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United States District Court, Northern District of Illinois

August 1, 2003


The opinion of the court was delivered by: Milton Shadur, Senior District Judge


This ERISA-based action is extraordinarily long in the tooth — not just in relation to the conventional ERISA actions that seek to collect unpaid employer contributions (actions that for the most part end in default judgments or other speedy resolutions), but even by comparison with the most complex lawsuits that find root in the provisions of the ERISA statute (actions for withdrawal liability provide a good example of such potentially protracted litigation).*fn1 No doubt impelled in part by an entirely justifiable sense of frustration at the manner in which defendants Abel Angulo ("Angulo") and Maria Rodriguez ("Rodriguez") have dealt with this litigation, counsel for the plaintiff employee benefit funds ("Funds") has moved for the imposition of the civil equivalent of a death sentence: the striking of defendants' answers to the Second Amended Complaint [ Page 2]

and the entry of an order of default, so that the only proof remaining would be the quantification of Funds' damages. Angulo and Rodriguez have responded to that motion, making it ripe for disposition. For the reasons set out here, the motion is denied in its entirety — but without prejudice to the potential future imposition of meaningful sanctions against both defendants.

As the last clause indicates, this Court is not ruling against the ultimate visitation of appropriate sanctions — and perhaps very substantial sanctions — on Angulo or Rodriguez (or both) when all of the proofs are in. This Court's observation of the rocky course of the litigation, with Funds having been compelled to encounter obstacles of various kinds each step of the way, has generated a strong sense that the reasons for the case's protracted and checkered history may properly be placed at Angulo's and Rodriguez' doorstep. And that sense has been reinforced by the chapter-and-verse recital of defendants' conduct that has been detailed in Funds' current motion.

What prompts this Court's denial rather than the granting of the current motion, despite what appear to be solid grounds for imposing sanctions, is instead that a number of the issues on which the ultimate sanctions would have to rest — as a prime example, the presence or absence of perjury on the part of both Angulo and Rodriguez is one of those issues focused on in both sides' submissions — appear to be fact-intensive and best handled [ Page 3]

as part of the final resolution via trial,*fn2 rather than as discrete matters to be resolved in more fragmented proceedings. It is worth noting that first Rodriguez and then Angulo sought shelter in bankruptcy proceedings, with each of them listing Funds as a creditor without voicing any dispute — Rodriguez' bankruptcy schedule listed the amount owed to Funds as $317,007 (the identical amount that LAMA Interiors, Inc. — the defunct employer whose obligation to Funds represented delinquent ERISA contributions — had shown as its own direct responsibility when filed for bankruptcy), while Angulo listed his undisputed indebtedness to Funds in the somewhat lower amount of $288,188. Funds then filed an adversary proceeding in each of the two individuals' bankruptcies objecting to the discharge of those debts, and this Court's subsequent orders withdrawing the reference as to those two adversary proceedings has caused the claims of nondischargeability to be folded into this litigation

If the account that has been set out in Funds' motion is accurate — and the Angulo-Rodriguez opposition does not really dispute the accuracy of the facts adduced by Funds, instead trying to put a different spin on those facts — Angulo and [ Page 4]

Rodriguez have engaged in major efforts to thwart the pursuit of justice. If those things are hereafter held, in the withdrawn adversary proceedings or in other aspects of the litigation before this Court, to constitute fraud or perjury or otherwise to justify sanctions, this Court will not hesitate to act at that time under one or more of the avenues of sanctions open to it — and to that end relief may take one or more forms (the possible shifting of fees and the possible mulcting of either or both defendants in fines are examples*fn3).

But as stated earlier, Angulo and Rodriguez have dodged any bullets for now. Funds' motion is denied, and the parties are expected to discuss the procedures and timing of a prompt resolution of the entire case at the previously scheduled 9 a.m. August 14, 2003 status hearing.

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