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CHICAGO DIST. COUNCIL OF CARPENTERS PENSION FUND V

June 2, 1997

CHICAGO DISTRICT COUNCIL OF CARPENTERS PENSION FUND, CHICAGO DISTRICT COUNCIL OF CARPENTERS WELFARE FUND, and the CHICAGO AND NORTHEAST ILLINOIS DISTRICT COUNCIL OF CARPENTERS APPRENTICE AND TRAINEE PROGRAM, Plaintiffs,
v.
VACALA MASONRY, INC., and VACALA CONSTRUCTION, Defendants.



The opinion of the court was delivered by: ASHMAN

 I. Background

 The Defendants, Vacala Construction, Inc. ("VCI") and Vacala Masonry, Inc. ("VMI"), filed a motion for summary judgment, alleging that VCI was not, as a matter of law, the alter ego of VMI and was therefore not bound by the Carpenter's Union collective bargaining agreement ("CBA") signed by VMI. This Court, in a December 3, 1996 opinion, found that VMI did not have the unlawful intent to evade the terms of its collective bargaining agreement, a prerequisite to any finding of alter ego status, and thus concluded that VCI could not be deemed the alter ego of VMI. While summary judgment was appropriately granted on this basis, the Court went on to analyze the other alter ego factors and concluded that these factors also supported a finding that VCI was not the alter ego of VMI. Thus, the Court entered summary judgement in favor of the Defendants on all claims based on the alter ego doctrine. However, the Court also held that any claims the Funds ("plaintiffs") had against VMI directly for the under-reporting of hours remained (an amount of approximately $ 2,500). The Plaintiffs then filed this motion to reconsider.

 II. Facts

 Because all of the facts from the Court's December 3, 1996 opinion are relevant to this motion, the statement of facts from that opinion is set out below.

 The collective bargaining agreement (CBA) at issue in this case prohibits employers, covered by the agreement, from, inter alia, subcontracting jurisdictional work to non-union subcontractors. (Funds' 12(N) Statement, P 5). If an employer, bound by the CBA, hires a non-union subcontractor to perform jurisdictional work, the employer must either (1) require the subcontractor to be bound by the terms of the agreement or (2) assume responsibility for reporting the hours worked by the subcontractor's carpenters and for paying contributions to the Funds based on those hours. (Funds' 12(N) Statement, P 5). Consequently, if VCI is the alter ego of VMI, VCI would be subject to the terms of the collective bargaining agreement, and would thus owe the Funds money for contributions it would have been obligated to make under the terms of that agreement for any non-union employees who performed work within the scope of the union's jurisdiction. Additionally, VCI would be obligated to allow the Funds to audit its books as part of the Funds' periodic audits.

 VCI and VMI are owned by Pat and Chuck Vacala. *fn1" (Defendants' 12(M) Statement, PP 12-13, 20-22, 30; Funds' Response to Defendants' 12(M) Statement ("Funds' Response"), PP 12-13, 20-22, 30). Pat is the sole shareholder and President of VCI while Chuck and Pat are the majority shareholders *fn2" of VMI. VCI was incorporated in 1980 and has operated as a general contractor at all relevant times. (Defendants' 12(M) Statement, PP 12, 14-15; Funds' Response, PP 12, 14-15). VCI has never been a signatory to any union agreements and has never executed any agreement with the Carpenter's Union. (Defendants' 12(M) Statement, P 17; Funds' Response, P 17).

 Until recently, Chuck Vacala was VMI's President and Pat Vacala was VMI's secretary. *fn3" (Defendants' 12(M) Statement, P 22; Funds' Response, P 22). As VMI's president, Chuck Vacala was responsible for the day-to-day running of VMI, including the bidding on, obtaining, scheduling, and overseeing of all jobs and the hiring and firing of all employees. (Defendants' 12(M) Statement, P 24; Funds' Response, P 24). Pat Vacala's involvement with VMI's operations was limited to signing checks and other papers when Chuck was not available, providing general business advice when asked and meeting with Chuck on a monthly basis to review the financial performance of VMI. (Defendants' 12(M) Statement, PP 27-29; Funds' Response, PP 27-29).

 Chuck Vacala worked for VCI from its inception until 1990, when he broke off to form his own company, VMI, to perform work as a masonry subcontractor. (Defendants' 12(M) Statement, PP 2, 12, 20; Funds' Response, PP 2, 12, 20). Although Pat helped Chuck form VMI, Chuck ultimately intended to buy out his brother's interest. (Defendants' 12(M) Statement; P 21; Funds' Response, P 21). Chuck ran VMI out of his house and from the field until 1995, when VMI acquired its own formal office space by renting space from Pat. (Defendants' 12(M) Statement; P 31; Funds' Response, P 31). During the time VMI was being run out of Chuck's home and thereafter, VCI's office staff helped VMI with its paper work, billing VMI for any time thus spent. (Defendants' 12(M) Statement, PP 58-60, 64; Funds' Response, PP 58-60, 64).

 Pat and Chuck discussed this problem and came up with a solution that would be beneficial to both VMI and VCI. (Defendants' 12(M) Statement, PP 40-41; Funds' Response, PP 40-41). Pursuant to this discussion, VMI became signatory to an agreement with the Carpenter's Union and Pfaff went to work for VMI. (Defendants' 12(M) Statement, P 40; Funds' Response, P 40). VMI also hired additional union carpenters and then leased Pfaff and the others back to VCI on an as needed basis. (Defendants' 12(M) Statement, PP 40-41; Funds' Response, PP 40-41). This arrangement enabled Pfaff to retain his benefits and allowed VMI to maintain its own contingent of carpenters, which it could then lease to VCI. (Defendants' 12(M) Statement, PP 40-41; Funds' Response, PP 40-41).

 Most of the work performed by VMI's carpenters was done under the leasing agreement with VCI. (Funds' 12(N) Statement, P 13; Defendants' Response, P 13). When VMI employees were leased to VCI, they worked under the supervision of VCI superintendents, who directed their work. (Defendants' 12(M) Statement, P 55; Funds' Response, P 55). Additionally, when VCI leased employees from VMI to perform work at construction sites where VCI was the general contractor, VCI occasionally provided tools for the leased employees when the need arose. (Funds' 12(N) Statement, P 10; Defendants' Response to Funds' 12(N) Statement ("Defendants' Response"), P 10).

 Work done for VCI represents a sizable portion of VMI's income. From 1990-1993, approximately 50% of VMI's work was the result of subcontract work done under lease to VCI. (Defendants' 12(M) Statement, P 77; Funds' Response, P 77). In 1994, VMI completed four jobs worth approximately $ 680,000, three of which were jobs where VCI was the general contractor. (Defendants' 12(M) Statement, P 78; Funds' Response, P 78). Through October 31, 1995, VMI had completed 18 jobs totaling approximately $ 524,000, with VCI the general contractor on 7 of the 18 jobs. (Defendants' 12(M) Statement, P 79; Funds' Response, P 79). However, VCI was the general contractor on all twelve of the jobs in progress as of October 31, 1995. (Funds' 12(N) Statement, P 12; Defendants' Response, P 12). From October 1, 1993 until September 30, 1995, VCI paid VMI $ 758,915.09. (Funds' 12(N) Statement, P 12; Defendants' Response, P 12). During this same period, VCI paid VMI $ 19,957 for leased non-supervisory employees and $ 68,645 for leased carpentry employees. (Funds' 12(N) Statement, P 12; Defendants' Response, P 12).

 VMI also received monetary advances from VCI, which was the only company to give VMI this type of cash advance. (Funds' 12(N) Statement, P 19; Defendants' Response, P 19). Other general contractors paid VMI only after the general contractor itself was paid. (Funds' 12(N) Statement, P 19; Defendants' Response, P 19). However, any advances VCI made to VMI were always repaid. (Defendants' 12(M) Statement, P 72; Funds' Response, P 72).

 Whenever VMI leased employees to VCI, VMI paid the required contributions to the Carpenter's Union fringe benefit funds for all hours worked by those employees while leased to VCI. (Defendants' 12(M) Statement, P 54; Funds' Response, P 54). However, Plaintiffs contend that Defendants owe them $ 107,937.67 in unpaid contributions. *fn4" (Funds' 12(N) Statement, P 7). This breaks down to $ 105,424.50 in contributions Plaintiffs claim VCI, if found to be VMI's alter ego, would owe for jurisdictional work performed by non-union individuals and subcontractors employed by VCI and $ 2,512.33 in contributions Plaintiffs claim VMI owes in its individual capacity for allegedly under-reporting hours worked by two of its own employees in October, November and December of 1993. (Funds' 12(N) Statement, PP 7-8; Funds' Response, P 49).

 III. Standard of Law

 Motions for reconsideration are not intended to give the moving party a second bite of the apple. Rather, such motions "'serve a limited function: to correct manifest errors of law or fact or to present newly discovered evidence'." Publishers Resource v. Walker Davis Publications, 762 F.2d 557, 561 (7th Cir. 1985)(citations omitted). Thus, the moving party may not merely reargue the same evidence or cases previously argued, or argue other evidence or cases previously available but not initially argued. See Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990); Jefferson v. Security Pacific Financial Services, 162 F.R.D. 123, 124 (N.D. Ill. 1995). Instead, the movant must either demonstrate that the court made manifest errors of law or fact in reaching its decision or must proffer new evidence in support of its motion for reconsideration. Id. With this guidance in mind, the Court now proceeds to the arguments advanced by the Plaintiffs.

 IV. Analysis

 The Plaintiffs submit two arguments in support of their motion for reconsideration. First, Plaintiffs contend that, based on this Court's misapprehension of the applicable legal standard for determining whether the Defendants had the requisite unlawful intent, the Court erroneously concluded that VMI did not possess the unlawful intent necessary to hold VCI its alter ego. Second, Plaintiffs argue that the Court made manifest errors of fact in concluding that the other alter ego factors supported the finding that VCI was not VMI's alter ego. Each argument will be addressed below.

 A. Whether The Defendants Have The Requisite Unlawful Intent

 Plaintiffs first take issue with the Court's finding that VCI was not VMI's alter ego based on the Court's conclusion that VMI lacked the requisite unlawful intent to avoid the terms of its CBA. Plaintiffs contend that this Court's finding was based on an erroneous determination that the alter ego doctrine did not apply because VCI, the non-union company was in existence prior to the formation of VMI, the union signatory. Arguing that VMI and VCI structured their operations side-by-side in such a manner as to allow VCI to employ both union and non-union carpenters while avoiding the obligations mandated by the CBA, the Plaintiffs assert that it is irrelevant which alter ego company was formed first. The Plaintiffs then spend several pages of their brief refuting this Court's alleged holding, citing many cases in support of the proposition that the alter ego doctrine applies to interrelated companies operating side-by-side in order to avoid the signatory's CBA obligations.

 Interestingly, Plaintiffs cite Chicago District Council of Carpenters v. CGI Contracting, Inc., 1996 U.S. Dist. LEXIS 1430, 1996 WL 660088 (N.D. Ill. 1996), a case this Court relied upon in reaching the conclusion that VCI is not VMI's alter ego. Although Plaintiffs apparently overlooked this case in their response to Defendants' motion for summary judgment, they now cite it in support of their motion for reconsideration, claiming that the two factors which inspired the CGI court to deny the defendants' cross-motion for summary judgment in that case are also present here.

 In CGI, the court found that the alter ego doctrine focused only on whether a non-signatory company was being used by the signatory to avoid its obligations under a CBA, rather than on whether a non-signatory company avoided the need to sign a CBA by having an affiliate sign such an agreement. 1996 WL 66008 at *4-5. In reaching this conclusion, the CGI court properly noted that the defendants could not have attempted to remove the non-signatory company from the ...


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