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Chicago Area Joint Welfare Committee for the Pointing, Cleaning and Caulking Industry, Local 52 v. Mid America Contracting

January 5, 2007

CHICAGO AREA JOINT WELFARE COMMITTEE FOR THE POINTING, CLEANING AND CAULKING INDUSTRY, LOCAL 52, ET AL., PLAINTIFFS,
v.
MID AMERICA CONTRACTING, INC., MICHAEL WILSON, AND DAVID ELLIOT, DEFENDANTS.



The opinion of the court was delivered by: Judge Robert W. Gettleman

MEMORANDUM OPINION AND ORDER

Plaintiffs, Chicago Area Joint Welfare Committee for the Pointing, Cleaning and Caulking Industry, Local 52 et al. ("Funds") filed a first amended complaint against defendant Mid America Contracting, Inc. ("Mid America") alleging that: (1) defendant Mid America failed to remit payment for contributions required under the collective bargaining agreement ("CBA") and the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1132, 1145 ("ERISA"); and (2) defendants Mid America, Michael Wilson, and David Elliot failed to pay the balance owed to plaintiffs on a promissory note. Plaintiffs then filed a motion for summary judgment. Although defendants do not dispute their liability, they contest the amount owed to plaintiffs.

For the reasons set out below, the court grants plaintiffs' motion for summary judgment. The court orders defendants Mid America, Michael Wilson, and David Elliot to pay to plaintiffs the balance remaining on the promissory note, or $52,396.35. The court further orders defendant Mid America to pay to plaintiffs $267,272.90 in unpaid contributions, $53,877.94 in liquidated damages, and $4,577.50 in audit costs, for a total of $325,728.34. Defendant Mid America must also pay to plaintiffs the interest on $267,272.90 in unpaid contributions at a rate of 11%, as well as attorneys' fees and court costs.

FACTS

Plaintiffs are "employee welfare benefits plans," "plans," and 'fiduciaries" under ERISA.

Defendant is an "employer" under ERISA and is obligated to make fringe benefit contributions to plaintiffs under the terms of the Agreements and Declarations of Trust pursuant to which the Funds are maintained, along with the terms of the CBA. On March 13, 2003, Judge John W. Darrah granted summary judgment for the Funds against defendant Mid America in a different case concerning the same subject matter. Chicago Area Joint Welfare Comm. for the Pointing, Cleaning and Caulking Indus., Local 52 v. Mid America Contracting, Inc., 2003 WL 1220231 (N.D. Ill. 2003). Judge Darrah awarded the funds $113,116.19 for unpaid contributions for the period of November 1998 through December 2002, along with liquidated damages, interest, and audit fees.

After plaintiffs received summary judgment, they agreed to accept a promissory note from Mid America and defendants Michael Wilson and David Elliott, both of whom signed in an individual capacity. The promissory note contained a principal amount of $95,246.93, but the parties agreed to reduce the principal to $42,850.58 if Mid America made weekly installment payments on the principal and remained current in all other contribution payments. Specifically, the promissory note stated:

Upon default in the payment of this installment plan, including current contribution reports and contributions, the whole of the principal sum then remaining unpaid hereon shall, at the option of the holder thereof, become immediately due and payable, without demand or notice. In the case of any payment herein provided for not being made as herein provided, Mid America Contracting, Inc., Michael Wilson, individually, and David Elliott, individually, further promise to pay all costs of collection and reasonable attorneys' fees incurred by said Funds as a result of such default.

Defendants satisfied the $42,840.58 owed to plaintiffs through weekly installments paid from April 25, 2003, through July 18, 2004. Defendants, however, did not remain current with respect to contribution payments or monthly reports from April 2003 through January 2004. Plaintiffs therefore contend that because defendants defaulted on the terms of the promissory note, they must pay the entire principal, which amounts to an additional $52,396.35.

Defendants dispute this amount and claim that payments of $36,500 made to the Funds between February 2004 and September 2005 should be applied to the remaining principal on the promissory note, reducing that balance to $15,896.35. Defendants claim that they intended these payments to be applied against their obligations on the promissory note itself, rather than against current debts.

Plaintiffs also claim that defendant Mid America owes additional contributions for the periods of April 2003 through November 2004. Mid America submitted contribution reports to plaintiffs for this period stating that defendants owed $351,180.30. Since January 2004, Mid America has paid $103,919.62 toward this amount. Plaintiffs claim that Mid America now owes $247,260.66 for unpaid contributions, in addition to $1,323.64 for July 2001 through December 2003. Further, plaintiffs request liquidated damages for all contributions paid late from July 2001 through November 2004, pursuant to the terms of the Trust Agreement, as well as interest. Plaintiffs also request $4,577.50 for costs of conducting an audit into this matter. Defendant Mid America disputes the amount of liquidated damages demanded by plaintiffs, as well as the interest rate.

Finally, plaintiffs claim in their reply brief that Mid America failed to make contribution reports from December 2004 through the present. Plaintiffs maintain that defendant Mid America owes $18,688.60 for December 2004, along with $3,737.72 in liquidated damages, and $423.36 in liquidated damages for making a late payment in April 2005.

DISCUSSION

A movant is entitled to summary judgment under Rule 56 when the moving papers and affidavits show there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Unterreiner v. Volkswagen of America, Inc., 8 F.3d 1206, 1209 (7th Cir. 1993). Once a moving party has met its burden, the nonmoving party must go beyond the pleadings and set forth specific facts showing there is a genuine issue for trial. See Fed. R. Civ. P. 56(e); Becker v. Tenenbaum-Hill Assocs., Inc., 914 F.2d 107, 110 (7th Cir. 1990). The court considers the record as a whole and draws ...


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