The opinion of the court was delivered by: Milton I. Shadur Senior United States District Judge
MEMORANDUM OPINION AND ORDER
Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity and their administrator, James Jorgensen (collectively "Funds") have brought suit against Lay-Com, Inc. ("Lay-Com"), Lord & Essex, Inc. ("Lord & Essex"), John Popp Jr. ("Popp Junior") both individually and as Trustee of the Irrevocable Lay Trust Dated December 26, 1995 ("Lay Trust"), Doralee King ("Doralee") and Gail King ("Gail"). Funds charge that it was denied benefit contributions, union dues and payments on an installment note in violation of the Employee Retirement Income Security Act of 1974 ("ERISA") and the Labor Management Relations Act of 1947.
At long last the extensive proceedings in this hoary action have reached the point at which the principal litigants have found it possible to move for summary judgment under Fed. R. Civ. P. ("Rule") 56, and cross-motions have been filed (1) by Funds and (2) by two separate pairs of defendants: (a) Lay-Com and Lay Trust jointly and (b) Lord & Essex and Popp Junior jointly (for convenience both sets of moving defendants are collectively termed "Defendants").*fn1 For the reasons explained here, Funds' motion is granted in principal part (with a corresponding denial of Defendants' motions), while the converse is true as to Funds' claim against Popp Junior in his individual capacity.
Summary Judgment Standards
Every Rule 56 movant bears the burden of establishing the absence of any genuine issue of material fact (Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986)). For that purpose courts "consider the evidentiary record in the light most favorable to the nonmoving party...and draw all reasonable inferences in his favor" (Lesch v. Crown Cork & Seal Co., 282 F.3d 467, 471 (7th Cir. 2002)). But to avoid summary judgment a non-movant "must produce more than a scintilla of evidence to support his position" that a genuine issue of material fact exists (Pugh v. City of Attica, 259 F.3d 619, 625 (7th Cir. 2001)) and "must set forth specific facts that demonstrate an issue of triable fact" (id.). Ultimately summary judgment is appropriate only if a reasonable jury could not return a verdict for the non-movant (Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)).
Finally, where as here cross-motions for summary judgment are involved, those principles require the adoption of a Janus-like perspective: As to each motion, the non-movant's version of any disputed evidence-supported facts is credited.
In an effort to highlight the existence or nonexistence of material factual disputes, this District Court's LR 56.1 requires both (1) that the movant file a "statement of material facts" organized by numbered paragraphs, each with specific citation to the evidentiary record (LR 56.1(a)(3)), and (2) that the non-movant file a paragraph-by-paragraph response to that statement, also with specific record citations (LR 56.1(b)(3)(A). Although the non-movant may of course advance "additional facts" as well, that must be done in a separate statement of numbered paragraphs, again with specific citations to the evidentiary record (LR 56.1(b)(3)(B); Ammons v. Aramark Unif. Servs., Inc., 368 F.3d 809, 817 (7th Cir. 2004)).
Given the importance of LR 56.1's function, our Court of Appeals has consistently made clear that District Courts are entitled to strict adherence to LR 56.1 and may penalize violations by disregarding a party's noncompliant factual statements or by simply adopting the opposition's statements (see, e.g., Ammons, 368 F.3d at 817-18 and cases cited there). Here both sides, but particularly Defendants, have committed a number of violations of LR 56.1. Those flaws are identified hereafter.
Most importantly, Defendants have failed to respond adequately to Funds' LR 56.1(a)(3) statement of facts.*fn2 Neither set of Defendants has offered anything remotely resembling the sort of separate paragraph-by-paragraph responses to that statement that LR 56.1(b)(3)(A) requires. Indeed, the only attempt to contest Funds' LR 56.1(a)(3) statement in any respect is set out in the Lord & Essex-Popp Junior responsive memorandum, which briefly takes issue with the audit report upon which portions of Funds' statement is grounded (L.E. Resp. Mem. 13, ¶36).*fn3 But that is wholly at odds with the purpose as well as the express requirements of LR 56.1(b)(3)(A), as to which this Court is entitled to require strict compliance (again see Ammons, 368 F.3d at 817-18 and cases cited there). This opinion accordingly disregards that effort and accepts Funds' LR 56.1 statement of facts on that score.
In addition to failing to respond properly to Funds' statement of facts, Defendants have also failed to comply with LR 56.1 in introducing their own facts. For example, although the Lay-Com-Lay Trust responsive memorandum purports to rely on "facts" beyond those included in the Stipulation, those Defendants have offered no LR 56.1(b)(3)(B) statement of those additional facts. Instead they cite new exhibits attached to their memorandum (see, e.g., L.C. Resp. Mem. 6-7). That same flaw exists in the Lord & Essex-Popp Junior initial Rule 56 memorandum, though it is far more limited in scope there (see, e.g., L.E. Mem. 4, ¶12). Again this opinion has not credited those improperly presented (and, as discussed further below, often ill-supported) factual claims (see, e.g., Cichon v. Exelon Generation Co., 401 F.3d 803, 810 (7th Cir. 2005)).
Finally, the parties have been less than diligent about properly supporting their factual assertions--whether or not adequately presented--with citations to the evidentiary record. On occasion they have cited to portions of the record that do not actually support the facts asserted, and in other instances they have offered no citations at all. On still other occasions some parties have mischaracterized or misrepresented the cited evidence. In all such instances this opinion has simply not credited factual assertions by any party that are not expressly supported by competent evidence.
King & Larsen Construction, Inc. ("King & Larsen") was incorporated in February 1995, and at all times relevant to this litigation Mike King ("King") was an officer, director and shareholder (Stip. ¶¶5-6). In May 1995 King & Larsen entered into a Memorandum of Joint Working Agreement ("1995 Agreement") with the Construction and General Laborers District Council of Chicago and Vicinity and Laborers Local Union No. 288 (id. ¶31). Under the 1995 Agreement King & Larsen was required to make monthly benefit contributions to Funds on its employees' behalf and to submit its books and records to Funds for periodic audits to determine compliance with that requirement (F. St. ¶2). Failure to make payments on time required King & Larsen to pay liquidated damages of 10% plus interest at a rate of 2% over prime (id.).
Over the years at least some of the contributions owed by King & Larsen under the 1995 Agreement were not paid (id. ¶¶7-9).
In February 2001 King & Larsen executed an Installment Note payable to Funds to cover certain of those past-due contributions (those owed for November 2000 through January 2001), and King signed a personal guaranty of that Note (Stip. ¶32).
Other significant players in this litigation are a trio of entities closely related to the Popp family: Lord & Essex, Lay Trust and Lay-Com. Lord & Essex, a construction company, came into being in April 1992, and at all times relevant here its President and Director was John Popp Senior ("Popp Senior"), while his son Popp Junior served as its Vice-President and Treasurer (Stip ¶¶9, 12, 13). Lay Trust was created a few years later (in December 1995), with Popp Senior and Loreen Popp as its primary beneficiaries and with distributions to be made to their surviving family members (including Popp Junior and his sister Kari Harrison ("Harrison")) in the event of their deaths (id.. ¶¶78, 81). Popp Senior was also Trustee of Lay Trust until he died during the pendency of this litigation, at which point Popp Junior and Harrison became Co-trustees and Popp Senior's assets became part of the Lay Trust corpus (id. ¶81).*fn5 Lay Trust was the sole shareholder of Lord & Essex until March 2002, when Popp Junior became its sole shareholder by a purchase from Lay Trust (id. ¶12). Lay-Com, which primarily engages in the purchase, development and sale of properties for commercial and residential development, was incorporated in September 1999 (id.. ¶8). At all times relevant to this litigation Popp Senior was President, Treasurer and a director of Lay-Com, Popp Junior was a director and its Vice-President and Lay Trust was its sole shareholder (id. ¶¶12-13, 81).
Finally, M.A. King Construction ("M.A. King") was incorporated on March 19, 2001 (Stip. ¶7).*fn6 M.A. King's original directors were Popp Senior, Popp Junior and King, and on April 1, after adopting corporate bylaws, those directors elected King as President and Treasurer and his then wife Gail as Vice President and Secretary (id. ¶¶11, 21). M.A. King's directors further adopted a resolution to issue 25,000 M.A. King shares to the G.A.K. Irrevocable Living Trust ("G.A.K. Trust"), an entity created on the same day (its sole asset was to be all of M.A. King's issued and outstanding shares, and its start-up documents were initially drafted by the Lay-Com-Lord & Essex attorney (id. ¶¶28, 56)), in consideration for a $25,000 promissory note (id. ¶¶21, 29). But there is no evidence that any such issuance of stock or delivery of a promissory note ever took place (id. ¶29).
In short, although M.A. King received a corporate charter from the State of Illinois, nothing supports its bona fide corporate existence. In the same vein of the absence of normal business and corporate attributes, Lay Trust later made a number of outright payments to M.A. King during its life span, but there ...