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Trustees of the Chicago Regional Council of Carpenters Pension Fund v. CMG Commercial Floor Maintenance Company

July 9, 2010

TRUSTEES OF THE CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, CHICAGO REGIONAL COUNCIL OF CARPENTERS WELFARE FUND, AND CHICAGO REGIONAL COUNCIL OF CARPENTERS APPRENTICE & TRAINEE PROGRAM FUND, PLAINTIFFS,
v.
CMG COMMERCIAL FLOOR MAINTENANCE COMPANY, INC., DEFENDANT.



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

Judge Joan B. Gottschall

MEMORANDUM OPINION & ORDER

Plaintiffs, Trustees of the Chicago Regional Council of Carpenters Pension Fund, Chicago Regional Council of Carpenters Welfare Fund, and Chicago Regional Council of Carpenters Apprentice & Trainee Program Fund (collectively, the "Funds"), brought this action pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), Pub. L. No. 93-406, 88 Stat. 829 (codified as amended in scattered sections of 5 U.S.C., 18 U.S.C., 26 U.S.C., 29 U.S.C., and 42 U.S.C.) and the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. §§ 141-197. The Funds seek various remedies for defendant CMG Commercial Floor Maintenance Company, Inc.'s ("CMG") failure to pay fringe benefits to the Funds for two CMG employees between February 2006 and March 2007. CMG admits that it did not pay the benefits at issue, but maintains that it never owed such payments. This matter is presently before the court on the parties' cross-motions for summary judgment. The parties have fully briefed the issue, and, on July 2, 2010, the court heard oral argument. For the reasons stated within, the Funds' motion is granted in part and denied as moot in part, and CMG's motion is denied.

I. FACTUAL BACKGROUND

On February 2, 2006, CMG, which operated a flooring business, entered into a Memorandum of Agreement (the "Memorandum") with the Chicago Regional Council of Carpenters (the "Union") regarding labor issues at CMG. (Def.'s Stmt. ¶¶ 2, 7.)*fn1 By executing the Memorandum, CMG agreed to be bound both by previously negotiated collective bargaining agreements between the Union and a regional bargaining association and by the various Trust Agreements establishing the Funds to which employers contributed. (Id. ¶¶ 5-7; see also Pls.' Stmt. ¶¶ 6-7.) The relevant Trust Agreement required each employer to "make continuing and prompt contribution to the [the Funds] in an amount equal to fifty (50) cents per hour for each hour worked" by the employer's bargaining unit employees. (Pls.' Ex. 4, Art. III, at 2; see also Pls.' Stmt. ¶ 7.) The relevant collective bargaining agreements reaffirmed the employer's obligation to make contributions to the Funds for each employee-hour worked. (Pls.' Ex. 6, Art. IV, at 14; Pls.' Ex. 7, Art. XII, at 14-15; Pls.' Ex. 8, Art. VI, at 12.)

Contemporaneously with the Memorandum, CMG signed a Flooring Installation Addendum (the "Addendum"), which the Union and a professional flooring association had negotiated previously. By executing the Addendum, CMG agreed to be bound by the above-described collective bargaining agreements. (Pls.' Ex. 5, at 1.) The Addendum contained three similar provisions for healthcare coverage, one each for employees categorized as helpers, material handlers, and cleaners. (Def.'s Stmt. ¶¶ 14-16.) The provision at issue here pertains to cleaners, and states in relevant part:

Employers agree to provide each Cleaner with either coverage under the Chicago Regional Council of Carpenters Funds or provide [sic] Hospital Surgical benefits under a plan to be no less favorable than "80/20" coverage. The Employer must submit to the UNION the Health Care Insurers [sic] name, policy number, and days of employment until covered if this plan is used. (Id. ¶ 16.) CMG maintained a company-sponsored insurance plan by which it offered benefits to its employees, including its cleaners. (Id. ¶¶ 17-18.)

At issue in this litigation are two CMG cleaners who did not receive coverage under CMG's plan or under the Funds. The first, David Evans, signed a waiver of coverage on March 2, 2006, and told CMG that he already had insurance coverage through his wife's insurance policy. (Id. ¶¶ 23-24.) Randy Comchomnon, another cleaner, also signed a waiver of coverage under the insurance plan on February 11, 2007, informing CMG personnel that he already had health insurance through his parents' insurance policy. (Id. ¶¶ 21-22.) CMG did not make contributions to the Funds for Evans or Comchomnon and did not enroll those two cleaners in its own insurance plan.

In 2007, the Funds hired certified accountants to audit CMG (Def.'s Stmt. ¶ 29), resulting in an adjusted audit report finding that CMG owed approximately $27,000*fn2 in unpaid contributions to the Funds on behalf of Evans, Comchomnon, and a third cleaner who is no longer at issue in this litigation.*fn3 (Id. ¶ 30.)*fn4 The parties were unable to resolve their dispute regarding these contributions, and the Funds brought this action.

II. LEGAL STANDARD

Summary judgment is warranted where "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)(2); see also Brengettcy v. Horton, 423 F.3d 674, 680 (7th Cir. 2005). All facts, and any inferences to be drawn from them, must be viewed in the light most favorable to the non-moving party. Wis. Cent., Ltd. v. Shannon, 539 F.3d 751, 756 (7th Cir. 2008); see also Bassiouni v. F.B.I., 436 F.3d 712, 721 (7th Cir. 2006) (same for cross-motions). The Seventh Circuit has repeatedly recognized that "summary judgment is particularly appropriate in cases involving the interpretation of contractual documents." Ryan v. Chromalloy Am. Corp., 877 F.2d 598, 602 (7th Cir. 1989); see also Neuma, Inc. v. AMP, Inc., 259 F.3d 864, 871 (7th Cir. 2001).

As the parties agree, "[w]hen considering a contract in the context of an ERISA claim, federal common law rules of interpretation apply." Cent. States, Se. & Sw. Areas Pension Fund v. Kroger Co., 73 F.3d 727, 731 (7th Cir. 1996) (citations omitted). Under federal common law rules, courts should interpret documents according to their "'ordinary and popular sense as would a person of average intelligence and experience.'"

Neuma, 259 F.3d at 873 (quoting Brewer v. Protexall, Inc., 50 F.3d 453, 457 (7th Cir. 1995)). In interpreting an ERISA-related document, the court's "first task is to determine if the contract at issue is ambiguous or unambiguous." Id. While a contract with only one reasonable interpretation is unambiguous and therefore proper for summary judgment, an ambiguous contractual term requires additional proceedings to establish its meaning and thus is not a proper subject for summary judgment. See Moriarty v. Svec, 164 F.3d 323, 330 (7th Cir. 1998). Finally, the court must "read collective bargaining ...


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