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CHICAGO DIST. COUNCIL OF CARPENTERS PENSION FUND V

December 15, 1993

CHICAGO DISTRICT COUNCIL OF CARPENTERS PENSION FUND, et. al., Plaintiffs,
v.
THE INDUSTRIAL ERECTORS, INC., Defendant.



The opinion of the court was delivered by: JOHN A. NORDBERG

 Before the Court is the Plaintiff's Motion for Partial Summary Judgement.

 FACTS

 The parties agree on the following facts. On June 9, 1975, Plaintiffs, the Chicago District Council of Carpenters Pension Fund, the Chicago District Council of Carpenters Welfare Fund and the Chicago and Northeast Illinois District Council of Carpenters Apprentice and Trainee Program ("Plaintiffs"), and Defendant, The Industrial Erectors, Inc. ("Defendant") entered into an Agreement ("The Agreement") binding the Defendant to the terms of a Collective Bargaining Agreement negotiated between the Carpenters Union and the Mid-America Regional Bargaining Association (MARBA) and any subsequent Collective Bargaining Agreement. (Plaintiff's Memorandum in Support of Partial Summary Judgement, Exhibit A P 2.) The Agreement also binds the Defendant to the terms of the Trust Agreements which create the Plaintiff Trust Funds and obligate the Defendant to make prompt contributions to the Plaintiffs for each hour worked by their carpenter employees at the rate per hour specified by the Collective Bargaining Agreement. Id; Exhibit B §§ 12.1, 13.1, 14.1.

 Plaintiffs bring this action, pursuant to Section 1132 of the Employee Retirement Income Security Act, 29 U.S.C. § 1132. In their Complaint, filed April 1, 1993, Plaintiffs allege that Defendant, in violation of its obligation under the Agreement, has failed to submit monthly contributions and contribution reports to the Plaintiffs for the months of February, 1993 through the present. (Complaint at P 7(a).) Plaintiffs state further that Defendant has underpaid the required contributions for the period of July 1990 through June 1991 and for the month of January, 1992. Id. at P 7(b) and (c). Finally, Plaintiffs state that Defendant has consistently failed to submit its monthly contributions in a timely manner. Id. at P 7(d).

 Except for the period from January 21, 1991 to November 5, 1991, Defendant admits that it was and is bound by the Collective Bargaining Agreement, the Trust Agreements and their amendments. Defendant also admits that, since October 1992, it has not submitted its monthly contributions to the Plaintiff in a timely manner. (Defendant's Response to Plaintiff's Motion for Partial Summary Judgement at 2, 4.) However, Defendant denies that it is currently delinquent in submitting its monthly contributions for July 1993.

 Plaintiffs assert that due to Defendant's continued untimely payment of contributions, the Plaintiffs, as a matter of law, are entitled to (1) interest on the untimely contributions, (2) liquidated damages on the untimely contributions (3) attorneys' fees and costs, and finally, (4) an injunction ordering Defendant to submit monthly contribution reports and contributions on a timely basis.

 In response, Defendant contends that (1) Plaintiffs are not entitled to interest or liquidated damages under Section 1132(g), (2) Plaintiffs are not entitled liquidated damages under the Collective Bargaining Agreement and the Trust Agreements, and (3) Plaintiffs are not entitled to attorneys' fees and costs under Section 1132(g).

 ANALYSIS

 Under Rule 56(c), summary judgement is proper "if the pleadings, depositions, answers to interrogatories, admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgement as a matter of law." Fed. R. Civ. P. 56(c). Summary judgement shall be entered against a party who "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 321, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986). The showing made by the non-moving party must be more than merely colorable. Summary judgement is appropriate "unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, 477 U.S. 242, 249, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).

 A. Defendant's Liability for Contributions After January 21, 1991

 Defendant argues that after January 21, 1991, or alternatively between January 21, 1991 and November 5, 1991, Defendant was not obligated to make contributions to the Plaintiffs. On January 21, 1991, the Union caused its membership to withhold its services from the Defendant because Defendant had been delinquent in paying its required contributions to the Plaintiffs. When the Defendant agreed on November 5, 1991 to pay at least $ 30,000 of what it owed, the withholding of services ended. From these facts, Defendant concludes that when the Union caused its membership to withhold its services, the Union effectively cancelled the Collective Bargaining Agreement. *fn1" Once the Union effectively cancelled the Collective Bargaining Agreement, the Defendant claims that Defendant had no obligation to pay contributions or pay interest and liquidated damages on the late contributions.

 Even assuming that the withholding of services effectively cancelled the Collective Bargaining Agreement between the Union and the Defendant, the Defendant still has an obligation to make contributions to the Plaintiff. Section 1145 of ERISA requires employers to make all pension payments "not inconsistent with the law." In Robbins v. Lynch, 836 F.2d 330, 333 (7th Cir. 1988), the Seventh Circuit stated, "this language was added to ERISA "to simplify delinquency collection" by freeing pension and welfare funds from defenses that pertain to the unions' conduct." The Robbins Court held that the employer was not relieved of his duty to make contributions to the pension and welfare trusts because of undisclosed side agreements between employers and the unions regarding such contributions. Id. at 333-334. The Court recognizes that the present case does not involve undisclosed side agreements. However, the Court determines that allowing the Defendant to defend against the Plaintiffs' claim for contributions by asserting an effective cancellation of the Collective Bargaining Agreement due to an employee strike would similarly complicate collection of delinquent contributions.

 The Seventh Circuit in Central States, S.E. & S.W. v. Gerber Truck, 870 F.2d 1148, 1152 (7th Cir. 1989) cites comments made by Representative Thompson concerning § 1145 of ERISA:

 
Recourse available under current law for collecting delinquent contributions is insufficient and unnecessarily cumbersome and costly. Some simple collection actions brought by plan trustees have been converted into lengthy, costly and complex litigation concerning claims and defenses unrelated to the employer's promise and the plans' entitlement to the contributions. This should not be the case. Federal pension law must permit trustees of plans to recover delinquent contributions efficaciously, and without regard to issues which might arise under labor-management relations law - other than 26 U.S.C. 186. Sound national pension policy demands that employers who enter into agreements providing for pension contributions not be permitted to repudiate their pension promises.

 126 Cong.Rec. 23039 (Rep. Thompson.) Allowing the Defendant to avoid paying required contributions because the Union encouraged the employees to withhold their service because Defendant was delinquent in paying its required contributions condones total subversion of the policy behind Section 1145. Consequently, this Court decides that the Defendant cannot avoid its obligation under the Agreement by arguing that the Union effectively cancelled the Collective Bargaining Agreement when it encouraged the employees to withhold their services.

 B. Section 1132(g)

 As the Court has resolved any dispute regarding the obligation of the Defendant to make contributions to the Plaintiff, the Court confronts the issue of the amount of damages resulting from Defendant's delay in discharging debts. *fn2" Section 1132(g) of ERISA governs the resolution of this issue.

 Section 1132(g)(2) reads as follows:

 
In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgement in favor of the plan is awarded, the court shall award the plan -
 
(A) the unpaid contributions,
 
(B) interest on the unpaid contributions,
 
(C) an amount equal to the greater of -
 
(i) interest on the unpaid contributions, or
 
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under federal or state law) of the amount ...

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