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Board of Trustees of the Plumbers' et al. v. S & K Plumbing Co. et al

March 2, 2011

BOARD OF TRUSTEES OF THE PLUMBERS' ET AL. PLAINTIFFS,
v.
S & K PLUMBING CO. ET AL., DEFENDANTS.



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

LOCAL UNION NO. 93 U.A.

MEMORANDUM OPINION & ORDER

This case involves a dispute over the amount of contributions owed by defendant S & K Plumbing Co. ("S & K") to certain multiemployer, employee benefit funds. The parties have filed cross-motions for partial summary judgment.

I.BACKGROUND

The Lake County and McHenry County Journeymen Plumbers Local Union 93 of the United Association (the "Union") has entered into a series of collective bargaining agreements with the Plumbing and Heating Contractors Association of Lake and McHenry Counties (the "Contractors Association"). Employers who hire members of the Union and who have subscribed to the collective bargaining agreements are required to pay contributions into various employee benefit trust funds. The trust funds are multiemployer plans as defined by the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1002(37). The plaintiffs in this action are the administrators of the trust funds (collectively, the "Trustees").

S & K is a small plumbing service shop in Wauconda, Illinois. On October 18, 1994, Jeffrey Killian ("Killian"), the Secretary/Treasurer and principal shareholder of S & K, signed a subscription agreement, committing S & K to participate in the then-existing collective bargaining agreement between the Union and the Contractors Association ("1992 CBA").*fn1 The subscription agreement provided:

SIGNATORY EMPLOYERS

For good consideration, the undersigned Employer hereby subscribes to and adopts the foregoing Collective Bargaining Agreement between PLUMBING AND HEATING CONTRACTORS ASSOCIATION OF LAKE AND McHENRY COUNTIES and JOURNEYMEN PLUMBERS, LOCAL UNION NO. 93, and agrees to abide by, and be bound by all of the terms and conditions thereof, and by any amendments thereto, and hereby ratifies and accepts said Collective Bargaining Agreement and the terms and conditions thereof as fully and completely as if the undersigned had been an original party thereto. (Doc. 52-1 at 14.) The 1992 CBA, to which the subscription agreement refers, provided that the Union will serve as the collective bargaining representative for all covered employees (Id. at 18-19); it established rules regarding working conditions (Id. at 22-29); and it set prevailing wages for covered employees (Id. at 33-34). The 1992 CBA also required employers to make monthly reports to the Trustees on the number of hours worked by covered employees and to pay contributions to the trust funds based on rates set by the agreement. (Id. at 32-34.)

When the Union and the Contractors Association drafted the 1992 CBA, they provided that both sides would be bound by the agreement for four years. After that time, the agreement would automatically be extended on a yearly basis, and either party could terminate the agreement by giving the proper notice. Specifically, the 1992 CBA provided:

This Agreement is effective as of June 1, 1992, and shall remain in full force and effect until May 31, 1996, inclusive and thereafter for successive yearly periods, unless at least sixty (60) days prior to the expiration of the initial period or any yearly period thereafter, either party hereto shall give notice to the other of its intention to modify or terminate the Agreement. (Id. at 30.) At some point, the Union and the Contractors Association negotiated a replacement to the 1992 CBA. The new agreement ("2005 CBA") contained very similar provisions,

although it set new prevailing wages and new contribution rates.*fn2 (Doc. 54-3 at 16.) The 2005 CBA also provided for a four year term-June 1, 2005 through May 31, 2008-followed by automatic yearly extensions, and either party could terminate by giving sixty days notice before an extension. (Id. at 13.) And, eventually, a third agreement ("2008 CBA") was negotiated covering the period June 1, 2008 through May 31, 2012.*fn3 (Doc. 54-4 at 29.)

According to S & K, in the spring of 2007, the company began to face financial difficulties. Killian avers that he met with representatives of the Union in 2007 and early 2008 "to seek their advise [sic] and guidance for terminating our affiliation with the Union." (Killian Aff., Doc. 52-3, ¶ 13.) Killian was told that "ending the Union affiliation was not an option." (Id. ¶ 15.) By May 2008, S & K had stopped making monthly payments to the Trustees. On June 26, 2008, the Trustees conducted an audit of S & K and found that the company had failed to pay $46,853.82 in contributions for the period between January 1, 2005 and May 1, 2008. (Doc. 54-7 at 3.) S & K acknowledges that it owes some contributions for this period, but it disputes the amount owed. The Trustees also maintain that S & K is bound by the 2008 CBA and will continue to owe contributions until May 31, 2012. S & K, on the other hand, contends that its obligations ended on May 31, 2008 (or, at the latest, on May 31, 2009).

II.SUMMARY JUDGMENT STANDARD

Summary judgment is proper "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "The moving party is so entitled if no reasonable fact-finder could return a verdict for the nonmoving party." Patton v. MFS/Sun Life Fin. Distribs., Inc., 480 F.3d 478, 485 (7th Cir. 2007). At the summary judgment stage, the court should view the evidence in the light most favorable to the nonmoving party, drawing all inferences ...


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