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Unite Here Health v. Pm Hospitality Strategies, Inc.

United States District Court, Seventh Circuit

June 19, 2013

UNITE HERE HEALTH, et al., Plaintiffs,
v.
PM HOSPITALITY STRATEGIES, INC., d/b/a SHERATON MEADOWLANDS HOTEL & CONFERENCE CENTER, Defendant.

MOTION FOR ENTRY OF DEFAULT AND JUDGMENT

JOHN W. DARRAH, District Judge.

NOW COME Plaintiffs, by their attorneys, and move for entry of judgment by default against Defendant, PM HOSPITALITY STRATEGIES, INC., d/b/a SHERATON MEADOWLANDS HOTEL & CONFERENCE CENTER, in the total amount of $396, 983.15, plus Plaintiffs' court costs and reasonable attorneys' fees in the amount of $3, 651.24. In support of the Motion, Plaintiffs state as follows:

1. On February 4, 2013, the Summons and Complaint was served on the Defendant by tendering a copy of said documents to an authorized agent at the Defendant's place of business (a copy of the Summons and Affidavit of Service is attached as Exhibit A). Therefore, Defendant's answer was due on February 25, 2013. As Defendant has failed to timely answer the Complaint, Plaintiffs respectfully request entry of default and judgment.

2. In March 2013, Defendant entered into a Settlement Agreement and Mutual Release in the total amount of $281, 580.14 at 5.25% interest on the declining balance. That amount included contributions, interest, liquidated damages, audit fees, and attorneys' fees for the audited period January 1, 2008 through December 31, 2011, and the unaudited period June 2012 through January 2013. Defendant agreed to pay the settlement amount in 5 monthly installments of $47, 651.25 each with a 6th payment of $47, 651.28. The first payment was due on April 15, 2013. Remaining installments were due on the 15th day of each month thereafter through September 15, 2013. All installment payments were to be received no later than the close of business on or before the 15th day of the month for which such payment is due (a copy of the Settlement Agreement and Mutual Release is attached as Exhibit B, See also Affidavit of Dean Dailey attached as Exhibit D ¶ 4).

3. As part of the terms of the Settlement Agreement, Defendant was also required to remain current in its on-going obligations to Plaintiff Fund. Those on-going monthly contributions were also due on the 15th day of the month following the month the work was performed. (Ex. B ¶ 2).

4. In the event the Defendant was late in making any of the payments agreed to in Paragraph 1 of the Settlement Agreement, or the Defendant was late in making its on-going monthly contributions under Paragraph 2 of the Settlement Agreement, the Defendant would be considered in default and in violation of the terms of the Settlement Agreement. In the event of a default, the Defendant had five (5) business days after receiving written notice of the default to cure the default. (Ex. B ¶ 3).

5. Defendant is in default under the Settlement Agreement because it failed to submit its monthly contributions due for the work months of April 2013 and May 2013. Accordingly, Defendant owes $205, 349.32 for these months. (Ex. D ¶ 5).

6. On May 30, 2013, Plaintiff's counsel sent a notice of default to the Defendant's President, Joseph Bojanowski, by U.S. Mail, return receipt requested, or by overnight national courier service, at the following address: 2020 K Street, NW, Suite 600, Washington, DC 20006 (a copy of the May 30, 2013 letter from Plaintiffs' counsel to Defendant's President, sent via UPS overnight mail, is attached as Exhibit C).

7. Defendant failed to cure the default within five (5) business days of receiving such notice. (Ex. D ¶ 5). As such, the Defendant agrees that it is in violation of the Settlement Agreement and consents to entry of judgment for all unpaid amounts due under Paragraph 1 of the Settlement Agreement, plus all unpaid contributions that accrue through the date of entry of judgment, including all reasonable attorneys' fees and costs that the Plaintiffs may incur as a result of the Defendant's violation of the Settlement Agreement.

8. Defendant submitted the first two (2) payments of $47, 651.25 each. Accordingly, the four (4) remaining payments are now due for a total of $191, 633.83. (Ex. D ¶ 5).

9. As stated above, Defendant owes contributions for the work months of April 2013 and May 2013 in the amount of $205, 349.32. (Ex. D ¶ 5).

10. Plaintiffs have incurred costs totaling $527.49 and reasonable attorneys' fees totaling $3, 115.00.

11. For all the reasons stated, the Plaintiffs hereby move the Court for entry of default and judgment against the Defendant. Specifically, Plaintiffs request:

A. That judgment be entered in favor of Plaintiffs and against Defendant to include the amount of $191, 633.83, being the amount remaining due pursuant to the terms of the Settlement Agreement and Mutual Release.
B. That judgment be entered in favor of Plaintiffs and against Defendant to include the amount of $205, 349.32, due for contributions due for the work months of April 2013 and May 2013.
C. That judgment be entered in favor of Plaintiffs and against Defendant to include the amount of $527.49 for costs and $3, 115.00 as and for Plaintiffs' just and reasonable attorneys' fees.
D. That Plaintiffs have such further relief as may be deemed just and equitable

EXHIBIT A

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS

YOU ARE HEREBY SUMMONED and required to serve upon PLAINTIFF'S ATTORNEY (name and address)

an answer to the complaint which is herewith served upon you, within Twenty-one (21) days after service of this summons upon you, exclusive of the day of service. If you fail to do so, judgment by default will be taken against you for the relief demanded in the complaint. You must also tile your answer with the Clerk of this Court within a reasonable period of time after service.

EXHIBIT B

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

This Settlement Agreement and Mutual Release (Agreement) is entered into this Day of March 2013 between UNITE HERE HEALTH (Health Fund), Matthew Walker as fiduciary of Health Fund, (Health Fund and Walker will be referred to collectively as Health Fund) and DPG Hotel XVII Owner, LLC d/b/a Sheraton Meadowlands (Hotel)

WHEREAS, Hotel is signatory to a collective bargaining agreement (CBA) with the New York Hotel & Motel Trades Council, AFL-CIO (Union).

WHEREAS, Under Article 19 of the CBA, Hotel was and is obligated to make contributions to the Health Fund on behalf of employees who perform bargaining unit work.

WHEREAS, Article 19D of the CBA binds Hotel to the Agreement and Declaration of Trust (Trust Agreement) under the terms of which Hotel, inter alia, shall pay, in addition to the contributions determined to be due, interest, liquidated, damages, attorneys fees and costs, audit costs, court costs and any other reasonable costs incurred by the Fund as a result of the collection process.

WHEREAS. On January 14, 2013, the Health Fund filed a lawsuit in the United States District Court for the Northern District of Illinois, case number 13 C 230 against Hotel. The complaint alleged that Hotel was delinquent in its obligations to the Health Fund for the audited period January 1. 2008 through December 31, 2011 and for the unaudited period June 2, 2012 through January 31, 2013.

WHEREAS, the Health Fund and Hotel desire to settle the pending lawsuit in order to fully resolve the issues of the amounts claimed due by the Health Fund.

THEREFORE, and in consideration of the mutual promises and conditions herein set forth, the Hotel and the Health Fund agree as follows:

1. Hotel shall pay to the Health Fund the total amount of 5281, 580.14 at 5.25% interest on the declining balance. That amount includes contributions, interest, liquidated damages, audit fees, and attorneys' fees for the audited period January 1, 2008 through December 31, 2011, and the unaudited period June 2012 through January 2013. The settlement amount will be paid in 5 monthly installments of 547, 651.25 each with a 6th payment of $47, 651.28, The first payment is due on April 15, 2013. Remaining installments are due on the 15th day of each month thereafter through September 15, 2013. All installment payments must be received no later than the close of business on or before the 15th day of the month for which such payment is due. All checks are to be made payable to the Health Fund and are to be mailed to the attention of Andrea Flaherty, Litigation Attorney, UNITE HERE HEALTH, 711 N. Commons Drive, Aurora, Illinois 60504.

2. As part of this Agreement, Hotel is required to remain current in its on-going obligations to the Health Fund. Those on-going monthly contributions are also due on the 15th day of the month following the month the work was performed.

3. In the event that Hotel is late in making any of the payments agreed to in Paragraph 1, or Hotel is late in making its on-going monthly contributions under Paragraph 2, Hotel will be considered in default and in violation of the terms of this Agreement. In the event of a default, Hotel will have five (5) business days after receiving written notice of the default to cure that default. Notice of default will be sent to PMHS's President Joseph Bojanowski by U.S. mail, return receipt requested or by overnight national courier service at the following address: 2020 K St, NW, Suite 600, Washington, DC 20006.

4. If Hotel cannot cure the default within the five business days of receiving such notice, Hotel agrees that it shall be considered in violation of this Agreement and it will consent to entry of judgment for all unpaid amounts due under paragraph 1, plus all unpaid contributions that accrue through the date of entry of judgment, including all reasonable attorneys' fees and costs that the Health Fund may incur as a result of the Hotel's violation of this Agreement.

6. In addition, if the Hotel is in default because it has failed to make the payment of on-going obligations, the Health Fund has the right to allocate any of the installment payments to overdue on-going obligations for amounts due for the work months February 2013 forward.

7. The parties understand and acknowledge that nothing contained herein limits or modifies the rights of the Health Fund to audit the books and records of Hotel in accordance with the Trust Agreement at such future time, as in the course of its regular audit program, nor do the terms of the Agreement limit or modify the Health Fund's rights to recover from Hotel any additional contributions, ineligible claims, interest, liquidated damages, or costs, which may become due or which may be found to be due as a result for such an audit for any period of time not already audited by the Health Fund.

8. Nothing contained herein shall require the Health Fund to take legal action in the event of a default under this Agreement. If the Health Fund decides, in its sole discretion, to permit additional time for Hotel to cure a default, such allowance of additional time shall not be construed as a waiver of its rights under this Agreement.

9. After the final payment is made under this agreement, Plaintiffs will execute and file a satisfaction of judgment with this Court in a form mutually agreeable to the parties.

10. After Hotel has paid all amounts due under this Agreement and has remained current during that period, it is agreed, in addition, that the Health Fund hereby releases, acquits, and forever discharges Hotel, and its respective owners, officers, directors, employees, agents, representatives and partners and their respective successors and assigns from any and all claims, actions, causes of action, demands, rights, damages, and costs in any way related to Hotel's obligations to make contributions to the Health Fund for the period January 1, 2008 through December 31, 2011. Likewise, it is agreed that Hotel hereby releases, acquits, and forever discharges the Fund its respective Trustees, officers, employees, and attorneys from any and all claims, actions, causes of action, demands, rights, damages, and costs which Hotel has, had, or may have in any way related to Hotel's obligations to make - contributions to the Fund for the period January 1, 2008 through December 31, 2011.

EXHIBIT C

Dear Mr. Bojanowski:

Under the terms of the settlement agreement, the Hotel is in default because it is delinquent for the work month of April 2013. The payment for that work month was due May 15 and has not been made. According to the terms of the settlement agreement, if the Hotel cannot cure the default within five business days of receiving this notice the Hotel agrees that it shall be considered in violation of the agreement and that it will consent to entry of judgment for all unpaid amounts due, plus all unpaid contributions that accrue through the date of judgment, including all reasonable attorneys' fees and costs that Plaintiff may incur as a result of the Hotel's violation of the agreement. The parties have not yet entered into the consent decree which would be the basis for dismissing the litigation. At this point, the Funds will not dismiss the lawsuit as long as the Hotel remains in default.

EXHIBIT D

IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION

AFFIDAVIT

DEAN DAILEY, being first duly sworn upon his oath, deposes and states:

am now and at all times relevant have been employed by UNITE HERE HEALTH ("Fund"). Since January 2005 I have served as the Fund's Collection Manager and in such capacity I have personal knowledge of the matters hereinafter set forth.

2. I have read and am familiar with the Complaint filed in this cause, and know of my own personal knowledge the contents of the collectively bargained labor agreement ("CBA") as it relates to contributions to be made to the Fund. I am also familiar with the Fund's Amended and Restated Agreement and Declaration of Trust ("Trust Agreement") again as it relates to contributions to be made to the Fund.

3 I am charged with reviewing records of contributions received by the Fund and monitor records on each entity required to make contributions to the Fund. Also, on behalf of the Fund, I review contribution reports made by employers required to make contributions, and have under my supervision and direction all books, records, documents and papers relating to such employers who are delinquent in their obligations to the Fund.

4. As the Collection Manager I work with the Fund's Legal Department, which maintains copies of the collectively bargained labor agreements to which all the employers who are bound make contributions to the Fund. The Legal Department also maintains copies of settlement agreements that employers enter into with the Fund, when necessary, to resolve outstanding collection matters. The Fund maintains these records in the usual course of its business. I have reviewed and have knowledge of the Defendant's Settlement Agreement and Mutual Release ("Agreement") in this matter.

5. I have examined the account of the Defendant in this case, and state that the Defendant:

(a) is required to remit monthly contribution reports pursuant to the terms of the aforesaid CBA;
(b) has submitted the monthly contribution reports for the work months of April 2013 and May 2013 but has failed to submit the monthly contributions which it acknowledges therein to be due in the amount of $205, 349.32.
(c) is also required to remit monthly installment payments each in the amount of $47, 651.25 pursuant to the terms of the Agreement and has remitted two payments under the Agreement leaving a total amount due under the Agreement of $191, 633.83;
6. I make this Affidavit in support of the application of Plaintiffs for default and judgment against the Defendant and request this Court to consider the proof in Support of the allegation contained in the Complaint of the Plaintiffs and such other facts herein set forth

FURTHER AFFIANCE SAYETH NOT.


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