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PAUL v. LINDGREN

April 23, 1974

JOHN PAUL, JR., ET AL., PLAINTIFFS,
v.
GERALD LINDGREN AND RICHARD LINDGREN, INDIVIDUALLY AND D/B/A LINDGREN CONSTRUCTION COMPANY, A PARTNERSHIP, DEFENDANTS.



The opinion of the court was delivered by: Bauer, District Judge.

MEMORANDUM OPINION AND ORDER

This cause comes on the defendants' motion to dismiss and in the alternative for summary judgment, and the plaintiffs' cross motion for summary judgment.

This action is brought under 29 U.S.C. § 185 for an alleged violation of a contract between an employer and a labor organization. The plaintiffs are the Trustees of the Laborers' Pension Fund, Laborers' Welfare Fund, and the Laborers' Vacation Fund, which trusts apparently were created and exist in accordance with the provisions of 29 U.S.C. § 186(c) and pursuant to a certain Agreement and Declaration of Trust.

The defendants Gerald Lindgren and Richard Lindgren, individually and d/b/a Lindgren Construction Company, a partnership (hereinafter referred to as "Lindgren") are employers engaged in an industry affecting commerce, as defined by the Labor Management Act of 1947.

The plaintiffs, in their amended complaint, allege, inter alia, the following facts:

  1. Gerald Lindgren and Richard Lindgren have agreed
  to be bound by the terms of the Collective Bargaining
  Agreement, the Welfare Trust and the Pension Fund
  Trust by virtue of executing a signed Memorandum of
  Understanding with the Construction and General
  Laborers District Council of Chicago and vicinity on
  June 9, 1971. Further, said defendants have been
  members of the Mason Contractors Association, a
  signatory to the Collective Bargaining Agreement
  since 1961, which association was the bargaining
  agent with the Construction and General Laborers
  District Council of Chicago and vicinity on behalf of
  the defendants herein. Defendants, Gerald Lindgren
  and Richard Lindgren, individually and d/b/a Lindgren
  Construction Company, a partnership, knew and
  acquiesced to the terms of the Trust Agreements by
  virtue of signing report forms which provides as
  follows:
    "We hereby certify that this report includes all
    hours worked by all laborers in our employ for the
    month shown above and further that the employer
    hereby subscribes to and agrees to be bound by the
    provisions and terms of the Trust Agreements
    between Construction and General Laborers' District
    Council of Chicago and Vicinity and Builders'
    Association, et al, for the Health and Welfare
    Department of the Construction and General
    Laborers' District Council of Chicago and Vicinity
    dated May 25, 1950, and Laborers' Pension Fund
    dated June 1, 1963, and the Laborers' Holiday

    or Vacation Fund dated May 31, 1968, and accepts
    all of them fully as though the same were herein
    contained and further agrees to accept as a
    personal obligation for himself and on behalf of
    his firm to oversee the payment of the established
    rates of contributions to the aforesaid Funds."
  The report forms have all been duly forwarded and
  executed by the defendants and the reports have been
  forwarded by each defendant to the plaintiffs in
  consecutive monthly fashion for a long period of
  time. By this course of conduct, defendants impliedly
  contracted with the plaintiffs herein to abide by the
  terms of said Trust Agreement; the plaintiff Trustees
  relied upon the representations made by defendants in
  reporting on the forms that they would be bound by
  said Trust Agreements; and that they are a
  contractual party to the Trust Agreement. The
  employees through the years have made claims and
  claims have been paid by plaintiffs herein in
  reliance upon defendants being bound to the terms of
  the said Trust Agreements. The defendants herein knew
  of and acquiesced to be bound to said written Trust
  Agreements by virtue of the fact that they bid its
  jobs and charged the owners and general contractors
  on its projects based upon the fact that they would
  have to pay pension and welfare benefits to their
  employees based upon the Trust Agreements. The
  defendants further acquiesced and agreed to be bound
  by the terms of the Trust Agreements by virtue of
  language in its contracts with general contractors
  wherein they agreed to pay all union benefits due.
  The defendants on numerous occasions discussed
  reports and payments with the Administrators of the
  Trust Funds and indicated to said Administrators they
  agreed to be bound by said Trust Agreement and
  further, the Administrators of the Trust Funds relied
  upon the representations of the defendants by and
  through its duly authorized and acting agents in the
  scope and course of their authority. The defendants
  herein recognized and agreed to be bound by said
  Trust Funds due to their conduct in underreporting
  hours and underreporting number of men working;
  because if the defendants considered that they are
  not bound by the Trust Agreements, they would not
  take a course of conduct deliberately understating
  liability under the Trust Fund Agreements.
  2. As provided in the Agreement and Declaration of
  Trust, plaintiffs, as Trustees aforesaid, are
  required to receive, hold and manage all moneys
  required to be contributed to Laborers' Pension Fund,
  Health and Welfare Department of the Construction and
  General Laborers' District Council of Chicago and
  Vicinity, and Laborers' Vacation Fund, in accordance
  with the provisions of the then applicable collective
  bargaining agreement, as a Trust Fund, for the uses
  and purposes set forth in the Agreement and
  Declaration of Trust governing the Fund to which the
  contributions are made. By virtue of provisions
  contained in the Collective Bargaining Agreements to
  which defendants are bound, defendants did promise
  and become obligated to make contributions, in
  certain amounts as set forth in the Agreements, to
  said funds on behalf of their employees for each hour
  worked or for which wages were received by such
  employees. Defendants further agreed that all amounts
  required to be paid into the respective funds, shall
  be paid not later than the 10th day of the month next
  succeeding the month in which an employee covered by
  the collective bargaining agreement worked or
  received wages. Defendants further agreed to furnish
  to the Trustees of the Laborers' Pension Fund, the
  Health and Welfare Department of the Construction and
  General Laborers' District Council of Chicago

  and Vicinity, and Laborers' Vacation Fund, a monthly
  contribution report, setting forth therein:

(a) the names of employees;

    (b) hours for which wages were received by the
    employee;
    (c) contributions required to be made on behalf of
    each employee,
  or in such cases where no employee worked or received
  wages, a statement to that effect and indicating no
  contributions were required to be made for such
  period. Each employer bound by the Collective
  Bargaining Agreement has agreed that a failure by an
  employer to make payment of contributions required to
  be made thereunder shall constitute a violation of
  said agreement by such employer.
  3. Pursuant to provisions contained in the Agreement
  and Declaration of Trust, the Trustees acting
  thereunder are authorized and empowered to examine
  and copy the payroll books and records of an employer
  to permit such Trustees to determine whether an
  employer is making full payment as required under the
  applicable Collective Bargaining Agreement. It is
  further provided therein, that in the event upon an
  audit made by the Trustees and/or upon other evidence
  it shall be found that an Employer has failed to make
  all contributions required on such employer's part to
  be made, Trustees shall impose the following upon
  such delinquent employer:
    a. all costs of such audit shall be paid by such
    employer;
    b. as provided in the Agreement and Declaration of
    Trust such employer shall pay, in addition to the
    amounts determined to be due, a sum equal to ten
    per cent thereof;
    c. all costs, expenses and attorney's fees incurred
    by the Trustees; and
    d. to furnish to Trustees, as a guarantee for the
    making of monthly payments an amount equal to three
    times the monthly payments of an employer as
    estimated by the Trustees and to further require
    that such guarantee be continuously maintained.
  4. Notwithstanding the foregoing, defendants have
  violated the obligations on defendant's part
  undertaken, in that the defendants failed:
    a. to permit an audit of his payroll books and
    records as required by the Trust Agreements;
    b. to make timely and complete payments to
    plaintiff Trustees herein.
  The above described omissions and breaches of
  Agreement by the defendant will have the ...

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