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Hancock v. Cook County Waste & Recycling

April 5, 2010

TERENCE J. HANCOCK, ET AL., PLAINTIFFS,
v.
COOK COUNTY WASTE & RECYCLING, INC., F/K/A/ WINDY CITY WASTE & RECYCLING, INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Amy J. St. Eve United States District Court Judge

Honorable Amy J. St. Eve

MEMORANDUM OPINION AND ORDER

AMY J. ST. EVE, District Court Judge

Before the Court is Plaintiffs Terrence J. Hancock, John Lisner, William Logan, Michael Richardson, Steve Vogrin, and Thomas J. Yonker's, trustees of the Local No. 731, I.B. of T., Private Scavengers and Garage Attendants Pension Trust Fund ("Plaintiffs"), motion for summary judgment. In their complaint, Plaintiffs allege two claims pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. § 1001, et seq. Count I alleges withdrawal liability under § 4201 of ERISA, 29 U.S.C. § 1381(b), against Defendant Cook County Waste & Recycling, Inc., f/k/a Windy City Waste & Recycling, Inc. ("Windy City" or "Cook County f/k/a Windy City"). Count II alleges controlled group liability under § 4201 of ERISA, 29 U.S.C. § 1381(b), against Defendants Crosstown Waste & Recycling, Inc. f/k/a Will County Waste & Recycling, Inc. ("Crosstown"), Cook County Waste & Recycling of Chicago & Suburbs, Inc. f/k/a Southtown Disposal, Inc. ("Southtown"), and "any other members of Windy City's Control Group." (R. 1-1, Compl. at 8.) (Defendants are collectively referred to as the "Windy City Control Group"). For the following reasons, the Court grants Plaintiffs' motion for summary judgment.

BACKGROUND

I. Northern District of Illinois Local Rule 56.1

When determining summary judgment motions, the Court derives the background facts from the parties' Local Rule 56.1 statements. Specifically, Local Rule 56.1 assists the Court by "organizing the evidence, identifying undisputed facts, and demonstrating precisely how each side propose[s] to prove a disputed fact with admissible evidence." Bordelon v. Chicago Sch. Reform Bd. of Trs., 233 F.3d 524, 527 (7th Cir. 2000). Local Rule 56.1(a)(3) requires the moving party to provide "a statement of material facts as to which the moving party contends there is no genuine issue." Cracco v. Vitran Exp., Inc., 559 F.3d 625, 632 (7th Cir. 2009). "The opposing party is required to file 'a response to each numbered paragraph in the moving party's statement, including, in the case of any disagreement, specific references to the affidavits, parts of the record, and other supporting materials relied upon.'" Id. (citing N.D. Ill. R. 56.1(b)(3)(B)). In addition, Local Rule 56.1(b)(3)(C) requires the nonmoving party to present a separate statement of additional facts that require the denial of summary judgment. See Ciomber v. Cooperative Plus, Inc., 527 F.3d 635, 643-44 (7th Cir. 2008). Pursuant to the Local Rules, the Court will not consider any additional facts proposed in the nonmoving party's Local Rule 56.1(b)(3)(B) Response, but instead must rely on the non-movant's Local Rule 56.1(b)(3)(C) Statement of Additional Facts when making factual determinations. See id. at 643; Cichon v. Exelon Generation Co., L.L.C., 401 F.3d 803, 809 (7th Cir. 2005) ("Local Rule 56.1 requires specifically that a litigant seeking to oppose a motion for summary judgment file a response that contains a separate 'statement . of any additional facts that require the denial of summary judgment.'") (emphasis in original).

Moreover, the purpose of Rule 56.1 statements is to identify the relevant evidence supporting the material facts, not to make factual or legal arguments, see Cady v. Sheahan, 467 F.3d 1057, 1060 (7th Cir. 2006), and thus the Court will not address the parties' arguments made in their Rule 56.1 statements and responses. Also, the requirements for responses under Local Rule 56.1 are "not satisfied by evasive denials that do not fairly meet the substance of the material facts asserted." Bordelon, 233 F.3d at 528. Further, the Court may disregard statements and responses that do not properly cite to the record. See Cichon, 401 F.3d at 809-10. Finally, "hearsay is inadmissible in summary judgment proceedings to the same extent that it is inadmissible in a trial." Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997). With these standards in mind, the Court turns to the relevant facts of the case.

II. Relevant Facts

Plaintiffs are trustees of the Local No. 731, I.B. of T., Private Scavengers and Garage Attendants Pension Trust Fund ("Fund"). (R. 57-1, Pl.'s Rule 56.1 Stmt. Facts, ¶ 1.)*fn1 Plaintiffs administer the Local No. 731, I.B. of T., Private Scavengers and Garage Attendants Pension Plan ("Plan"), a multiemployer pension plan within the meaning of ERISA, 29 U.S.C. §§ 1002 and 1301(a)(3). Id. at ¶ 2. Pursuant to ERISA 29 U.S.C. § 1132(a) and 1451(a)(1), as trustees of the Fund Plaintiffs may bring this civil action on behalf of the Fund for purposes of collecting withdrawal liability from Defendants. Id. at ¶ 3. Plaintiffs administer the Fund at 1000 Burr Ridge Parkway, Burr Ridge, Illinois, 60527, its principal place of business. Id. at ¶ 4.

Windy City was an Illinois corporation that operated a waste and recycling business. (R. 65-1, Def.'s Rule 56.1 Stmt. Add'l Facts, ¶ 1.) Defendants Southtown and Crosstown are also Illinois corporations. (R. 57-1, ¶¶ 8-9.) As of February 1, 2008, Robert Wiserman owned 100% of Windy City, Southtown and Crosstown. Id. at ¶ 11. From 2000 through at least September 30, 2007, Windy City was subject to a collective bargaining agreement with Local Union No. 731, affiliated with the International Brothers of Teamsters ("Union") ("CBA"). (R. 57-1, ¶ 14; R. 65-1, ¶ 2.) The CBA contained an "evergreen" provision that provided that the CBA "shall continue in full force and effect through September 30, 2008, and shall continue automatically on an annual basis thereafter, unless written notice is given by either party sixty (60) days prior to September 30, 2008 . . . ." (R. 67-3, p. 14, Article XXXII.) The CBA also contains an addendum effective October 1, 2003 that states that the CBA shall apply to employees who perform work involving the transporting of waste materials from transfer stations to landfills or other on-off loading destinations. (R. 65-1, ¶ 5; R. 67-3, Pl. Ex. 2, pp. 19-27.)

In February 2008, Windy City entered into a purchase and sale agreement with Groot, Inc. ("Groot") in which Windy City sold its equipment and assets to Groot, including the name Windy City Waste, Inc. (R. 57-1, ¶ 15; R. 65-1, ¶ 6.)*fn2 On February 1, 2008, Windy City terminated some if its employees. (R. 57-15, Resp. to No. 64.) In response to discovery in a related delinquency case proceeding in the United States District Court for the Northern District of Illinois, Windy City asserted that it ceased waste and recycling operations on February 1, 2008, and denied that it had not sold its business. (R. 57-1, ¶¶ 23-24.) In a letter dated April 4, 2008, Windy City informed the Fund that it was no longer in business effective February 1, 2008. Id. at ¶ 26. Based on this evidence, the Fund's trustees determined that Windy City permanently ceased to have an obligation to the Fund. Id. at ¶ 27. Although Windy City informed Plaintiffs that it had ceased operations and Plaintiffs sent Windy City a notice of withdrawal liability, as of May 2008, neither party to the CBA explicitly invoked Article XXXII which provides that the CBA will continue unless written notice is given by one party. (R. 65-1, ¶ 14; R. 67-3, Art. XXXII.)

After the sale of its assets to Groot, Cook County f/k/a Windy City continued Windy City's business of transporting waste and/or recycling materials from transfer stations, and continued to employ at least two drivers to perform the transporting. (R. 65-1, ¶¶ 7, 12.) Cook County f/k/a Windy City maintained driver logs showing driver destinations and transfer work. Id. at ¶ 8. Due to this continued transfer work, Cook County f/k/a Windy City attempted to contribute to the Fund for the month December 2008. Id. at ¶ 9. Robert Wiersma contends that from April 2008 through April 2009, Cook County f/k/a Windy City attempted to contact the Union concerning the status of the CBA, but the Union never responded. (R. 65-1, ¶ 13; R. 67-2, Wiserman Aff., ¶ 10.) Conversely, Terrence Hancock contends that, in early 2009, the Union met with Robert Wiersma, President of Cook County f/k/a Windy City. (R. 68-1, Ex. A, Dep. of T. Hancock, pp. 62-63.) Hancock testified that during that 2009 meeting, Wiersma inquired about entering into a new CBA with the Union, but Hancock declined Wiersma's request. Id.

After determining that Windy City no longer had an obligation to the Fund, on May 22, 2008, and pursuant to 29 U.S.C. §§ 1382(2) and 1399, the Fund issued a notice and demand of estimated withdrawal liability to the Windy City Control Group in the amount of $169,923. (R. 57-1, ¶¶ 29-30.) On May 23, 2008, Cook County f/k/a Windy City received the May 22, 2009 notice and demand. Id. at ¶ 31. The May 22, 2008 estimated notice and demand informed Cook County f/k/a Windy City that its first installment of withdrawal liability in the amount of $20,790 was due to the Fund by July 22, 2008. (R. 57-4, Ex. A-2, p. 2.) The estimated notice and demand further informed Cook County f/k/a Windy City that it had 90 days from the date of receipt of the letter to request review of the letter. (R. 57-1, ¶ 31.) Cook County f/k/a Windy City did not submit any payment to the Fund in response to the May 22, 2008 estimated demand and notice. Id. at ¶ 34.

On July 18, 2008, the Union mailed a notice of expiration of the CBA to Windy City which stated, "please let this letter serve as written notice of Local Union's intent to terminate the current [CBA]." (R. 67-7, p. 2.) The United States Postal Service returned the letter to the Union as "unclaimed." (R. 67-1, p. 3.) Wiersma asserts that, "[t]o the best of my knowledge, no one at Windy City Waste/Cook County Waste had any knowledge or any notice of any kind that the Union had tried to mail a notice of termination of the CBA or that the Union believed that the CBA has been terminated." (R. 67-2, Wiersma Aff., ¶ 9.) Due to the dispute over Windy City's receipt of notice to terminate the CBA and whether the withdrawal notice constitutes notice of termination of the CBA, the parties dispute whether the CBA was automatically renewed from October 1, 2008 to September 30, 2009. (R. 65-1, ¶ 19; R. 57-1, ¶¶ 15-27.)

On July 31, 2008, the Fund issued a notice of default to Cook County f/k/a Windy City for its failure to make the first required withdrawal liability payment that was due on July 22, 2008. (R. 57-1, ¶ 35.) Cook County f/k/a Windy City received the notice of default on August 11, 2008. Id. at ¶ 37. The notice of default informed Cook County f/k/a Windy City that if it did not cure its failure to pay the first installment within 60 days it would be in default and the full amount of withdrawal liability would become immediately due and payable. Id. at ¶ 36. Despite the default notice, Defendants did not submit any payment to the Fund in response to the May 22, 2008 estimated notice and demand. Id. at ¶ 40. Moreover, prior to September 1, 2008, Windy City did not request the Fund to review its withdrawal determination pursuant to 29 U.S.C. § 1399(b)(2)(A). (R. 57-1, ¶ 39.) More than sixty days have passed since Cook County f/k/a Windy City received the August 11, 2008 notice of default. Id. at ¶ 41.

In January 2009, the Fund determined that pursuant to 29 U.S.C. § 1381(b), Windy City's liability for its withdrawal during the plan year October 1, 2007 through September 30, 2007 was $216,121. Id. at 42. Accordingly, on January 9, 2009, the Fund sent a revised notice and demand to the Wind City Control Group stating that its actual withdrawal liability was $216,121, and that it was in default on its payments. Id. at ¶¶ 44, 46; R. 57-6, Ex. A-4. Cook County f/k/a Windy City received the revised notice and demand on January 12, 2009. (R. 57-1, ¶ 45.)

Also in January 2009, Windy City sent a report and purported contribution payments for the work month December 2008 to the Fund, in the amount of $290, and its related Welfare Fund, in the amount of $416.80. Id. at ΒΆΒΆ 47, 49-50. In response, in a January 15, 2009 letter, the Fund advised Windy City that, based on its complete withdrawal from the Plan and failure to remit withdrawal liability payments, Windy City was in default. (R. 57-9, Ex. A-7.) The January 15, 2009 letter further informed Windy City that as there was no current obligation for Windy City to contribute to the Fund, the Fund was returning Windy City's $416.80 contribution ...


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