Board of Trustees of the Pipe Fitters Retirement Fund, Local 597 et al v. Kramer Mechanical LLC et al

Filing 28

MOTION by Plaintiffs Board of Trustees of the Pipe Fitters Retirement Fund, Local 597, Board of Trustees of the Pipe Fitters Training Fund, Local 597, Board of Trustees of the Pipe Fitters Welfare Fund, Local 597, Board of Trustees of the Pipe Fitte rs' Individual Account and 401 (K) Plan, Board of Trustees of the Pipe Fitting Council of Greater Chicago, The Board of Trustees of the Chicago Area Mechanical Contracting Industry Imporvement Trust, The Pipe Fitters' Association, Local 597 U.A to reopen case , MOTION by Plaintiffs Board of Trustees of the Pipe Fitters Retirement Fund, Local 597, Board of Trustees of the Pipe Fitters Training Fund, Local 597, Board of Trustees of the Pipe Fitters Welfare Fund, Local 597, Board of Trustees of the Pipe Fitters' Individual Account and 401 (K) Plan, Board of Trustees of the Pipe Fitting Council of Greater Chicago, The Board of Trustees of the Chicago Area Mechanical Contracting Industry Imporvement Trust, The Pipe Fitters ' Association, Local 597 U.A for judgment (Attachments: # 1 Exhibit 1 - Secured Settlement Agreement, # 2 Exhibit 2 - Signed Order, # 3 Exhibit 3 - Affidavit of Maloney, # 4 Exhibit 4 - Affidavit of Attorney's Fees)(Adelman, Jessica)

SETTLEMENT AGREEMENT
This Settlement Agreement (“Agreement”) by and between KRAMER MECHANICAL LLC
(“KRAMER MECHANICAL”), TIMOTHY KRAMER, and The Pipe Fitters’ Welfare Fund, Local
597, The Pipe Fitters’ Retirement Fund, Local 597, The Pipe Fitters’ Training Fund, Local 597, The
Industry Improvement Fund, Local 597, The Pipe Fitters’ Individual Account and 401(k) Plan, Local
597, and the Pipe Fitting Council of Greater Chicago (“TRUST FUNDS”), and Pipe Fitters
Association, Local 597 U.A (“UNION”) is hereby entered into:
WHEREAS, KRAMER MECHANICAL is signatory to a Collective Bargaining Agreement with the
UNION;
WHEREAS, TIMOTHY KRAMER is the Managing Member of KRAMER MECHANICAL;
WHEREAS, on or about August 3, 2012, KRAMER MECHANICAL, TIMOTHY KRAMER, the
TRUST FUNDS and UNION entered into a Settlement Agreement (the “August 2012 Settlement
Agreement”), for audit deficiencies, liquidated damages, interest and attorney’s fees owed by
KRAMER MECHANICAL to the TRUST FUNDS and UNION in the amount of $101,031.93;
WHEREAS, subsequent to entering into the August 2012 Settlement Agreement, the TRUST
FUNDS conducted a payroll compliance audit on KRAMER MECHANICAL for the period of
March 1, 2012 through September 30, 2012, which revealed contribution deficiencies in the amount
of $29,610.60 in violation of the August 2012 Settlement Agreement;
WHEREAS, the audit also revealed unpaid wages allegedly owed to Maurice McCullum during the
period of March 21, 2012 through September 26, 2012;
WHEREAS, as a result of KRAMER MECHANICAL’s refusal to pay the audit deficiencies, the
TRUST FUNDS and UNION filed suit in the U.S. District Court for the Northern District of Illinois
against KRAMER MECHANICAL and TIMOTHY KRAMER on January 11, 2013, captioned
Board of Trustees of the Pipe Fitters Retirement Fund, Local 597 et al. v. Kramer Mechanical, LLC
et al., Case No. 13-CV-195, (“the Lawsuit”), alleging a breach of the August 2012 Settlement
Agreement;
WHEREAS, the TRUST FUNDS and the UNION allege that KRAMER MECHANICAL and
TIMOTHY KRAMER owe the aggregate amount of $133,087.14 as follows:
Type:
Audit Contribution Deficiencies
(3/1/12 - 9/30/12)
Amounts Remaining on
August 2012 Settlement Agreement
Unpaid Wages (3/21/12 - 9/26/12)
401(k) Deficiencies
Liquidated Damages
Interest
Attorney’s Fees
TOTAL

1

Amount:
$29,610.60
$56,485.97
$13,851.56
$882.17
$21,636.83
$1,659.42
$8,960.59
$133,087.14

EXHIBIT
1

WHEREAS, KRAMER MECHANICAL and TIMOTHY KRAMER dispute the amounts claimed
due but desire to compromise and resolve all of their liabilities to the TRUST FUNDS and UNION
without incurring the expense and inconvenience of further litigation;
WHEREAS, upon receipt of an executed copy of this Agreement, the TRUST FUNDS and UNION
have agreed to dismiss the Lawsuit, without prejudice and with a retention of jurisdiction by the
Court to enforce the terms of this Agreement (A copy of the Stipulated Order of Dismissal is attached
as Exhibit 1);
WHEREAS, the Parties have agreed to enter into a payment schedule pursuant to which KRAMER
MECHANICAL and TIMOTHY KRAMER will submit monthly payments to the TRUST FUNDS
and UNION to settle its liabilities to the TRUST FUNDS; and
NOW THEREFORE, for and in consideration of the mutual promises contained in this Agreement,
and for good and valuable consideration, the sufficiency of which is hereby acknowledged,
IT IS HEREBY AGREED AS FOLLOWS:
1. KRAMER MECHANICAL and TIMOTHY KRAMER shall make a single payment to
the TRUST FUNDS in the amount of $882.17 payable to the Pipe Fitters Trust Funds,
Local 597 upon execution of this Agreement.
2. KRAMER MECHANICAL and TIMOTHY KRAMER shall make a single payment to
Maurice McCullum in the amount of $5,000.00 payable to Maurice McCullum upon
execution of this Agreement.
3. KRAMER MECHANICAL and TIMOTHY KRAMER have agreed to pay, and the
TRUST FUNDS and the UNION have agreed to accept the sum of $85,603.80 to settle
all current liabilities owed by KRAMER MECHANICAL and TIMOTHY KRAMER to
the TRUST FUNDS and UNION.
4. KRAMER MECHANICAL and TIMOTHY KRAMER shall pay off the balance of
$85,603.80 over twenty-one (21) months at 6.0% interest pursuant to the amortization
schedule attached hereto as Exhibit 2. KRAMER MECHANICAL and TIMOTHY
KRAMER shall make the twenty-one (21) monthly installments in the amounts and on
the dates shown in Exhibit 2.
5. All of the installment payments called for in this Agreement shall be made payable to the
Pipe Fitters Trust Funds, Local 597 and shall be mailed to the TRUST FUNDS and
UNION’s attorneys at the following address:
Jessica Adelman
Johnson & Krol, LLC
300 S Wacker Drive, Suite 1313
Chicago, IL 60606
6. Any monthly payment not received by the due date shown on Exhibit 2 shall constitute a
default of this Agreement and shall be subject to a liquidated damages charge in the

2

amount of ten percent (10%) of the unpaid amount.
7. KRAMER MECHANICAL and TIMOTHY KRAMER agree to submit monthly
Contribution Reports and payments to the Fund Office in a timely manner, by the 15 th
day of each month following the month in which the work was performed, beginning
with the contribution period of May 2013 through the duration of this Agreement as
required by Article III of the Collective Bargaining Agreement. TIMOTHY KRAMER
agrees to be personally liable for all of the obligations of KRAMER MECHANICAL
called for in this Agreement, including but not limited to all ongoing contributions,
liquidated damages, interest, attorney’s fees and audit fees that shall become due and
owing during the duration of this Agreement
8. In the event KRAMER MECHANICAL and TIMOTHY KRAMER default on any of
their obligations under the terms of this Settlement Agreement: 1) all remaining
payments referenced herein will be accelerated and become immediately due and
payable; 2) KRAMER MECHANICAL and TIMOTHY KRAMER hereby confess
judgment for any and all unpaid amounts and the TRUST FUNDS and UNION shall be
entitled to file for immediate judgment of all such amounts; 3) an additional liquidated
damages charge of 10% of all unpaid amounts shall become due and payable by
KRAMER MECHANICAL and TIMOTHY KRAMER; and 4) in the event the TRUST
FUNDS and/or UNION are required to engage an attorney to collect any amounts due
under this Agreement, KRAMER MECHANICAL and TIMOTHY KRAMER shall be
liable for all reasonable attorney’s fees and costs incurred by the TRUST FUNDS and
UNION.
9. Should the TRUST FUNDS and/or UNION choose to waive the lateness of any
payment(s) called for in this Agreement, such waiver shall only be effective to the
specified lateness actually waived and shall not act as a waiver to any subsequent
payments.
10. Any additional liquidated damages, interest, audit fees or attorney’s fees incurred
throughout the duration of this Agreement shall be due by KRAMER MECHANICAL
and TIMOTHY KRAMER within ten (10) days of from the date of occurrence. Failure
by KRAMER MECHANICAL and TIMOTHY KRAMER to submit payment within ten
(10) days may be deemed a breach of this Agreement at the TRUST FUNDS and
UNION’S sole discretion.
11. The Contribution Reports relied on for this Agreement have not been verified by a
payroll compliance audit. If a new payroll compliance audit should be conducted and a
reporting deficiency or discrepancy is discovered for any contribution period, the parties
agree that said discrepancy and/or deficiency shall be a separate and distinct claim from
the claims settled in this Agreement.

12. That the TRUST FUNDS and UNION’s attorneys have the right to, at any time
during the duration of this Agreement, request documentation relating to KRAMER
MECHANICAL’s current project(s) including, but not limited to, certified payroll
and Accounts Receivable reports. KRAMER MECHANICAL and TIMOTHY
KRAMER agree to produce to the TRUST FUNDS and UNION’s attorneys all

3

requested documentation within three (3) business days of any documentation
request. Failure by KRAMER MECHANICAL and TIMOTHY KRAMER to
produce the requested documentation within three (3) business days of any
documentation request shall constitute a default of this Agreement.
13. That the recitals shall be considered a part of this Agreement.
14. That this Agreement shall be executed in counterparts and each one shall be deemed an
original. A facsimile copy or scanned copy of the Agreement or counterpart shall be
deemed, and shall have the same legal force and effect as, an original document.
15. This Agreement shall be binding upon the heirs, successors, and assigns of the Parties
hereto.
16. The persons signing below represent that they are authorized to execute this Agreement
and bind their respective entities and themselves to the terms herein.
17. This Agreement and the exhibits hereto constitute and represent the complete and entire
agreement between the Parties. The terms of this Agreement may not be altered,
modified, or supplemented except by a writing signed by each of the Parties.
18. This Agreement shall terminate upon the receipt of the last payment called for in this
Agreement and confirmation that the KRAMER MECHANICAL current with all of their
ongoing contribution obligations to the TRUST FUNDS and UNION, including but not
limited to any obligations owed under this Agreement.
19. The parties agree that if any provision of this Agreement is rendered invalid or
unenforceable by a court or governmental agency of competent jurisdiction, the
remaining provisions shall remain in full force and effect.
20. This Agreement shall be construed in accordance with Illinois law without regard to
choice of laws except as preempted by applicable federal law.
21. Upon default in payment or performance of any of the obligations under this Agreement,
KRAMER MECHANICAL and TIMOTHY KRAMER agree that the TRUST FUNDS
and the UNION shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code for any and all amounts owed under this Agreement, pursuant
to the previously executed Security Agreement and U.C.C. Financing Statement on file
with the Illinois Secretary of State.
22. The Parties acknowledge that each has been advised by his/her/its own competent legal
counsel in connection with the execution of this Agreement, or has had the opportunity to
consult competent legal counsel, that the signor below has carefully read and understands
this Agreement, and signs the same of his/her/its own free will.

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06/24/2013 2:21:07 PM Page 1
Kramer Mechanical LLC
Compound Period
................................. : Monthly
Nominal Annual Rate
................................. : 6.000 %
CASH FLOW DATA
Event
1 Loan
2 Payment

Date

Amount

05/29/2013
07/01/2013

Number

85,603.80
4,306.42

1
21

Period
Monthly

End Date
03/01/2015

AMORTIZATION SCHEDULE - Normal Amortization
Date

Payment

Interest

Principal

Balance

Loan 05/29/2013
1 07/01/2013
2 08/01/2013
3 09/01/2013
4 10/01/2013
5 11/01/2013
6 12/01/2013
2013 Totals

4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
25,838.52

470.45
408.84
389.35
369.77
350.08
330.30
2,318.79

3,835.97
3,897.58
3,917.07
3,936.65
3,956.34
3,976.12
23,519.73

7 01/01/2014
8 02/01/2014
9 03/01/2014
10 04/01/2014
11 05/01/2014
12 06/01/2014
13 07/01/2014
14 08/01/2014
15 09/01/2014
16 10/01/2014
17 11/01/2014
18 12/01/2014
2014 Totals

4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
4,306.42
51,677.04

310.42
290.44
270.36
250.18
229.90
209.52
189.03
168.44
147.76
126.96
106.06
85.06
2,384.13

3,996.00
4,015.98
4,036.06
4,056.24
4,076.52
4,096.90
4,117.39
4,137.98
4,158.66
4,179.46
4,200.36
4,221.36
49,292.91

58,088.07
54,072.09
50,036.03
45,979.79
41,903.27
37,806.37
33,688.98
29,551.00
25,392.34
21,212.88
17,012.52
12,791.16

19 01/01/2015
20 02/01/2015
21 03/01/2015
2015 Totals

4,306.42
4,306.42
4,306.42
12,919.26

63.96
42.74
21.40
128.10

4,242.46
4,263.68
4,285.02
12,791.16

8,548.70
4,285.02
0.00

Grand Totals

90,434.82

4,831.02

85,603.80

85,603.80
81,767.83
77,870.25
73,953.18
70,016.53
66,060.19
62,084.07

06/24/2013 2:21:07 PM Page 2
Kramer Mechanical LLC

Last interest amount decreased by 0.03 due to rounding.