Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

02/09/95 TRUSTEES SHEET METAL WORKERS LOCAL NO. 1

February 9, 1995

TRUSTEES OF SHEET METAL WORKERS LOCAL NO. 1 WELFARE TRUST, PLAINTIFF-APPELLANT,
v.
AAA-NORTHGATE, INC., AN ILLINOIS CORPORATION, DEFENDANT-APPELLEE.



Appeal from the Circuit Court of the 10th Judicial Circuit, Peoria County, Illinois. No. 90-MR-13. Honorable John A. Barra, Judge Presiding.

Rehearing Denied and Released for Publication March 23, 1995.

Presiding Justice Stouder delivered the opinion of the court: Lytton and Breslin, JJ., concur. Present - Honorable Allan L. Stouder, Presiding Justice, Honorable Peg Breslin, Justice, Honorable Tom M. Lytton, Justice. Lytton and Breslin, JJ., concur.

The opinion of the court was delivered by: Stouder

PRESIDING JUSTICE STOUDER delivered the opinion of the court:

The plaintiff-appellant, the Trustees of Sheet Metal Workers Local No. 1 Welfare Trust, appeals from a judgment of the circuit court of Peoria County in favor of the defendant, AAA-Northgate, Inc. The circuit court found the plaintiff had failed to prove AAA-Northgate, Inc. was the alter ego of a previously existing business. Finding this determination is not against the manifest weight of the evidence, we affirm.

Initially, we note we have some doubt as to the jurisdiction of state courts in this type of case. This doubt is reenforced by the fact that all the cases cited and relied on by the parties are Federal cases, most of which stem from actions initiated before the National Labor Relations Board. Here, the plaintiff is essentially attempting to assert its rights under section 515 of the Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C. § 1145 (1985)). Under section502(e)(1) of ERISA (29 U.S.C. § 1132(e)(1) (1993)) federal courts have exclusive jurisdiction over civil actions brought by fiduciaries such as the instant plaintiff/trust fund. However, courts in this state and others have interpreted the jurisdictional provisions of section 301(a) of the Labor Management Relations Act of 1947 (LMRA) (29 U.S.C § 185(a) (1978)) as conferring jurisdiction on state courts to hear actions brought by union trust funds to recover contributions due under collective-bargaining agreements. See, Pierce v. P.J.G. & Associates, Inc. (1986), 112 Ill. 2d 535, 494 N.E.2d 482, 98 Ill. Dec. 360; Vermeer v. Tomken Construction, Inc. (1980), 49 Or. App. 37, 618 P.2d 1301.

In the instant declaratory judgment action, the plaintiff seeks a determination that the defendant is the alter ego of a previous business and thus bound by a collective-bargaining agreement to make contributions to the fund. There was no challenge raised in the circuit court as to jurisdiction, although such a challenge may be raised any time. ( Geise v. Phoenix Company of Chicago, Inc. (1994), 159 Ill. 2d 507, 639 N.E.2d 1273, 203 Ill. Dec. 454.) Thus, relying on section 301 of the LMRA we reach the merits of the plaintiff's claim on appeal.

The record shows that starting in 1977, Michael Kirk and his father, Robert Kirk, operated Northgate Heating and Air Conditioning as partners. The Kirks were members of the Sheet Metal Workers International Association Local No. 1 (the union). About 1980, union officials told the Kirks that as owners they could not receive union benefits and that one of them would have to become an employee in order to receive benefits. The Kirks decided Robert would become the employee and the business was continued as a sole proprietorship with Michael as owner. Also around this time, Michael purchased the assets of another heating and air conditioning business. Thereafter his business was known as AAA-Northgate Heating and Air Conditioning (referred to hereinafter as AAA-Northgate). The business continued making welfare contributions to various union funds for the benefit of Robert. Robert was the only employee of AAA-Northgate.

In March 1987, Robert retired and became eligible for full pension benefits from the union. That same month Michael Kirk and Jimmy Stevens formed AAA-Northgate Heating and Air Conditioning, Inc. (hereinafter AAA, Inc.) Michael and Stevens each owned 50% of the company. Stevens' business, Total Air Systems, became a wholly owned subsidiary of AAA, Inc. Each contributed vehicles and approximately $10,000 to the business.

At trial, Michael Kirk testified the primary business of the company was to be asbestos inspection. That is, Total Air Systems, Inc. was to be the main business with the heating and air conditioning operations conducted as a side business. Jimmy Stevens testified that at the time AAA, Inc. was formed, it was contemplated that asbestos inspection was going to be a thriving business. However, according to Stevens as a result of new government regulations and competition, asbestos inspection quickly became unprofitable for a small operation. (In March 1989, Stevens bought Total Air Systems from AAA, Inc. for $1,500 and ceased his ownership interest in AAA, Inc.)

The record shows AAA, Inc. operated for at least two months out of the home of Robert Kirk, just as AAA-Northgate had been operated out of the home. AAA, Inc. rented the sheet metal tools and equipment used by AAA-Northgate from Michael Kirk. AAA, Inc. used the same telephone number and ad in the local telephone book. For a time, AAA, Inc. used the billing and other forms used by AAA-Northgate. The defendant conceded that the business of AAA, Inc. and AAA-Northgate were the same, namely residential heating and air conditioning. AAA, Inc. also assumed a lease to a building owned by the Kirks and continued paying rent to Robert Kirk.

On the other hand, AAA, Inc. maintained separate banking accounts from those of AAA-Northgate. Michael Kirk testified he was careful to keep the warranty work from AAA-Northgate separate from the subsequent work he did for AAA, Inc.

The record also shows that sometime in the spring or summer of 1987, AAA, Inc. hired a sheet metal worker. AAA, Inc. subsequently hired other sheet metal workers. These workers were not paid union scale, nor were contributions made to union trust funds on behalf of these workers.

At the conclusion of the bench trial, the court found the plaintiff failed to prove AAA, Inc.'s formation was motivated by anti-union animus. The plaintiff also failed to prove there was a substantial continuity of work force between AAA-Northgate and AAA, Inc. and that AAA, Inc. was the alter ego of AAA-Northgate. The court entered judgment for AAA, Inc. In denying the plaintiff's subsequent post-trial motion, the circuit court found that the formation of AAA, Inc. did not ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.