Trustees of the Chicago Regional Council of Carpenters Pension Fund et al v. Francis, LLC.
Filing
64
MEMORANDUM Opinion and Order. Signed by the Honorable Arlander Keys on 3/27/2013: Mailed notice(ac, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)
TRUSTEES OF THE CHICAGO
)
REGIONAL COUNCIL OF CARPENTERS)
PENSION FUND, et al.,
)
)
Plaintiffs,
)
)
v.
)
)
FRANCIS, LLC.,
)
)
Defendant.
)
Case No. 11 C 2476
Magistrate Judge Arlander Keys
MEMORANDUM OPINION AND ORDER
The plaintiffs in this case are the Trustees of the Chicago
Regional Council of Carpenters Pension Fund, the
Chicago
Regional Council of Carpenters Welfare Fund, and the Chicago
Regional Council of Carpenters Apprentice and Trainee Program
(collectively, “the Funds”).
These Funds receive contributions
from employers pursuant to certain Collective Bargaining
Agreements entered into between employers and the Chicago
Regional Council of Carpenters, a union that is the successor to
the Chicago & Northeast Illinois District Council of Carpenters.
In this lawsuit, the Funds have sued, under the Employee
Retirement Income Security Act of 1974 (“ERISA”), to recover
unpaid and delinquent contributions from Francis, LLC, one such
employer.
The parties consented to proceed before a United States
Magistrate Judge, and the case was reassigned to this Court on
April 16, 2012.
judgment.
Thereafter, the Funds filed a motion for summary
Despite being given at least two extensions of time in
which to do so, Francis has not responded to the motion.
For
this reason, and because the undisputed facts establish that the
Funds are entitled to judgment as a matter of law, the Court
grants the Funds’ motion.
Facts & Procedural History
The Pension, Health and Welfare and Apprenticeship Funds are
all multiemployer plans within the meaning of ERISA, 29 U.S.C.
§1002(3).
Plaintiffs’ Rule 56.1 Statement, ¶3.
The Funds
receive contributions from numerous employers pursuant to
collective bargaining agreements executed between the Chicago
Regional Council of Carpenters (the Union) and employers.
Id.
Francis is one such employer; on April 28, 2010, it executed a
“Memorandum of Agreement” agreeing “to be bound by the various
Trust Agreements to which contributions are required to be made
under the [Collective Bargaining Agreements], including all rules
and regulations adopted by the Trustees of each Fund.”
See
Memorandum of Agreement, ¶4 (attached as Exhibit 2 to Plaintiffs’
Rule 56.1 Statement); see also, Plaintiff’s Rule 56.1 Statement,
¶4.
Pursuant to the provisions of the CBA and the Trust
Agreements, employers use monthly reports to identify covered
employees, the hours worked, wages paid, and contributions and
dues to be paid for each employee each month.
2
Plaintiffs’ Rule
56.1 Statement, ¶6.
According to the Funds, Francis submitted
monthly reports for the month of November 2010 and for the period
beginning November 2011 and going through January 2012, but did
not pay the required contributions or dues, leaving a balance
owed totaling $25,001.60.
Id., ¶7.
The Funds also claim that
Francis submitted reports and payments for the months of
September and October 2010 and October 2011, but paid late,
thereby incurring additional charges.
Id.
In total, the Funds
allege that Francis owes contributions, dues, interest and
liquidated damages in the amount of $31,050.67, plus reasonable
attorneys’ fees and costs incurred in pursuing the delinquent
payments.
They argue that, when viewed in the appropriate light,
the record evidence establishes, as a matter of law, that Francis
is liable to the Funds for this amount. And they, therefore, seek
summary judgment on their complaint.
Discussion
Summary 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.” Fed. R. Civ. P.
56©.
At this stage, the Court does not weigh evidence or
determine the truth of the matters asserted.
Lobby, Inc., 477 U.S. 242, 249 (1986).
3
Anderson v. Liberty
The Court views all
evidence and draws all inferences in favor of the non-moving
party, and may enter summary judgment only if the record as a
whole establishes that no reasonable jury could find for the nonmoving party.
Michas v. Health Cost Controls of Ill., Inc., 209
F.3d 687, 692 (7th Cir. 2000).
Francis has failed to respond to the motion for summary
judgment, despite being given more than ample opportunity to do
so and despite being warned by the Court of the consequences of
its failure.
Francis also failed to file any kind of response to
the Funds’ Rule 56.1 Statement of Facts, which means the Court
treats those facts as if they were admitted. Raymond v. Ameritech
Corp., 442 F.3d 600, 608 (7th Cir. 2006)(citing Wienco, Inc. v.
Katahn Associates, Inc., 965 F.2d 565, 568 (7th Cir. 1992)).
That does not mean that the Funds automatically win on their
motion.
Rather, the Funds must still demonstrate that the
undisputed facts entitle them to judgment as a matter of law. Id.
(citing Reales v. Consolidated
Rail Corp., 84 F.3d 993, 997 (7th
Cir. 1996); Wienco, 965 F.2d at 568).
Under ERISA, “[e]very 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 contributions
in accordance with the terms and conditions of such plan or
agreement.”
29 U.S.C. §1145.
ERISA further provides that
4
[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).
The Funds argue that they are entitled to summary judgment
because the undisputed facts establish that Francis was
contractually obligated to make contribution payments each month
for covered employees, and to pay dues each month for covered
employees, that Francis employed covered employees, recognized
its obligation to make the required payments, yet failed to make
all of the required payments.
To support their motion, the Funds submitted the Collective
Bargaining Agreement between the Union (the Chicago Regional
Council of Carpenters) and Mid-America Regional Bargaining
Association (and any other employers who sign on to the
agreement) in force and effect from June 1, 2010 through May 31,
2014.
See Plaintiff’s Rule 56.1 Statement, Exhibit 3.
The CBA
requires signatory employers to contribute, on behalf of covered
5
employees doing covered work, set amounts per hour worked to the
Union’s Health and Welfare Fund (Article XII, ¶12.1), the Pension
Fund and Supplemental Retirement Fund (Article XIII, ¶13.1); and
the Apprenticeship Fund (Article XIV, ¶14.1).
In addition to
these contributions, the CBA also requires signatory employers to
withhold and submit to the Union dues for each covered employee
on a monthly basis.
CBA, Article XXVII, ¶¶27.1, 27.2.
The CBA further provides that, if an employer becomes
delinquent in making these contributions, the employer shall pay,
in addition to the amount due, “reasonable fees of Certified
Public Accountants as expressly used to establish the amount due,
reasonable fees of Attorney in effectuating payment, and
liquidated damages in amount as determined in accordance with the
Agreement and Declaration of Trust.”
CBA, Article XII, ¶12.10
(Health and Welfare Fund); Article XIII, ¶13.8 (Pension and
Supplemental Retirement Funds); Article XIV, ¶14.8
(Apprenticeship Fund).
Along with the CBA, the Funds submitted copies of the
relevant Trust Agreements: Plaintiffs’ Exhibit 4 is the Chicago
District Council of Carpenters Welfare Fund Trust Agreement;
Exhibit 5 is the Chicago District Council of Carpenters Pension
Fund Trust Agreement; Exhibit 6 is the Supplemental Retirement
Fund Trust Agreement; and Exhibit 7 is the Chicago District
Council of Carpenters Apprentice and Trainee Program Trust
6
Agreement. The Trust Agreements authorize the Trustees to collect
employer contributions to their respective funds.
E.g., Exhibit
4, Article IV, ¶2 (Welfare Fund); Exhibit 5, Article IV, Section
3 (Pension Fund); Exhibit 6, Article VIII, ¶8.2 (Supplemental
Retirement Fund); Exhibit 7, Article VI, Section 2
(Apprenticeship Fund).
With respect to unpaid and delinquent contributions, the
Trustees are also empowered to collect, in addition to the
contributions, “liquidated damages in the amount of one and onehalf per cent (1½%) per month on the whole amount of the accounts
receivable balance remaining from time to time unpaid.
In the
event the account is placed for collection, the employer shall be
liable for reasonable attorney’s fees, court fees, audit fees,
and other reasonable costs incurred in the collection process.”
Welfare Fund Trust Agreement, Article III, ¶6, Article IV, ¶3;
Pension Fund Trust Agreement, Article IV, Section 4, Article VI,
Section 2(C).
Similarly, the Apprenticeship Fund Trust Agreement provides
that a delinquent employer shall be liable for (in addition to
the unpaid contributions) “liquidated damages of $25.00 for each
delinquency or liquidated damages in the amount of 1½% per month
on the whole amount of contributions remaining from time to time
unpaid whichever is greater.”
Apprenticeship Fund Trust
Agreement, Article VI, Section 4.
7
And the Supplemental
Retirement Fund Trust Agreement authorizes the Trustees to
collect, in addition to the delinquent contributions, interest,
as well as all costs and reasonable attorney’s fees incurred in
connection with any collection action, and “any liquidated
damages required under policies adopted by the Trustees.”
Supplemental Retirement Fund Trust Agreement, Article VIII, ¶8.3.
In addition to these agreements, the Funds submitted a copy
of a Memorandum of Agreement, signed by Francis on April 28,
2010, in which Francis agrees to be bound by the terms of the CBA
and the Trust Agreements.
Exhibit 2.
See Plaintiffs’ Rule 56.1 Statement,
By signing that Agreement (Christopher Z. Muhammad,
Manager, signed on behalf of Francis), Francis expressly agreed
“to be bound to the terms of the various Trust Agreements to
which contributions are required to be made under the [CBA],
including all rules and regulations adopted by the Trustees of
each Fund.”
Id., ¶4.
This evidences demonstrates Francis’ contractual obligation
to remit to the various Funds contribution and dues payments on
behalf of covered employees for covered work.
More to the point,
this evidence demonstrates that Francis was required to make such
payments in the manner specified in those agreements, and it
establishes the damages to be awarded for failing to make those
payments in the manner specified.
In addition to the contracts, the Funds also submitted a
8
declaration from John Libby, the Manager of Audits & Collections
for the Funds, in which he represents that, after reviewing the
relevant documents, including the agreements and the Funds’ files
on Francis, he has determined that Francis owes: contributions in
the amount of $25,001.60; liquidated damages (calculated at the
rate of 1.5% per month) in the amount of $4,191.90; interest in
the amount of $569.78; and dues in the amount of $1,287.39.
See
Declaration of John Libby, ¶¶20-24 (attached as Exhibit 10 to
Plaintiff’s Rule 56.1 Statement). Thus, Mr. Libby represents, the
Funds’ total claim against Francis is $31,050.67.
Id., ¶25.
In his declaration, Mr. Libby reiterates the obligations
imposed by the CBA and the Trust Agreements; he represents that
the CBA requires signatory employers like Francis to pay
contributions to the Funds for all hours worked by covered
employees, and that the CBA also requires employers to withhold
from the wages of each covered employee dues; according to Mr.
Libby, employers are required to remit both contributions and
dues on a monthly basis.
Id., ¶4-5, 8-9.
Mr. Libby further represents that he reviewed the Union’s
files and the Funds’ files pertaining to Francis and determined
that Francis has been bound to the CBA since April 28, 2010; that
Francis failed to remit timely payment of contributions owed for
the period September 2010 through January 2012; that Francis
failed to submit a July 2012 report; and that Francis submitted
9
reports for November 2010 and November 2011 through January 2012,
but failed to pay all contributions due and owing consistent with
those reports.
Id., ¶¶7, 20-22. In total, Mr. Libby represents,
after giving Francis credit for payments made during this time
period, Francis owes $25,001.60 in contributions.
Id., ¶20.
The Funds also submitted work history reports, prepared on
behalf of Francis, showing the amount of the contributions that
were due and owing from Francis and these reports are consistent
with Mr. Libby’s declaration. See Plaintiffs’ Rule 56.1
Statement, Exhibit 8.
And, indeed, although they never responded
to the motion for summary judgment, in proceedings in court
Francis’ representatives have never denied that they owe the
Funds money.
According to Mr. Libby, in addition to these missing
payments, the CBA and the Trust Agreements authorize the Trustees
to assess and collect interest at the rate of 1.5% per month, as
well as liquidated damages, and attorneys’ fees and costs
incurred in the collection of delinquent contributions.
Dec., ¶14.
Libby
He represents that, consistent with the CBA and the
Trust Agreements, the Funds use a monthly compound interest
calculation to determine the amounts of interest and liquidated
damages owed; the calculation is performed separately for each
delinquent contribution month, with the principal for each
separate compound interest calculation being the delinquent
10
contributions amount and with the interest rate being based on
IRS Section 6621.
Id., ¶15.
Mr. Libby explains that, for the
first month in which the contributions are delinquent, interest
is calculated based on the portion of the month that occurs after
the 15th; the calculation to determine the interest amount for
the first month in which the delinquency occurs is based on the
principal amount multiplied by the applicable monthly interest
rate, which is the rate stated by the IRS for that particular
month divided by 12, multiplied by the fraction of the month that
occurs after the 15th (the date the payments are due).
Id., ¶17.
The interest is then added to the principal to determine a new
principal in the next month, and so on.
Id., ¶18.
Mr. Libby
represents that, using this methodology, Francis owes the Funds
interest in the amount of $569.78.
Id., ¶23.
Mr. Libby represents that, under the CBA and the Trust
Agreements, Francis is also liable for liquidated damages, which
are calculated at the rate of 1.5% compounded monthly; the
calculations from month to month are done in the same way
described above, with the liquidated damages from one month being
added to the principal in the next month and so on. Id., ¶¶16,
17.
Mr. Libby represents that, using this methodology, Francis
owes the Funds liquidated damages in the amount of $4,191.90.
Id., ¶22.
According to Mr. Libby, Francis also withheld, but failed to
11
remit, $1,287.39 in dues during the months of November 2010,
November 2011, December 2011 and January 2012. Libby Dec., ¶24.
Again, the work history reports are consistent with Mr. Libby’s
declaration.
See Plaintiffs’ Rule 56.1 Statement, Exhibit 8.
As explained above, Francis has offered nothing to rebut or
contradict any of these facts.
And, without question, these
facts demonstrate that the Funds are entitled to judgment as a
matter of law on their ERISA claim.
There is no question that
Francis agreed to be bound by the CBA and the Trust Agreements,
which require signatory employers to make contributions and remit
dues on behalf of covered employees; there is no question that
Francis failed to remit the required contributions and dues; and
there is no question that Francis owes what the plaintiffs say it
owes in terms of contributions and dues.
As a signatory to the
CBA, Francis agreed to remit contributions and dues, and to do so
in the manner specified; its failure to make such payments in
accordance with the CBA and the Trust Agreements gives rise to
the litany of penalties provided therein.
Thus, in addition to
being liable for the unpaid contributions and dues, Francis is on
the hook for interest on the unpaid contributions in the amount
of $569.78 and liquidated damages in the amount of $4,191.90.
Francis must also pay the Funds’ reasonable attorneys’ fees and
collection costs.
12
Conclusion
For the reasons set forth above, the Court grants the
plaintiffs’ motion for summary judgment [Docket #43]. Judgment is
entered in favor of the Funds and against Francis in the amount
of $31,050.67.
Date: March 27, 2013
E N T E R E D:
______________________________
MAGISTRATE JUDGE ARLANDER KEYS
UNITED STATES DISTRICT COURT
13
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?