United States District Court, N.D. Illinois, Eastern Division
June 18, 2004.
WILLIAM E. DUGAN, et al., Plaintiffs,
AMERICAN BRICK PAVING, INC., and COMMERCIAL BRICK PAVING, INC., Defendants.
The opinion of the court was delivered by: AMY J. ST. EVE, District Judge
MEMORANDUM OPINION AND ORDER
Plaintiffs brought this action in their capacity as trustees of
various employee welfare benefit plans ("the Funds") to which
Defendants were allegedly required to make fringe benefit
contributions on behalf of Defendants' employees. Plaintiffs
moved for summary judgment, requesting unpaid contributions,
liquidated damages, audit fees, and attorneys' fees under the
Employee Retirement Income Security Act of 1974,
29 U.S.C. § 1132, 1145 ("ERISA"). For the reasons discussed below,
Plaintiffs' motion is denied.
Summary judgment is proper when "the pleadings, depositions,
answers to interrogatories, and admissions on file, together with
affidavits, if any, show that there is no genuine issue of
material fact, and that the moving party is entitled to a
judgment as a matter of law." Fed.R.Civ.P. 56(c). The party
seeking summary judgment has the burden of establishing the lack
of any genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 2552 (1986). A
genuine issue of triable fact exists only if "the evidence is
such that a reasonable jury could return a verdict for the nonmoving
party." Pugh v. City of Attica, 259 F.3d 619, 625 (7th Cir.
2001) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248, 106 S.Ct. 2505, 2510 (1986)). A party will successfully
oppose summary judgment only if it presents "definite, competent
evidence to rebut the motion." Equal Opportunity Comm'n v.
Roebuck & Co., 233 F.3d 432, 437 (7th Cir. 2000). The Court
"considers the evidentiary record in the light most favorable to
the non-moving party, and draws all reasonable inferences in his
favor." Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471
(7th Cir. 2002).
Under Local Rule 56.1, a party moving for summary judgment must
file a statement of material facts consisting of "short numbered
paragraphs," pointing to record materials supporting the motion.
Local Rule 56.1(a)(3). In response, a party opposing a motion
must file "a concise response to the movant's statement that
shall contain: (A) a response to each numbered paragraph in the
moving party's statement, including, in the case of any
disagreement, specific references to the affidavits, parts of the
record, and other supporting materials relied upon . . ." Local
Rule 56.1(b)(3)(A). Further, "[a]ll material facts set forth in
the statement required of the moving party will be deemed to be
admitted unless controverted by the statement of the opposing
party." Local Rule 56.1(b)(3)(B).
Defendants are alter ego entities engaged in the business of
construction and landscaping.*fn1 In 1996, Defendants
executed the Heavy and Highway and Underground Agreement, the
Illinois Building Agreement, and the Illinois and Indiana
Landscape Contractors Labor Agreement. These agreements required Defendants to make
contributions to the Funds for each hour worked by employees
covered by the terms of the agreements. On July 24, 2002,
Plaintiffs filed the instant lawsuit, alleging Defendants'
delinquency in their contributions to the Funds since 1996.
Accordingly, Plaintiffs sought an audit of Defendants' payroll
books and records in order to ascertain and recover the alleged
In November 2003, Plaintiffs completed a draft audit of
Defendants' records.*fn2 From the audit, Plaintiffs
concluded that the Funds are entitled to payments of $317,920.01
in delinquent contributions, $3,179.20 in liquidated damages, and
$13,000 in auditing and attorneys' fees. In reaching this
conclusion, the auditing accountant relied on "[Plaintiffs']
attorneys' determination that the . . . employees performed work
defined under the scope of work provisions" in the relevant
agreements. (R. 35-1, Pl.'s Stmt. of Facts, Ex. 20 ¶¶ 13, 15.)
I. Local Rule 56.1
As a threshold and potentially dispositive matter, the Court
must address the requirements of the Local Rules of the Northern
District of Illinois. As stated above, summary judgment movants
must file a statement of facts to which non-movants must respond
with some specificity or risk admitting the movants' facts.
Plaintiffs submitted a statement of sixty-two facts, to which
Defendants responded with four statements. The Court will
reproduce Defendants' entire Rule 56.1 response, as doing so will
not take much space: 1-35. Defendants admit the facts set forth in paragraphs 1 through
36. Defendants deny that Commercial Brick and American Brick are
alter egos and the same company. For purposes of defending the
subject action, the Defendants are not contesting the "alter
ego" allegations of Plaintiffs.
37. Defendants admit the allegations of paragraph 37.
38-62. Defendants deny that the "facts" set forth in paragraphs 38-62
are undisputed, and to the contrary, Defendants allege that
these paragraphs contain substantial material facts which are
contested and disputed, and as such, should result in denial
by this Court of Plaintiffs' motion for summary judgment.
Defendants' blanket denial of Plaintiffs' statements 38-62 does
not approach conformity with the requirements of Local Rule 56.1.
While Defendants have technically provided a "response to each
numbered paragraph," Defendants' truncated response is void of
any "specific references to the affidavits, parts of the record,
and other supporting materials relied upon." Further, Defendants
have not provided their own statement of facts under Local
Rule 56.1. As a result, Defendants have not effectively controverted
any material fact set forth in Plaintiffs' statement of facts.
Because of the importance of Local Rule 56.1, the Seventh Circuit
has consistently upheld a district court's discretion to strictly
enforce it. Bordelon v. Chicago School Reform Bd. of Trustees,
233 F.3d 524
, 526-527 (7th Cir. 2000). Accordingly, the Court
is well within its discretion to deem admitted all supported
facts set forth in Plaintiffs' Rule 56.1 statement.*fn3
II. Defendants' Liability
The absence of a meaningful response by Defendants does not
automatically result in summary judgment for the Plaintiffs. Instead, Plaintiffs must
demonstrate through the uncontested facts that they are entitled
to summary judgment. As discussed below, Plaintiffs have failed
to meet their burden.
Plaintiffs seek judgment on the grounds that Defendants'
employees performed covered activities and Defendants did not
make corresponding contributions to the Funds. Plaintiffs seek
$254,194.89 in unpaid contributions under the Heavy and Highway
and Underground Agreement and/or Illinois Building Agreement, and
$63,725.12 under the Illinois and Indiana Landscape Contractors
Labor Agreement. (R. 35-1, Pl.'s Stmt. of Facts ¶¶ 59-60.) In
support of their assertion of the performance of covered
activities, Plaintiffs point to the scope-of-work provisions, job
descriptions, and testimony of eyewitnesses who saw Defendants'
employees performing certain tasks allegedly covered by the
relevant agreements. The conclusions of Plaintiffs' auditors
leading to the dollar amounts listed above specifically rely on
the assumption that the employees' activities fall under the
authority of the relevant agreements.
Plaintiffs' assertions fail in at least two respects: (1) it is
not clear that the employees' activities fall under the scope of
work provisions of the agreements; and (2) Plaintiffs do not
specify the duration of covered activities. Without evidentiary
support in connection with both of these issues, there remain
genuine issues of material fact which must await trial for
Pointing to the opinion of the Eleventh Circuit Court of
Appeals in Combs v. King, 764 F.2d 818 (11th Cir. 1985),
Plaintiffs appear to argue that such details are unnecessary
because of Defendants' lack of employment records. Even if the
Court adopted the reasoning of the Eleventh Circuit, however,
summary judgment is still not appropriate. That case set forth a
burden-shifting procedure for use when an employer maintained
insufficient records to determine benefit contribution requirements. According to this procedure,
"an employee carries his burden if he proves that he has in fact
performed work for which he was improperly compensated and if he
produces sufficient evidence to show the amount and extent of
that work as a matter of just and reasonable inference." Combs,
764 F.2d at 826 (citing Anderson v. Mt. Clemens Pottery Co.,
328 U.S. 680, 687, 66 S.Ct. 1187, 1192, 90 L.Ed. 1515 (1946)).
Upon satisfaction of the employee's initial burden, "the burden
then shifts to the employer to come forward with evidence of the
precise amount of work performed or with evidence to negative the
reasonableness of the inference to be drawn from the employee's
evidence." Id. The Combs court applied this burden-shifting
procedure, articulated by the Supreme Court in the context of the
Fair Labor Standards Act ("FLSA"), to an ERISA case. Id.
In this case, Plaintiffs have failed to carry their initial
burden. While they have provided ample evidence that Defendants'
employees performed certain tasks, they have not shown "as a
matter of just and reasonable inference" the extent to which
those tasks are contemplated under the relevant agreements or the
amount of the work actually performed. While reference to
accounting audits may lend the illusion of reasonableness to
Plaintiffs' allegations, the numbers in such reports are mere
speculation arising from assumptions fed from attorney to
accountant. Plaintiffs have not provided evidence to support the
initial assumptions made by the attorney. Because Plaintiffs have
not carried the initial burden of showing a reasonable inference
of unpaid contributions, the rule of the Eleventh Circuit does
not serve them.
Plaintiffs have failed to show that there is no issue of
material fact with regard to the extent of covered work performed
by Defendants' employees. Accordingly, Plaintiffs' motion for
summary judgment is denied. CONCLUSION
Because there exists a genuine issue of material fact with
respect to the extent of covered work performed by Defendants'
employees, Plaintiffs' motion for summary judgment is denied.