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Central States v. J.C. Cornillie Company

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION


February 18, 2009

CENTRAL STATES, SOUTHEAST AND SOUTHWEST AREAS PENSION FUND, AND HOWARD MCDOUGALL, TRUSTEE, PLAINTIFFS,
v.
J.C. CORNILLIE COMPANY, L.L.C., CORPORATION, DEFENDANT.

The opinion of the court was delivered by: Judge Manning a Michigan

Magistrate Judge Mason

MOTION FOR ENTRY OF ORDER OF DEFAULT AND JUDGMENT BY DEFAULT

Plaintiffs Central States, Southeast and Southwest Areas Pension Fund and Howard McDougall, trustee, (hereinafter collectively referred to as "Pension Fund"), pursuant to Rule 55(b) of the Federal Rules of Civil Procedure ("F.R.Civ.P."), hereby move this court for the entry of an order of default and judgment by default against Defendant J.C. Cornillie, LLC, a Michigan limited liability corporation ("J.C. Cornillie"). In support of this motion, the Pension Fund states as follows:

1. On April 10, 2008, Plaintiffs filed a Complaint against Defendant in accordance with the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq., as amended by the Multiemployer Welfare Plan Amendments Act of 1980, to recover shortfall payments and delinquent employer contributions due and owing to the Pension Fund by Defendant as well as interest, liquidated damages, and attorneys' fees and costs.

2. This Court has subject matter jurisdiction of this action and venue of this action properly lies in this District. 29 U.S.C. § 1132(e)(1) and (e)(2). (Affidavit of Andrew M. Sprau ¶2 ("Sprau Affidavit") attached hereto as Exhibit 1 and incorporated herein by reference; Affidavit of Juan J. Beaton ¶¶ 4-5 ("Beaton Affidavit") attached hereto as Exhibit 2 and incorporated herein by reference).

3. On April 14, 2008, Defendant was served by personal delivery of Summons and Complaint and this Court has personal jurisdiction over Defendant. See Affidavit of Service filed on April 29, 2008; F.R.Civ.P. Rule 4(c), (h).

4. Defendant is in default because it has failed to file an answer or other responsive pleading to the complaint within the time limit prescribed by Fed.R.Civ.P. 12.

5. The Pension Fund receives contributions from numerous employers pursuant to collective bargaining agreements by and between employers and various local unions affiliated with the International Brotherhood of Teamsters ("IBT"). (Beaton Affidavit ¶6).

6. The contributions received by the Pension Fund are used to provide retirement benefits for the participants of the Pension Fund. (Beaton Affidavit ¶6).

7. Defendant is an employer bound by the provisions of a collective bargaining agreement with Local 247 of the IBT. Pursuant to the provisions of the collective bargaining agreement, Defendant was required to pay monthly employer contributions to the Pension Fund on behalf of certain covered employees. (Beaton Affidavit ¶7).

8. Defendant and Local 247 executed a Participation Agreement which requires Defendant to pay contributions to the Pension Fund in accordance with the collective bargaining agreement. (Beaton Affidavit ¶7).

9. Defendant, as a participating employer in the Pension Fund, is required to advise the Pension Fund with respect to the names of individuals who perform covered work and are required to indicate which weeks are worked by the employees. Based upon the work history reported by the employers, the Pension Fund bills the employers for contributions. (Beaton Affidavit ¶8).

10. Defendant breached the provisions of the collective bargaining agreement, the participation agreement, and the Pension Fund's Trust Agreement by failing to pay all contributions to the Pension Fund which the employee work history reported to the Pension Fund revealed to be owed for the period of February 2008 through April 2008. (Beaton Affidavit ¶9).

11. As a result, Defendant owes the principal amount of $6,474.00 for delinquent employer contributions to the Pension Fund. (Beaton Affidavit ¶9).

12. Defendant also entered into a Settlement Agreement and Release with the Pension Fund settling claims related to a sale of assets and the subsequent withdrawal liability assessment which required Defendant to maintain a certain contribution base unit level for the period of 2006 through 2008 pursuant to the collective bargaining agreement, Participation Agreement, and the Pension Fund Trust Agreement. (Sprau Affidavit ¶6).

13. Defendant did not maintain the required contribution base unit level for the year 2007, and therefore was notified that it should remit shortfall payments no later than March 15, 2008. (Sprau Affidavit ¶7).

14. Defendant failed to remit the shortfall payments for the year 2007 as required by the collective bargaining agreement, Participation Agreement, and the Trust Agreement. (Sprau Affidavit ¶7).

15. As a result, Defendant owes the principal amount of $83,498.00 for delinquent shortfall payments to the Pension Fund. (Sprau Affidavit ¶12).

16. Pursuant to the Settlement Agreement and Release, the failure of J.C. Cornillie to pay the shortfall payments by March 15, 2008 is treated in the same manner as a delinquent contribution under Section 515 of ERISA, 29 U.S.C. § 1145 and the Pension Fund is entitled to all remedies available under Section 502(g)(2) of ERISA, 29 U.S.C. § 1132(g)(2). (Sprau Affidavit ¶8).

17. Pursuant to 29 U.S.C. § 1132(g)(2), the Pension Fund is entitled to the following relief when it prevails in an action under 29 U.S.C. § 1145:

(i) the unpaid contributions;

(ii) interest on the unpaid contributions;

(iii) an amount equal to the greater of the interest or liquidated damages as provided under the Plan in an amount not in excess of twenty percent (20%) of the unpaid contributions; and

(iv) reasonable attorneys' fees and costs.

18. Pursuant to the terms of the Pension Fund Trust Agreement, the Pension Fund is entitled to pre-judgment interest on the entire outstanding balance at an annualized interest rate equal to two percent (2%) plus the prime interest rate established by Chase Manhattan Bank (New York, New York) for the fifteenth (15th) day of the month for which interest is charged and shall be compounded annually. (Sprau Affidavit ¶11; Beaton Affidavit ¶11).

19. Through May 15, 2008, Defendant owes the Pension Fund the total amount of $35.65 in interest on the unpaid employer contributions. (Beaton Affidavit ¶12).

20. Through May 15, 2008, Defendant owes the Pension Fund the total amount of $1,027.45 in interest on the shortfall payments. (Sprau Affidivit ¶12).

21. Pursuant to the terms of the Pension Fund Trust Agreement, the Pension Fund is entitled to the greater of doubled interest or liquidated damages in the amount of twenty percent (20%) of unpaid employer contributions. (Beaton Affidavit ¶13; Sprau Affidavit ¶12).

22. Defendant owes the Pension Fund the total amount of $1,294.80 ($6,474.00 x 20%) in liquidated damages in the greater amount of twenty percent (20%) of the unpaid employer contributions. (Beaton Affidavit ¶14).

23. Defendant owes the Pension Fund the total amount of $16,699.60 ($83,498.00 x 20%) in liquidated damages in the greater amount of twenty percent (20%) of the unpaid shortfall payments. (Sprau Affidavit ¶13).

24. Under the Pension Fund's Plan, interest on a judgment entered against an employer is computed and charged at an annualized interest rate equal to two percent (2%) plus the prime interest rate established by Chase Manhattan Bank (New York, New York) for the fifteenth (15th) day of the months for which the interest is charged. (Sprau Affidavit ¶15; Beaton Affidavit ¶16).

25. Pursuant to the provisions of the Pension Fund Trust Agreement and ERISA, 29 U.S.C. § 1132(g)(2)(D), Defendant is required to pay all attorneys' fees and costs incurred in connection with this case. The attorneys' fees total $1,425.00 and costs total $390.00. (See Affidavit of Rebecca K. McMahon attached hereto as Exhibit 3 and incorporated herein by reference).

26. Accompanying this motion is a proposed Judgment Order which is attached hereto as Exhibit 4.

WHEREFORE, Plaintiffs Central States, Southeast and Southwest Areas Pension Fund, and Howard McDougall, trustee, pray for entry of judgment by default in favor of Plaintiffs and against Defendant J.C. Cornillie, LLC, a Michigan limited liability corporation, as follows:

(B) For the past employer contributions in the amount of $6,474.00; together with interest in the amount of $35.65; liquidated damages in the amount of $1,294.80; attorneys' fees in the amount of $712.50; and costs in the amount of $195.00.

(A) For the past due shortfall payments in the amount of $83,498.00; together with interest in the amount of $1,027.45; liquidated damages in the amount of $16,699.60; attorneys' fees in the amount of $712.50; and costs in the amount of $195.00.

(C) That this Court award Plaintiffs Central States, Southeast and Southwest Areas Pension Fund, and Howard McDougall, trustee, post-judgment interest computed at an annualized interest rate equal to two percent (2%) plus the prime interest rate established by Chase Manhattan Bank (New York, New York) for the fifteenth (15th) day of the month for which interest is charged;

(D) That this Court retain jurisdiction to enforce the provisions of its Order; and

(E) For such other relief deemed just and proper.

EXHIBIT 1

EXHIBIT B

EXHIBIT C

EXHIBIT 2

EXHIBIT 3

EXHIBIT 4

JUDGMENT ORDER

At Chicago, Illinois, in the District and Division aforesaid, before the Honorable Mark Filip, District Judge.

This cause coming to be heard this 15th day of May, 2008, on Plaintiffs' Motion for Entry of Order of Default and Judgment by Default, due notice having been served, and it appearing of record that a complaint for collection of shortfall payments and delinquent employer contributions, interest, and statutory damages under the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001 et seq., as amended by the Multiemployer Pension Plan Amendments Act of 1980, was filed by Plaintiffs onApril 10, 2008; that Defendant J. C. Cornillie, LLC, a Michigan limited liability corporation, was served by delivery of Summons and Complaint on April 14, 2008; that Plaintiffs have submitted affidavits in support of judgment; and the Court having fully considered the Complaint, the Motion for Entry of Order of Default and Judgment by Default and supporting affidavits, and the record in this case does hereby find: (i) that this Court has jurisdiction of the action; (ii) that an order of default and judgment by default may properly be entered in favor of Plaintiffs and against Defendant J. C. Cornillie, LLC, a Michigan limited liability corporation; and (iii) that Plaintiffs have established by evidence satisfactory to this Court that judgment should be entered against Defendant for the principal amount, interest, liquidated damages, attorneys' fees and costs ordered hereinbelow, wherefore:

IT IS ORDERED:

A. Judgment by default be and is hereby entered in favor of Plaintiffs Central States, Southeast and Southwest Areas Pension Fund and Howard McDougall, trustee, and against Defendant J. C. Cornillie, LLC, a Michigan limited liability corporation, in the total amount of $110,844.50. The judgment amount consists of: (i) delinquent shortfall payments in the amount of $83,498.00; (ii) interest on the delinquent shortfall payments in the amount of $1,027.45; (iii) liquidated damages on the shortfall payments in the amount of $16,699.60; (iv) delinquent employer contributions in the amount of $6,474.00; (ii) interest on the delinquent employer contributions in the amount of $35.65; (iii) liquidated damages delinquent employer contributions in the amount of $1,294.80; (iv) attorneys' fees in the total amount of $1,425.00; and (v) costs in the amount $390.00 awarded pursuant to 29 U.S.C. § 1132(g)(2).

B. That Plaintiffs are awarded post-judgment interest on the entire judgment balance at an annualized interest rate equal to two percent (2%) plus the prime interest rate established by Chase Manhattan Bank (New York, New York) for the fifteenth (15th) day of the month for which interest is charged and shall be compounded annually.

C. Specifically excluded from this judgment and not barred under any claim preclusion are: (i) any obligation of Defendant J. C. Cornillie, LLC, a Michigan limited liability corporation to pay employer contributions (or interest and statutory damages thereon) for any period other than the period of February 2008 through April 2008; (ii) any claim for employer contributions (or interest or statutory damages thereon) for any period of time (including the period of February 2008 through April 2008) on behalf of employees whose work history was not reported or was inaccurately reported to the Welfare Fund; and (iii) any claim for employer contributions for failure to maintain an annual contribution base unit level pursuant to a contribution guarantee for any year other than 2007.

D. That Plaintiffs are awarded execution for the collection of the judgment and costs granted.

E. That the Court retain jurisdiction of the cause for the purpose of enforcing this Order.

Order prepared by attorney for Plaintiffs: Rebecca K. McMahon Central States, Southeast and Southwest Areas Pension Fund 9377 W. Higgins Road Rosemont, Illinois 60018-4938 (847) 518-9800, Ext. 3441

20090218

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