Wisconsin Laborers Pension Fund et al v. JI Construction, LLC et al

Filing 81

ORDER GRANTING IN PART and DENYING IN PART plaintiffs' partial motion for summary judgment. Signed by District Judge William M. Conley on 3/12/2017. (KC)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

WISCONSIN LABORERS PENSION FUND,
WISCONSIN LABORERS HEALTH FUND,
WISCONSIN LABORERS APPRENTICESHIP
&
TRAINING
FUND,
WISCONSIN
LABORERS-EMPLOYERS
COOPERATION
AND
EDUCATION
TRUST
FUND,
WISCONSIN
LABORERS
DISTRICT
COUNCIL, and JOHN J. SCHMITT (in his
capacity as Trustee),
Plaintiffs,
v.

OPINION AND ORDER
16-cv-127-wmc

JI CONSTRUCTION, LLC, and JEREMY IVERSON,
Defendants.
In this civil suit, plaintiffs assert claims against defendant JI Construction, LLC,
under section 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”),
29 U.S.C. § 1132, and section 301(a) of the Labor Management Relations Act of 1947
(“LMRA”), 29 U.S.C. § 185(a), for allegedly failing to make required contributions to
employee benefit funds. Now before the court is plaintiffs’ partial motion for summary
judgment, which seeks a declaration as a matter of law that JI Construction failed to
make contributions required under the terms of its collective bargaining agreement, as
well as that defendants’ counterclaim for abuse of process is meritless. For the reasons
explained below, the court will grant plaintiffs’ motion in part and deny it in part, finding
that JI Construction failed to fulfill its obligation to make required contributions for work

performed by certain employees and dismissing defendants’ abuse of process
counterclaim.
UNDISPUTED FACTS 1
A. The Parties
Plaintiffs consist of employee benefit plans, as well as their trustees and
fiduciaries. Defendant JI Construction, LLC, is incorporated in the state of Wisconsin
and has its principal place of business in Livingston, Wisconsin. Jeremy Iverson is JI
Construction’s principal and owner, and he lives in Wisconsin. Regardless, this court has
jurisdiction over these federal labor law claims.

B. Letter of Assent
On March 1, 2007, JI Construction, by its owner, Jeremy Iverson, signed a
one-page “Letter of Assent.”

The parties dispute whether his signature bound JI

Construction to the underlying 2006 multi-employer, collective bargaining agreement
(“CBA”) with the Wisconsin Laborers’ District Council (“District Council”), the union
representative, and the Associated General Contractors of Wisconsin Inc. (“AGC”),
which was empowered to negotiate on behalf of employers for the period from 2006
through 2011, absent termination by an employer. The first paragraph of the Letter of
Assent unambiguously reads: “This Agreement is entered into between [JI Construction]
its successors and assigns, hereinafter referred to as the “Contractor” and the Wisconsin
The court finds the following facts taken from the parties’ proposed findings of fact to be
material and undisputed when viewed in a light most favorable to defendants as the non-moving
party.
1

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Laborers’ District Council, its successors and assigns, hereinafter referred to as the
“Union.” (Decl. of Jeremy Iverson Ex. 1 [hereinafter “Letter of Assent”] (dkt. #49-1).)
In support of their argument that JI Construction bound itself to the CBA by signing the
letter of assent, plaintiffs point to the language of the first two numbered paragraphs of
the Letter of Assent.
The Contractor and the Union agree as follows:
1. The Contractor recognized the Union as the sole and
exclusive bargaining representative for and on behalf of the
employees of the Contractor within the territorial and
occupational jurisdiction of the Union, as specified in the
Agreement between the Union and the Municipal/Utilities
Division, WI Chapter, Associated General Contractors of
America Inc.
2. The Union and the Contractor hereby adopt the Labor
Agreement between the Union and the “Municipal/Utilities
Division, WI Chapter, Associated General Contractors of
America Inc.” dated June 1, 2006 and both the Contractor
and the Union agree to be bound by all the terms and
conditions of said Agreement.
(Id.)
In contrast, defendants assert that JI Construction did not intend to become a
party to any CBA by signing the Letter of Assent, but rather intended only to reach an
agreement with Laborers Local 464 to be able to hire its workers. (Defs.’ Resp. PFOF
(dkt. #48) ¶ 5 (citing Decl. of Jeremy Iverson (dkt. #49) ¶ 11).) Iverson reports reaching
that conclusion “[b]ased upon the Letter of Assent itself and how it was presented.”
(Decl. of Jeremy Iverson (dkt. #49) ¶ 13.) Specifically, Iverson declares that the Local
464 representatives who presented him with the Letter of Assent did not inform him that

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it “was in anyway related to a collective bargaining agreement” and that “it appeared that
the District Council and the Local 464 were all the same.” (Id. at ¶¶ 8, 14.)
‘
C. Attempted Terminations
Even if JI Construction became a party to the 2006 CBA by signing the letter of
assent, JI Construction claims to have effectively terminated its participation in that CBA
and subsequent ones. Plaintiffs, in contrast, again point to the language in the Letter of
Assent, which includes an “evergreen clause” regarding adoption of successor CBAs and
termination:
3. This Agreement and the adoption of the Agreement
between the Union and the Municipal/Utilities Division, WI
Chapter, Associated General Contractors of America, Inc.
shall remain in effect to and including the expiration of the
Agreement between the Union and the Municipal/Utilities
Division, WI Chapter, Associated General Contractors of
America, Inc. This Agreement shall continue in effect
from year to year thereafter and specifically adopt any
successor agreement entered into between the union and
the Municipal/Utilities Division, WI Chapter, Associated
General Contractors of America, Inc. subsequent to the
expiration date of the Agreement adopted herein, unless
notice of termination or amendment is given in the
matter provided herein.
....
5.
Either party desiring to amend or terminate this
Agreement must notify the other in writing at least sixty
days prior to the expiration of the Agreement between the
Union and the Municipal/Utilities Division, WI Chapter,
Associated General Contractors of America, Inc.

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(Letter of Assent (dkt. #49-1) (emphasis added).) The 2006, 2011 and 2014 CBAs also
expressly required termination notifications to be in writing.

(Pls. Reply PFOF (dkt.

#52) ¶ 7-10.)
For purposes of summary judgment, the court will assume that Iverson orally
notified representatives of Laborers Local 464 in 2008 that JI Construction wished to
“opt out” of the CBA.

(Defs.’ Resp. PFOF (dkt. #48) ¶ 13.)

There is no dispute

however, that JI Construction first provided written notice to the District Council on
August 29, 2015, that it intended to terminate its participation in the CBA. 2
Plaintiffs acknowledge that this written notice was effective to terminate JI
Construction as a party to the CBAs going forward. They assert, however, that the terms
of the 2014 CBA, which succeeded the 2011 CBA, required JI Construction to comply
with its terms, including its contribution requirements, through May 31, 2017, as the
CBA provides that it “shall continue in force until midnight” of that date. (Pls.’ Reply
PFOF (dkt. #52) ¶ 12.)

D. Covered Work
In this lawsuit, plaintiffs seek unpaid contributions for work performed under the
terms of the 2006 and 2014 CBAs. 3 The parties agree that those CBAs only require
contributions for “covered work” performed by laborers on public works construction
projects, including “flagging.”
2

The parties disagree, however, whether several JI

JI Construction followed-up with another written notice of termination on October 5, 2016.

Since 2014, JI Construction has only made contributions for three hours worked by Casey
Shemak and three hours worked by Terrance Udelhoven.
3

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Construction employees performed covered work, as well as whether the CBAs require JI
Construction to make contributions for work performed by Mitchell Trecek, an
independent contractor.
JI Construction has prepared an “Employee Payroll Classifications” document,
which indicates that four individuals -- Johnathan Crapp, Stephanie Rickard, Jonathan
Stivarius and Brian Welsh -- worked as flaggers in August of 2014. (Dep. of Jeremy
Iverson Ex. 6 (dkt. #45-2).) That same document also reflects flagging work done by
Crapp and Rickard in September of 2014. (Id.) Iverson testified at his deposition that JI
Construction misclassified Crapp and Welsh as having done flagging work on that
document when they instead drove dump trucks, but Iverson did not make the same
assertions as to Rickard and Stivarius. 4

(Pls.’ Reply PFOF (dkt. #52) ¶¶ 31, 32.)

Moreover, independent contractor Trecek testified at his deposition that he saw Rickard
and Stivarius flagging for JI Construction in 2014. 5 (Id. at ¶ 34.)
Nevertheless, defendants assert that whether Rickard and Stivarius performed
covered work for JI Construction’s Highway 133 project remains a disputed fact because

In light of Iverson’s testimony at his deposition, defendants do not raise a genuine dispute as to
whether JI Construction also misclassified other employees. (Pls.’ Reply PFOF (dkt. #52) ¶ 32
(citing Dep. of Jeremy Iverson (dkt. #45) at 38:4-12).) In addition, the parties disagree whether
Crapp’s and Welsh’s dump truck driving was covered as “tending” work, which “includes both the
preparation of, and the delivery of materials to mechanics of other crafts,” but the court need not
resolve this dispute at summary judgment for the reasons explained in the opinion section below,
however likely it appears that JI Construction’s dump truck drivers performed tending work by
delivering sand to its job sites. (Defs.’ Resp. PFOF (dkt. #48) ¶¶ 40-44.)

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Absent any contrary evidence, defendants’ response to plaintiffs’ proposed fact regarding
Trecek’s deposition testimony fails to create a genuine dispute of fact, particularly when JI
Construction is in the best position to dispute that fact and could not. (Pls.’ Reply PFOF (dkt.
#52) ¶ 34.)

5

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each of them, along with Crapp and Welsh, signed affidavits asserting that they “did not
perform work covered by the [CBAs].” 6 (Defs.’ Resp. PFOF (dkt. #48) ¶ 33 (citing
Affidavits (dkt. #51)).) Similarly, although Iverson testified at his deposition that Alex
Holmes performed laborers’ work at a JI Construction public works construction project
in Verona, Wisconsin, Holmes also submitted a signed affidavit making the same
assertion. 7 (Pls.’ Reply PFOF (dkt. #52) ¶ 37.) Ben Bollent, another JI Construction
employee, did not sign an affidavit disclaiming covered work, however, and Iverson
testified at his deposition that Bollent performed covered work on the Verona project,
including laying pipe and digging trenches with a shovel. 8

OPINION
Plaintiffs move for summary judgment as to defendant JI Construction’s liability
on their ERISA and LMRA claims for failing to make contributions for covered work
Defendants do not dispute that the Highway 133 project was a public works construction
project. (Pls.’ Reply PFOF (dkt. #52) ¶ 36.)
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Defendants do not raise a genuine dispute as to whether the Verona project was a public works
construction project, given there appears no dispute that “the Verona Project consisted of putting
in water and sewer mains” (Pls.’ Reply PFOF (dkt. #52) ¶ 39), but they do argue that JI
Construction was not required to make contributions for worked performed on that project, since
JI Construction began working on it in July of 2016, well after JI Construction sent its first
written notice to withdraw as a party to the CBAs in August of 2015.
7

Again, defendants fail to raise a genuine dispute as to whether Bollent performed covered work.
In response to plaintiffs’ proposed fact that “[a]t the Verona project, JI employees Ben Bollent
and Alex Holmes performed laborers work including laying pipe and digging trenches using a
shovel,” defendants purport to dispute that fact by asserting, “Iverson testified that he was the
only person who performed laborers work at Verona.” (Defs.’ Resp. PFOF (dkt. #48) ¶ 37.) In
fact, Iverson testified at his deposition that he was “the only person who works on [his] two feet
on the Verona project,” and after plaintiffs’ counsel asked Iverson to clarify whether anyone else
did “pipe laying work or digging work with a shovel” in Verona, Iverson named Bollent. (Dep. of
Jeremy Iverson (dkt. #45) at 83:5-25.)

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under the relevant CBAs from 2011 to 2017. Plaintiffs also move for summary judgment
on defendants’ counterclaim for abuse of process. The court will address those motions
separately.

I. ERISA and LMRA Liability
A. Letter of Assent
As the Seventh Circuit has explained, there is a “general rule that an employer will
not be held to the terms of a collective bargaining agreement negotiated between a union
and a multi-employer association unless the employer has expressed an unequivocal
intention to be bound.” Laborers’ Pension Fund v. Blackmore Sewer Constr., Inc., 298 F.3d
600, 606 (7th Cir. 2002). But here, the Letter of Assent states unambiguously that JI
Construction was entering into an agreement with the Wisconsin Laborers’ District
Council by which the parties were adopting and agreeing to be bound by all of the terms
of the 2006 CBA. Since the parties’ intent is denoted by that signed agreement, any
argument that JI Construction did not understand the significance of signing the Letter
of Assent is dubious at best. See Robbins v. Lynch, 836 F.2d 330, 332 (7th Cir. 1988)
(“Reference[] . . . to the importance of ‘intent to be bound’ [is] misleading if taken
literally.”). The best, indeed controlling, signal of JI Construction’s intent is Iverson’s
signature on the Letter of Assent: “[a] signatory to a contract is bound by its ordinary
meaning even if he gave it an idiosyncratic one; private intent counts only if it is
conveyed to the other party and shared.” Id.

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Although Iverson now asserts that he went to Laborers Local 464 only “to find out
how to hire a union laborer,” and that “JI did not desire to enter into a collective
bargaining agreement or assign its bargaining rights,” he never asserts that he informed
the District Council or Laborers Local 464 about it before signing the letter. (Decl. of
Jeremy Iverson (dkt. #49) ¶¶ 6, 11.) Nor, contrary to defendants’ argument, does the
lack of a “specific delegation and assignment of bargaining rights” in the Letter of Assent
somehow undermine JI Construction’s intent (Def.’s Opp’n Br. (dkt. #47) at 3), as the
letter’s unequivocal language binding it to the 2006 CBA -- as well as successor CBAs
absent timely, written termination -- created an unambiguous commitment to abide by
its terms. See Robbins, 836 F.2d at 332 (“You can’t escape contractual obligation by
signing with your fingers crossed behind your back, even if that clearly shows your intent
not to be bound.”) (emphasis in original). 9
The bottom line is that plaintiffs had the right to rely upon defendants’ written
commitment in March of 2007 until their August of 2015 termination notice became
effective at the end of 2017 under the terms of the then-effective 2014 CBA.
Accordingly, there exists no material dispute of fact as to JI Construction’s intent to be
bound by the 2006 CBA.

Defendants’ argument that the Letter of Assent was not the same as the “Assumption of
Agreement” form attached to the 2006 CBA somehow indicates its intent not to become bound
by the terms of the CBA fails for the same reasons. Similarly, the other facts defendants advance
to undermine JI Construction’s intent to be bound by the unambiguous terms of the CBAs -- that
it did not stay apprised of CBA negotiations, was not a member of the AGC, and did not receive
informational mailings from the AGC -- don’t cut either way. Cf. Trs. of UIU Health and Welfare
Fund v. N.Y. Flame Proofing Co., 828 F.2d 79, 83 (2d Cir. 1987) (membership in a multi-employer
association responsible for bargaining is not enough to reflect intent to be bound by the
agreements it negotiates).

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B. Fraud in the Execution
Defendants also raise a fraud in the execution defense to plaintiffs’ claim that they
were bound by the 2006 CBA. See Laborers’ Pension Fund v. A & C Envtl., Inc., 301 F.3d
768, 780 (7th Cir. 2002) (“[F]raud in the execution is a viable defense under ERISA
section 515[.]”). To make out a fraud in the execution defense, however, JI Construction
must show both that: (1) it did not know it was signing an agreement to make
contributions under that CBA; and (2) it reasonably relied on misrepresentations from
the union. Id.
While Iverson avers to the first element, reliance on a misrepresentation is not
reasonable under the scecond if it was negligent. Wis. Laborers Health Fund, Bldg. & Public
Works Laborers Vacation Fund v. Safe Abatement for Everyone, Inc., No. 13-cv-866-bbc, 2014
WL 2873880, at *3 (W.D. Wis. June 17, 2014). This includes a person, like Iverson
now claims to be, who “signs a contract without ascertaining its contents and is not
prevented from doing so, even if induced to sign by fraudulent misrepresentations.” Id.
(quoting Ritchie v. Clapper, 109 Wis.2d 399, 304, 326 N.W.2d 131, 134 (Ct. App.
1982)). Therefore, defendants’ insistence that the Letter of Assent could have included
more information about the terms of the 2006 CBA, or that Iverson was “not provided a
copy” of the CBA, fails to establish the fraud necessary to undo the plain language of the
Letter of Assent committing JI Construction to “be bound by all the terms and
conditions” of the CBA, especially since Iverson does not even assert that he asked to
review the CBA, much less was prevented from doing so. Indeed, contrary to allusions in
defendants’ brief, Iverson does not even claim that anyone actually told him that he was
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not agreeing to be bound by the terms of the 2006 CBA by signing the Letter of Assent. 10
For these reasons, defendants cannot establish fraud in the execution of the Letter of
Assent.

C. 2011 and 2014 CBAs
By signing the Letter of Assent, JI Construction agreed to be bound by the terms
and conditions of the 2006 CBA, as well as any succeeding CBAs, absent written notice
of amendment or termination. Defendants do not argue that Iverson’s oral notice of
termination to a Laborers Local 464 representative in 2008 was effective to excuse JI
Construction’s adherence to the terms of the 2011 CBA or the 2014 CBA, nor were
plaintiffs required to give oral notice force under the terms of the Letter of Assent, ERISA
or the LMRA. See Cent. States, Se. & Sw. Areas Pension Fund v. Gerber Truck Serv., Inc., 870
F.2d 1148, 1154 (7th Cir. 1989) (“Section 302(c)(5)(B), like § 515, prevents a court
from giving force to oral understandings between union and employer that contradict the
writings.”).
Defendants instead argue that Iverson’s oral notice rendered unreasonable any
belief held by plaintiffs that the AGC had the apparent authority to negotiate on behalf

Viewing Iverson’s declaration in the light most favorable to defendants as the nonmoving party,
he “went on behalf of JI to the Laborers Local 464 . . . to find out how to hire a union laborer”
and “was told that all [he] needed to do was sign a single page document.” (Decl. of Jeremy
Iverson (dkt. #49) ¶¶ 6, 7.) As plaintiffs point out, that representation was accurate as far as it
goes. So, even though Iverson asserts that he “was not informed that the Letter of Assent was in
anyway related to a collective bargaining agreement or that by signing JI could be bound by a
collective bargaining agreement,” (Id. at ¶ 8), the one-page agreement’s plain language makes any
reliance on the union representative’s arguably incomplete statement at best unreasonable and at
worse inexcusable.

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of JI Construction with respect to the 2011 and 2014 CBAs.

Plaintiffs are correct,

however, that their right to receive contributions from JI Construction does not derive
from any apparent authority of the AGC, but rather JI Construction’s assent to be bound
by the terms and conditions of those CBAs by virtue of its agreement to the Letter of
Assent. Defendants’ apparent authority argument, therefore, fails. Cf. Moriarty v. Pepper,
256 F.3d 554, 558 (7th Cir. 2001) (noting, after reversing district court’s finding that
defendant’s signature expressly authorized bargaining on his behalf, that district court
did not consider whether defendant had “manifested his unequivocal intent to be bound
in some other fashion,” including through apparent authority).
That leaves defendants’ argument that JI Construction’s written notice of
termination dated August 29, 2015, extinguished any further obligation to make
contributions for covered work after that date. In response, plaintiffs argue that while
the written notice may have been effective to terminate JI Construction’s intent to be
bound by any subsequent CBAs, the terms of the 2014 CBA require JI Construction to
continue making contributions through May 31, 2017, which is the date that CBA
expires.

The court agrees with plaintiffs that the relevant question regarding JI

Construction’s contribution obligations is what the then-binding 2014 CBA states.
Regardless, even the Letter of Assent contemplates that written notice will be effective
upon “expiration” of the operative CBA.
Courts apply federal common law rules of contract interpretation to plans
governed by ERISA. Cent. States, Se. & Sw. Areas Pension Fund v. Waste Mgmt. of Mich.,
Inc., 674 F.3d 630, 634 (7th Cir. 2012). Therefore, courts first determine whether the
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contract is unambiguous, and if it is, limit interpretation of its meaning to its four
corners. Id. With respect to termination, the 2014 CBA provides:
This Agreement shall become effective on the 2nd day of
June, 2014 and shall continue in force until midnight, May
31, 2017.
If a change is desired by either party to this Agreement, a
written notification shall be given at least sixty (60) days
before the expiration date, otherwise the Agreement shall
continue in force and effect from year to year.
(Pls.’ Reply PFOF (dkt. #52) ¶ 12 (citing Decl. of John Schmitt Ex. 3 (dkt. #43-3) at
73).)
In Waste Management, the Seventh Circuit explained why similar language in a
different CBA precluded an employer from immediately cancelling its contribution
obligations by a written notice of termination:
“This Agreement shall be in full force and effective from
February 1, 2005 to and including January 31, 2009, and
shall continue in full force and effect from year to year
thereafter unless written notice of desire to terminate or
cancel the Agreement is served by either party upon the other
by Certified Mail at least sixty (60) days prior to the date of
expiration.”
Waste Management asserts that the opt-out provision in the
last clause could be interpreted to allow either party to the
CBA to unilaterally cancel the agreement at any time during
the four-year period of the CBA, so long as sixty days’ notice
was provided. . . .
Waste Management’s reading of the 2005 CBA is
grammatically inaccurate and unreasonable. The first clause,
stating the duration of the CBA, is separated from the
remainder of the language by a comma, and then is followed
by an automatic renewal provision. The opt-out provision
follows, modifying only the automatic renewal provision; the
opt-out provision does not modify the first clause. Thus, the
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CBA unambiguously allows either party to unilaterally cancel
the automatic renewal of the 2005 CBA, so long as sixty days’
notice is provided prior to the expiration of the CBA. It does
not, as Waste Management asserts, allow for the unilateral
cancellation of the CBA during the stated term of the CBA.
As the district court aptly noted, Waste Management’s
reading of the CBA “would be absurd if for no other reason
than it would allow either party to opt out of the contract at
any time during the four-year agreement except for the last
sixty days.” Plainly, the terms of the relevant documents are
unambiguous.
674 F.3d at 635-36 (citation and footnote omitted).
Here, the duration and automatic renewal provisions in the 2014 CBA are
separated by a paragraph, not a comma, and the opt out clause precedes the renewal
clause, but the principle recognized in Waste Management still applies -- the opt out
provision modifies the automatic renewal provision, and not the clause stating the CBA’s
duration.

Thus, under the unambiguous terms of the then-effective CBA, JI

Construction’s contribution obligations were not immediately terminated by JI
Construction’s written notice, and they continue through May 31, 2017.

D. Covered Work by JI Construction Employees
Next, plaintiffs move for summary judgment as to defendants’ liability for failing
to make contributions for covered work performed by several employees under the
operative terms of the 2011 and 2014 CBAs.

Specifically, plaintiffs claim that JI

Construction failed to make required contributions “for the flagging work performed by
Rickard and Stivarius, the laborers’ work performed by Holmes and Bollent on the
Verona project, or the tending work performed by its dump truck drivers on all of its
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projects.” (Pls.’ Opening Br. (dkt. #40) at 16.) There is no dispute that flagging, pipe
laying and digging trenches are all types of covered work.
Plaintiffs’ evidence that JI Construction employees performed covered work for
which JI Construction did not make required contributions consists solely of: (1) a
document prepared by JI Construction, which identies Rickard and Stivarius as flaggers
in 2014; (2) Iverson’s deposition testimony that Holmes and Bollent performed covered
work on the Verona project; and (3) independent contractor Trecek’s deposition
testimony that he saw Rickard and Stivarius working as flaggers.
Defendants argue that despite the document classifying Rickard and Stivarius as
flaggers, as well as Trecek’s testimony that those employees performed covered work,
there is still a genuine dispute of fact as to whether they actually did, since Crapp,
Rickard, Stivarius, Welsh and Holmes signed affidavits stating that they “did not
perform work covered by the labor agreement.” (Dkt. #51.) Plaintiffs argue that given
their evidence proving otherwise, the conflicting, bare-bones affidavits deserve no weight
at summary judgment, and thus they cannot create genuine disputes of fact.
The Seventh Circuit has explained that “[c]onclusory statements, not grounded in
specific facts, are not sufficient to avoid summary judgment.” Bordelon v. Bd. of Educ. of
Chi., 811 F.3d 984, 989 (7th Cir. 2016). In Bordelon, the Seventh Circuit held that
assertions lacking specific facts in support, including that the employer “showed
favoritism for the younger workers against the older workers,” were inadequate to raise a
genuine dispute regarding discrimination. Id. at 991. Plaintiffs also point to Resolution
Trust Corp. v. Juergens, 965 F.2d 149 (7th Cir. 1992), in which the Seventh Circuit held
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that an affiant’s assertions that he “received no ‘good and valuable consideration’ or
‘benefit of the bargain’” were properly ignored at summary judgment, since he could not
prove lack of consideration at trial “just by taking the stand and reciting legal
buzzwords.” Id. at 153.
Here, the employees’ assertions that they “did not perform work covered by the
labor agreement” are mixed statements of law and fact, and the affidavits lack any details
regarding what type of work they actually did perform or their understanding of what
type of work was covered by the CBA.

Therefore, those affidavits are arguably

insufficient to create genuine disputes of fact under Bordelon and Juergens.
Still, the affidavits are the only sworn statements from those employees that are in
the record, and the Seventh Circuit has urged district courts to be cautious in applying
the sham affidavit rule, which prevents parties from creating genuine factual disputes at
summary judgment by submitting affidavits that contradict a witness’s own prior sworn
testimony. Bank of Ill. v. Allied Signal Safety Restraint Sys., 75 F.3d 1162, 1168-69 (7th
Cir. 1996). Moreover, viewed in the light most favorable to defendants, it is at least
arguable that employees generally have a suitable understanding of what work was
covered by the CBA. Finally, those workers were in the best position to recall what work
they did or did not perform.
Regardless, defendants have no evidence contradicting plaintiffs’ proof that JI
Constriction failed to make contributions for covered work performed by: (1) Bollent,
who signed no contrary affidavit; and (2) Holmes, whose affidavit states only that he did
not perform covered work during the period of May 1 through May 31, 2015 (dkt. #51
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at ECF 1). Therefore, plaintiffs are entitled to summary judgment that JI Construction is
liable for failing to make contributions required by the 2014 CBA.

To the extent

defendants continue to rely on the unlikely possibility that the employees who signed
conclusory affidavits could overcome the contradictory evidence that they performed
covered work at trial, their veracity and the underlying foundation for their statements
can be addressed at the damages trial that will be necessary in any event.

E. Contributions for Trecek
Next, plaintiffs move for summary judgment regarding contributions for Trecek,
explaining that they “are not asking the Court to resolve [the] factual dispute [as to
whether Trecek performed covered work] at the summary judgment stage,” but rather
“are asking the Court to rule as a matter of law that, to the extent Trecek did perform
covered work, his status as a common law independent contractor is not a valid defense
to JI’s obligation to make contributions to the Plaintiffs for the hours of covered work
Trecek performed.” (Dkt. #40 at 9.) Plaintiffs fail to make that showing.
In their opening brief, plaintiffs raise two arguments regarding whether the 2011
and 2014 CBAs require employers to make contributions for hours worked by
independent contractors. In support of both arguments, plaintiffs rely on two provisions
of the CBA: (1) “all of the work covered by this agreement shall be done under and in
accordance with the terms and conditions of the agreement”; and (2) “[t]he contractor
shall sublet work under this Agreement only to an employer whose workmen receive at

17

least the standards of wages, fringe benefits . . . and working conditions provided by this
agreement.” (Defs.’ Resp. PFOF (dkt. #48) ¶¶ 21, 27.)
Citing Mazzei v. Rock-N-Around Trucking, Inc., 246 F.3d 956 (7th Cir. 2001),
plaintiffs first argue that “[t]he CBA[], by specifying that independent contractors must
receive the compensation and working conditions provided by the agreement, makes
clear that its terms apply to common law employees and common law independent
contractors alike. Common law independent contractors therefore are employees covered
by the agreement[.]” (Dkt. #40 at 9.) While plaintiffs concede that they cannot point
to similar, unambiguous language in the CBAs at issue here, they persist in arguing that
“the teaching of Mazzei is nonetheless applicable: A CBA can require an employer to
make contributions measured by the hours worked by non-employees, by including those
non-employees in its definition of employees covered by the CBA.” (Pls.’ Reply Br. (dkt.
#53) at 13.)

However, plaintiffs’ failure to identify any language in the CBAs that

defines covered employees to include independent contractors is fatal to this argument.
Plaintiffs’ second argument is that because JI Construction paid Trecek a lower
hourly rate than “the total package hourly compensation of $41.22 that the CBA
required for a general laborer,” the funds are entitled to contributions. (Pls.’ Opening Br.
(dkt. #40) at 11.) Specifically, plaintiffs point to the provision in the CBAs requiring
“all of the work covered . . . [to] be done under and in accordance with [its] terms and
conditions,” arguing that “[a]n employer owes contributions to the Funds for hours
worked by a common law independent contractor, when its subcontracting of work to the
independent contractor violated the plain language of the parties’ agreement.” (Id.)
18

In response, defendants point out that the CBAs also state that “[t]he provisions
of this Article shall be construed to mean that the subcontracting contractor shall only
have to pay the rates and fringes as called for in his particular union agreement, unless
higher wages and/or fringes are called for in the prevailing wages determinations as
established by the State or Federal agency for a particular project.”

(Decl. of John

Schmitt Ex. 2 (dkt. #43-2) at 6; Decl. of John Schmitt Ex. 3 (dkt. #43-3) at 10.) The
CBAs’ reference to the subcontractor’s own union agreements, therefore, undermines any
argument that JI Construction was obligated to pay Trecek the $41.22 hourly rate, much
less contribute to the funds if he or his employer did not. 11

II. Abuse of Process
Plaintiffs move separately for summary judgment on defendants’ counterclaim for
abuse of process. The two elements of an abuse of process claim under Wisconsin law
are: “(1) a purpose other than that which the process was designed to accomplish, and
(2) a subsequent misuse of the process.” Strid v. Converse, 111 Wis.2d 418, 427, 331
N.W.2d 350, 355 (1983); see also Brownsell v. Klawitter, 102 Wis.2d 108, 115, 306
N.W.2d 41 (Wis. 1981) (describing the two elements as “‘a willful act in the use of

Plaintiffs raise a third argument in their reply -- that “[a]lternatively, JI violated the CBA by
assigning covered work to Trecek, for reasons not limited to its failure to pay Trecek the wages
and fringe benefit or equivalent payments required by the CBA” (Pls.’ Reply Br. (dkt. #53) at 13)
-- but since it was not presented in their opening brief, it is waived. See Nelson v. La Crosse Cty.
Dist. Attorney, 301 F.3d 820, 836 (7th Cir. 2002) (“It is well-settled that issues raised for the first
time in a reply brief are deemed waived.”). Even if preserved, their new argument would fall short
at summary judgment, as it relies on several assertions not supported by citation to any facts,
including that “JI as a practical matter could not subcontract covered work.” (Pls. Reply Br. (dkt.
#53) at 14.)

11

19

process not proper in the regular conduct of the proceedings’ and an ‘ulterior motive.’”)
(quoting Thompson v. Beecham, 72 Wis.2d 356, 362, 241 N.W.2d 163 (Wis. 1976)).
Proving the misuse element requires a showing of:
[s]ome definite act or threat not authorized by the process, or
aimed at an objective not legitimate in the use of the
process . . . ; and there is no liability where the defendant has
done nothing more than carry out the process to its
authorized conclusion, even though with bad intentions.
Thompson, 72 Wis.2d at 362 (quoting Prosser, Law of Torts (4th Ed. 1971), sec. 121, pp.
857, 858).
According to defendants, “the abuse of process claim is based upon the Plaintiffs’
ulterior motive in bringing their claims and instituting an investigation by the
Department of Workforce Development (‘DWD’). The Plaintiffs sought to strong-arm
the Defendants into ceding to the Plaintiffs’ demands to re[-]sign as a union contractor
and pay contributions.” (Defs.’ Opp’n Br. (dkt. #47) at 15.) Defendants also claim that
plaintiffs’ abuse of process is further shown by their assertion of civil theft and
conversion claims against Iverson as an individual defendant “to compel the Defendants
through fear of personal liability to pay the Plaintiffs for the alleged contributions,” since,
defendants argue, plaintiffs lacked a good faith basis to do so and the claim was
preempted by federal law. (Id. at 16.)
Even drawing all reasonable inferences in favor of defendants at summary
judgment, defendants’ abuse of process counterclaim borders on the frivolous.
Defendants cannot maintain an abuse of process claim based on plaintiffs’ desire for JI
Construction to be a “union contractor and pay contributions,” since succeeding on their
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unpaid contribution claims requires a finding of liability that JI Construction is bound by
the terms of the CBAs, which is, of course, a valid use of legal process. See Schmit v.
Klumpyan, 2003 WI App 107, ¶ 21, 264 Wis.2d 414, 663 N.W.2d 331 (“As explained by
the [Restatement 2d of Torts], . . . there is no action for abuse of process when the
process is used for the purpose for which it is intended, but there is . . . an ulterior
purpose or benefit[.]”). Furthermore, even crediting defendants’ assertion that plaintiffs
asserted a conversion claim against Iverson as an individual defendant to put pressure on
him, as the owner of JI Construction, to settle the unpaid contribution claims, a
settlement would reflect a legitimate outcome in civil litigation, not a misuse of process,
and so any ulterior motive could not support an abuse of process claim.

See id.

Moreover, unlike a claim for malicious prosecution, “the gist of the [abuse of process]
tort is not commencing an action or causing process to issue without justification, but
misusing, or misapplying process justified in itself for an end other than that which it was
designed to accomplish.” W. Page Keeton et al., Prosser and Keeton on the Law of Torts
§ 121, at 897 (5th ed. 1984).
Admittedly, this is defendants’ strongest argument in support of their abuse of
process claim, especially since plaintiffs have moved to withdraw them for lack of
evidentiary support, but given the relatedness of the claims against Iverson as an
individual defendant to the unpaid contribution claims, this conduct is a far cry from the
“usual case . . . of some form of extortion, using the process to put pressure upon the
other to compel him to pay a different debt or take some other action or refrain from it.”
Sweeney v. Flanagan, 92 F.3d 1187 (Table), 1196 WL 414170 (7th Cir. July 23, 1996)
21

(quoting Restatement (Second) of Torts § 682 cmt. b); see also Quarra Stone Co., LLC v.
Yale Univ., No. 13-cv-790-slc, 2014 WL 3120995, at *7 (W.D. Wis. July 8, 2014);
Triester v. 191 Tenants Assn., 415 A.2d 698, 702 (Pa.Super.1979) (“The classic example
[of an abuse of process] is the initiation of a civil proceeding to coerce the payment of a
claim completely unrelated to the cause of action sued upon.”). That plaintiffs’ assertion
of claims against Iverson as an individual defendant are not enough to support an abuse
of process claim is further supported by the pronouncement from the Wisconsin courts
that “[b]ecause of its potential chilling effect on the right of access to the courts, the tort
of abuse of process is disfavored and must be narrowly construed to insure the individual
a fair opportunity to present his or her claim.” Wis. Pub. Serv. Corp. v. Andrews, 2009 WI
App ¶ 19, 316 Wis.2d 734, 766 N.W.2d 232 (quoting Schmit v. Klumpyan, 2003 WI App
107, ¶ 6, 264 Wis.2d 414, 663 N.W.2d 331). Even drawing inferences from a threat to
“make [JI Construction] pay one way or another” in the light most favorable to
defendants, that threat can at most establish plaintiffs had an ulterior motive, but not
that they misused process.
Finally, even crediting defendants’ assertion that the District Council filed a wage
complaint with the DWD shortly after threatening to make them pay, and assuming that
plaintiffs could be held liable for the filing of the wage complaint, defendants again can
only establish an ulterior motive at most, offering nothing to suggest that the wage
complaint was an abuse of process in view of an objective not legitimate under that
particular use of process. Accordingly, defendants’ abuse of process counterclaim will be
dismissed.
22

III. Next Steps
Consistent with the above, plaintiffs’ motion to dismiss defendants’ abuse of
counterclaim (dkt. #15) is denied as moot. Plaintiffs’ motion for leave to file a second
amended complaint (dkt. #33) is granted, since defendants’ objection was premised on
their now-dismissed abuse of process counterclaim.

Finally, defendants’ motion to

dismiss plaintiffs’ claims against Iverson (dkt. #10) is denied as moot.
In light of the court’s rulings, the parties are encouraged to discuss resolving this
case, and failing that, to try to reach agreement as to whether the remaining unpaid
contribution claims are best addressed by bench trial. Regardless, the court will strike the
final pretrial conference and jury trial now set to begin March 20, 2017, and hold a
telephonic scheduling conference on the remaining disputes on March 22, 2017, at 3:00
p.m.

ORDER
IT IS ORDERED THAT:
1. Plaintiffs’ motion for summary judgment (dkt. #46) is GRANTED IN PART and
DENIED IN PART, consistent with this opinion.
2. The court will hold a telephonic conference on the remaining disputes on March
22, 2017, at 3:00 p.m. Plaintiffs are to initiate the call.
Entered this 12th day of March, 2017.
BY THE COURT:
/s/
WILLIAM M. CONLEY
District Judge
23