Carpenters Fringe Benefit Funds of Illinois et al v. McGreal Construction Company
Filing
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MEMORANDUM Opinion and Order Signed by the Honorable Arlander Keys on 10/8/2013. Mailed notice(ac, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
CARPENTERS FRINGE BENEFIT
FUNDS OF ILLINOIS, et al.,
Plaintiffs,
V.
MCGREAL CONSTRUCTION CO.,
Defendant.
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Case No. 11 C 2429
Magistrate Judge Arlander Keys
MEMORANDUM OPINION AND ORDER
On July 11, 2012, the Court issued a Memorandum Opinion and
Order granting the plaintiffs’ motion for summary judgment as to
liability, but finding that the amount of damages was not readily
determinable from the parties’ summary judgment submissions.
The
Court determined that:
[t]he evidence submitted by the Funds makes clear that
McGreal has paid hundreds of thousands of dollars in
contributions to the Funds. But the evidence also
shows that those payments may not have covered the full
amount due and that they were rarely received by the
Funds in a timely manner. McGreal admits that it was a
signatory to the agreements requiring contribution
payments to be made in a specified manner, and its
failure to make such payments in accordance with the
agreements gives rise to the litany of penalties
provided therein; thus, in addition to the contribution
payments, McGreal is on the hook for interest and
liquidated damages, calculated as provided in the
agreements, as well as for attorneys’ fees and audit
and court costs.
Memorandum Opinion and Order issued July 11, 2012 (Docket #39),
p. 8.
Having determined what types of damages McGreal owed, the
Court directed the parties to meet and confer in an effort to
resolve the question of the amount of those damages.
The parties
were unsuccessful, however, and the issue is now back before the
Court on plaintiffs’ motion for summary judgment.
The funds
argue that they are entitled to judgment in the amount of
$53,797.79, plus costs and fees in the amount of $17,522.50;
McGreal denies that the plaintiffs are entitled to judgment in
this amount and argues that issues of fact remain as to the exact
amount to be awarded.
For the reasons explained below, the Court
grants the plaintiffs’ motion.
Factual Background
The Carpenters Fringe Benefit Funds of Illinois consist of
the Carpenters Pension Fund of Illinois and the Carpenters
Retirement Savings Fund of Illinois, and serve as the collecting
agent for various welfare and related joint, labor-management
funds, including the Heartland Healthcare Fund, the Chicago
Regional Council of Carpenters Apprenticeship Training Fund, the
MIDRESCOM Construction Industry Advancement Fund, the National
Labor Management Education and Development Fund, and the
Labor/management Union Carpentry Cooperation Promotion Fund.
Plaintiffs’ First Local Rule 56.1 Statement, ¶¶ 1, 3.1
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See
The Funds
The “first” Rule 56.1 Statement appears at Docket #28; it is the
statement filed on February 27, 2012 in support of the
plaintiffs’ initial motion for summary judgment.
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are employee pension benefit plans under ERISA, which are
administered in this District.
Id., ¶ 1.
McGreal was, at all
times relevant, bound to various collective bargaining agreements
obligating it to report and pay contributions to the Funds on
behalf of covered employees.
Id., ¶ 5.
McGreal, through the
collective bargaining agreements, also agreed to be bound by the
Trust Agreements governing the Funds, which further required
McGreal to submit to payroll compliance audits and allowed the
Funds to recover liquidated damages, interest, audit costs, and
court costs and attorneys’ fees for contribution payments that
were either not paid at all or were not paid in a timely manner.
Id., ¶¶ 6-7.
In their Amended Complaint, the plaintiffs alleged that
McGreal failed to pay certain contributions as required under the
relevant agreements, and that McGreal paid other required
contributions late.
In their initial summary judgment motion,
the Funds sought judgment in the amount of $49,839.66, plus fees
and costs.
This amount included: unpaid contributions in the
amount of $18,144.71 (and this, in turn, included $13,620.06 in
unpaid contributions identified in an audit report prepared by
outside accountants in 2006 and $4,524.65 in contributions from
November and December 2010, which were reported by McGreal but
never paid); $1,814.48 in liquidated damages on those unpaid
contributions ($1,362.01 on the contributions identified in the
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2006 Report and $452.47 for the November and December 2010
contributions); $23,794.22 in liquidated damages for
contributions paid late; and $6,086.25 in audit costs.
This time around, the plaintiffs seek the same amount with
respect to the audit costs and with respect to unpaid
contributions and liquidated damages for November and December of
2010.
But they seek less in damages based on the 2006 Report
($12,599.04 in unpaid contributions and $1,259.90 in liquidated
damages, as compared with $13,620.06 in contributions and
$1,362.01 in liquidated damages) and more in liquidated damages
for contributions paid late ($28,875.48, as compared to
$23,794.22).
The former is because the funds have elected not to
pursue certain contributions challenged by McGreal, and the
latter is simply due to the passage of additional time.
Discussion
As the Court noted in its last decision, “[s]ummary judgment
is appropriate when ‘the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to a judgment
as a matter of law.’” Memorandum Opinion and Order issued July
11, 2012 (Docket #39), p. 3 (quoting Fed. R. Civ. P. 56(c)).
The
evidence submitted in connection with the first motion for
summary judgment established that McGreal was liable to the funds
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under ERISA.
And, as the Court noted in its earlier decision,
ERISA provides that
[i]n 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)(2).
Memorandum Opinion and Order issued July 11, 2012 (Docket #39),
pp. 3-5.
The Funds argue that summary judgment on damages is
appropriate because the amounts identified above are undisputedly
due under the relevant agreements.
In support of their motion, the plaintiffs submitted an
affidavit from Deborah French, the Contributions and Collections
Department Manager for the third-party administrator for the
Carpenters Fringe Benefit Funds of Illinois.
Ms. French
submitted a similar affidavit in support of the plaintiffs’ last
summary judgment motion.
Here, after detailing her review of the
records and payments received by or on behalf of McGreal, Ms.
French represents that the plaintiffs “have not received payment
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of any contributions for: (1) the hours identified in the 2006
Report for October and November 2004 (1145 hours); (2) the hours
worked by Camren, and [Kleinschmidt] in January and February
2005, and hours worked by Metcalf in February and April 2005 (452
hours); or (3) the hours identified in the 2006 Report for
February and March 2006 (307 hours).”
French Affidavit, ¶11.
McGreal has offered nothing to refute this evidence.
McGreal has consistently claimed that it paid at least some
of these contributions to other fringe benefit funds.
Initially,
although the plaintiffs do not really dispute the point, McGreal
has not demonstrated that the particular contributions claimed
here were ever paid to anyone.
After determining that McGreal
was liable to the plaintiffs and setting the matter for a proveup hearing on damages, the Court advised McGreal that it needed
to “be prepared to offer evidence to support its claim that it
paid some of what the Funds claim it owes, as well as any
evidence that might affect the amount of the liquidated damages
and interest claimed.”
See Memorandum Opinion and Order, p. 9.
Yet in response to the plaintiffs’ most recent summary judgment
motion, McGreal offers no such evidence.
McGreal has offered
checks showing that it paid various sums to various funds – for
example, it paid the Chicago District Council of Carpenters
Welfare and Pension Fund $33,731.66 on February 25, 2005;
$47,695.36 on April 13, 2005; $52,103.39 on May 11, 2005;
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$46,729.93 on May 31, 2005; $47,550.33 on June 20, 2005;
$60,366.66 on July 15, 2005; $54,909.52 on August 15, 2005; and
$71,109.77 on September 15, 2005; it paid the “Dues CKO” at the
Chicago District Council of Carpenters $15,149.14 on April 13,
2005, $18,710.40 on May 11, 2005, and $20,224.79 on June 20,
2005; and it paid the Carpenters Benefit Fund of Illinois in
Geneva $16,990.47 on June 20, 2005, $23,131.80 on July 15, 2005,
and $18,912.69 on August 15, 2005.
See McGreal’s Corrected
Response to Plaintiffs’ Motion for Summary Judgment as to
Damages, Exhibit 1, pp. A-2 through A-16.
But no one disputes
that McGreal paid some contributions to some funds.
And these
checks say nothing about whether McGreal paid the contributions
identified above to the plaintiffs in this lawsuit – the actual
funds to which the contributions are owed.
At the end of the day, McGreal offers nothing to refute the
funds’ evidence concerning damages.
It has offered nothing to
show that it paid the specific contributions the funds say it did
not; nor has it offered the records underlying its checks to
allow the Court to determine whether the payments reflected in
those checks even cover the employees and the periods included in
the audit reports or in Ms. French’s affidavit.
And, although
McGreal implies that it should get some sort of credit for paying
the Carpenters Benefit Fund of Illinois in Geneva, nothing on the
face of the checks suggests that the plaintiffs share accounts
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with this fund or that they are in any way reciprocal; indeed,
Ms. French represents in her affidavit that they are not.
See
French Affidavit, ¶3 (attached to Plaintiffs’ Response to
Defendant’s Additional Statement of Additional Facts Pursuant to
Local Rule 56.1).
Significantly, McGreal has offered no additional evidence to
further its claim that it paid someone else the money it was
supposed to have paid the plaintiffs; the last time around, the
Court noted that the evidence submitted by McGreal did not allow
the Court to track the particular contributions owed to the
particular contributions paid
some other fund.
this time around.
-- whether to the plaintiffs or to
McGreal did nothing to rectify that problem
If McGreal had evidence to show that it paid
what the plaintiffs claim was owed, then it should have brought
it to the Court’s attention; it did not.
What it did offer – the
same arguments it made last time and copies of checks showing
that it made some benefit and dues payments – is not enough to
defeat summary judgment.
See Arnett v. Webster, 658 F.3d 742,
760 (7th Cir. 2011)(quoting Johnson v. Cambridge Indus., Inc.,
325 F.3d 892, 901 (7th Cir. 2003)(“[S]ummary judgment is the ‘put
up or shut up’ moment in a lawsuit, when a party must show what
evidence it has that would convince a trier of fact to accept its
version of events.”).
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The same is true with respect to the contributions
identified for November and December 2010.
The funds have
offered evidence demonstrating that the contributions were due
but unpaid, and McGreal has offered nothing to show that it paid
these contributions.
In fact, McGreal has never really disputed
that it owes these contributions.
And, certainly, the checks
McGreal submitted, all written in 2005, do not reflect payments
for contributions accrued in 2010.
Accordingly, the Court finds
that McGreal is liable to the plaintiffs for unpaid contributions
in the amount of $17,123.69.
With regard to liquidated damages, Ms. French also details
in her affidavit how the plaintiffs calculated their liquidated
damages claim with respect to unpaid contributions and late paid
contributions.
See French Affidavit, ¶¶13-14, 16-17, 18-23.
This same evidence was submitted with the first summary judgment
motion, and the Court cited to the relevant provisions of the
various agreements in determining that liquidated damages were
appropriate under those agreements.
Accordingly, the Court finds
that the plaintiffs are entitled to liquidated damages on late
contributions in the amount of $28,875.48 and on unpaid
contributions in the amount of $1,712.37.
As noted, in its earlier summary judgment ruling, the Court
determined that, under the terms of the relevant agreements,
McGreal was liable to the plaintiffs for audit costs, as well as
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attorneys’ fees and costs.
The plaintiffs seek $6,086.25 for the
former, and $17,522.50 for the latter.
McGreal argues that
neither category of damages is reasonable and that neither should
be awarded in the amount requested.
To be sure, the Funds have established that they incurred
the audit costs.
Along with Ms. French’s affidavit, the
plaintiffs submitted documents from Bansley and Kiener, the
accountants who conducted the audit covering the period from
October 1, 2004 through September 30, 2006.
This is the same
evidence the plaintiffs submitted in support of their first
motion for summary judgment.
The plaintiffs also submitted
invoices from Bansley and Kiener evidencing the $6086.25 in audit
costs the plaintiffs claim they incurred.
See Plaintiffs’ Rule
56.1, Exhibit (A)(2).
McGreal argues that, because it has maintained all along
that it paid the contributions to funds other than the
plaintiffs, it was unreasonable for the plaintiffs to conduct the
audit in the first place.
But the collective bargaining
agreements – to which McGreal is unquestionably a party and by
which McGreal unquestionably agreed to be bound – provide for an
audit under the circumstances presented.
And the Court already
determined, in its summary judgment ruling on liability, that
McGreal is on the hook for audit costs, as well as unpaid
contributions and liquidated damages.
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With regard to attorneys’ fees, the plaintiffs have
submitted an affidavit from Catherine Chapman, one of their
attorneys.
See Chapman Affidavit, Plaintiffs’ 56.1 Statement,
Exhibit C.
In her affidavit, Ms. Chapman represents that she and
her associates have expended 83 hours to collect delinquent
contributions, liquidated damages and audit costs from McGreal,
and that the total bill for that time, as of April 25, 2013, is
$17,087.50.
See Chapman Affidavit, ¶2.
Ms. Chapman further
represents that the plaintiffs have incurred costs in this action
in the amount of $435, consisting of $350 to file the case and
$85 to serve McGreal with the summons and complaint. Id., ¶6.
McGreal argues that the attorneys’ fees sought are
unreasonable, given that it has consistently admitted that it
failed to pay certain contributions to the plaintiffs and
maintained that it paid them instead to other funds.
But
McGreal’s stance did nothing to ameliorate the funds’ obligation
to track and collect contributions owed the funds on behalf of
employees.
And, as the plaintiffs point out, the funds still had
to determine how much McGreal owed – it was up to McGreal to
recover funds wrongfully or mistakenly paid to other funds.
The
Court finds that the fees and costs requested are reasonable and
recoverable.
Conclusion
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For the reasons set forth above, the Court grants the
plaintiffs’ motion for summary judgment as to damages [Docket
#52] and finds that the Funds are entitled to judgment in the
amount of $71,320.29.
This amount includes unpaid contributions
in the amount of $17,123.69, plus liquidated damages on those
contributions in the amount of $1712.37; liquidated damages on
late contributions in the amount of $28,875.48; audit costs in
the amount of $6,086.25; attorneys’ fees in the amount of
$17,087.50; and costs in the amount of $435.00.
Date: October 8, 2013
E N T E R E D:
_____________________________________
MAGISTRATE JUDGE ARLANDER KEYS
UNITED STATES DISTRICT COURT
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