United States District Court, C.D. Illinois, Peoria Division
LABORERS' LOCAL #231, LABORERS' LOCAL #231 PENSION FUND, LABORERS' LOCAL #231 HEALTH & WELFARE FUND, LABORERS' LOCAL #231, ANNUITY FUND, LABORERS' LOCAL #231, TRAINING TRUST FUND, LABORERS' NATIONAL HEALTH & SAFETY FUND, LABORERS' EMPLOYERS' COOPERATIVE EDUCATION TRUST, MIDWEST REGION FOUNDATION FOR FAIR CONTRACTING, ILLINOIS LABORERS' LEGISLATIVE COMMITTEE, LABORERS' LOCAL #231 RETIREE COUNCIL, LABORERS' LOCAL #231 INDUSTRY FUND, WEST CENTRAL BUILDING TRADES FUND, TRI COUNTY CONSTRUCTION LABOR MANAGEMENT COUNCIL, MIDWEST REGION ORGANIZING FUND, REAL ESTATE MAINTENANCE FUND, LABORERS' POLITICAL LEAGUE FUND, LABORERS' NATIONAL POLITICAL LEAGUE FUND, Plaintiffs,
RUPE CONTRACTING INC., an Illinois Corporation, JBR EARTHSCAPES INC., an Illinois limited liability corporation, and JOHN RUPE, Individually, Defendants.
ORDER & OPINION
JOE BILLY McDADE, Senior District Judge.
This matter is before the Court on Defendant, JBR Earthscapes Inc.'s (hereinafter "JBR") Motion for Summary Judgment (Doc. 24) and Plaintiffs' Motion To Stay Defendant's Motion For Summary Judgment (Doc. 25) pending the conclusion of discovery. This case was originally filed on July 3, 2012. (Doc. 1) The case was stayed between September 24, 2012 and March 8, 2013 because of the then-pending bankruptcy of one of the defendants, Rupe Contracting, Inc. ("Rupe, Inc."). (Text Order, Sept. 24, 2012). After the case was reinstated, the Court entered a scheduling order on May 22, 2013 setting dates including a December 15, 2013 fact discovery cutoff. (Minute Entry, May 22, 2013, No. 12-cv-1216). Thereafter, it appears not much was done in the case until November 15, 2013, when Plaintiffs served JBR with requests for production and interrogatories. (Doc. 25 at 2). JBR never responded. Instead, JBR filed a motion for summary judgment on November 26, 2013. (Doc. 24). Fact discovery closed on December 15, 2013 with neither party moving the Court for an extension. Plaintiffs waited until December 18, 2013 to file their motion to stay JBR's motion for summary judgment. (Doc. 25).
According to the Complaint (Doc. 1), Plaintiffs are employee benefit funds maintained and administered in accordance with provisions of the Labor Management Relations Act of 1947, and Employee Retirement Income Security Act (as amended), 29 U.S.C. §1001 et seq. ("ERISA"). Plaintiffs operate for the benefit of a union, Laborers' Local #231 (the "Union"). The Union is party to a collective bargaining agreement (the "CBA") with Defendant, Rupe, Inc. The CBA incorporates into its provisions certain duties arising under the Labor Management Relations Act of 1947 and ERISA. One such duty is for Rupe, Inc. to pay contributions into the Plaintiffs' funds because Rupe, Inc. employed several of the Union's members as employees.
Plaintiffs allege Rupe, Inc. failed to make contributions in 2007 and such failure is the basis of this current action. The problem for Plaintiffs is Rupe, Inc. apparently became dissolved and incapable of making payments in 2008. Plaintiffs assert that JBR is a continuation of Rupe, Inc. and that JBR is liable for Rupe, Inc.'s pension debt obligations. Plaintiffs contend the following facts support a finding that JBR is a continuation of Rupe, Inc. JBR and Rupe, Inc. are, were in the case of Rupe, Inc., engaged in same business of performing excavation work. Rupe, Inc. transferred its assets to JBR. Shareholders of JBR knew that Rupe, Inc. owed Plaintiffs before it took Rupe, Inc.'s assets. Finally, John Rupe now works for JBR as a supervisor.
JBR has filed a motion for summary judgment and presented affidavits from Mr. Rupe and Judy Blumenstock. The following facts come from those affidavits. Ms. Blumenstock is the sole officer and shareholder of JBR. Ms. Blumenstock has never been a shareholder, officer, or director of Rupe, Inc. Mr. Rupe has never been a shareholder, officer, or director of JBR. Mr. Rupe was the sole shareholder and sole officer of Rupe, Inc. at all times relevant. JBR and Rupe, Inc. have never operated from the same plants. JBR primarily performs excavations on farms and small commercial worksites while Rupe, Inc. performed excavations on residential developments and large commercial worksites. The difference in companies' relative worksite sizes caused each company to perform different types of services. Since its incorporation, JBR has only employed five employees who worked on behalf of Rupe, Inc. at some point in its last year of operation.
JBR also contends it has not acquired its assets from Rupe, Inc. directly. Rupe, Inc. possessed eighteen pieces of equipment, sixteen of which were sold to Martin Equipment of Illinois, Inc. ("Martin"). Martin turned around and sold two of the sixteen pieces that once belonged to Rupe, Inc. to JBR. Those two transactions were conducted at arm's length with the two pieces priced at market value. JBR argues that these facts sufficiently demonstrate there is no basis to impose successor liability on it for debts owed by Rupe, Inc.
Plaintiffs contend the case is not ripe for summary judgment because there is outstanding discovery pertinent to the Court's analysis on whether successor liability is appropriate for JBR. The following are some of the Plaintiffs' relevant requests for information presented to JBR:
1) Names of all sellers of construction equipment and of trucks, vehicles or trailers to JBR since its incorporation in October 2007;
2) Names of all lessors of construction equipment and of trucks, vehicles or trailers to JBR since October 2007;
3) Names of all providers of construction equipment and of trucks, vehicles or trailers to JBR who did not charge for the equipment's use;
4) Copies of all contracts for excavation and demolition work entered into by the ...