief as the
court deems appropriate.” 29 U.S.C. § 1132(g).
Section 1145 states: “Every employer who is obligated to make contributions to a
multiemployer plan under the terms of the plan or under the terms of a collectively
bargained agreement shall, to the extent not inconsistent with law, make such
plan” fees and costs for a § 1145 enforcement action “in which a judgment in favor of
the plan is awarded.” Simply put, (g)(1) covers every action under § 1132 “other
than” the type of action outlined in (g)(2), and (g)(2) describes actions to enforce
§ 1145 in which a judgment was awarded in favor of the plan; the award of fees and
costs is discretionary under (g)(1) and mandatory under (g)(2); and, under (g)(1) the
court may award fees and costs to “either party,” but under (g)(2) a court awards
fees and costs only to the benefit plan.
The parties agree that this lawsuit constitutes an action to enforce § 1145
and that plaintiffs are entitled to some relief under § 1132(g)(2) as the prevailing
party on the Monda Window & Door and the Timothy Wright claims. See  at 4;
 at 3. The parties dispute whether defendant may nevertheless be entitled to
attorney’s fees and costs under § 1132(g)(1). Defendant argues that the Seventh
Circuit “has often approved attorney’s fees awards to successful defendants under
either or both of these provisions.” See  at 3. Plaintiffs correctly note, however,
that none of the cases defendant cites in support of that statement stand for the
proposition that a defendant is entitled to attorney’s fees when the action is one
described by § 1132(g)(2).4
contributions in accordance with the terms and conditions of such plan or such agreement.”
Id. at § 1145.
Defendant mischaracterizes Sullivan v. William A. Randolph as a § 1132(g)(2) case, when
in fact the Seventh Circuit affirmed the district court’s judgment and award of attorney’s
fees for the defendant under § 1132(g)(1). 504 F.3d 665 (7th Cir. 2007). The other two cases
defendant cites—Stark v. PPM Am., Inc., 354 F.3d 666 (7th Cir. 2004) and Little v. Cox’s
Supermarkets, 71 F.3d 637 (7th Cir. 1995)—do not involve a plan that obtained a judgment
in a § 1145 enforcement action and therefore are inapplicable to this case.
Plaintiffs also argue that § 1132(g)(1) “by its express terms” does not apply to
this action “[b]ecause judgment was entered in favor of [plaintiffs].”  at 4.
Defendant responds that such an interpretation would be inconsistent with the
legislative history of § 1132(g). According to defendant, Congress added paragraphs
(g)(1) and (g)(2) “in order to make it easier for fringe benefit funds to collect
penalties and attorney’s fees as a matter of right and not something which
previously had been within a court’s discretion.”  at 5. Defendant emphasizes
that “[n]owhere in this history did Congress state [. . .] that it intended to make any
other changes by adopting these statutes so as to deprive a litigant of the right to
seek a fee award against a benefit fund under either [(g)(1)] or [(g)(2)].” Id. at 6–7.
I agree with plaintiffs’ reading of the statute and I do not find the legislative
history to require a different reading. Although there is no authoritative case law on
the precise question defendant raises, the plain language of the statute is clear:
§ 1132(g)(1) only operates in cases that are not lawsuits described in § 1132(g)(2).
Since § 1132(g)(2) refers to actions to enforce § 1145 where the plan has obtained “a
judgment” in its favor, § 1132(g)(1) does not apply to such actions. The
congressional intent reflected in the legislative history emphasizes that § 1132(g)(2)
was intended to make fee awards in favor of plans mandatory; nothing about that
intent sheds light on whether defendants should be awarded fees when the
judgment was in favor of the plan.
Section 1132(g)(2) does not explicitly forbid defendants from recovering
attorneys’ fees, but that does not mean that § 1132(g)(1) permits it. Discretionary
awards are authorized by § 1132(g)(1), except in cases—such as this one—described
by § 1132(g)(2). Since § 1132(g)(1) does not apply in such cases, there is no statutory
authority for an award of fees to defendant here, and I conclude that the absence of
authority precludes defendant’s request.
In reply, defendant also remarks that: “a compelling argument can be made
under [§ 1132(g)(2)] that Defendant is probably more of a ‘prevailing party’ in this
case than are the Plaintiffs.”  at 3. This argument is unavailing. Section
1132(g)(2) refers to “a judgment in favor of the plan.” (emphasis added). It does not
require that a judgment in its entirety favor the plan on all claims raised by the
plan; thus, if plaintiffs obtained a judgment, it is irrelevant whether defendant
successfully pared back the extent of liability. This remains true even if plaintiffs
had raised each subcontractor claim as a separate count in the complaint because
there would still be a judgment in favor of the plan.
In sum, when the plan obtains a judgment in a § 1145 enforcement action,
§ 1132(g)(1) does not apply, and § 1132(g)(2) does not permit the court to use its
discretion to award defendant fees and costs. Since the judgment, as modified by the
Seventh Circuit, was in favor of the plan, plaintiffs are entitled to attorneys’ fees
and defendant is not. Defendant’s motion for attorney’s fees is denied.5
It may be counterintuitive that a litigant with more “wins” in its column than “losses”
should be the one that the court orders to pay the other’s fees, but whatever tension this
decision brings to the surface should be resolved by Congress. Moreover, the reasonableness
of the fee award in favor of the plan remains a consideration, and it should limit the
potential for distorted outcomes. As discussed below, in a case such as this it would not be
reasonable to award the plan all the attorneys’ fees it spent pursuing a defendant who
ultimately owed only a small fraction of the plan’s estimated damages.
Plaintiffs’ Fee Award
District courts calculate fee awards first by determining the “lodestar”—the
sum of hours reasonably spent on the case multiplied by a reasonable hourly rate.
Pickett v. Sheridan Health Care Ctr., 664 F.3d 632, 639 (7th Cir. 2011). If necessary,
district courts adjust the lodestar based on equitable considerations such as the
degree of success or the results obtained from litigation. See Hensley v. Eckerhart,
461 U.S. 424, 430 n.3 (1983).6 In light of the Seventh Circuit’s holding that
defendant was not liable for two of the four claims, defendant argues that the fee I
previously awarded to plaintiffs should be reduced to exclude work by plaintiffs’
attorneys on all claims except the Monda Window & Door and the Timothy Wright
The Supreme Court denied plaintiffs’ petition for certiorari, so there can be
no dispute that the amount of the judgment must be reduced by the damages
attributable to the Edward Don & Company and the Canac claims. Plaintiffs argue
that I “already properly rejected” defendant’s position that the fee award should be
reduced due to plaintiffs’ failure to obtain an award of damages for the thirty-six
claims in the original audit.  at 6.
In Hensley, the Supreme Court identified twelve factors for district courts to consider in
calculating a reasonable fee: “(1) the time and labor required; (2) the novelty and difficulty
of the questions; (3) the skill requisite to perform the legal service properly; (4) the
preclusion of employment by the attorney due to acceptance of the case; (5) the customary
fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or
the circumstances; (8) the amount involved and the results obtained; (9) the experience,
reputation, and ability of the attorneys; (10) the ‘undesirability’ of the case; (11) the nature
and length of the professional relationship with the client; and (12) awards in similar
cases.” 461 U.S. at 430 n.3.
In my earlier decision, I acknowledged that “it may seem that plaintiffs
achieved only partial success relative to their initial demand,” but I concluded that
the time plaintiffs spent withdrawing and narrowing its claims from thirty-six to
eight, and finally to four, was reasonable. See  at 6. The Seventh Circuit’s
decision has altered one of the underlying premises of my reasoning—previously,
plaintiffs were the prevailing party on all four subcontractor claims they raised in
the motion for summary judgment; but now, plaintiffs are the prevailing party on
only two of the four claims, and small-value claims at that.
When the plaintiff only achieves a partial success, the lodestar amount may
be excessive. Illinois Welfare Rights Org. v. Miller, 723 F.2d 564, 567 (7th Cir.
1983). I now conclude that it would be excessive to award plaintiffs the full amount
of the requested fees. It was reasonable for plaintiffs to pursue multiple avenues
when auditing defendant because of the inadequacy of defendant’s books and
records, but the results obtained for the plans are too small to justify the original
fee award. In cases of partial success, “the court may adjust the award either by
identifying specific hours that should be eliminated or by simply reducing the
overall award to reflect the plaintiff’s limited success.” Id. Under Hensley, a claim
that is distinct “in all respects” from the successful claim should be treated as
unrelated to the successful claim; therefore, any time the attorney spent working on
the distinct claim would not have been in furtherance of the successful claim and
should not be included in the fee award for the successful claim. 461 U.S. at 440.
Conversely, when a claim is based on a common core of facts or related legal
theories such that the action cannot be divided into discrete claims, Hensley directs
the district court to consider the weight of the overall relief in relation to the hours
plaintiff reasonably spent litigating the action. Id. at 435.
This case may fall in the first category; it involves discrete claims related to
different subcontractors that each worked a unique amount of hours at various
rates for defendant. The legal theories also differed amongst the claims: the Monda
Window & Door and the Edward Don & Company claims both involved a question
as to whether the work those subcontractors performed was “jurisdictional work”
under the agreement; the Timothy Wright claim turned on whether that
subcontractor could be considered as a union signatory; and the Canac claim
depended on how the single-employer doctrine applied to this set of facts. The case
may also fit in the second category because: (1) the audit reasonably encompassed
multiple potential subcontractor claims that needed to be explored to identify the
successful ones; (2) whether defendant breached the trust agreements for the four
plaintiff funds is a common legal and factual theory; and (3) the complaint alleged
overarching legal claims about defendant’s breach of the agreements. An across-theboard reduction to adjust the lodestar for the minimal damages recovery achieved
may be warranted.
Plaintiffs must file an amended fee petition that accounts for the time its
attorneys spent working on the Monda Window & Door and the Timothy Wright
claims, and that addresses the weight of the overall relief in relation to the total
hours spent litigating the entire action. Plaintiffs shall also submit recalculated
damages, penalties, and costs to account for the judgment as modified by the court
of appeals. Defendant’s motion to reconsider the earlier fee award is granted.
Defendant’s motion for attorney’s fees and to modify the court’s earlier fee
award to plaintiffs, , is denied in part and granted in part. It is denied with
respect to defendant’s motion for attorney’s fees. It is granted insofar as the earlier
fee award to plaintiffs is vacated, and plaintiffs shall file an amended fee petition.
The amended fee petition (with revised damages, penalties, and costs calculations)
shall be filed by 4/21/17. Defendant shall respond to the fee petition by 5/5/17, and
plaintiff may reply by 5/19/17.
Manish S. Shah
United States District Judge
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