Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Laborers' Pension Fund v. Midwest Railroad Construction

May 5, 2010

LABORERS' PENSION FUND AND LABORERS' WELFARE FUND, ET AL., PLAINTIFFS,
v.
MIDWEST RAILROAD CONSTRUCTION, INC., AN ILLINOIS CORPORATION, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM OPINION AND ORDER

This case is before the Court on the motion of Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity (the "Funds"), and James S. Jorgensen (the "Administrator") (collectively, "Plaintiffs") for summary judgment. Plaintiffs brought this action against Midwest Railroad Construction Inc. ("Midwest"), Alan Szaks, and Edwin Thornley (collectively "Defendants") pursuant to 29 U.S.C. §§ 1132(e)(1) and (2), 29 U.S.C. § 185(a), and 28 U.S.C. §1331 based upon allegations that Defendants deprived the Funds of Employee Benefit Contributions and Union Dues. For the reasons set forth below, Plaintiffs' motion for summary judgment [76] is granted.

BACKGROUND

The facts below are drawn from the parties' local rule 56.1 stipulation of material facts unless otherwise noted. The Funds are multiemployer benefit plans established and maintained pursuant to their respective agreements and declarations of trust. The Construction and General Laborers' District Council of Chicago and Vicinity (the "Union") authorizes the Funds to collect two types of payments from employers who employ union workers: (1) amounts which have been or are required to be withheld from the wages of employees for payment of dues to the Union ("Union Dues") , and (2) amounts employers are required to contribute to employee benefit plans on behalf of each employee ("Employee Benefit Contributions"). Midwest is an Illinois corporation, and Alan Szaks and Edwin Thornley are officers and shareholders of the company. The Union and Midwest entered into a Collective Bargaining Agreement on November 1, 2003 (the "Collective Bargaining Agreement"). The Collective Bargaining Agreement incorporates by reference other agreements and declarations of trust, including the Chicago-Area Rail Contractor's Organization and the Construction and General Laborers District Council of Chicago and Vicinity Railroad Construction and Maintenance Agreement (the "Maintenance Agreement").

Plaintiffs believe that Midwest owes them the two types of amounts described earlier: (1) Employee Benefit Contributions and (2) Union Dues. The terms Working Dues and Union Dues are used in various instances in the documents submitted by the parties. We will use the term Union Dues for consistency. First we address Employee Benefit Contributions, and then we discuss Union Dues.

The Maintenance Agreement obligates Midwest to make contributions on behalf of its covered employees for pension funds, health and welfare benefits, and for training funds. The Maintenance Agreement further requires that Midwest submit to the Funds monthly remittance reports, which identify the covered employees and the amount of contributions to be made for each employee. (Parties' Local Rule 56.1 Stipulation of Material Facts at 3). Midwest submitted monthly reports to the Fund and reported that no employees worked during each of those months. (Defs.' Resp. to Pls.' Mem. Supp. Summ. J. Ex. D). Finally, the Maintenance Agreement states that contributions not submitted in a timely fashion will be assessed at a 10% liquidated damages rate plus interest. (Parties' Local Rule 56.1 Stipulation of Material Facts at 3; Parties' Local Rule 56.1 Stipulation of Material Facts Ex. B at 20).

The Collective Bargaining Agreement states in paragraph three that the employer "shall deduct from the wages of employees uniform working dues in the amount of 1.5% of gross wages, or such other amount as directed by the union." (Defs.' Resp. to Pls.' Mem. Supp. Summ. J. Ex. B ¶ 3). Untimely contributions for these Union Dues will be assessed at a 10% liquidated damages rate plus interest. (Parties' Local Rule 56.1 Stipulation of Material Facts Ex. B Art. IX ¶ 2).

Pursuant to the Maintenance Agreement, Midwest must submit its books to the Funds for an audit to determine if Midwest is in compliance with its contribution responsibilities. The Funds conducted two audits that gave rise to the instant lawsuit. Plaintiffs' four--count complaint consists of two counts for the audit period of November 1, 2003 through October 31, 2004 and two counts for the audit period of November 1, 2004 through September 30, 2006. Counts I and III allege that Midwest failed to pay Employee Benefit Contributions on behalf of its employees during the time periods of the audits. Counts II and IV allege that Midwest failed to pay Union Dues that Midwest should have deducted from the wages of covered employees.

LEGAL STANDARD

Summary judgment is proper when the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that no genuine issue of material fact exists and therefore, the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). The existence of a factual dispute is not enough to defeat summary judgment; rather the non-moving party must present definite, competent evidence to rebut the motion for summary judgment. See Butts v. Aurora Health Care, Inc., 387 F.3d 921, 924 (7th Cir. 2004). A genuine issue of material fact exists only when the evidence is such that a reasonable jury could find in favor of the non-moving party. Andersen v. Liberty Lobby, Inc., 477 U.S. 277, 248 (1986). When deciding a motion for summary judgment the Court must construe all facts and draw all reasonable inferences in a light most favorable to the non-moving party. See id. at 255.

DISCUSSION

Plaintiffs assert four counts in their complaint, two for each audit performed. One count for each audit period asserts that Midwest failed to pay Employee Benefit Contributions on behalf of its employees; the other count for each audit period asserts that Midwest failed to pay Union Dues it should have deducted from the covered employees wages for the time periods covered in the audits. Employees must be "Covered Employees" performing "Covered Work" before Midwest's is obliged to pay the amounts the Funds asserted in their compliant. (Defs.' Resp. to Pls.' Mem. Supp. Summ. J. Ex. D). The Funds assert that the only issue of material fact is whether these employees performed Covered Work, and that the unambiguous language of the contract obligates Midwest to pay the outstanding amounts due on the audit. (Pls.' Mem. Supp. Summ. J. at 7). The Funds assert that Midwest employed Covered Employees during the time periods at issue, despite the fact that Midwest leased its employees from a company called Labor Ready. Midwest asserts that Paragraph 3 of Article IX of the Railroad Construction and Maintenance Agreement creates a condition precedent that requires the Funds to give Midwest notice prior to Midwest having any obligation to pay Employee Benefit Contributions and withhold Union Dues, and that this condition precedent was never satisfied.

We find that Plaintiffs are entitled to summary judgment on all four counts of their complaint because, under the plain language of the Collective Bargaining Agreement and the Maintenance Agreement, (1) Midwest clearly employed Covered Employees performing Covered Work during the audit periods, (2) the Funds were not required to give Midwest notice of an obligation to pay Employee Benefit Contributions and Union Dues, and (3) even if notice was required, Midwest had actual notice of its obligation to pay said Employee Benefit Contributions and Union Dues.

Plaintiffs bring this action against Midwest and against Alan Szaks and Edwin Thornley, individually. Plaintiffs allege Szaks and Thornley fraudulently and intentionally failed to report and submit dues owed to the Funds. (Pl's Amend. Compl. ΒΆ 29). The parties' summary judgment briefs focus solely on Midwest, the company, as a defendant and not the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.