Michiana Area Electrical Workers Health & Welfare Fund et al v. TGB Unlimited Inc

Filing 58

AMENDED OPINION AND ORDER: The Court GRANTS the Plaintiffs Motion for Damages 45 . The Court DIRECTS the Clerk of Court to VACATE the Courts December 18, 2017, Opinion and Order 56 . Further, the Court DIRECTS the Clerk of Court to enter an amended judgment in favor of the Plaintiffs and against Defendants TGB Unlimited d/b/a S/T Bancroft Electric and West Bend Mutual Insurance Company. The Plaintiffs are awarded $79,905.22 against Defendant TGB Unlimited, in the following breakdown:  6;36,164.40 in unpaid contributions, including the value of the Contractors Bond ($6,500) for which Defendant West Bend Mutual Insurance is jointly and severally liable; $7,232.88 in mandatory liquidated damages; $33,716.25 in attorney fees and $2,277.39 in costs; and $514.30 for the cost of the payroll audit; Finally, the Plaintiffs are also entitled to a statutory award of interest on the $36,164.40 in unpaid contributions outstanding at the time the Plaintiffs filed suit. Signed by Chief Judge Theresa L Springmann on 12/21/2017. (jss)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF INDIANA
TRUSTEES OF THE MICHIANA
AREA ELECTRICAL WORKERS
HEALTH & WELFARE FUND,
TRUSTEES OF THE MICHIANA
AREA ELECTRICAL WORKERS
PENSION FUND and TRUSTEES OF
THE MICHIANA AREA ELECTRICAL
WORKERS MONEY PURCHASE
PLAN,
Plaintiffs,
v.
TGB UNLIMITED, INC. d/b/a
S/T BANCROFT ELECTRIC and WEST
BEND MUTUAL INSURANCE
COMPANY,
Defendants.

)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)

CAUSE NO.: 2:15-CV-446-TLS

AMENDED OPINION AND ORDER
This matter comes before the Court on the Plaintiffs’ Motion for Damages [ECF No. 45].
On September 28, 2017, the Court issued an Opinion and Order [ECF No. 48] granting the
Plaintiffs’ Motion for Summary Judgment [ECF No. 35], but ordering the Clerk to withhold
entry of judgment until the issues of damages, costs, a contractor’s bond, and attorney fees were
briefed by the parties and resolved by the Court. The parties have briefed the issues, which are
now ripe for review.

BACKGROUND
The instant case began when the Plaintiff Funds1 sought unpaid contributions from
Defendant TGB Unlimited d/b/a S/T Bancroft Electric and a judgment against West Bend
Mutual Insurance Company as a surety of Bancroft Electric’s contractor’s bond (the
“Contractor’s Bond”) under the Employment Retirement Income Security Act (“ERISA”). On
September 28, 2017, the Court issued an Opinion and Order granting the Plaintiffs’ Motion for
Summary Judgment and found that there was no genuine issue of material fact concerning
TGB’s liability for the unpaid contributions. The Court further found that there was no genuine
issue of material fact concerning West Bend’s liability for the Contractor’s Bond ($6,500). The
Court, however, ordered the Clerk to withhold judgment until the parties had briefed the issues
related to damages, costs, contractor’s bond, and attorney fees.
The Plaintiffs have produced evidence that the unpaid contributions total $36,164.40
(ECF No. 36-18), and that the accompanying payroll audit (the “Payroll Audit”) cost $514.30,
(ECF No. 36-17). The Plaintiffs further provided an affidavit of itemized attorney fees
($32,501.25) and costs ($2,277.39). (See ECF No. 46, Exs. 2, 2-A.) The Plaintiffs further
contend they continue to incur additional attorney fees totaling $1,215.00 in reviewing recent
filings by Defendants and in preparation of its Reply brief to the Motion for Damages. (See ECF
No. 54, Ex. 2-B.)
The Defendants object to the Motion for Damages on multiple grounds. First, the
Defendants attempt to re-litigate whether the Plaintiffs’ noncompliance with the parties’
Collective Bargaining Agreement Collection Policy affects damages. Second, the Defendants

1

Trustees of the Michiana Area Electrical Works Health and Welfare Fund, Trustees of the Michiana
Area Electrical Workers Pension Fund, and the Michiana Area Workers Money Purchase Plan are jointly
referred to as “the Funds” or “the Plaintiffs.”

2

raise a defense based on ERISA’s de minimus rule, which applies to withdrawal liability rather
than unpaid contributions. Third, the Defendants assert that, despite liability on the entirety of
the Payroll Audit, they should be required to pay only the unpaid contributions to the funds
present in the current litigation. Fourth, the Defendants argue that they should not have to pay
past contributions to the Plaintiffs’ Health and Welfare Fund. Finally, the Defendants assert that
the Plaintiffs’ attorney fees are unreasonable, and attack both the billing rate and specific
itemized entries provided by Plaintiffs’ counsel.

DISCUSSION
A.

ERISA Remedies
In its Opinion and Order, the Court found Defendant TGB liable for its unpaid

contributions, which the Plaintiffs have shown to total $36,164.40.2 Delinquent contributions are
enforceable under 29 U.S.C. § 1132. When the Court enters judgment on behalf of a plan in an
action brought by a fiduciary, such as the Trustee-Plaintiffs, for or on behalf of a plan to enforce
contribution obligations, “the court shall award the plan” unpaid contributions, interest on the
unpaid contributions, double interest or liquidated damages, reasonable attorney fees and costs,
and any other relief the Court deems appropriate. 29 U.S.C. § 1132(g)(2) (emphasis added). A
multiemployer plan may recover audit costs under § 1132(g)(2)(E). Moriarty ex rel. Local Union
No. 727 v. Svec, 429 F.3d 710, 721 (7th Cir. 2005). Here, the Plaintiffs submitted evidence that
the audit cost is $514.30.

2

While Defendant TGB is liable for the entirety of the $36,164.40 in unpaid contributions, Defendant West Bend is
also jointly and severally liable for $6,500.00 of the unpaid contributions. The $6,500.00 represents the value of the
Contractor’s Bond West Bend withheld from Plaintiffs. (See Op. & Order 12–13.)

3

The “double interest” provision provides that, on top of an initial interest award, the
prevailing plan is entitled to either a second award of interest on the unpaid contributions or 20%
of the unpaid contributions, whichever is greater. 29 U.S.C. § 1132(g)(2)(C)(i)–(ii). The interest
penalty provision applies to contributions that are unpaid at the date of suit. See Operating
Eng’rs Local 139 Health Benefit Fund v. Gustafson Constr. Corp., 258 F.3d 645, 654 (7th Cir.
2001). These statutory remedies are mandatory. See Moriarty, 429 F.3d at 720–21. In the instant
case, the liquidated damages for the withdrawal liability total $7,232.88.3
The Plaintiffs have submitted evidence that their attorney fees total $33,716.25,4 with an
additional $2,277.39 in costs. The Court has wide discretion to determine whether attorney fees
are reasonable. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). In the Seventh Circuit, district
courts must examine whether attorney fees represent a large multiple of the damages claimed or
recovered, and also explain the claimed hourly rate. Moriarty, 233 F.3d at 965, 968. However,
attorney fees are not required to be calculated proportionally to damages. Anderson v. AB
Painting & Sandblasting, Inc., 578 F.3d 542, 545 (7th Cir. 2009) (reversing district court that
held $50,000 in attorney fees could not be justified to collect $5,000 in damages). Here, attorney
fees are slightly below, but nearly equal to, the unpaid contribution amount.
To date, Attorney Teresa A. Massa has worked 149.85 hours on the case. The case has
spanned nearly two years, and the number of hours worked involved discovery, briefing for a

“The Plaintiffs do not seek interest in light of the award of liquidated damages as calculated by the
Court.” (ECF No. 46 at 2–3.) As explained above, the Plaintiffs are entitled to a mandatory statutory
award that includes both liquidated damages and an additional award of interest on the unpaid
contributions as of the day of suit. See 29 U.S.C. § 1132(g)(2); see also Operating Eng’rs Local 139
Health Benefit Fund, 258 F.3d at 654.
3

4

The Plaintiffs have included in their latest Reply attorney fees ($1,215.00) for preparing their Reply and
reviewing new filings by Defendants. (See ECF No. 54, Ex. 2-B.)

4

summary judgment motion, and briefing for damages. Further, Plaintiffs have submitted a
detailed time schedule and affidavit to support the attorney fees and cost calculation. Attorney
Massa billed at $225.00 per hour, which is in line with rates for similar cases. See, e.g., Local
1546 Welfare Fund v. BBHM Mgmt. Co., No. 08 C 6133, 2011 WL 1740034, at *2 (N.D. Ill.
May 5, 2011); Misch v. Piping Techs. N., Inc., No. 2:06-CV-425, 2010 WL 535713, at *1 (N.D.
Ind. Feb. 4, 2010). The total time spent on the case is also in line with similar ERISA collection
cases. See Chi. Reg’l Council of Carpenters Pension Fund v. Rink Sys., Inc., No. 13 C 4886,
2014 WL 5863156, at *2 (N.D. Ill. Nov. 12, 2014). Given the Plaintiffs’ highly detailed
submission, the Court can make the finding that the requested fees and costs are reasonable. The
Defendants object on multiple grounds, and the Court will address each objection in turn.

B.

Defendants’ Damages Objections
The Court does not find the Defendants’ objections to damages persuasive, but will

address each concern regardless.

1.

Collection Policy Compliance
The Defendants begin their objections by arguing that the Plaintiffs were required by

their own Collection Policy to bill TGB within 30 days, that the Plaintiffs failed to do so, and
that the Plaintiffs should therefore be barred from recovering any unpaid contributions. The
Court specifically addressed this issue in its Opinion and Order issued on September 28, 2017,
and found that the Defendants were liable for the unpaid contributions even though the Plaintiffs
did not strictly comply with the Collection Policy. (Op. & Order 11–12.) The Court declines to
reconsider its reasoning in its September 28, 2017, Opinion and Order. Additionally, the

5

Defendants appear to be mistaken as to the source for the liquidated damages award. For
clarification, and as stated above, liquidated damages flow from a mandatory statutory award
under ERISA rather than the Collection Policy.

2.

The De Minimis Rule
The Defendants’ second objection involves the de minimis rule, 29 U.S.C. § 1389, which

applies only to an employer’s withdrawal liability. See Connolly v. Pension Ben. Guar. Corp.,
475 U.S. 211, 226 n.8 (1986). However, the instant action is one for unpaid contributions, not
withdrawal liability. The de minimis rule therefore does not apply. All liability in the instant case
stems from unpaid contributions. The Defendants cite no case law in support of this de minimis
rule objection, and the Court will not apply it.

3.

Required Payment to All Funds
In its Opinion and Order, the Court found TGB liable for all unpaid contributions

included in the Payroll Audit, and that the Plaintiffs requested all amounts owed pursuant to the
audit report. (Op. & Order 10.) TGB does not contest its total liability under the Payroll Audit,
but rather suggests that Plaintiffs can properly collect only the unpaid contributions owed to
them specifically rather than additional National Electrical Contractors Association funds listed
in the Payroll Audit. The Court has already found TBG liable for the entire amount listed in the
Payroll Audit. Additionally, as TGB showed, the National Electrical Contractors Association
accepts a single check for fringe benefits from all employers, and then deposits the appropriate
amount in each respective fund. (Defs.’ Obj to Mot. for Damages, ECF No. 49, Ex. 1.)

6

Therefore, awarding the entire unpaid contribution amount to the Plaintiffs will be consistent
with the practice that would have taken place if TGB paid its contributions in a timely manner.

4.

Health and Welfare Fund Unpaid Contributions
The Defendants next complain that unpaid contributions to the Health and Welfare Fund

cannot pay for past health benefits, therefore Plaintiffs should not be able to collect this portion
of the unpaid contributions. The Collective Bargaining Agreement required TGB to pay
contributions to various funds regardless of whether any participant made a claim to one of the
funds. TGB was bound by the Collective Bargaining Agreement and needed to contribute
accordingly. TGB did not contribute, and it is liable for those unpaid contributions that it failed
to make. As such, unpaid contributions to the Health and Welfare Fund are included in TGB’s
unpaid contribution liability.

5.

Reasonable Attorney Fees
Finally, the Defendants object to both the hourly rate billed by the Plaintiffs’ counsel, as

well as specific tasks for which she billed. As described above, the hourly rate charged by the
Plaintiffs’ counsel is reasonable and on par with similar cases. Additionally, in her Reply, the
Plaintiffs’ counsel adequately addresses each line and time objection made by Defendants. The
Court finds that the explanations provided by the Plaintiffs’ counsel support her records, and are
reasonable. Given that, as stated previously, the total amount of time is also on par for similar
cases, the Court finds the Plaintiffs’ counsel requested reasonable attorney fees totaling
$33,716.25 and costs totaling $2,277.39.

7

CONCLUSION
For these reasons, the Court GRANTS the Plaintiffs’ Motion for Damages [ECF No. 45].
The Court DIRECTS the Clerk of Court to VACATE the Court’s December 18, 2017, Opinion
and Order [ECF No. 56]. Further, the Court DIRECTS the Clerk of Court to enter an amended
judgment in favor of the Plaintiffs and against Defendants TGB Unlimited d/b/a S/T Bancroft
Electric and West Bend Mutual Insurance Company. The Plaintiffs are awarded $79,905.22
against Defendant TGB Unlimited, in the following breakdown:


$36,164.40 in unpaid contributions, including the value of the Contractor’s Bond
($6,500) for which Defendant West Bend Mutual Insurance is jointly and severally liable;



$7,232.88 in mandatory liquidated damages;



$33,716.25 in attorney fees and $2,277.39 in costs; and



$514.30 for the cost of the payroll audit;
Finally, the Plaintiffs are also entitled to a statutory award of interest on the $36,164.40 in

unpaid contributions outstanding at the time the Plaintiffs filed suit.
SO ORDERED on December 21, 2017.
s/ Theresa L. Springmann
CHIEF JUDGE THERESA L. SPRINGMANN
UNITED STATES DISTRICT COURT

8