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Minor v. Pro-Comm Communications

June 26, 2006

ARTHUR MINOR, JR., ET AL., PLAINTIFFS,
v.
PRO-COMM COMMUNICATIONS, INC., DEFENDANT.



The opinion of the court was delivered by: Herndon, District Judge

MEMORANDUM AND ORDER

I. Introduction

Before the Court is a motion for summary judgment filed by Plaintiffs Trustees of the Local 309 Electrical Heath and Welfare Fund; Trustees of the NECAIBEW Pension Benefit Fund; Trustees of the Southwestern Illinois Joint Apprenticeship and Training Committee; Trustees of the National Electrical Benefit Fund; Local 309, International Brotherhood of Electrical Workers, AFL-CIO ("Local 309"); Trustees of the National Labor Management Cooperation Committee-Illinois Chapter; and the Administrative Maintenance Fund (collectively, "Plaintiffs"). (Doc. 41.) Defendant Pro-Comm Communications ("Defendant") responds in opposition. (Doc. 50.) For the reasons below, the Court grants in part and denies in part Plaintiffs' motion.

II. Background

This case arises under the Employment Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA"). Plaintiffs consist of a union, Local 309, that represents employees of Defendant, and a group of funds that are third-party beneficiaries to the collective bargaining agreement ("CBA" or "agreement") entered into by Defendant and Local 309 on July 25, 2002. Plaintiffs allege that Defendant, a corporation engaged in the electrical construction business, failed to make payments due under the CBA, and therefore that Defendant owes them several thousand dollars in addition to liquidated damages, interest, and attorneys' fees under 29 U.S.C. § 1132. More specifically, Plaintiffs assert that Defendant is liable both for unreported contributions and for $72,273.79 in contributions and working dues for the period from July 25, 2002 to September 2005, as well as interest, liquidated damages, and fees. Included in this sum are contributions Plaintiffs claim are due on amounts paid to Rodney Cheatham, Defendant's President. Plaintiffs maintain that the CBA covers the supervisory work Cheatham performed.

Defendant sees things differently. It argues, as an initial matter, that it is not liable to Plaintiffs for failing to contribute in accordance with the CBA's terms.

Its position is that its obligation to perform under the CBA ended when Local 309 breached a pre-CBA promise to provide Defendant's employees with health-and-welfare coverage. Defendant also assets that even if it is liable under the CBA, it should be permitted to deduct the cost of the health insurance it purchased for its employees when Local 309 failed to live up to its pre-agreement promise. Further, Defendant maintains that in any case, it is not liable for contributions on behalf of Cheatham because the work he performed was not covered by the CBA, and also that it owes Plaintiffs no liquidated damages, interest, or fees. Finally, Defendant argues that the CBA expired on August 31, 2005, and no contributions are due after that date.*fn1

III. Analysis

A. Summary Judgment

Summary judgment is proper where the pleadings and affidavits, if any, "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c);Oats v. Discovery Zone, 116 F.3d 1161, 1165 (7th Cir. 1997) (citingCelotex Corp. v. Catrett, 477 U.S. 317, 322 (1986)). The movant bears the burden of establishing the absence of fact issues and entitlement to judgment as a matter of law. Santaella v. Metro. Life Ins. Co., 123 F.3d 456, 461 (7th Cir. 1997) (citing Celotex, 477 U.S. at 323). In reviewing a summary judgment motion, the Court does not determine the truth of asserted matters, but rather decides whether there is a genuine factual issue for trial. Celex Group, Inc. v. Executive Gallery, Inc., 877 F. Supp. 1114, 1124 (N.D. Ill. 1995). The Court must consider the entire record, drawing reasonable inferences and resolving factual disputes in favor of the non-movant. Regensburger v. China Adoption Consultants, Ltd., 138 F.3d 1201, 1205 (7th Cir. 1998) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).

In response to a motion for summary judgment, the non-movant may not simply rest upon the allegations in his pleadings. Rather, the nonmoving party must show through specific evidence that an issue of fact remains on matters for which he bears the burden of proof at trial. Walker v. Shansky, 28 F.3d 666, 670-71 (7th Cir. 1994). In reviewing a summary judgment motion, the court does not determine the truth of asserted matters, but rather decides whether there is a genuine factual issue for trial. Dykema v. Skoumal, 261 F.3d 701, 704 (7th Cir. 2001) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249). The "mere existence of a scintilla of evidence in support of the [nonmoving party's] position will be insufficient to show a genuine issue of material fact." Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926, 933 (7th Cir. 1997) (citingAnderson, 477 U.S. at 252). No issue remains for trial "unless there is sufficient evidence favoring the non-moving party for a jury to return a verdict for that party. If the evidence is merely colorable, or is not sufficiently probative, summary judgment may be granted." Anderson, 477 U.S. at 249-50 (citations omitted). Accord Starzenski v. City of Elkhart, 87 F.3d 872, 880 (7th Cir. 1996); Tolle v. Carroll Touch, Inc., 23 F.3d 174, 178 (7th Cir. 1994). "[The nonmoving party's] own uncorroborated testimony is insufficient to defeat a motion for summary judgment." Weeks, 126 F.3d at 939. "Conclusory and immaterial statements contained in an affidavit are insufficient to bar summary judgment."Laborers' Pension Fund v. RES Envtl. Servs., 377 F.3d 735, 736 (7th Cir. 2004).

B. Defendant's Liability Under the CBA

Pursuant to 29 U.S.C. § 1145, Every employer who is obligated to make contributions to a multiemployer plan under the terms of the plan or under the terms of a collectively bargained agreement shall, to the extent not inconsistent with law, make such contributions in accordance with the terms and conditions of such plan or such agreement.

Multiemployer plans, like all-but-one Plaintiff here,*fn2 are not parties to collective bargaining agreements. Instead, such plans are third-party beneficiaries with standing similar to that of holders in due course. Central States, Southeast & Southwest Areas Pension Fund v. Gerber Truck Serv., Inc., 870 F.2d 1148, 1149 (7th Cir. 1989).Employers' monetary obligations to multiemployer plans are not terminated by defects in formation "such as fraud in the inducement [or] oral promises to disregard the text." Id. at 1153. Rather, a party's obligations are dictated solely by the language of the CBA. Central States, Southeast and Southwest Areas Pension Fund v. Joe McClelland, Inc., 23 F.3d 1256, 1257 (7th Cir. ...


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