Board of Trustees of the Pipe Fitters Retirement Fund, Local 597 et al v. Commercial Cooling and Heating, Inc.

Filing 137

MEMORANDUM Opinion and Order Signed by the Honorable Jeffrey Cole on 7/1/2019:Mailed notice(jms, )

Case: 1:13-cv-07731 Document #: 137 Filed: 07/01/19 Page 1 of 7 PageID #:1564

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
BOARD OF TRUSTEES of the PIPE FITTERS’
RETIREMENT FUND, LOCAL 597, et al.,
Plaintiffs,
v.
COMMERCIAL COOLING AND HEATING,
INC, an Indiana Corporation, and JEANNIE
ANDERSON, an Individual,
Defendants.

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No. 13 C 7731
Magistrate Judge Jeffrey Cole

MEMORANDUM OPINION AND ORDER
A.
In late May of this year, I entered an extensive Opinion that dealt with certain critical aspects
of this case regarding the alleged filing of the defendants’ Answer to the Complaint. Familiarity with
that history will be presumed. See Bd. of Trustees of Pipe Fitters' Ret. Fund, Local 597 v.
Commercial Cooling & Heating, Inc., 2019 WL 2269959, at *1 (N.D. Ill. 2019). Thereafter, the
plaintiffs asked for entry of a Final Judgment Order, awarding them jointly and severally the amount
of $2,583,663.95.This amount included $33,252.36 in legal fees incurred in connection with the
sanctions portion of the case and an additional $19,865.09 in attorneys’ fees not associated with the
Motion for Sanctions.1

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This amount includes $33,252.36 in attorneys’ fees and costs related to Plaintiffs’ Motion for
Sanctions incurred between August 27, 2018 and February 20, 2019. The request for an award of this amount
is contrary to the Order finding that defendants’ counsel was responsible for the $33,252.36 in attorneys’
fees and costs. While Mr. Johnson has accepted responsibility for payment of that amount, the Opinion and
Order finding responsibility for that amount ran solely to Mr. Johnson and his Firm, and not to his clients.
Mr. Johnson has represented that he has no objection to paying that amount immediately.

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However, I had concluded that the $33,252.36 would not be awarded against the defendants
but was the responsibility of their lawyer, Mr. Johnson, who agreed unhesitatingly to pay those fees
and costs. His only question was what was the actual amount he had to pay. Thus, that amount is not
and should not be included in the Final Judgment Order applicable to the defendants’ obligation to
pay the plaintiffs, despite the fact that the plaintiffs have sought to have that amount included in the
Final Judgment Order against the defendants.
The plaintiffs have sought an award of $169,374.06 in liquidated damages for the period of
May 1, 2014 through December 31, 2017. The defendants’ proposed Final Order claims that the
liquidated damages only come to $166,682.91 – which is the amount specified in the settlement
agreement. And it is the amount specified in paragraph 1 of the plaintiffs’ Motion for Entry of Final
Judgment. Accordingly, we shall use the amount of $166,682.91 and not the amount of $169374.06.
As to the balance of the amount sought by the plaintiffs, the defendants contend that it was not part
of the Settlement Agreement and that a new lawsuit would have to be filed by the plaintiffs.
Consistent with their conduct throughout the course of this case, no reasoned or supported argument
has been made by the defendants. In fact, beyond the simple assertion that the defendants are right,
and the plaintiffs wrong, the defendants have offered nothing in support of their partisan conclusions.
But, the Seventh Circuit, like other Courts of Appeals, has “repeatedly and consistently held that
‘perfunctory and undeveloped arguments, and arguments that are unsupported by pertinent authority,
are waived.’” United States v. Cisneros, 846 F.3d 972, 978 (7th Cir. 2017). Accord Blow v. Bijora,
855 F.3d 793,805 (7th Cir. 2017); Silais v. Sessions, 855 F.3d 736, 746 (7th Cir. 2017); Quintana
v. Adair, 673 F. App'x 815, 820 (10th Cir. 2016); Massuda v. Panda Exp., Inc., 759 F.3d 779, 783784 (7th Cir. 2014); Puffer v. Allstate Ins. Co., 675 F.3d 709, 718 (7th Cir.2012). See also United
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States v. Manjang, 634 F. App'x 528, 531 (6th Cir. 2015).
The undeveloped argument, conclusorily advanced by defendants’ counsel at the hearing on
the Motion for Entry of Final Judgment Order, [Dkt. #135] was also the subject of extensive analysis
by the plaintiffs much earlier in the case. [Dkt. #91]. At the time, the defendants and their counsel
did exactly what they did at the recent hearing: that is, they did nothing, except advance a conclusion
without authority or development or briefing or explication. That is a waiver. United States v. Alden,
527 F.3d 653, 664 (7th Cir. 2008);Garlington v. O'Leary, 879 F.2d 277, 285, (7th Cir. 1989);
Rogers v. Henry Ford Health Sys., 897 F.3d 763, 779 (6th Cir. 2018); Elizarri v. Sheriff of Cook
Cty., 2017 WL 5900277, at *3 (N.D. Ill. 2017).
By contrast, the plaintiffs filed an extensive brief in September 2018, which explored at great
length the meaning of the Settlement Agreement and explained paragraph 13 of the Agreement
should not be construed as, and was not intended to be, a jurisdictional requirement that the plaintiffs
file a separate lawsuit in order to pursue the collection of subsequent audit deficiencies, beyond the
amount that the parties had agreed to. See the extensive discussion by the plaintiffs in their brief of
9/12/18. [Dkt. #91]. Of course, consistent with their performance in this case, neither the defendants
nor their counsel filed any brief or other document in response to the plaintiffs’ lengthy analysis
regarding the meaning of the Settlement Agreement and why the defendants were contractually
obligated to pay the entire amount found to be owing, and why that amount was not limited merely
to the approximately $166,000 plus which the parties did not dispute was due and owing. [See Dkt.
#91]. In short, the plaintiffs demonstrated why there was no jurisdictional violation by requiring the
defendants to pay the amount that the plaintiffs claimed was owing and not merely the approximately
$166,000 which the defendants agreed they owed.
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B.
The practice of the parties settling a civil case with the court retaining jurisdiction to enforce
the terms of the settlement is not novel, and parties often will ask a court to dismiss the case without
prejudice and retain jurisdiction for a definite time to enforce the terms of the Settlement Agreement.
The parties will often find that preferable to being required to file a new action in the state court to
enforce what is, in essence, a contract. Shapo v. Engle, 463 F.3d 641, 643 (7th Cir. 2006). One can
see why a plaintiff would not want to settle a suit if that settlement was little more than a ticket to
starting things over again in state court (assuming the parties are not diverse) against the same party
whose conduct precipitated the suit in the first place. In this regard, Shapo advised district court
judges and parties that, to avoid problems, “the district court should state that judgment is being
entered in order to allow the parties to enforce it and that the ‘without prejudice’ language shall not
allow them to reopen issues resolved by the judgment.” Shapo v. Engel, 463 F.3d 641, 646 (7th Cir.
2006). See also White v. Adams, 2009 WL 773877, at *1 (7th Cir. 2009).
Under the terms of the Settlement Agreement in this case, the defendants agreed that they
owed plaintiffs “$166,682.91 in unpaid contributions, liquidated damages, interest, audit fees,
Referral Hall fees and attorney’s fees” and would pay that off in 23 monthly installments at 6%
interest. [Dkt. # 91-1, Pars. 1, 2]. The Collective Bargaining Agreement between the parties would
then terminate. But the defendants also agreed that plaintiffs could conduct future payroll
compliance audits for the period of May 1, 2014 until the termination of the Collective Bargaining
Agreement. [Dkt. #91-1, ¶ 8]. Any additional obligations that might turn up as a result of those
audits – additional liquidated damages, interest, audit fees, attorney’s fees – would, they agreed, be
due from the defendant within 10 days of occurrence. [Dkt. #91-1, ¶. 12]. As it happens, these
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audits under the Settlement Agreement turned up additional obligations in the amount of just over
$2.5 million. Plaintiffs say, quite rightly, that the defendants are also obligated for that amount under
the terms of the Settlement Agreement. Defendants don’t agree. But, as we have said, defendants
offer only their partisan and unsupported conclusion.“[U]nfortunately... saying so doesn't make it
so....” United States v. 5443 Suffield Terrace, Skokie, Ill., 607 F.3d 504, 510 (7th Cir.2010
Paragraph 13 of the Settlement Agreement provided:
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.
[Dkt. #91-1, 13]. At the hearing on plaintiffs’ motion for default judgment on August 29, 2018,
defendants raised the specter of this provision, but offered, as we have noted, no support or reasoned
explanation; there was only the defendants’ partisan insistence that they were right and that the
amounts due under the payroll audits were, by definition under the terms of paragraph 13 “separate
and distinct claim[s]” that were not part of the Settlement Agreement and thus would have to be
hashed out in another litigation. But that was the first time defendants mentioned anything like this.
They certainly didn’t mention it in their Answer [Dkt. #87], which, as it turns out, was part of the
fraud on the court and has been stricken in any event. [Dkt. # 121]. See Bd. of Trustees of Pipe
Fitters' Ret. Fund, Local 597 v. Commercial Cooling & Heating, Inc., 2019 WL 2269959, at *1
(N.D. Ill. 2019).
Moreover, at the close of the August 29th hearing, defendants asked for and were given until
September 26th to develop this argument in response to plaintiffs’ interpretation that the obligations
revealed by the audits were due under the terms of the Settlement Agreement. September 26th came
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and went with nothing from defendants. [Dkt. #92]. At that time, it was becoming clear that the
Answer defendants had filed was filed fraudulently and defendants and counsel were ordered to
appear on October 4th. [Dkt. #93]. They didn’t. [Dkt. #95]. Defense counsel and defendant were
ordered to appear again, on October 9th. [Dkt. # 95]. This time counsel appeared, but defendants did
not. Counsel said this was because he had only managed to read the beginning of the previous Order
and didn’t get to the part that ordered his client to appear, even though it was in the 12th line. [Dkt.
# 96]. Thus, to say the very least, defendants and their lawyer never bothered to brief or develop
their argument and it is deemed waived. Matter of Lisse, 921 F.3d 629, 640 (7th Cir. 2019); M.G.
Skinner & Assocs. Ins. Agency v. Norman-Spencer Agency, 845 F.3d 313, 321 (7th Cir. 2017); Ingle
v. Pace, 744 F. App'x 883, 884 (5th Cir. 2018).
Reading the Settlement Agreement as a whole and giving effect to each clause, Newman v.
Metro. Life Ins. Co., 885 F.3d 992, 998 (7th Cir. 2018); Selective Ins. Co. of S.C. v. Target Corp.,
845 F.3d 263, 267 (7th Cir. 2016), it is clear as the plaintiffs previously demonstrated [Dkt. #91]
what paragraph 13 was meant to assure is that, once the defendant paid the $166,682.91 that was
specifically determined and provided for in the Settlement Agreement, defendants wouldn’t simply
balk at its continuing obligations to make full contributions during the period covered by the
settlement agreement. In other words, if additional audits – which defendant was obligated to allow
under the terms of the Settlement Agreement – showed that defendant was further in arrears or
continuing to dodge its obligations, claims regarding those deficiencies were not “covered” by the
$166,682.91. The defendants were not, as it were, buying a get-out-of-union-jail free card with their
$166,682.91 payment. That would make no sense and contracts – and that is what a Settlement
Agreement is – are to be interpreted in a common sense way. United States v. Barnett, 415 F.3d 690
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(7th Cir. 2005) (Posner, J.). “‘All interpretation is contextual, and the body of knowledge that goes
by the name of ‘common sense’ is part of the context of interpreting most documents, certainly most
business documents.’” McElroy v. B.F. Goodrich Co., 73 F.3d 722, 727-28 (7th Cir. 1996). See also
Dispatch Automation, Inc. v. Richards, 280 F.3d 1116, 1120 (7th Cir. 2002); Fla. E. Coast Ry. Co.
v. CSX Transp., Inc., 42 F.3d 1125, 1131 (7th Cir. 1994). The defendants’ unsupported, conclusory
interpretation of the Settlement Agreement requires a construction of the Agreement that is neither
rational, probable, nor consonant with common sense.

ENTERED:
UNITED STATES MAGISTRATE JUDGE

DATE: 7/1/19

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