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Trustees of the Chicago Plastering Institute Pension Trust v. Solarcrete Energy Efficient Building Systems Inc.

September 17, 2009


The opinion of the court was delivered by: Judge Joan B. Gottschall


Plaintiffs have brought the instant case against Defendant Solarcrete Energy Efficient Building Systems, Inc. ("Solarcrete") pursuant to the Labor Management Relations Act, § 301 and § 502(a)(3) of the Employee Retirement Income Security Act ("ERISA"). Plaintiffs sought to compel an audit, and now seek to recover delinquent contributions revealed by that audit. A bench trial was held on October 22, 2007, October 25, 2007, and January 20, 2009. The following opinion represents the court's findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure as to liability only.*fn1 The issue of damages will be briefed subsequently.


A. The Parties

1. Plaintiffs Chicago Plastering Institute Pension Fund, Chicago Plastering Institute Health and Welfare Fund, Chicago Plastering Institute Retirement Savings Fund, and the Journeymen Plasterers' Protective and Benevolent Society of Chicago Apprentice and Training Fund are employee benefit plans within the meaning of Section 3 of ERISA, 29 U.S.C. § 1002(3). Plaintiff Chicago Plastering Institute ("CPI") is a promotional trust fund that promotes the plastering industry, and Plaintiff Chicagoland Safety Council ("CEA") is an area wide safety council for whom the CPI collects and forwards contributions. These plaintiffs are referred to collectively as the "Funds."

2. Plaintiff Journeymen Plasterers Protective and Benevolent Society of Chicago, Local No. 5 (the "Union"), is a labor organization within the meaning of Section 2 of the Labor Management Relations Act, 29 U.S.C. § 152(5), and an employee organization within the meaning of Section 3 of ERISA, 29 U.S.C. § 1002(4).

3. At the time of the filing of the instant action, Plaintiff Ronald Bowser was a trustee, fiduciary, or agent of the Funds and the Union. Plaintiff John Manley is currently a trustee, fiduciary or agent of the Funds and the Union.

4. This lawsuit involves events in the time period from May 1, 1997, through November 30, 2004 (the "Audit Period").

5. Defendant Solarcrete is an Illinois corporation that operated during the Audit Period as a construction contractor. Solarcrete was a privately held corporation, with 100% of the shares held by Peter J. Konopka ("P. Konopka") and his wife, Kathleen M. Konopka ("K. Konopka"). P. Konopka was Solarcrete's President throughout the Audit Period, and K. Konopka was its corporate Secretary.

6. Solarcrete worked both as a general construction contractor and as a specialty builder of buildings using a pre-fabricated, highly insulated wall system referred to as "Solarcrete." The walls are built using special wall panels pre-fabricated at Solarcrete's shop from Styrofoam and rebar, taken to the job site, and erected. Then "shotcrete," a form of cement, is sprayed onto the wall panels. The walls are finished in a variety of ways, including either (a) permitting the cement to completely dry and then painting the wall; (b) permitting the cement to set but not fully dry, and then giving a textured finish using trowels or stencils; or (3) permitting the cement to dry, and applying a coat of plaster over the wall, resulting in a more finished look.

B. The Collective Bargaining Agreement of the Fund and Union Generally

7. The Chicagoland Association of Wall and Ceiling Contractors ("CAWCC") is a voluntary membership organization that negotiates collective bargaining agreements with the Union. Solarcrete has never been a member of the CAWCC.

8. The CAWCC and the Union were signatories to a series of collective bargaining agreements throughout the Audit Period, including the June 1, 1993 through May 31, 1997 Agreement, the June 1, 1997 through May 31, 2000 Memorandum of Understanding, the June 1, 2000 through May 31, 2004 Agreement, and the June 1, 2004 through May 31, 2007 Agreement (collectively, the "CBAs"). The CBAs provide for terms and conditions of employment for employees of signatory employers performing plastering work within the Union's geographical jurisdiction, which consisted of the Illinois counties of Cook, DeKalb, Grundy, Kane, Kendall, LaSalle, Livingston, McHenry, and Will.

9. The Funds are third-party beneficiaries of the CBAs between the CAWCC and the Union.

10. The CBAs require signatory contractors to remit contributions to the Funds based on hours worked by, and in the case of the Retirement Savings Fund, hours paid to, their plastering employees. The CBAs also require signatory contractors to withhold dues from the paychecks of employees who have completed a dues deduction authorization and to remit them to the Union. The dues to be withheld are, like the Fund contributions, calculated on the basis of the number of hours the employee works.

C. Solarcrete's Affiliation with the CBAs

11. Plaintiffs seek to collect contributions and payments from Solarcrete from throughout the Audit Period.

12. In May, 1997, Solarcrete was engaged in a particularly large job referred to as the "Roman Addison job." Solarcrete needed additional workers skilled in plastering, and the job was to continue for several more months, and did continue until December 1997. Solarcrete and the Union had never worked together before, but when Solarcrete was approached by the Union, it agreed to use union labor for the Roman Addison project.

13. On about May 16, 1997, Solarcrete executed a pre-printed agreement with the Union (the "1997 Agreement") that states that Solarcrete "desires to employ members of Plasterers' Local #5 on an intermittent or casual basis" and "agrees to do all work in accordance with the wages, hours, fringe benefits and other conditions of employment which are now in effect by virtue of the Agreement between the Plastering Contractors of Cook, Will, Grundy, McHenry, Kane, LaSalle, Livingston, and DeKalb Counties, and the Journeymen Plasterers' P&B Society, Local #5." The referenced agreement between the Plastering Contractors and the Union sets forth wages and benefit contribution rates for the period June 1, 1996, through May 31, 1997. Handwritten on the 1997 Agreement are the words, "(FOR ROMAN ADDISON JOB ONLY -) PJK," the last three letters being the initials of P. Konopka. The agreement is signed by P. Konopka for Solarcrete and by Richard Dahm, then the Vice President of the Union. P. Konopka wrote in the above phrase before he and Dahm signed the 1997 Agreement.

14. On about June 1, 1998, Solarcrete executed a Memorandum of Understanding (the "1998 MOU") which modified the CBA that had existed from June 1, 1993 through May 31, 1997.

a. The 1998 MOA is a two page document. It consists of an opening paragraph (the "preamble"), three sections identifying changes to three different articles in the prior ...

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