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Illinois District Council No. 1 of the International Union of Bricklayers and Allied Craftworkers, AFL-CIO v. Christoffer

September 5, 2006

ILLINOIS DISTRICT COUNCIL NO. 1 OF THE INTERNATIONAL UNION OF BRICKLAYERS AND ALLIED CRAFTWORKERS, AFL-CIO, PLAINTIFF,
v.
ALFRED CHRISTOFFER, ET AL. DEFENDANTS.



The opinion of the court was delivered by: James F. Holderman, Chief Judge

MEMORANDUM OPINION AND ORDER REGARDING PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT

Plaintiff Illinois District Council No. 1 of the International Union of Bricklayers and Allied Craftworkers, AFL-CIO ("Union") filed this lawsuit to enforce a labor arbitration award against defendants, Alfred Christoffer, Julie Christoffer, Christoffer Enterprises, Inc. ("Enterprises"), Bral Restoration Services, Inc.("Bral Services"), and Bral Restoration, LLC., ("Bral Restoration"). On June 9, 2006, the Union filed the pending motion for summary judgment (Dkt. No. 24). For the reasons stated below, the court grants the Union's motion.

BACKGROUND

Defendant Alfred Christoffer was the sole owner and officer of the business Enterprises, whose name he changed to Christoffer Restoration Group, Inc. ("CRG") as of 1999, but continued to conduct the same business (hereinafter "CRG/Enterprises"). (Pl. LR 56.1¶¶ 4-5.) Julie Christoffer, Alfred Christoffer's wife, was never an officer, owner, or operator of CRG/Enterprises. (Def. LR 56.1¶ 9.) Julie Christoffer established her own business, Bral Services, in 1998, and later established Bral Restoration in 2004. (Pl. LR 56.1¶ 6.)

On August 28, 1997, Alfred Christoffer on behalf of Enterprises entered into a collective bargaining agreement ("CBA") with the Union. (Pl. LR 56.1¶ 8.) Julie Christoffer was not a signatory to the CBA in any capacity nor was her businesses, Bral Services and Bral Restoration. (Def. LR 56.1¶ 8.) Pursuant to an "evergreen" provision, the CBA automatically renewed each year subject to written cancellation by one of the parties during a designated window of time. (Pl. LR 56.1¶ 9.)*fn1 The CBA also contained an arbitration clause. The Illinois Secretary of State administratively dissolved CRG/Enterprises on April 6, 2004. (Pl. LR 56.1¶ 5.) As a result of the dissolution, CRG/Enterprises did not perform any work between June 1, 2004 and May 31, 2005. (Def. LR 56.1¶ 10.)

On June 15, 2005, the Union notified all the defendants by letter that the Union considered the defendants "sufficiently interrelated as to make all of them bound to and liable for the obligations created by the contract between Enterprises and th Union." (Pl. LR 56.1¶ 11.) Furthermore, the Union alleged in the notification that it believed the defendants violated various provisions of the CBA between June 1, 2004 and May 31, 2005 and that a hearing would take place in front of a joint arbitration board ("JAB") on June 30, 2005 to address the grievance. (Pl. LR 56.1¶ 11.)

In response, the Union received three letters dated June 20, 2005, one from counsel for Alfred Christoffer, and two from the same counsel this time representing Bral Services and Bral Restoration, respectively. In the letter on behalf of Alfred Christoffer, counsel stated that Enterprises was dissolved as a corporation in 2004 and no longer exists as a legal entity. Counsel explained further that "there is no such corporate entity that can respond to your alleged violations at the Arbitration on June 30, 2005." (Pl. Ex. F-1.) In the letters on behalf of Bral Services and Bral Restoration, counsel asserted that Bral Services and Bral Restoration had never been signatories to any agreement with the Union and that the Union had no jurisdiction to require Bral Services or Bral Restoration to appear at any arbitration hearing. (Pl. Exs. F-2, F-3.) The Union sent a letter to counsel for Alfred Christoffer, Bral Services, and Bral Restoration on June 24, 2005, explaining that the "claim against all of the individuals and businesses is that each of them is liable under the contract Mr. Christoffer signed on behalf of Christoffer Enterprises" and stating that the Union intended to "go forward with the claims against the individuals and businesses, and they can make whatever arguments they choose about their corporate status or anything else." (Pl. Ex. G.)

None of the defendants or their representatives attended the June 30, 2005 arbitration hearing, despite having received notice of the hearing and being named specifically as parties to the arbitration. (Pl. LR 56.1¶ 12.) After the hearing, the JAB issued a written decision in favor of the Union, ruling that CRG/Enterprises, the Christoffers, Bral Services, and Bral Restoration were "one and the same and jointly responsible for the contracts and obligations to each other" and had violated the CBA. (Pl. Ex. D.) The JAB ordered the defendants to pay $419,00.70 in damages. (Pl. Ex. D.)

The Union mailed the award to the defendants on July 28, 2005, along with a letter urging compliance. (Pl. LR 56.1¶ 15.) In addition, the Union arranged for personal service of the award along with another letter urging compliance on September 14, 2005. (Pl. LR 56.1¶ 15.) Alfred and Julie Christoffer both received the award shortly after July 28, and Julie Christoffer was personally serviced in September. (Pl. LR 56.1¶ 15.) None of the defendants has satisfied the damage award or otherwise complied with the JAB decision by challenging the arbitration award within 90 days of the decision. (Pl. LR 56.1¶ 16.) Subsequently, on January 19, 2006, the Union filed this lawsuit to enforce the arbitration award.

LEGAL STANDARD

Under Rule 56(c) of the Federal Rules of Civil Procedure, summary judgment is proper "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 ruling on a motion for summary judgment, this court takes all facts and inferences in favor of the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). This court's function is not to weigh the evidence and determine the truth of the matter, but to determine whether there is a genuine issue for trial. A party who bears the burden of proof on a particular issue, however, may not rest on its pleadings, but must affirmatively demonstrate, by specific factual allegations, that there is a genuine issue of material fact that requires trial. Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). In considering a motion for summary judgment, this court is not required to scour the record in search of evidence to defeat the motion; the nonmoving party must identify with reasonable particularity the evidence upon which the party relies. Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 898 (7th Cir. 2003). Moreover, the evidence relied upon must be competent evidence of a type otherwise admissible at trial. Stinnett v. Iron Work Gym/Exercise Health Spa, Inc., 301 F.3d 610, 613 (7th Cir. 2002).

ANALYSIS

The only issue presented in the Union's motion for summary judgment is whether the defendants have waived all affirmative defenses relating to the validity of the arbitration award by failing to move to vacate the award before the expiration of the 90-day statute of limitations. When a defendant fails to move to vacate an arbitration award within the prescribed limitations period for such a motion, the defendant waives any affirmative defenses to the validity of the arbitration award. See, e.g., Int'l Union of Operating Eng'rs, Local 150, AFL-CIO v. Rabine, 161 F.3d 427, 430-31 (7th Cir. 1998); Sullivan v. Gilchrist, 87 F.3d 867, 871 (7th Cir. 1996). Affirmative defenses include arguments that the arbitration board lacked jurisdiction over the defendant to render an award or that the defendant did not sign the collective bargaining agreement. Sullivan, 87 F.3d at 871. A challenge to the court's subject matter jurisdiction, however, may be raised at any time. Rabine, 161 F.3d at 429.

Contending that the defendants received notice of the arbitration hearing, chose not to attend, and never challenged or complied with the award, the Union argues that the defendants cannot now challenge the validity of the arbitration award before this court by presenting arguments they should have raised before the JAB or during the 90-day statute of limitations. In response, the defendants assert that their arguments challenge the court's subject matter jurisdiction rather than the validity of arbitration award. According to the defendants, there was no contractual basis to bind any of the defendants to the CBA with the Union-an argument that the defendants contend can be raised at any time-and without a contract binding the defendants there is no subject matter jurisdiction. The defendants base their "no contract argument" generally on the allegations that (1) CRG/Enterprises was dissolved before the arbitration hearing and so allegedly there was no CBA between the Union and Enterprises at the of the alleged violations, and (2) Julie Christoffer, Bral Services, and Bral Restoration were neither signatories of the contract. In addition, the defendants contend that it ...


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