Teamsters Local Union No. 727 Health and Welfare Fund et al v. L&R Group of Companies
Filing
69
Enter MEMORANDUM, OPINION AND ORDER: For the reasons stated, the Court denies L & Rs Motion for Summary Judgment as to its claims for: (1) $1,255,802.66 for mistaken contribution overpayments; (2) for $330,000 for overcharges by the Funds; and (3) understated contributions in 2003 and 2004 discovered in L & Rs internal audit in the amount of $14,125.60. The Court grants L & Rs Motion for Summary Judgment on its counterclaim for $35,428.30 for agreed upon overpayments related to specific employees who switched from one contract to another following a significant break in employment. Signed by the Honorable Virginia M. Kendall on 3/31/2014.Mailed notice(tsa, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
TEAMSTERS LOCAL UNION NO. 727
HEALTH AND WELFARE FUND,
TEAMSTERS LOCAL UNION NO. 727
PENSION FUND and TEAMSTERS
LOCAL UNION NO. 727 LEGAL AND
EDUCATIONAL ASSISTANCE FUND,
Plaintiff,
v.
L & R GROUP OF COMPANIES,
Defendant.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
No. 11 C 1747
Hon. Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
Plaintiffs Teamsters Local Union No. 727 Health and Welfare Fund, Teamsters Local
Union No. 727 Pension Fund, and Teamsters Local Union No. 727 Legal and Educational
Assistance Fund sued Defendant L & R Group of Companies under the Employment Retirement
Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(g)(2), (a)(3), and 1145. The
Complaint alleges that L & R failed to submit payments and reports from 2003 to the present
required by collective bargaining agreements between L & R and Teamsters Local Union No.
727. L & R now seeks summary judgment concerning its restitution counterclaim based on
alleged overpayments L & R made to Plaintiffs. For the reasons stated below, L & R’s motion
for summary judgment is granted in part and denied in part.
FACTS
The following facts are undisputed unless otherwise noted.
A. The Parties
In 2008, L & R, which is a Los Angeles-based parking property company, purchased
1
System Parking, Inc. (“System Parking”), a Chicago-based parking operation. System Parking
entered into collective bargaining agreements (“CBAs”) with the Auto Livery Chauffeurs,
Embalmers, Funeral Directors, Apprentices, Ambulance Drivers, and Helpers, Taxicab Drivers,
Miscellaneous Garage Employees, Car Washers, Greasers, Polishers, and Wash Rack Attendants
Union, [Teamsters] Local No. 727 (“Union”). (Dkt. No. 60, at ¶ 1-3.) L & R assumed certain
liabilities related to the CBAs between System Parking and the Union. (Dkt. No. 60 at ¶ 5.) L&R
sold System Parking in September 2010. 1
The Teamsters Local Union No. 727 Health and
Welfare Fund, Teamsters Local Union No. 727 Pension Fund, and the Teamsters Local Union
No. 727 Legal and Educational Assistance Fund (collectively “the Funds”) collected funds from
multiple employers, including System Parking, as part of the CBA between System Parking and
the Local Union No. 727 in order to provide benefits for its employees.
B. The Collective Bargaining Agreements
Four CBAs are at issue. Two cover cashiers, hikers, attendants, porters, maintenance
workers/custodians, drivers, washers, collectors, customer service representatives, dispatchers,
bellmen, doormen, working foremen and all other garage and parking lot employees between: (1)
November 1, 2001 and October 31, 2006 (“Commercial CBA 1”), and (2) November 1, 2006 and
October 31, 2011 (“Commercial CBA 2”). The other two cover employees who performed valet
services between (1) July 1, 2000 and June 30, 2005 (“Valet CBA 1”), and (2) July 1, 2005 and
June 30, 2011 (“Valet CBA 2”). (Dkt. No. 60 at ¶ 4.)
C. The Benefits Funds
During the period of the agreements, the Teamsters Local Union No. 727 Health and
Welfare Fund provided medical benefits, prescription drug benefits, short-term disability
1
Because there is no dispute that L & R owned System Parking between 2008 and 2010 (Dkt. No. 60 at ¶ 2), this
Court refers to the two entities interchangeably with respect to this period.
2
benefits, life insurance, dental insurance, vision insurance, and a member assistance plan. The
Teamsters Local Union No. 727 Pension Fund provided retirement benefits. The Teamsters
Local Union No. 727 Legal and Educational Fund provided legal and educational assistance
benefits. According to Fund Manager William Coli, between 275-300 employers contributed to
the Funds. (Dkt. No. 60 at ¶ 9.)
Central to the dispute is how much was contributed to the benefit funds on behalf of
System Parking employees and how the amount due was calculated by each party.
It is
undisputed that System Parking paid into the benefit funds for its full-time and part-time
employees for hours worked and not for any additional hours paid to employees for paid
vacation, holiday and/or sick leave. (Dkt. No. 60 at ¶ 6.) The parties dispute whether this was the
proper method of calculation.
D. Contracts, Policies and Procedures
In addition to the CBAs, a Restated Agreement and Declaration of Trust Agreement of
the Teamsters Local Union No. 727 Health and Welfare Fund (“Trust Agreement”) governed the
relationship between the Union and System Parking. The parties entered this agreement on July
25, 2000 (amended in 2006 and 2011). The relevant parts of the Trust Agreement include
Article VI-Contributions, Article VII-Controversies and Disputes, and specific policies and
procedures listed herein.
The following policies and procedures were effective during the period covered by the
CBAs: (1) the Teamsters Local Union No. 727 Benefits Funds Policy for Erroneous Payments
and Overpayments Made by an Employer (“Funds Policy for Erroneous Payments”), dated
September 30, 2009, which addresses situations where contributing employers make
overpayments to the Funds; (2) the Statement of Audit Procedures: Health and Welfare, Pension,
3
and Legal and Educational Assistance Funds, which addressed the Funds (“Funds Audit
Procedures”) auditing procedures for all contributing employers; and (3) the Statement of
Collection Procedures: Health and Welfare, Pension, and Legal and Educational Assistance
Funds (“Funds Collection Procedures”), dated June 25, 2008, which addressed the method by
which the contributions from employers are collected and submitted. This last document also
addressed how to handle payment delinquencies and outlined the legal action the Funds might
take in the event an employer did not adequately address the alleged delinquency.
E. Audit History
There are three audits at issue: two performed by the Funds and one performed by L & R.
Periodically, the Funds conducted financial audits of employers’ benefit contributions. The
Funds Audit Procedures included the purpose of the audit and the roles and responsibilities of
each of the parties during the audit. (Dkt. No. 60 at ¶ 14.) In December 2005, the Funds filed a
complaint against System Parking, Inc. for delinquent contributions of $553,965.82. The parties
settled that action in 2007 with Systems Parking agreeing to pay the Funds $48,000.00 over a
two-year period at $2,000.00 per month. (Dkt. No. 60 ¶ 15.)
The Funds subsequently contracted with Bansley & Keiner, LLP, Certified Public
Accountants (“B & K”) to conduct an audit sometime in or around 2008. During 2008 and 2009,
the parties corresponded back and forth in writing and held meetings to discuss the results of the
2005 audit and litigation, procedures on how the parties would manage future audits, and the
management of the 2008 audit. (Dkt. No. 60 at ¶ 15-17.) On March 20, 2009, B & K provided
the Funds and System Parking, with a first draft of the 2008 audit report for the period January 1,
2003 through March 31, 2008. The 2008 audit reported a deficiency of $808,000.
System Parking personnel reviewed the 2008 audit. The review identified purported
4
errors, which System Parking reported in writing to the Funds per the Policy on Erroneous
Payments. (Dkt. No. 60 at ¶ 18-19.) In response, on November 9, 2009, B & K followed up
with a letter to System Parking. The November 9, 2009, letter, which came after System Parking
reported the errors, outlined new audit findings. B & K found that a decrease in the original
deficiency of $210,000 was due to L & R but a subsequent unrelated increase in the original
deficiency was owed to them in the amount of $330,000. This increase resulted from alleged
underpayments by L & R. Thus, the overall total deficiency amount increased from $808,000.00
to $949,149.29. With accrued interest, liquidated interest, and fees added, the total purported
deficiency increased to $1,563.627.38 as of June 4, 2010. (Dkt. No. 60 at ¶ 19.)
Because of B & K’s new findings, System Parking conducted its own internal audit and
found that it made overpayments in the amount of $1,629,533.50. System Parking submitted
another report to the Funds, and demanded that the Funds reimburse or credit the overpayment
amount. (Dkt. No. 60 at ¶ 24-25; Dkt. No. 58-19.) The Funds subsequently conducted a second
audit covering period April 2008 through September 2010.
F. Procedural History
On March 14, 2011, the Funds filed a complaint seeking $1,563,627.38 for alleged
delinquent contributions owed by L & R for audit period January 1, 2003 through March 31,
2008. (Dkt. No. 1.) L & R filed its answer and a counterclaim demanding $1,629,553.60 for
alleged reimbursement or credit for mistaken contribution overpayments. (Dkt. No. 13.) L & R
moved for default judgment against the Funds on its counterclaim. (Dkt. No. 40.) The Court
denied L & R’s motion for default judgment on May 29, 2012. (Dkt. No. 43.)
That same day, L & R moved to compel discovery and extend time for discovery
following the Plaintiff’s motion to compel an audit of the L & R’s records for the period March
5
2008 through September 30, 2012. The Court extended discovery to January 18, 2012. On
January 12, 2012, L & R purportedly produced over 20,000 documents.
The Court then
extended fact discovery to May 25, 2012. After L & R claimed that they did not receive any
responses from the Funds concerning the second audit, they filed the motion to compel. (Dkt.
No. 39.) The Court granted L & R’s motion. (Dkt. No. 43.)
On August 1, 2013, L & R filed the present motion for summary judgment on its
restitution counterclaim for $1,635,356.56 concerning the audit period January 1, 2003 through
March 31, 2008. The Funds filed a timely response to L & R’s motion for summary judgment
and L & R’s Rule 56.1 statement of facts. The Funds then filed its Rule 56.1 Statement of Facts
to which L & R filed a timely response. (Dkt. Nos. 59, 60, 62.)
STANDARD OF REVIEW
Summary judgment is proper when “the pleadings, the discovery and disclosure materials
on file, and any affidavits show that there is no genuine issue as to any material fact and that the
movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a); see also Carroll v. Lynch,
698 F.3d 561, 564 (7th Cir. 2012). 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). In determining whether a genuine dispute of fact exists, the
Court must view the evidence and draw all reasonable inferences in favor of the party opposing
the motion. Bennington v. Caterpillar Inc., 275 F.3d 654, 658 (7th Cir. 2001). Factual disputes
“are genuine only if the evidence is such that a reasonable jury could return a verdict for the
nonmovant.” CAE,
Inc.
v.
Clean
Air
Engineering,
Inc., 267
F.3d
660,
676
(7th
Cir.2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 248, 255 (1986)) (internal
quotations and citations omitted).
6
On summary judgment, the Court will limit its analysis of the facts to the evidence that is
supported by the parties' Local Rule 56.1 statements. See F.T.C. v. Bay Area Business Council,
Inc., 423 F.3d 627, 634 (7th Cir.2005); Bordelon v. Chicago Sch. Reform Bd. of Tr., 233 F.3d
524, 529 (7th Cir.2000). When a proposed statement of fact is supported by the record and not
adequately controverted by the opposing party, the Court will accept that statement as true. See
Albiero v. City of Kankakee, 246 F.3d 927, 933 (7th Cir.2001). To adequately dispute a statement
of fact, the opposing party must cite to specific support in the record; an unsubstantiated denial
or a denial that is mere argument or conjecture is not sufficient to create a genuinely disputed
issue of material fact. See id.; see also Judson Atkinson Candies, Inc., 529 F.3d at 382 n.
2; Cady, 467 F.3d at 1060.
DISCUSSION
With the exception of L & R’s overpayment claim for $35,428.30, there are genuine
issues of material fact that preclude summary judgment. Here, L & R points to its own audit to
show that it made overpayments to the Funds. (Dkt. No. 60 at ¶ 24.) But the evidence also
indicates that the Funds performed their own audits (Dkt. No. 60 at ¶ 14) and reviewed at least
one of the purported overpayments identified by L & R (Dkt. No. 60 at ¶ 25, n.5). Drawing all
reasonable inferences in the Funds’ favor, this Court finds that a reasonable jury could conclude
that L & R did not make overpayments based on the Funds’ records and audits. To do so, the
jury will have to consider whether to credit the Funds’ take on L & R’s contributions and
whether L & R’s internal audit should receive greater weight than the Funds’ independent audits.
When deciding motions for summary judgment, courts do not weigh evidence or make
credibility determinations because such considerations are for the jury. Omnicare, Inc. v.
7
UnitedHealth Group, Inc., 629 F.3d 697, 704-05 (7th Cir. 2011). Here, the record indicates that
there are disputes concerning amounts paid by L & R that a jury should resolve.
ERISA Section 502(a)(3) states in relevant part:
A civil action may be brought—by a participant, beneficiary or
fiduciary (A) to enjoin any act or practice which violates any
provision of this subchapter or the terms of the plan, or (B) to
obtain other appropriate equitable relief (i) to redress such
violations or (ii) to enforce any provisions of this subchapter or the
terms of the plan. Federal courts have exclusive jurisdiction over
actions brought pursuant to this provision. 29 U.S.C. § 1132(e).
While ERISA’s anti-inurement clause in § 1103(c)(1) states: “the assets of a plan shall never
inure to the benefit of any employer” it also states that “if such a contribution is made by an
employer to a multiemployer plan by mistake of fact or law, paragraph (1) shall not prohibit the
return of such contribution or payment to the employer….” 29 U.S.C. § 1103(c)(1), (c)(2)(A)(ii).
A. Mistaken Overpayments by L & R in the Amount of $1,255,802.56
There are genuine issues of material fact concerning whether L & R mistakenly made
overpayments for specified employees in the amount of $1,255,802.66. The Trust Agreement
states in Article VI-Contributions, “that Nothing in this Restated Agreement shall prevent a
Contribution which is made by an Employer by a mistake of fact or law to be returned by the
Trustees to such Employer, upon written request, within twelve months after the Trustees
determine the Contribution was made by such a mistake”. (Dkt. No. 60-3 at p. 5.) This statement
is supported by the Funds Policy for Erroneous Payments, which states “that under certain
circumstances … a refund to an employer of erroneous payments or overpayments to the Funds
… may be permitted” and that “the interpretation and application of this policy is solely within
the authority and discretion of the Trustees … any decision the Trustees make with respect to
refunding contributions will be final and not subject to appeal or further review.” (Dkt. No. 58-7
8
at p. 1-2.) L & R alleged that its own internal audit revealed $1,255,802.66 in mistaken employee
contribution overpayments made to the Funds. The sixty-five page document is a spreadsheet
that includes the names of employees, dates reflecting the period the employee was covered, and
alleged amounts paid into each of the benefits funds. (Dkt. Nos. 58-19; 58-20; 58-21; 58-22.)
L & R claimed that its internal audit came after several attempts between the parties to
calculate and reconcile alleged deficiencies and overpayments. The following letters exchanged
between the parties chronicle the continued failure of the parties to reach an agreement:
(1) December 31, 2008 Letter from John Phillips, CEO of System
Parking to Tom Marino, Payroll Audit Supervisor for B & K
stating that in the draft audit report for the first audit outlining L &
R deficiencies. According to L & R, the parties agreed following
the litigation in 2005, that future audits would include both
deficiencies and overpayments. (Dkt. No. 58-26.) L & R contends
the Funds, through its Funds Auditor, B & K, have yet to honor
their oral agreement;
(2) March 20, 2009 Letter from Tom Marino to John Phillips in
reply to his December 31, 2008 letter, stated that after a careful
review there were still some issues remaining regarding the
amount of deficiencies and a meeting to discuss in detail the
findings was in order. (Dkt. No. 58-27.) The amount of the
deficiency at that time was $808,000;
(3) On April 30, 2009 Tom Marino sent another letter to John
Phillips which stated that a review of employees who switched
unions (and subsequently were covered by a different CBA as L &
R alleged) following a significant break in their employment
history triggered a “possible reduction in the total deficiency” in
the amount of $35,428.30. Mr. Marino also suggested the parties
meet to discuss the findings in detail. (Dkt. No. 58-28.) L & R
claimed that as of the date of filing their motion for summary
judgment, the Funds have yet to credit their account for the
undisputed $35,428.30 overpayment;
(4) Finally, in a November 9, 2009 Letter from Tom Marino to
Todd Tucker, System Parking, Mr. Marino provided an
explanation for several adjustments in the deficiency amount
resulting in a total deficiency of $949,194.29 owed by L & R,
increased from $808,000.00. (Dkt. No. 58-29.) Furthermore,
9
according to the Funds, the amount increased due to the Funds’
inclusion of interest, liquidated damages and fees. As of the date
the Funds’ complaint was filed the amount of the delinquency was
$1,563,627.38 and continues to increase as interest and fees
accrue. (Dkt. No. 1.)
Following the Funds’ Policy for Erroneous Overpayments Made by an Employer, L & R
performed an internal audit to discover any errors and submitted in writing to the Administrator
of the Funds the amount of the contribution that the employer desired to be refunded. (Dkt. No.
58-7 at ¶ 1-3.) The policy also stated that no refunds will be made if a participant’s receipt of a
benefit was based in reliance on the contribution for which the refund is requested. For example,
according to the policy, if an employee receives a benefit for which the employee would not be
eligible but for the erroneous contribution or overpayment, no refund is permitted. (Dkt. No. 587 at ¶ 7.) The policy also states that no refunds shall be made to an employer with an outstanding
delinquency and will be held until the delinquency is resolved. (Dkt. No. 58-7 at ¶ 12.)
The parties’ failed attempts at reconciliation stem from disputes concerning which
employees’ contributions, if any, were overpaid and for which periods. The results of the Funds’
first audit and L & R’s internal audit yielded drastically different results. Both parties claimed in
excess of $1,000,000.00 of either deficiencies or overpayments. Furthermore, the Funds’ dispute
the validity of L & R’s internal audit as it did not hire an outside firm to conduct the audit and L
& R did not explain how it conducted its audit. These disputes create genuine issues of material
fact regarding the calculation of overpayments payments of $1,255,802.56 and implicate the
validity of the two parties’ respective audits. These disputes preclude summary judgment on L
& R’s claim for overpayments in the amount of $1,255,802.66.
B. Overcharges of $330,000 by the Funds Due to Calculations Based on
Employee Hours Worked Versus Hours Paid
There are genuine issues of material fact concerning whether to use hours worked or
10
hours paid to calculate payments. Congress anticipated “that a federal common law of rights and
obligations under ERISA-regulated plans would develop,” Central States, S.E. & S.W. Areas
Pension Fund v. Neurobehavioral Assoc., P.A., 53 F 3d 172 (7th Cir. 1995). Citing UIU
Severance Pay Trust Fund v. Local Union No. 18–U, 998 F.2d 509, 512 n. 10 (7th Cir.1993)
(holding that Congress had determined that actions affecting welfare and pension plans are
governed by federal common law). When courts examine a contract in the ERISA context they
apply federal common law rules of interpretation. Central States, S.E. & S.W. Areas Pension
Fund v. Kroger Co., 73 F. 3d 727, 731 (7th Cir. 1996). These federal common law rules instruct
the Court to interpret the Agreement “in an ordinary and popular sense as a person of “average
intelligence and experience” would. Phillips v. Lincoln Nat’l Life Ins. Co., 978 F. 2d 302, 308
(7th Cir. 1992) (quoting Evans v. Safeco Life Ins. Co., 916 F. 2d 1437, 1441 (9th Cir. 1990). The
Court will not artificially create ambiguity where none exists. Id.
If an agreement is ambiguous, the trier of fact must resolve questions of interpretation.
Kroger, 73 F. 3d at 732. In the ERISA context, a contract is ambiguous if it is “susceptible to
more than one reasonable interpretation.” Id. Here, L & R based its calculations on the number
of hours worked by employees and not the number of hours for which it paid employees.
According to L & R, it used hours worked because it claims that the benefits sections of the
CBAs do not mention hours paid. L & R also claims that it used hours worked because a
Contributions Report Form provided by the Funds included a column for “number of hours
worked.” L & R argues that this form shows that the CBAs contemplate payment for hours
worked and not hours paid.
But the Funds’ disagree. They cite to portions of the CBA that state “All hours worked or
paid for (personal leave days, holidays, sick leave, bereavement pay) shall be considered as
11
hours worked in compensation” (Dkt. No. 13-1, p. 12 at ¶ 14.5) and “A vacation day for which
an employee is paid and during which he or she did not work shall be considered as time actually
worked by him or her under the terms of this Agreement”. (Dkt. No. 13-2 at p. 15, ¶ 14.9.) If
hours paid count as hours worked, then L & R’s contributions should have been higher and no
overpayments were made.
The Seventh Circuit has emphasized the centrality of the collective bargaining agreement
in a § 515 claim. It is the collective bargaining and contribution agreements that establish the
employer’s obligation to the pension fund. Central States S.E. & S. W. Areas Pension v. Kroger
Co., 73 F. 3d 727, 730 (7th Cir. 1996) citing Central States S.E. & S.W. Areas Pension Fund v.
McClelland, Inc., 23 F. 3d 1256, 1258 (7th Cir. 1994). The parties in Kroger disagreed about the
meaning of terms in a collective bargaining agreement and a supplement thereto. The Court held
that when parties suggest different yet reasonable interpretations of a contract, the contract is
ambiguous. Kroger, 73 F.3d at 732.
Here, the language in the Commercial CBAs supports different yet reasonable
interpretations as to the meaning of hours worked. Though the plain and ordinary meaning of
“worked” could suggest the number of hours an employee is engaged in actual work, the CBAs
equate hours worked with hours paid in certain instances. It is not clear whether the CBAs
limited this meaning to those instances, or whether this meaning applied throughout the contract.
Therefore, genuine issues of material fact remain as to the preferred method of calculating
employee contributions to the funds, either using hours worked or hours paid as a basis (and how
each is defined), for the alleged $330,000.00, Therefore, granting the Defendant’s motion for
summary judgment is inappropriate.
12
C. Agreed Upon Credit of $35,428.30 Owed to L & R for Employee Breaks in Service
The Funds admit that L & R is entitled to an amount of $35,428.30 based on employees
who sustained a “significant break in employment” (agreed by the parties to be three months or
more) before switching from one contract to another during the audit period (example: from a
commercial to a valet contract). However, the Funds alleged that they planned to credit the
amount of overpayment against any resulting deficiency owed by L & R. According to the
Funds Policy for Erroneous Payments: “No refunds will be made to an employer with an
outstanding delinquency, and will be held at least until the delinquency is resolved. (Dkt. No.
58-7 at p. 4, ¶ 12.) However, the policy goes on to explain that the Trustees may amend or
suspend all or any part of these policies and guidelines in their sole and exclusive
discretion…regardless if there are any refund requests pending, and may apply any amendment
or change in policy retroactively to pending requests. (Id at ¶ 15.)
L & R met its burden in proving the validity of the discrepancy and the Funds agree that a
refund is due. Given that there are no genuine issues of material fact and the issuance refund is at
the sole discretion of the Trustees, it is appropriate to grant the Defendant’s motion for summary
judgment in awarding L & R $35,428.30 for overpayments made on behalf of employees with a
significant break in employment.
D. Audit Discrepancies in the Amount of $14,125.60 Owed to L & R
As a result of L & R’s internal audit conducted in 2010, L & R found discrepancies in the
amounts of $9,649.90 in 2003 and $4,475.78 in 2004. L & R alleged that the Fund Auditors
understated L & R’s contributions in the above amounts and thus owes L & R a refund or credit
in the total amount of $14,125.60. The Funds agreed to investigate the identified discrepancies
and, following their investigation, concluded that they provided full-time benefits or credited
13
pension accounts for those employees L & R identified as those whose contributions were
mistakenly overpaid.
However, L & R claims the Funds never produced any documentation to support its
findings. The Funds object and offer as evidence a letter dated December 12, 2012 from Nan
Kmiecik of Elite Administration and Insurance Group, an agency contracted by the Funds to
review the list of employees and social security numbers for whom L & R alleged they
mistakenly overpaid. In the letter and attachment, Ms. Kmiecik listed the affected employees and
indicated whether or not benefits were provided, effective date, and what type of benefit was
provided. If the information was unavailable, a note “unable to verify” appears beside the
employee’s name. The list does not indicate the date through which coverage was effective only
the start date. Without the period for which the employee was covered L & R claimed it is not
possible to determine whether or not the Funds properly credited L & R for any and all
overpayments. (Dkt. Nos. 60-7, 60-8.)
Because L & R’s claims are based solely upon their internal audit findings and
allegations contained within Paragraphs 25, 30-32 of their Rule 56.1 Statement of Facts (Dkt.
No. 58 at p. 9-11, ¶¶ 25, 28, 30-32; Dkt. No. 60 at p. 14-19, ¶¶ 25, 28, 30-32.) and those claims
are refuted by the Plaintiffs, there are genuine issues of material fact as it relates to the validity of
L & R’s internal audit results and hence the alleged amount of overpayments. Therefore,
granting the Defendant’s motion for summary judgment for $14,125.60 is improper.
CONCLUSION
For the reasons stated, the Court denies L & R’s Motion for Summary Judgment as to its
claims for: (1) $1,255,802.66 for mistaken contribution overpayments; (2) for $330,000 for
overcharges by the Funds; and (3) understated contributions in 2003 and 2004 discovered in L &
14
R’s internal audit in the amount of $14,125.60. The Court grants L & R’s Motion for Summary
Judgment on its counterclaim for $35,428.30 for agreed upon overpayments related to specific
employees who switched from one contract to another following a significant break in
employment.
________________________________________
Virginia M. Kendall
United States District Court Judge
Northern District of Illinois
Date March 31, 2014:
15
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?