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Midland Logistics, Inc. v. Chicago Truck Drivers

April 4, 2008

MIDLAND LOGISTICS, INC., PLAINTIFF,
v.
CHICAGO TRUCK DRIVERS, HELPERS AND WAREHOUSE WORKERS UNION (INDEPENDENT) HEALTH AND WELFARE FUND, AND CHICAGO TRUCK DRIVERS, HELPERS AND WAREHOUSE WORKERS UNION (INDEPENDENT), DEFENDANTS.



The opinion of the court was delivered by: Judge George M. Marovich

MEMORANDUM OPINION AND ORDER

Plaintiff Midland Logistics, Inc. ("Midland") filed in the Circuit Court of Cook County a three-count complaint against defendants Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) Welfare Fund (the "Fund") and Chicago Truck Drivers, Helpers and Warehouse Workers Union (Independent) (the "Union"). In its complaint, Midland asserted claims for conversion, constructive fraud and unjust enrichment. Defendants removed the case to this Court, asserting that plaintiff's claims are preempted by the Employee Retirement Income Security Act ("ERISA"). Defendants have moved to dismiss plaintiff's claims or, in the alternative, for summary judgment. For the reasons set forth below, the Court grants in part and denies in part defendants' motion.

I. Background

The following facts are taken from plaintiff's sparse complaint.

The defendant Fund is a multi-employer ERISA welfare benefit plan. The Fund is sponsored by the Union.

Plaintiff Midland is an Illinois corporation. Its business is the movement of freight via trucks. According to the allegations in plaintiff's complaint, Midland is not a signatory to any collective bargaining agreement to which the Union is a party. Another entity, Stellman Inc. ("Stellman") is a party to a collective bargaining agreement with the Union and is obligated to contribute to the Fund. Stellman has been so obligated since at least 1998.

The connection between Stellman and Midland is not clear from the complaint. What is clear is that there is some connection. The complaint describes Stellman as a "shell corporation" that has not, since 1998, conducted any trucking or freight business. Still, Stellman and/or Midland have made contributions to the Fund over the years on behalf of employees. (Who employs said employees is not made clear in the complaint.) For example, the Union and/or the Fund have conducted audits to determine whether contributions were owed by Stellman on behalf of its employees. The Fund and/or the Union has sent bills to Midland for contributions to the Fund. Those bills were addressed to "Midland Dist/Stellman." From January 1998 through June 2007, Midland made fund contributions totaling $211,887.46. Midland made those contributions on behalf of Clether Robinson ("Robinson") and Vicki Gentile ("Gentile").

Robinson and Gentile each received, at different times, notices from the Fund that he or she was not covered by the Fund. In Gentile's case, the Fund sent her a letter in August 2007. In the letter, the Fund explained, "[t]o be eligible to receive benefits from the Fund a person must be an employee working in an occupation covered by a collective bargaining agreement. . . . The Fund has determined that you are not an Employee as defined by the Plan." The Fund informed Gentile that she was not eligible for benefits and that the decision would be applied retroactively to February 1, 2003. In Robinson's case, the Fund sent him a letter on July 11, 2007. In the letter, the Fund informed Robinson that he was neither covered by the collective bargaining agreement nor eligible to receive benefits from the Fund. When Midland tendered to the Fund a check for COBRA benefits for Gentile and Robinson, the Fund returned the check.

Based on the Fund's determination that Robinson and Gentile are not employees, Midland has asserted claims for conversion, constructive fraud and unjust enrichment against the Fund and the Union. In Count I, plaintiff asserts that defendants converted Midland's assets when it accepted contributions and then denied COBRA benefits for Robinson and Gentile. In Count II, plaintiff asserts a claim for constructive fraud. Plaintiff asserts that defendant breached a duty by deceiving plaintiff into thinking it was obtaining some benefits in exchange for its contributions to the Fund. In Count III, plaintiff asserts that defendants were unjustly enriched when they accepted contributions and then failed to provide benefits.

II. Standard on a Motion to Dismiss

The Court may dismiss a claim pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure if the plaintiff fails "to state a claim upon which relief can be granted." Fed.R.Civ.P. 12(b)(6). In considering a motion to dismiss, the Court accepts as true all well-pleaded factual allegations and draws all reasonable inferences in the plaintiffs' favor. McCullah v. Gadert, 344 F.3d 655, 657 (7th Cir. 2003). Under the notice-pleading requirements of the Federal Rules of Civil Procedure, a complaint must "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombley, 127 S.Ct. 1955, 1964 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). A complaint need not provide detailed factual allegations, but mere conclusions and a "formulaic recitation of the elements of a cause of action" will not suffice. Twombley, 127 S.Ct. at 1964-1965. A complaint must include enough factual allegations to "raise a right to relief above a speculative level." Twombley, 127 S.Ct. at 1965.

III. Discussion

Because ERISA's purpose is to "provide a uniform regulatory regime over employee benefit plans," ERISA contains "expansive" preemption provisions. Aetna Health Inc. v. Davila, 542 U.S. 200, 208 (2004). Section 514(a) of ERISA preempts "any and all State laws insofar as they may now or hereafter relate to any employee benefit plan." 29 U.S.C. § 1144. The preemption extends not just to state statutes but also to state causes of action that "relate to" ERISA plans. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 47-48 (1987). In a nutshell: any state-law cause of action that duplicates, supplements, or ...


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