The opinion of the court was delivered by: Samuel Der-yeghiayan, District Judge
This matter is before the court on Defendant William A. Randolph Inc.'s ("Randolph") motion for attorney's fees and costs. For the reasons stated below, we grant the motion in its entirety.
Plaintiffs alleged in this action that there were certain collective bargaining agreements ("CBAs") in effect between Randolph and its employees' union. Plaintiffs further contended that, pursuant to the CBAs, Randolph was obligated to make contributions into Plaintiff pension funds ("Funds") and that Randolph was obligated to permit the Funds to audit Randolph's books and records to assess Randolph's compliance with its contribution obligations. According to Plaintiffs, Randolph breached the CBAs by failing to make contributions to the Funds, by refusing to allow the Funds to audit Randolph's records, and by subcontracting out work in violation of the CBAs. On October 5, 2006, we granted Randolph's motion for summary judgment and denied Plaintiffs' motion for summary judgment. Randolph now seeks $55,667.00 for attorney's fees and costs pursuant to 29 U.S.C. § 1132(g)(1) ("Section 1132").
Pursuant to Section 1132, "[i]n any action under [Section 1132] by a participant, beneficiary, or fiduciary, the court in its discretion may allow a reasonable attorney's fee and costs of action to either party." 29 U.S.C. § 1132 (g)(1). There exists a "'modest presumption' in favor of awarding fees to the prevailing party, but that presumption may be rebutted." Herman v. Central States, Southeast and Southwest Areas Pension Fund, 423 F.3d 684, 695-96 (7th Cir. 2005)(quoting Harris Trust & Sav. Bank v. Provident Life & Accident Ins. Co., 57 F.3d 608, 617 (7th Cir. 1995)). There are two tests approved by the Seventh Circuit for determining whether to award fees to a prevailing defendant under Section 1132. Id. at 696. Under the first test, an award of damages should be denied if the "plaintiff's position was both 'substantially justified'-meaning something more than non-frivolous, but something less than meritorious-and taken in good faith, or if special circumstances make an award unjust." Id. Under the second test, the court makes a determination after considering the following factors:
(1) the degree of the offending parties' culpability or bad faith; (2) the degree of the ability of the offending parties to satisfy personally an award of attorneys' fees; (3) whether or not an award of attorneys' fees would deter other persons acting under similar circumstances; (4) the amount of benefit conferred on members of the pension plan as a whole; and (5) the relative merits of the parties' positions.
Id. The ultimate issue that needs to be determined under either test has been defined by the Seventh Circuit as whether "the losing party's position [was] substantially justified and taken in good faith, or [whether] that party simply [was] out to harass its opponent[.]" Id. (quoting Quinn v. Blue Cross & Blue Shield Ass'n, 161 F.3d 472, 478 (7th Cir.1998)).
I. Whether Fees Are Warranted
Randolph indicates, and Plaintiffs do not dispute, that after the court's prior ruling, Randolph sent a letter to Plaintiffs' counsel to attempt to set up a meeting regarding fees and costs, as is required under Local Rule 54.3. Randolph indicates that he received no response and forwarded a second letter in which he included a statement of the fees and costs that he was seeking to recover. After again receiving no response from Plaintiffs' counsel, Randolph brought the instant motion. Thus, Plaintiffs have refused to engage in the required discussions concerning the applicability of fees or the appropriate fee amounts.
We first note that there is no evidence that would indicate that Plaintiffs are financially unable to satisfy the fees and costs request. Also, an award of fees and costs will serve to deter Plaintiffs and other plans from putting employers such as Randolph through the expense of litigation to defend unjustifiable requests for contributions. Employees may also indirectly benefit from the savings incurred by employers. At the very least, the additional capital retained by the employer could contribute to the fiscal stability of the employer and thus to the stability of the jobs of the employees.
As we explained in our prior ruling, Plaintiffs alleged in the instant action that Randolph was bound by CBAs for the pertinent period in 2000, simply because Randolph had allegedly employed covered employees in 1997 and because Randolph continued to send monthly reports to the Funds. Plaintiffs acknowledged that Randolph was not even a signatory to one of the CBAs, but argued that Randolph was impliedly bound by the CBA in light of its conduct. Plaintiffs also contended that Randolph hired subcontractors in a fashion that violated the provisions of the CBAs.
We pointed out in our ruling granting Randolph's motion for summary judgment that Plaintiffs' arguments ignored the fact that there is no evidence that there were any covered employees employed by Randolph during the pertinent period. (OP 10/5/05 7, 11). Plaintiffs in fact admitted that fact in response to Randolph's Local Rule 56.1 statement of facts. ( R SF Par. 4). Plaintiffs' entire case was thus based on an alleged vindication of the rights of nonexistent covered employees in light of the fact that Randolph did not employ any employees covered by the CBAs during the pertinent period. We also pointed out that even if Randolph was bound by the CBAs, Randolph clearly had not violated the provisions of the CBAs. (OP 10/5/05 10-14). The CBAs provided certain requirements for "employees" and also provided Randolph with the ability to subcontract out work. (OP 10/5/05 11-14). As we noted in our prior ruling, when Plaintiffs were confronted by Randolph's arguments pointing out the deficiencies in Plaintiffs' case, Plaintiffs avoided the issues by arguing that they did not receive certain information during discovery, despite the ...