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Trustees of the NECA-IBEW Pension Benefit Trust Fund v. Springman

February 8, 2008

TRUSTEES OF THE NECA-IBEW PENSION BENEFIT TRUST FUND; TRUSTEES OF THE ALTON IBEW-NECA HEALTH AND WELFARE PLAN; TRUSTEES OF THE JOINT APPRENTICESHIP AND TRAINING COMMITTEE; TRUSTEES OF THE NATIONAL ELECTRICAL BENEFIT FUND; LOCAL 649 SUPPLEMENTAL UNEMPLOYMENT BENEFIT WELFARE FUND; NECA-IBEW NATIONAL LABOR MANAGEMENT COOPERATION COMMITTEE; ADMINISTRATIVE MAINTENANCE FUND; AND INTERNATIONAL BROTHERHOOD, PLAINTIFFS,
v.
TRUDI SPRINGMAN D/B/A A. C. SPRINGMAN ELECTRIC AND A. C. SPRINGMAN ELECTRIC, INC.; AARON SPRINGMAN D/B/A A. C. SPRINGMAN ELECTRIC AND A. C. SPRINGMAN ELECTRIC, INC.; AND A. C. SPRINGMAN ELECTRIC, INC., DEFENDANTS.



The opinion of the court was delivered by: Michael J. Reagan United States District Judge

MEMORANDUM AND ORDER

REAGAN, District Judge

I. Factual and Procedural Background*fn1

Between March 1, 2005 and June 1, 2006, Trudi Springman signed letters of assent on behalf of Springman Electric, A. C. Springman Electric and Springman Electric, Inc., to the collective bargaining agreements ("CBA") then in effect between Local 649 and the Alton Wood River Division, Illinois Chapter of the National Electrical Contractors Association ("NECA"). On October 2, 2006, Springman Electric, Inc., was involuntarily dissolved by the Illinois Secretary of State for failure to file an annual report, but Trudi and Aaron Springman continued to engage in the electrical construction business, as A. C. Springman Electric, Inc., in a manner not necessary to winding up and liquidating the business after the involuntary dissolution of the company.

Defendants are employers within the meaning of Section 301 of the Labor Management Relations Act ("LMRA"), as amended, 29 U.S.C. § 185, and within the meaning of Section (3)(5) of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1002(5). Defendants are required to file reports and pay monthly obligations to the Employee Benefit Plans covered by this complaint, at the rates set forth in the CBA, for the benefit of bargaining unit employees. For the period from March, 2005 forward, Defendants have failed to file reports with the Employee Benefit Plans and failed to pay contributions due to the Plans for hours worked by its bargaining unit employees as required by the CBAs. Defendants' failure to file reports and pay contributions is a continuing violation of the CBAs and ERISA. Plaintiffs are entitled to an audit of Defendants' books to ascertain the exact amount of contributions due under the CBAs.

Plaintiffs seek an accounting and audit, at Defendants' expense, payment of the unpaid, unreported contributions owed by Defendants to the Funds, payment of liquidated damages and interest owed on the unpaid and delinquent contributions, payment of the unpaid, unreported working dues owed by Defendants to Local 649, and reasonable attorneys' fees and costs incurred in prosecuting this action.

Defendants move to dismiss Counts VI, VII and VIII of the amended complaint, pursuant to Federal Rules of Civil Procedure 12(b)(6) (Counts VI, VII and VIII) and 12(b)(1) (Count VIII), as barred by the statute of limitations. In Counts VI and VII, the Trustees of the NECA-IBEW National Labor Management Cooperation Committee ("NLMCC") and the Administrative Maintenance Fund ("AMF"), respectively, contend that Defendants are liable to them for their breach under § 301. The NLMCC and the AMF seek an accounting and audit of Defendants' books to determine the exact amounts owed to them under the CBA, payment of unpaid, unreported contributions, payment of liquidated damages and interest, and attorneys' fees and costs. Neither the NLMCC nor the AMF is covered by ERISA. In Count VIII, the International Brotherhood of Electrical Workers, Local 649 ("Local 649"), claims that Defendants have failed to report and pay working dues, which is a continuing violation of the CBAs. Local 649 seeks an audit and payment of unpaid, unreported working dues owed by Defendants to Local 649 from March, 2005 forward.

Defendants contend that the statute of limitations for a claim brought pursuant to § 301 of the LMRA, 29 U.S.C. § 185, is six months and that the Counts at issue were brought approximately two-and-one-half years after the alleged conduct began. The actions alleged in the amended complaint do not constitute a "continuing violation," and the CBAs at issue do not countenance continuing violations. Lastly, the alleged breaches of the CBAs were subject to a grievance procedure, which required that the grievance be referred to the Labor-Management Committee if it was not resolved.

Plaintiffs respond that Counts VI, VII and VIII of the amended complaint are timely because § 301 does not contain an express statute of limitations applicable to delinquent contribution collection actions. Instead, the general rule is that the Court must apply the most analogous state limitations period to determine the timeliness of a § 301 suit. The most analogous Illinois statute of limitations is the ten-year limitations period for actions on a written contract.

Plaintiffs have no duty to exhaust the grievance and arbitration procedures contained in the CBAs because trustees pursuing collection of delinquent contributions, as third-party beneficiaries to the CBA, have no right to use the contractual grievance and arbitration mechanisms unless the agreement expressly grants that right. The CBAs at issue do not expressly grant the Trustees that right.

Defendants reply that Plaintiffs attempt to recast the allegations in the amended complaint. Counts VI, VII and VIII are actions to compel an audit and not merely actions for delinquent contributions and, as such, are subject to the six-month limitations period.

II. Applicable Legal Standards

FEDERAL RULE OF CIVIL PROCEDURE 12(b)(6) governs motions to dismiss for failure to state a claim upon which relief can be granted. In Bell Atlantic v. Twombly, the United States Supreme Court "retooled federal pleading standards," and retired the oft-incanted standard from Conley v. Gibson, 355 U.S. 41, 47 (1957), that a complaint should not be dismissed for failure to state a claim unless it appeared "beyond doubt" that the plaintiff could prove "no set of facts in support of his claim" which would entitle him to relief. Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614, 618 (7th Cir. 2007).

In assessing whether a complaint states a claim upon which relief can be granted (thereby escaping Rule 12(b)(6) dismissal), the district court accepts all well-pleaded allegations as true and draws all favorable inferences in plaintiff's favor. Id.See ...


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