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Teamsters Local Union No. 727 Health v. L & R Group of Companies

United States District Court, N.D. Illinois, Eastern Division

March 31, 2014

TEAMSTERS LOCAL UNION NO. 727 HEALTH AND WELFARE FUND, TEAMSTERS LOCAL UNION NO. 727 PENSION FUND and TEAMSTERS LOCAL UNION NO. 727 LEGAL AND EDUCATIONAL ASSISTANCE FUND, Plaintiff,
v.
L & R GROUP OF COMPANIES, Defendant.

MEMORANDUM OPINION AND ORDER

VIRGINIA M. KENDALL, District Judge.

Plaintiffs Teamsters Local Union No. 727 Health and Welfare Fund, Teamsters Local Union No. 727 Pension Fund, and Teamsters Local Union No. 727 Legal and Educational Assistance Fund sued Defendant L & R Group of Companies under the Employment Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1132(g)(2), (a)(3), and 1145. The Complaint alleges that L & R failed to submit payments and reports from 2003 to the present required by collective bargaining agreements between L & R and Teamsters Local Union No. 727. L & R now seeks summary judgment concerning its restitution counterclaim based on alleged overpayments L & R made to Plaintiffs. For the reasons stated below, L & R's motion for summary judgment is granted in part and denied in part.

FACTS

The following facts are undisputed unless otherwise noted.

A. The Parties

In 2008, L & R, which is a Los Angeles-based parking property company, purchased System Parking, Inc. ("System Parking"), a Chicago-based parking operation. System Parking entered into collective bargaining agreements ("CBAs") with the Auto Livery Chauffeurs, Embalmers, Funeral Directors, Apprentices, Ambulance Drivers, and Helpers, Taxicab Drivers, Miscellaneous Garage Employees, Car Washers, Greasers, Polishers, and Wash Rack Attendants Union, [Teamsters] Local No. 727 ("Union"). (Dkt. No. 60, at ¶ 1-3.) L & R assumed certain liabilities related to the CBAs between System Parking and the Union. (Dkt. No. 60 at ¶ 5.) L&R sold System Parking in September 2010.[1] The Teamsters Local Union No. 727 Health and Welfare Fund, Teamsters Local Union No. 727 Pension Fund, and the Teamsters Local Union No. 727 Legal and Educational Assistance Fund (collectively "the Funds") collected funds from multiple employers, including System Parking, as part of the CBA between System Parking and the Local Union No. 727 in order to provide benefits for its employees.

B. The Collective Bargaining Agreements

Four CBAs are at issue. Two cover cashiers, hikers, attendants, porters, maintenance workers/custodians, drivers, washers, collectors, customer service representatives, dispatchers, bellmen, doormen, working foremen and all other garage and parking lot employees between: (1) November 1, 2001 and October 31, 2006 ("Commercial CBA 1"), and (2) November 1, 2006 and October 31, 2011 ("Commercial CBA 2"). The other two cover employees who performed valet services between (1) July 1, 2000 and June 30, 2005 ("Valet CBA 1"), and (2) July 1, 2005 and June 30, 2011 ("Valet CBA 2"). (Dkt. No. 60 at ¶ 4.)

C. The Benefits Funds

During the period of the agreements, the Teamsters Local Union No. 727 Health and Welfare Fund provided medical benefits, prescription drug benefits, short-term disability benefits, life insurance, dental insurance, vision insurance, and a member assistance plan. The Teamsters Local Union No. 727 Pension Fund provided retirement benefits. The Teamsters Local Union No. 727 Legal and Educational Fund provided legal and educational assistance benefits. According to Fund Manager William Coli, between 275-300 employers contributed to the Funds. (Dkt. No. 60 at ¶ 9.)

Central to the dispute is how much was contributed to the benefit funds on behalf of System Parking employees and how the amount due was calculated by each party. It is undisputed that System Parking paid into the benefit funds for its full-time and part-time employees for hours worked and not for any additional hours paid to employees for paid vacation, holiday and/or sick leave. (Dkt. No. 60 at ¶ 6.) The parties dispute whether this was the proper method of calculation.

D. Contracts, Policies and Procedures

In addition to the CBAs, a Restated Agreement and Declaration of Trust Agreement of the Teamsters Local Union No. 727 Health and Welfare Fund ("Trust Agreement") governed the relationship between the Union and System Parking. The parties entered this agreement on July 25, 2000 (amended in 2006 and 2011). The relevant parts of the Trust Agreement include Article VI-Contributions, Article VII-Controversies and Disputes, and specific policies and procedures listed herein.

The following policies and procedures were effective during the period covered by the CBAs: (1) the Teamsters Local Union No. 727 Benefits Funds Policy for Erroneous Payments and Overpayments Made by an Employer ("Funds Policy for Erroneous Payments"), dated September 30, 2009, which addresses situations where contributing employers make overpayments to the Funds; (2) the Statement of Audit Procedures: Health and Welfare, Pension, and Legal and Educational Assistance Funds, which addressed the Funds ("Funds Audit Procedures") auditing procedures for all contributing employers; and (3) the Statement of Collection Procedures: Health and Welfare, Pension, and Legal and Educational Assistance Funds ("Funds Collection Procedures"), dated June 25, 2008, which addressed the method by which the contributions from employers are collected and submitted. This last document also addressed how to handle payment delinquencies and outlined the legal action the Funds might take in the event an employer did not adequately address the alleged delinquency.

E. Audit History

There are three audits at issue: two performed by the Funds and one performed by L & R. Periodically, the Funds conducted financial audits of employers' benefit contributions. The Funds Audit Procedures included the purpose of the audit and the roles and responsibilities of each of the parties during the audit. (Dkt. No. 60 at ¶ 14.) In December 2005, the Funds filed a complaint against System Parking, Inc. for delinquent contributions of $553, 965.82. The parties settled that action in 2007 ...


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