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CHICAGO, CARPENTERS PENSION FUND v. WAUCONDA ROOFING

May 20, 2003

CHICAGO DISTRICT COUNCIL OF CARPENTERS PENSION FUND, ET AL., PLAINTIFFS,
v.
WAUCONDA ROOFING CO., INC., MICHAEL A. PRATE, INC., AND PRATE INSTALLATIONS, INC. DEFENDANTS.



The opinion of the court was delivered by: Michael Mason, Magistrate Judge

MEMORANDUM OPINION AND ORDER

Plaintiffs Chicago District Council of Carpenters Pension, Welfare and Apprenticeship Funds, et al. (the "Trust Funds") sued Defendants Wauconda Roofing Co., Inc., Prate Installations, Inc., and MichaeL A. Prate (collectively, "Prate") for failing to make sufficient contributions to the Trust Funds on behalf of their unionized workers. The parties entered into a settlement agreement on July 12, 2002. In the settlement agreement, Prate agreed, among other things, to pay their workers by the hour and keep appropriate time records.

Since the entering of the settlement agreement, Trust Funds has filed several motions to enforce the settlement agreement. We addressed Trust Funds' second motion to enforce in our opinion dated April 4, 2003. See, Chicago Dist. Council of Carpenters Pension Fund, et al. v. Wauconda Roofing Co., Inc., et al., 2003 WL 1798937 (N.D. Ill. April 4, 2003). We now address Trust Funds' first motion to enforce.

FACTS

This motion to enforce arises out of a dispute over the hours reported on the time card of Prate employee Arnulfo Valdez ("Arnulfo") during the week of July 29, 2002. During this week, Arnulfo, along with crew leader Humberto Valdez ("Humberto") and crew member Isaac Valdez ("Isaac"), worked together on a residential roofing assignment for Prate.*fn1 At the end of the week, each individual turned in a time card recording the number of hours worked that week. Humberto and Isaac each stated that they had worked 22 hours. Arnulfo stated that he had worked 40 hours. All three members of the crew agree that they had taken frequent breaks throughout the week, including a barbecue at Humberto's house on one of the days.

After Arnulfo's time card was received, the Payroll Department notified Human Resources Manager Debra Kuester ("Kuester") about the discrepancies between the number of hours on Arnulfos time card and the number of hours on Humberto's and Isaac's time cards. Kuester then asked superintendents Ruben Torres ("Torres') and Dave Biba ("Biba") to investigate the matter. Torres met with Humberto about the discrepancies in the the cards first, and determined that Arnulfo had lied about the number of hours he had worked during the week of July 29. Torres then called a breakfast meeting to discuss the issue further. The breakfast meeting took place on August 6, 2002 and was attended by Torres, Arnulfo, Humberto, Isaac, and former crew member Jose Moreno ("Moreno"). At the meeting, Arnulfo was directed by Humberto and Torres to change the hours he had reported on his time sheet to reflect 22 hours of time worked instead of 40. Arnulfo refused to do so, and was fired. P rate issued Arnulfo a final paycheck for 22 hours worked.

Following Arnulfo's termination, Trust Funds brought this motion to enforce, alleging that Prate violated the settlement agreement by; paying their employees by the job rather than by the hour, requiring their employees to keep false time records under the threat of being fired, and discarding work orders, job tickets, and daily time sheets which form the basis of how employees are paid. An evidentiary hearing was scheduled to take place in this matter in November 2002. Three days prior to the hearing, on November 3, 2002, Trust Funds' main witness, Arnulfo, died in a roofing accident. Because Arnulfo could not testify at the hearing, his testimony was presented by way of two affidavits which he had submitted previously. In these affidavits, Arnulfo asserted that his supervisors had told him to report only 22 hours of time worked even though he had allegedly worked 40 hours. Prate objected to the admission of these affidavits, as well as certain other disputed evidence, on hearsay grounds. The Court reserved ruling on these issues until after the parties had briefed them. The disputes concern the following evidence.

First, Trust Funds seeks to admit the two affidavits discussed above in which Arnulfo swears he was told to report 22 hours of time worked even though he had worked 40 hours. Prate argues that the affidavits are inadmissible hearsay. Trust Funds, in response, argues that the affidavits should be admitted under the residual exception of Rule 807 of the Federal Rule of Evidence, which allows hearsay evidence not admissible under any other hearsay exception to be admitted if certain circumstances are present. Second, Trust Funds seeks to admit an affidavit submitted by Moreno, one of the Prate employees present at the breakfast meeting on August 6, 2002, which states that Torres and Humberto did in fact tell Arnulfo to either alter the hours on his time sheet or risk being fired. Prate objects to the admission of these statements on hearsay grounds, as well. Trust Funds, in response, argues that Moreno's affidavit is admissible under Rule 801(d)(2)(D) as the admission of a party-opponent. Finally, Trust Funds also seeks to admit the testimony of Thomas Shipley ("Shipley"), an individual who was present at the time Arnulfo's affidavits were taken. Trust Funds states that Shipley's testimony is not being offered to establish the truthfulness of the statements in Arnulfo's affidavits, but only to attest to the circumstances surrounding Arnulfo's provision of the affidavits. We will address these evidentiary issues before we decide whether Prate violated the settlement agreement.

ANALYSIS

A. Hearsay Objections

1. Moreno's Affidavit

As mentioned above, Moreno testified in his affidavit that Torres and Humberto told Arnulfo that if he did not change his hours, he would be fired. Trust Funds argues that this evidence is admissible as a party-opponent admission under Rule 801(d)(2)(D). To be admissible under Rule 801(d)(2)(D), the statements must be against a party's interest (here, Prate's), and made by that party's agent or servant concerning a matter within the scope of the agency or employment, during the existence of the relationship. F.R.E. 801(d)(2)(D).

Prate does not contest that the statements made by Torres and Humberto were against Prate's interest. Prate does argue, however, that the statements were not made within the scope of Torres' or Humberto's employment. Prate cites to Campbell v. Fasco, 861 F. Supp. 1385 (N.D. Ill. 1994) in support of this contention. In Campbell, the plaintiffs sought to admit the testimony of two department heads who stated that their employer had awarded a disproportionately low number of raises to employees over the age of 50. Id. at 1392. The Campbell court concluded that these statements were not admissible under the hearsay exception of Rule 801(d)(2)(D) because the declarants had not been involved in deciding when and to whom the raises were to be given, and thus the statements were not made within the scope of their employment. Id. at 1393.

Prate argues, based on Campbell, that Torres' and Humberto's statements were also outside the scope of their employment, as neither Torres nor Humberto had the authority to either direct employees to change the hours on their time sheets or fire them. We disagree with Prate's contention, and find that Torres' and Humberto's statements were made within the scope of their employment. Torres was involved in determining whether Arnulfo had reported too many hours on his time sheet. Indeed, Torres called the meeting with Arnulfo in which he was directed to change the hours on his time sheet, and Torres reported back to Prate regarding Arnulfo's refusal to do so ...


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