Shales et al v. Schroeder Asphalt Services, Inc. et al
Filing
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Enter MEMORANDUM, OPINION AND ORDER: For the reasons set forth above, the Funds Motion to Reconsider is granted and, therefore, the Defendants Motion to Dismiss is denied in its entirety. Signed by the Honorable Virginia M. Kendall on 12/30/2013.Mailed notice(tsa, )
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
MIKE SHALES, JOHN P. BRYAN, AL
OROSZ, DAN BREJC, TOBY KOTH and
VERN BAUMAN as Trustees of THE FOX
VALLEY LABORERS’ HEALTH AND
WELFARE FUND, and MIKE SHALES, JOHN
P. BRYAN, AL OROSZ, DAN BREJC, TOBY
KOTH and VERN BAUMAN as Trustees of
THE FOX VALLEY & VICINITY
LABORERS’ PENSION FUND,
Plaintiffs,
v.
SCHROEDER ASPHALT SERVICES, INC.,
BRENT SCHROEDER, individually and d/b/a
SCHROEDER SEALCOATING, and STACY
SCHROEDER, individually and d/b/a
SCHROEDER SEALCOATING,
Defendants.
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No. 12 C 6987
Hon. Virginia M. Kendall
MEMORANDUM OPINION AND ORDER
Plaintiffs Mike Shales, John P. Bryan, Al Orosz, Dan Brejc, Toby Koth and Vern
Bauman as Trustees of the Fox Valley Laborers’ Health and Welfare Fund and the Fox Valley &
Vicinity Laborers’ Pension Fund (collectively the “Funds”) filed a Motion to Reconsider this
Court’s decision dismissing with prejudice their claims against Defendants Schroeder Asphalt
Services, Inc., Brent Schroeder and Stacy Schroeder and Schroeder Sealcoating made on behalf
of the Laborers’ District Council Labor-Management Cooperation Committee (“LMCC”), the
Chicago Area Laborers-Employers Cooperation and Education Trust (“LECET”), and the Illinois
Small Pavers Association (“ISPA”) (collectively the “Affiliated Entities”). For the reasons
stated below, the Funds’ motion is granted.
BACKGROUND
The Funds filed a two-count Amended Complaint against the Defendants on October 25,
2012. The Amended Complaint alleges that the Defendants failed to submit reports and pay
contributions to the Funds in violation of Section 515 of the Employee Retirement Income
Security Act of 1947 (“ERISA”), 29 U.S.C. § 1145 and Section 301 of the Labor Management
Relations Act of 1947 (“LMRA”), as amended, 29 U.S.C. § 185. (Dkt. No. 28 at ¶ 16.)
Specifically, the Funds alleged that they are multiemployer benefit plans, and that the
Defendants entered into a collective bargaining agreement (“CBA”) with the Construction and
General Laborers’ District Council of Chicago and Vicinity (the “Union”) containing provisions
requiring contribution payments to the Funds and the Affiliated Entities. (Id. at ¶¶ 1, 5–8.) The
Defendants moved to dismiss the Amended Complaint for failure to state a claim under Fed. R.
Civ. P. 12(b)(6) and for lack of subject-matter jurisdiction under Fed. R. Civ. P. 12(b)(1). The
Court granted the Defendants’ motion in part, dismissing with prejudice the claims brought by
the Funds to collect amounts the Defendants allegedly owed to the Affiliated Entities arising out
of the CBA. Shales v. Schroeder Asphalt Servs., Inc., 2013 WL 2242303, *6–8 (N.D. Ill. May
21, 2013). The Funds filed the present Motion to Reconsider on June 18, 2013.
LEGAL STANDARD
This Court’s decision dismissing the Funds’ claims on behalf of the Affiliated Entities
did not dispose of this case in its entirety. The Defendants’ motion to reconsider is therefore
reviewed under Fed. R. Civ. P. 54(b), which states:
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[A]ny order or other decision, however designated, that adjudicates
fewer than all the claims or the rights and liabilities of fewer than
all the parties does not end the action as to any of the claims or
parties and may be revised at any time before the entry of a
judgment adjudicating all the claims and all the parties’ rights and
liabilities.
See also Chi. Reg’l Council of Carpenters v. Prate Installations, Inc., 2011 WL 2469820, at *1
(N.D. Ill. June 20, 2011). A non-final order is modifiable at the Court’s discretion, and at any
time before entry of a final judgment. Moses H. Cone Mem. Hosp. v. Mercury Const. Corp., 460
U.S. 1, 12 (1983) (stating that “every order short of a final decree is subject to reopening at the
discretion of the district judge”). Nevertheless, motions to reconsider (or revise) will only be
granted “to correct manifest errors of law or fact or to present newly discovered evidence.”
Caisse Nationale de Credit Agricole v. CBI Indus., 90 F.3d 1264, 1269–70 (7th Cir. 1996); see
also Telewizja Polska USA, Inc. v. Echostar Satellite Corp., 2005 WL 289967, at *1 (N.D. Ill.
Feb. 4, 2005). A manifest error of law is “the wholesale disregard, misapplication, or failure to
recognize controlling precedent.” Oto v. Metro. Life Ins. Co., 224 F.3d 601, 606 (7th Cir. 2000)
(citation omitted).
DISCUSSION
The Funds’ claims on behalf of the Affiliated Entities were dismissed because the Court
did not find that the Funds alleged sufficient facts to show the Court had subject-matter
jurisdiction over them pursuant to Fed. R. Civ. P. 12(b)(1). Shales, 2013 WL 2242303 at *6–8.
The Court properly stated the legal framework for a motion to dismiss for failure to state a claim
under Rule 12(b)(6) and for lack of standing under Rule 12(b)(1). Id. at *2. However, when
analyzing the Funds’ standing to assert claims on behalf of the Affiliated Entities, the Court did
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not consider the pertinent ERISA and LMRA statutes that convey standing to fiduciaries and
third-party beneficiaries of employee benefit funds, respectively. Id. at *2, *6–8.
ERISA permits fiduciaries of employee benefit plans to sue for the collection of
delinquent contributions to those plans. Line Const. Ben. Fund v. Allied Elec. Contractors, Inc.,
591 F.3d 576, 578–79 (7th Cir. 2010) (citing 29 U.S.C. § 1132).
A plan’s fiduciary is
identifiable by his ability to: (1) exercise “discretionary authority or discretionary control
respecting management of such plan or exercises any authority or control respecting
management or disposition of its assets;” (2) render “investment advice for a fee or other
compensation, direct or indirect, with respect to any moneys or other property of such plan, or
has any authority or responsibility to do so;” or (3) exercise “discretionary authority or
discretionary responsibility in the administration of such plan.” Id. at 579 (quoting 29 U.S.C. §
1002(21)(A)).
The LMRA applies for the Affiliated Entities that are not ERISA benefit funds. Section
301 of the LMRA creates the civil right to enforce contract breaches between employers and
labor organizations representing employees. 29 U.S.C. § 185(a). This right has long been
understood to grant the trustees of employee benefit funds standing to sue an employer for
breach of a contract or a collective bargaining agreement. See Laborers’ Pension Fund v. Nat’l
Wrecking Co., 1994 WL 513589, *13 n.5 (N.D. Ill. Sept. 16, 1994) (citing Lewis v. Quality Coal
Corp., 243 F.2d 769, 772–73 (7th Cir. 1957)). The trustees of an employee benefit fund may
enforce the entirety of the agreement, not just certain provisions. See Woldman v. Cnty. Line
Cartage, Inc., 2003 WL 22995161, *3 (N.D. Ill. Dec. 16, 2003) (finding that if a trustee of an
employee benefit fund may sue to enforce part of a contract, it may do so to enforce the entire
contract). Permitting this enforcement of the entire agreement by either the union or the trustee
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of the employee benefit fund is not counter to public policy because the union members still
benefit regardless of who enforces their CBA. See Nat’l Wrecking Co., 1994 WL 513589 at *13
n.5.
Here, the Funds allege they are multiemployer benefit plans that have been authorized by
the Affiliated Entities to collect amounts owed to them by the Defendants under the CBA. (Dkt.
No. 28 at ¶¶ 1, 7, 9.) They further allege that the CBA requires the Defendants to make
payments to the Affiliated Entities, but that the Defendants did not make these payments
between November 1, 2010 and June 1, 2012. (Dkt. No. 28 at ¶¶ 1–14.) Alleging these facts is
sufficient to establish the Funds’ right to enforce the entire CBA, including the payments the
Defendants agreed to make to Affiliated Entities that are not ERISA benefit funds.
See
Woldman, 2003 WL 22995161 at *3. The Funds need not present evidence of this authorization
at the pleadings stage. See Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431
(7th Cir. 1993). Instead, “In assessing a facial standing challenge at the pleadings stage, the
Court looks no further than the allegations in the complaint and accepts all such allegations as
true.” Shales, 2013 WL 2242303 at *2 (citing Apex Digital, Inc. v. Sears, Roebuck & Co., 572
F.3d 440, 443–44 (7th Cir. 2009)). The Court therefore finds that the Funds have alleged facts
sufficient to show their standing to assert the Affiliated Entities’ claims, and reverses its prior
decision dismissing these claims. See, e.g. Laborers’ Pension Fund v. Safe Envtl. Corp., 2013
WL 1874197 (N.D. Ill. May 3, 2013); Laborers’ Pension Fund v. Safe Envtl. Corp., 2013 WL
3200070 (N.D. Ill. June 24, 2013).
CONCLUSION
For the reasons set forth above, the Funds’ Motion to Reconsider is granted and,
therefore, the Defendants’ Motion to Dismiss is denied in its entirety.
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________________________________________
Virginia M. Kendall
United States District Court Judge
Northern District of Illinois
Date: December 30, 2013
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