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February 10, 1997


The opinion of the court was delivered by: Richard Mills, District Judge:


Under ERISA, an employer must keep "records with respect to each of his employees sufficient to determine the benefits due or which may become due to such employees."

Steve Gilbert Trucking, a sole proprietorship, signed an agreement that required him to make contributions to a joint labor-management employee benefit fund. The agreement bound the company to pay the fund a certain amount per hour of covered work performed.

On the fund's motion for summary judgment, the Court found Steve Gilbert Trucking liable for delinquent contributions, and that finding was affirmed. But uncertainty as to the amount of contributions Steve Gilbert Trucking owed the benefit fund required a bench trial.

The trial is over, and the Court still does not know how many hours of covered work Steve Gilbert Trucking performed during the relevant period. In fact, the Court does not know how many hours of work the company's covered employees performed.

Why? Because Steve Gilbert Trucking did not keep the records required by ERISA. And because the company breached its statutory duty, it is liable for contributions for every hour of work covered employees performed during any period when the company performed any covered work. Of course, due to Defendant's failure to keep required records the Court must derive the number of covered hours by dividing gross pay, less any bonuses, by the highest applicable prevailing wage.


On October 23, 1992, Plaintiff filed this lawsuit to compel an audit of Defendant's payroll records and to recover delinquent contributions. On July 22, 1994, this Court granted Plaintiff summary judgment as to both liability and damages and entered Judgment in favor of Plaintiff and against Defendant in the total amount of $203,505.27, for delinquent contributions through December 31, 1992, and associated liquidated damages, audit expenses, attorneys' fees, and costs. On October 24, 1994, Defendant filed a petition pursuant to Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Central District of Illinois, Danville Division. The Bankruptcy Court modified the automatic stay pursuant to 11 U.S.C. § 362 to the extent necessary to permit this action to proceed to liquidate the amount of delinquent contributions owing to the Illinois Conference of Teamsters and Employers Welfare Fund. On March 23, 1995, Defendant appealed this Court's summary judgment decision to the United States Court of Appeals for the Seventh Circuit.

On December 18, 1995, the United States Court of Appeals for the Seventh Circuit affirmed this Court's finding of liability against Defendant and found that Defendant was bound by the Articles of Construction. The Seventh Circuit reversed this Court's entry of summary judgment as to the issue of damages. The Court of Appeals found a genuine issue of material fact as to the amount of delinquent contributions owing to the Fund. The Court of Appeals remanded this action for trial solely on the issue of damages.


A. The Welfare Fund

Plaintiff Illinois Conference of Teamsters & Employers Welfare Fund (the Fund) is an employee welfare benefit plan established by the Agreement and Declaration of Trust, as amended, made and entered into between the Illinois Conference of Teamsters and the Associated General Contractors of Illinois, Central Illinois Builders of the A.G.C. and the Southern Illinois Builders Association. The Fund is administered by Zenith Administrators, a third party administration firm which has served in that capacity since 1992. Mr. Michael Cairns of Zenith Administrators is the Fund Administrator. Prior to 1992, Ms. Karen Sidener served as the Fund Administrator.

The Fund provides qualified employees, their families and dependents, with medical or hospital care, compensation for injuries or illness resulting from occupational activities, life insurance, disability and sickness insurance, and accident insurance. The Fund determines eligibility for benefits based upon an established minimum number of hours for each participant within consecutive six month periods.

B. The Employer

At all relevant times, Defendant Steve Gilbert Trucking has been a sole proprietorship wholly owned by Mr. Steve Gilbert of Mansfield, Illinois. Mr. Gilbert is fifty-two years old and has worked in the trucking business all of his adult life. He originally began working with his father and formed Steve Gilbert Trucking in 1967. At all relevant times, Steve Gilbert Trucking owned between twenty and thirty trucks split approximately equally between 12 ton tandems and 22 ton semis and was and is engaged in the business of hauling sand, rock, gravel, dirt and similar construction materials from gravel pits owned by Steve Gilbert or third parties to construction sites within central Illinois. Additionally, Steve Gilbert Trucking hauls some fertilizer, agricultural lime, corn, and soybeans within a similar geographical area, has developed vacant land adjoining a gravel pit for residential sales, operates two rock quarries where gravel is mined for resale, and operates an aggregate recycling business. Defendant maintains no records from which it can be determined what tasks each of his employees were performing on a specific day, week or month.

During each month in which Defendant performed hauling work, at least some of Defendant's work consisted of hauling of construction materials to construction sites within the scope of Article II of the Articles of Agreement. Employees of Defendant who were primarily drivers spent between 80 and 90 percent of their time driving.

C. The Articles of Agreement

On March 19, 1990, Steve Gilbert executed the Articles of Construction Agreement between the Associated General Contractors of Illinois and the Illinois Conference of Teamsters for the period May 1, 1989, through April 30, 1992. The Articles of Agreement provide in relevant part:


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