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Laborers' Pension Fund v. Latin Pavers, Inc.

United States District Court, Seventh Circuit

August 1, 2013

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, and JAMES S. JORGENSEN, Administrator of the Funds Plaintiffs,
v.
LATIN PAVERS, INC., Defendant.

PLAINTIFFS' MOTION FOR DAMAGES

JOAN B. GOTTSCHALL, Judge.

Plaintiffs, the Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Fund of the Health and Welfare Department of Construction and General Laborers' District Council of Chicago and Vicinity, and James S. Jorgensen, Administrator of the Funds (collectively the "Funds"), by their attorneys, hereby move for judgment in sum certain against defendant, Latin Pavers, Inc., (the "Company"), pursuant to Rule 55 of the Federal Rules of Civil Procedure. In support of the this motion, plaintiffs by their attorneys state:

1. On January 5, 2012, plaintiffs filed an amended complaint under Sections 502(e)(1) and (2) of the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1132(e)(1) and (2); Section 301(a) of the Labor Management Relations Act, as amended, 29 U.S.C. § 185(a); and 28 U.S.C. § 1331 alleging that at all material times defendant has an obligation, arising from a collective bargaining agreement to make contributions to plaintiffs' Funds, to submit to an audit upon demand and to obtain and maintain a surety bond. In the Complaint, plaintiffs specifically alleged that defendant failed to report and pay contributions from May 2011 to the present. Plaintiffs requested relief included producing books and records for an audit upon plaintiffs' request. (See Docket #1).

2. On July 30, 2013, after failing to appear in person or by counsel as ordered by this Court (See Docket #34), the Court entered an order of default against the defendant, Latin Pavers and in favor of the plaintiffs.

3. As established by the Laborers' Field Representative, James Fosco, the Company of Richard J. Wolf And Company, Inc. ("Wolf"), was selected to perform a review of the Company's books and records for the period between November 1, 2009 through December 31, 2011 for the Funds. (See attached, Exhibit 1, ¶2, Fosco Affidavit). The Wolf audit report dated, April 27, 2012, showed principal contributions owed to the Welfare, Pension, Training, LMDC, WGC and LECET funds and for Union dues in the total amount of $49, 102.55. (See, Exhibit 2, Revised Audit Report).

4. The Company reviewed the Wolf audit report, and objected to the audit findings. After due consideration to the Company's objections, the Funds agreed to revise down the audit, such that the total amount of $22, 423.92 remains due for principal contributions owed to the Welfare, Pension, Training, LMDC, WGC and LECET funds and for Union dues. (See, Exh. 1, ¶3, Fosco Affidavit; Exh. 2, Revised Audit Report). Based on the revised audit, Mr. Fosco prepared a summary report, which is attached to his affidavit as Exhibit 1A. (See, Exh. 1, ¶4).

5. According to the collective bargaining agreement and trust agreements to which the defendant is bound, payment is also owed for liquidated damages in the amount of twenty (20) percent of the unpaid or late contributions to the Welfare, Pension, and Training funds, and ten (10) percent of the principal amount of delinquent contributions to the LDMC, WGC and LECET funds, and for Union dues. Additionally, interest is calculated at twelve (12) percent and is owed for all delinquencies excluding union dues. As such, liquidated damages are owed in the amount of $4, 233.65 to the Welfare, Pension and Training funds, liquidated damages are owed in the amount of $125.56 to LDCLMCC, WGC and LECET funds and Union dues, and $5, 495.97 is owed in accumulated interest to date. (See, Exh. 1A, Summary Report; Exh. 1, ¶4 and ¶5, Fosco Affidavit)

6. Also, as established by Mr. Fosco, when the Funds filed the present lawsuit, the Company ceased to submit payments to the Funds for its prior installment note, leaving a total unpaid balance due in the amount of $4, 694.24, which is shown remaining on the Company's payment plan worksheet that is attached as Exhibit 1B. (See, Exh. 1 ¶6, Fosco Affidavit; Exh. 1B, Installment Note Worksheet).

7. The defendant is also obligated to pay the $900.00 for the cost of the audit based on the respective Collective Bargaining Agreement and Trust Agreements to which it is bound. (See, Exh 1, ¶8, Fosco Affidavit; Exh. 2, p.2, Revised Audit Report).

8. Plaintiffs are further entitled to attorneys' fees and costs under ERISA, 29 U.S.C.§ 1132(g)(2)(B). The attached affidavit of Sara Stewart Schumann establishes the amount of attorneys' fees incurred in this matter are $12, 992.50 plus court costs of $420.00, which consist of service of process and filing fees. (See, Exhibit 3, Schumann Affidavit, and Exhibit 3A, Attorney fee report).

WHEREFORE, plaintiffs request entry of judgment against the defendant, Latin Pavers, Inc., pursuant to F.R. Civ. P., Rule 55, and request that the Court order judgment in a total amount of $51, 285.84 to be entered. Further, plaintiffs request the Court order specify that, should the defendant resume operations, it must report hours of covered employees on a monthly basis and pay current contributions as they become due as required under the collective bargaining agreement, and it must provide written proof that it has obtained a surety bond to plaintiffs' counsel, Sara S. Schumann, Esq., Allison, Slutsky & Kennedy, P.C., 230 W. Monroe Street, Suite 2600, Chicago, IL 60606.

James Fosco, being first duly sworn on oath, deposes and states as follows:

1. I am a Field Representative of the Field Department, employed by the 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"), the plaintiffs in the above referenced action. My responsibilities include oversight of collection of amounts owed by Latin Pavers, Inc. (the "Company"), which has been a signatory employer since September 13, 2001. A copy of the Company's Collective Bargaining Agreement was attached to the Complaint in the above captioned lawsuit. This affidavit is submitted in support of the Funds' motion for damages against the Company.

2. The Funds' auditors of the firm of Richard J. Wolf & Company, Inc., reviewed the Company's records for the audit period covering November 1, 2009 through December 31, 2011. The auditors' findings are reflected in its report, dated April 27, 2012. This report shows principal contributions owed to the Welfare, Pension., Training, LMDC, WGC, LECET funds and for Union dues in the total amount of $49, 102.55.

3. A copy of the audit report was sent to the Company with a letter demanding payment for the audit findings. Subsequently, the Company presented objections to the audit findings, and, after due consideration and a review of additional information, the Funds agreed to revise down the audit. The revised audit is attached to the plaintiffs' motion as Exhibit 2 and shows the principal contributions owed to the Welfare, Pension, Training, LMDC, WGC, LECET funds and for Union dues in the total amount of $22, 423.92.

4. Based on the revised audit, I prepared a summary report which is attached hereto as Exhibit 1A, reflecting the principal contributions, union dues, liquidated damages and audit costs that the Company owes pursuant to its Collective Bargaining Agreement and the respective Trust Agreements. According to these Agreements, the Funds are entitled to liquidated damages at the rate of twenty (20) percent of the amount owed in principal contributions to the Pension, Welfare, Training funds, and at the rate of ten (10) percent of the amount owed in principal contributions to the LMDC, WGC and LECET funds and for Union dues. Thus, $4, 233.64 is owed for liquidated damages due to the principal contributions to the Pension, Welfare, and Training funds, and $125.56 is owed for liquidated damages due to amounts owed to the LMDC, WGC, and LECET funds and for Union dues.

5. The Funds are also entitled pursuant to its Collective Bargaining Agreement and the respective Trust Agreements to the amount of twelve (12) percent accumulated interest for all amounts owed by the Company to date. I have calculated the accumulated interest owed by the Company through July 31, 2013, and entered the amount of $5, 495.97 owed for accumulated interest into my summary reports as well.

6. Additionally, at the time, the Funds filed this lawsuit the Company ceased submitting payments on a prior note. The note payment schedule is attached hereto as Exhibit 1B, and shows that $4, 694.24 is owed from the Company's prior note delinquency. This amount is also listed on my summary report.

7. The Company has ceased operating, but should it resume operations in the future, the Funds reserve the right to audit the as yet unaudited period from January 1, 2012 in accordance with its Collective Bargaining Agreement and the respective Trust Agreements, and at the direction of the Funds' trustees in regard to collection matters. The Funds may also file a new lawsuit if necessary to collect any additional outstanding amounts owed by the Company.

8. The Company is further obligated pursuant to its Agreements for the audit costs in the amount of $900.00, as well as responsible by law for the reasonable attorneys' fees and court costs incurred by the Funds in obtaining judgment in this matter.

Exhibit 1 A

Exhibit 1 B

Exhibit 2

Sara Stewart Schumann, being first duly sworn on oath, deposes and states as follows:

1. I am an associate attorney at the law firm of Allison, Slutsky & Kennedy, P.C., counsel for plaintiffs 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") in the action against Latin Pavers, Inc. (the "Company"). This affidavit is submitted to document attorneys' fees and costs incurred by the Laborers' Funds covering the period from December 1, 2011 through August 1, 2013, for work performed in connection with obtaining contributions owed.

2. Since December 1, 2011, this firm has billed the Laborers' Funds on an hourly basis for collection services rendered to the Funds, at a rate of $200.00 per hour for shareholders, $175.00 per hour for associates, and $100.00 per hour for clerks/paralegals. In this cause records kept for legal work on this matter kept contemporaneously and are attached hereto as Exhibit 3A.

3. This fee report is attached here to as Exhibit 3A and sets forth the time expended from December 1, 2011, through August 1, 2013, by the firm's attorneys and paralegals in this matter. The billable entries were reviewed, and any duplicate entries were struck. As set forth in Exhibit 3A, the Laborers' Funds have incurred legal fees to my firm in this matter in the amount of $12, 992.50

4. In addition, the Laborers' Funds have incurred court costs in the prosecution of this matter totaling $420.00, which consists of filing fees, and fees for service of process.

Exhibit 3A


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