United States District Court, N.D. Illinois, Eastern Division
September 29, 2004.
THOMAS J. MORIARTY, Trustee o/b/o the TEAMSTERS LOCAL UNION NO. 727 PENSION FUND et al., Plaintiff,
TAREQ KORKIS and ELITE PARKING, INC., Defendants.
The opinion of the court was delivered by: JOHN GRADY, Senior District Judge
Before the court are plaintiff's motion for summary judgment,
defendants' motion for partial summary judgment, and defendants'
motion to strike an affidavit. For the reasons explained below,
each motion is denied.
This action for unpaid employee benefit plan contributions is
brought pursuant to § 301 of the Labor-Management Relations Act,
29 U.S.C. § 185, and § 502 of the Employee Retirement Income
Security Act, 29 U.S.C. § 1132. Plaintiff Thomas J. Moriarty is
the Trustee of the Teamsters Local Union No. 727 Pension Fund,
Health & Welfare Fund, and Legal & Educational Assistance Fund
(the "Funds"). Plaintiff seeks a judgment compelling defendants
Elite Parking, Inc. ("Elite") and its president and sole shareholder, Tareq
Korkis, to pay delinquent contributions owed to the Funds.
In August 1999, Korkis, who was doing business as T & K
Enterprises ("T & K"), entered into a collective bargaining
agreement with the Auto Livery Chauffeurs, Embalmers, Funeral
Directors, Apprentices, Ambulance Drivers and Helpers, Taxicab
Drivers, Miscellaneous Garage Employees, Car Washers, Greasers,
Polishers and Wash Rack Attendants Union, Local 727. The
agreement required T & K to make contributions to the Funds. In
November 1999, Elite Parking, Inc. was incorporated and took over
T & K's business.
In April 2002, plaintiff brought the instant action for
contributions due to the Funds in addition to interest,
liquidated damages, audit costs, attorney's fees, and court
costs. In June 2002, this court granted plaintiff's motion to
compel defendants to submit to an audit. An audit was conducted
the following month.
Plaintiff now moves for summary judgment; defendants cross-move
for partial summary judgment.
Summary judgment "shall be rendered forthwith if the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party
is entitled to a judgment as a matter of law." Fed.R. Civ. P. 56(c). In considering such a motion, the court construes the
evidence and all inferences that reasonably can be drawn
therefrom in the light most favorable to the nonmoving party.
See Pitasi v. Gartner Group, Inc., 184 F.3d 709, 714 (7th
Cir. 1999). "Summary judgment should be denied if the dispute is
`genuine': `if the evidence is such that a reasonable jury could
return a verdict for the nonmoving party.'" Talanda v. KFC Nat'l
Mgmt. Co., 140 F.3d 1090, 1095 (7th Cir. 1998) (quoting
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). The
court will enter summary judgment against a party who does not
"come forward with evidence that would reasonably permit the
finder of fact to find in [its] favor on a material question."
McGrath v. Gillis, 44 F.3d 567, 569 (7th Cir. 1995).
A. Defendants' Motion for Partial Summary Judgment
1. Tareq Korkis
Defendants' first argument is that Tareq Korkis is not an
"employee" on whose behalf the Funds may properly seek
contributions. In their reply brief, however, defendants indicate
that subsequent to the filing of their principal brief, the
Supreme Court held in Raymond B. Yates, M.D., P.C. Profit
Sharing Plan v. Hendon, 124 S. Ct. 1330, 158 L. Ed. 2d 40
(2004), that a president and sole shareholder of a corporation
could qualify as an ERISA pension plan participant. Accordingly,
defendants withdraw their argument regarding Tareq Korkis. 2. Peter and Adnan Gorgees
Defendants assert that the undisputed facts establish that
Peter and Adnan Gorgees, defendant Tareq Korkis's brothers, were
part-time employees who worked less than 36 hours per week and
less than ten days per month. According to defendants, the
Pension Fund therefore is entitled to no contributions for these
employees, and the applicable contributions to the Health &
Welfare and Legal & Educational Assistance Funds should be
calculated using the lower contractual part-time employee rates.
Defendants submit the affidavits of Tareq Korkis and Adnan
Gorgees, who state that Peter and Adnan (1) did not have
regularly scheduled days or hours of work at Elite; (2) generally
worked from 5 to 20 hours per week; (3) did not work 36 or more
hours per week over any 120-day period; and (4) did not work 10
or more days per month. (Defendants' Local Rule 56.1 Statement,
Exs. 2 & 3, Declarations of Tareq Korkis and Adnan Gorgees.)
Korkis admitted in his deposition, however, that neither Elite
nor T & K maintained employee time records. (Plaintiff's Local
Rule 56.1 Statement, Ex. 4, Transcript of Deposition of Tareq
Korkis, at 20.)
Plaintiff submits Elite's payroll records and the report
pertaining to the audit of the payroll records and argues that
the it can be determined from pay records that Peter and Adnan
Gorgees were full-time employees. Plaintiff points out that
defendants failed to keep time records. According to plaintiff,
the declarations of Korkis and Gorgees are not credible because Peter
and Adnan Gorgees were paid roughly the same compensation as
Korkis, who is not contesting his full-time status.
Where a fund is unable to prove damages with specificity
because of an employer's failure to keep adequate records,
summary judgment against a fund is not appropriate. See
Laborers' Pension Fund v. A & C Envtl., Inc., 301 F.3d 768, 783
(7th Cir. 2002). Instead, the evidentiary burden shifts to the
employer. Defendants have produced the declarations of Korkis and
Adnan Gorgees; plaintiff maintains that those declarations are
not credible in light of the payroll records. Issues of
credibility cannot be resolved on a motion for summary judgment.
See Wolf v. Buss (Am.) Inc., 77 F.3d 914, 922 (7th Cir.
1996). Defendants' motion for partial summary judgment therefore
will be denied.
B. Plaintiff's Motion for Summary Judgment
Plaintiff moves for summary judgment based on the payroll audit
report, maintaining that the report demonstrates that
contributions to the Funds are due on behalf of five employees in
addition to Korkis and his brothers. With the audit report,
plaintiff submits the affidavit of Christopher P. Kogut, who was
not one of the auditors. Mr. Kogut states that he was formerly
employed by the firm that conducted the audit, Thomas Havey LLP
("Havey") and that he reviewed the audit report and Havey's file
pertaining to defendants. Mr. Kogut's affidavit includes information about the records on which the audit report is based
and describes the results of the audit.
Defendants object to the admission of the audit report and move
to strike the Kogut Affidavit, arguing that the affidavit is not
based on Mr. Kogut's personal knowledge, but rather a review of
the documents, and that the audit report thus is unauthenticated.
We agree that the audit report has not been properly
authenticated. At trial, plaintiffs should be prepared to lay a
proper foundation for the audit report with testimony regarding
how the audit was conducted and what records the auditors
reviewed. That said, although the Kogut Affidavit does not
provide a sufficient basis to grant plaintiff summary judgment,
we decline to strike it.
Plaintiff's motion for summary judgment will be denied.
For the foregoing reasons, defendants' motion for partial
summary judgment is denied. Defendants' motion to strike the
affidavit of Christopher P. Kogut is denied. Plaintiff's motion
for summary judgment is denied.
A status hearing in this case is set for October 27, 2004 at
11:00 a.m., at which time a trial date will be set.
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