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A.L.L. Masonry Construction Co., Inc. v. Omielan

July 23, 2009

A.L.L. MASONRY CONSTRUCTION CO., INC., PLAINTIFF,
v.
BOGUSLAW OMIELAN AND IZABELA OMIELAN, DEFENDANTS.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

Plaintiff A.L.L. Masonry Construction Co., Inc. and Jerry Ryce Masonry, Inc. are masonry contractors who routinely compete with one another for work on construction projects. In 2006, the owner of a property located at 525 Kedzie Street in Evanston, Illinois, requested bids for construction of a six-floor residential building on the property (the "Kedzie Project"). The masonry work for the project was ultimately awarded to Jerry Ryce Masonry, which is run by Defendants Boguslaw Omielan and his daughter, Izabela. Plaintiff claims that the only reason Jerry Ryce, rather than Plaintiff, won the contract is Jerry Ryce's practice of paying artificially depressed wages to its workers, many of whom are aliens unauthorized to work in the United States. According to Plaintiff, Defendants hired these aliens knowing that they were both unauthorized for work in the United States and that they were brought into the country in violation of federal immigration law. Plaintiff brought suit under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), claiming that Defendants ran an illegal enterprise that harmed Plaintiff by preventing it from winning the contract for the Kedzie Project. Defendants now move for summary judgment, arguing that the evidence does not establish a RICO violation. For the reasons that follow, Defendants' motion is granted.

FACTS

Defendant Boguslaw Omielan purchased Jerry Ryce Company, Inc., a construction company, in 2002. (Defs.' Reply ¶ 21.) Boguslaw divided the company into two businesses: Jerry Ryce Masonry, Inc. and Jerry Ryce Builders, Inc.*fn1 (Id.) Boguslaw runs both companies with his daughter, Defendant Izabela Omielan, and Barbara Kasper. (Pl.'s 56.1 ¶¶ 24, 26.) Prior to the filing of this lawsuit, Jerry Ryce Masonry generally designated its workers as "employees" and Jerry Ryce Builders classified its workers as "subcontractors." (Id. ¶ 23.) Plaintiff alleges in its complaint that there was no practical distinction between the two categories and the classification was merely an attempt to get around the immigration laws, as Jerry Ryce hired a number of unauthorized Polish immigrants to act as "independent contractors." (Compl. ¶ 17.) Specifically, Plaintiff points out that Jerry Ryce did not require any of its workers to fill out an Employment Eligibility Verification, or "I-9," form prior to the time this lawsuit was filed. (Pl.'s 56.1 ¶ 42.) Employers are required by law to have employees, but generally not independent contractors, complete an I-9 form to demonstrate that the employees are authorized to work in the United States. 8 U.S.C. § 1324a(b). Furthermore, Plaintiff argues that Defendants knew that their employees and "independent contractors" were likely to be unauthorized immigrants, because Jerry Ryce targeted the immigrant community, running advertisements for workers exclusively in Polish-language newspapers. (Pl.'s 56.1 ¶ 25.) Boguslaw also admitted that he sometimes hired workers at the gas station "where they wait," another common method for finding unauthorized workers. (Id.)

Plaintiff deposed a number of current and former Jerry Ryce employees, and obtained written statements from others.*fn2 Many of the employees refused to answer questions about whether they were authorized to work in the United States.*fn3 Several others admitted that they were unauthorized at the time they worked for Jerry Ryce. (Id. ¶¶ 1-4.) One employee, Krzysztof Kwas, stated that he called Boguslaw in 2007 to ask about work. (Kwas Decl. ¶ 4, Ex. G to Pl.'s 56.1.) Boguslaw asked Kwas if he was authorized to work in the United States; Kwas told him he was not, but he was hired anyway. (Id. ¶ 6.) Other employees, such as Grzegorz Breda, did not recall ever discussing their work authorization with Defendants. (Breda Dep. at 22, Ex. C to Pl.'s 56.1.) According to Kasper, every Jerry Ryce employee spoke Polish, many did not speak English, and many were friends of Boguslaw. (Pl.'s 56.1 ¶ 50.) Neither party has produced any evidence that either Defendant knew whether the Jerry Ryce employees entered the United States legally, although several former employees testified that they originally entered on a tourist visa. (Id. ¶¶ 1-4.)

On April 19, 2006, Plaintiff submitted a bid for $666,185 for the masonry work on the Kedzie Project to Tishman Construction Corporation, the general contractor for the Project.*fn4 (Defs.' 56.1 ¶ 6; Ex. A to Ornoff Decl., Ex. V to Pl.'s 56.1.) According to Neil Ornoff, the owner of the property located at 525 Kedzie, Tishman recommended that Plaintiff receive the contract to conduct masonry work, as it had provided the lowest bid. (Ornoff Decl. ¶ 4, Ex. V to Pl.'s 56.1.) Several weeks later, Ornoff fired Tishman and took over the general contractor responsibilities on his own, in an effort to control costs on the project. (Id. ¶ 5.) Ornoff, who had previously used Jerry Ryce for masonry work, then invited Jerry Ryce to submit a bid on the project, but did not invite Plaintiff to submit another bid. (Defs.' 56.1 ¶¶ 12, 14.) Jerry Ryce's final bid on the project was for $518,300, nearly $150,000 less than Plaintiff's bid to Tishman. (Id. ¶ 15.) Ornoff accepted this bid in November 2006, and Jerry Ryce was awarded the contract. (Id.)

Plaintiff brought suit*fn5 , alleging that Defendants violated RICO by conducting an enterprise engaged in racketeering activity and that Defendants conspired to violate RICO. Plaintiff claims that Defendants violated section 274 of the Immigration and Nationality Act by knowingly hiring at least ten unauthorized employees who were illegally brought into the United States, which constitutes racketeering under RICO. The court granted Defendants' motion to dismiss the claim that Defendants misclassified their workers for tax purposes, but denied the motion in all other respects. (2/1/08 Minute Order [26].) On December 9, 2008, Defendants moved for summary judgment against A.L.L. Masonry.

DISCUSSION

Summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c).

The court will view the evidence in the light most favorable to the non-moving party and draw all reasonable inferences in that party's favor. Tubergen v. St. Vincent Hosp. & Health Care Ctr., Inc., 517 F.3d 470, 473 (7th Cir. 2008). "Inferences that are supported by only speculation or conjecture will not defeat a summary judgment motion," however. McDonald v. Vill. of Winnetka, 371 F.3d 992, 1001 (7th Cir.2004).

I. 1962(c)

The Complaint alleges violations of section 1962(c) of RICO. To prove such a violation, a plaintiff must show "(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity." Sedima, S.P.R.L. v. Imrex Co., Inc., 473 U.S. 479, 496 (1985). In their motion for summary judgment, Defendants dispute only the final two elements; that is, they urge that Plaintiff cannot establish that Defendants engaged in a "pattern of racketeering activity." 18 U.S.C. § 1962(c). Under the terms of the statute, a "'pattern of racketeering activity' requires at least two acts of racketeering activity" that occurred within ten years of each other. 18 U.S.C. § 1961(5). Defendants argue that Plaintiff has not raised a genuine dispute that Defendants engaged in any racketeering activity. Plaintiff's claim rests on the RICO provisions which define, as a racketeering activity, "any act which is indictable under the Immigration and Nationality Act, section 274."

18 U.S.C. § 1961(1)(F). This includes violations of 8 U.S.C. § 1324(a)(3)(A), which makes it illegal for anyone, "during any 12-month period," to "knowingly hire[] for employment at least 10 individuals with actual knowledge that the individuals are [unauthorized] aliens." 8 U.S.C. § 1324(a)(3)(A). Defendants contend that Plaintiff cannot prove either that Defendants actually did employ ten unauthorized workers during any given twelve-month period, or that Defendants acted with actual knowledge of the workers' status. The court declines to address whether Defendants actually employed ten unauthorized workers during separate twelve month periods because the court concludes, as explained below, that Plaintiff has failed to create a genuine dispute that Defendants acted with the required level of knowledge.

Section 1324 prohibits individuals from "knowingly hir[ing] for employment at least 10 individuals with actual knowledge that the individuals are ...


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