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Chicago Regional Council of Carpenters Pension Fund v. Schal Bovis, Inc.

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

September 22, 2014

CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, et al., Plaintiffs,
v.
SCHAL BOVIS, INC., Defendant.

ORDER

MANISH S. SHAH, District Judge.

Plaintiffs' motion for entry of final judgment [48] is granted in part. The court finds that defendant is liable for: $28, 520.25 in damages for non-union subcontracting liability, plus an amount based on the jurisdictional work reflected in defendant's construction schedules for the Canac Kitchens portion of the case (which the court currently estimates to be an additional $129, 225.50); $2, 849.04 in auditors' fees; and $49, 226.44 in attorneys' fees and costs. If the parties have new objections to the court's calculation of the Canac Kitchens liability, they shall file supplemental, simultaneous objections by 10/6/2014. Plaintiffs shall also file a revised double-interest calculation by 10/6/2014. Status hearing remains set for 10/8/2014 at 9:30.

STATEMENT

Plaintiffs are multi-employer plans for the benefit of union carpenters, and defendant Schal Bovis is liable to plaintiffs for unpaid fringe benefit contributions (based on work performed by certain non-union subcontractors at job sites run by defendant). See [46]. The parties dispute the amount of damages, attorney's fees, and interest due on this liability, and they agreed to submit the issue of damages and fees in written submissions. See [47, 48, 49, 50].

Plaintiffs are entitled to damages in the following categories: (1) the amount of fringe benefit contributions that should have been paid, based on the jurisdictional work ( i.e., work covered by the occupational jurisdiction of the union) performed by non-union subcontractors; (2) double interest on the unpaid contributions; (3) auditors' fees; and (4) attorneys' fees and costs. Defendant does not dispute the hourly rates or the interest calculation methodology used by the plaintiff.

There is no dispute that defendant maintained substandard records. Therefore, plaintiffs' auditor's calculations are presumed correct. Chicago Dist. Council of Carpenters Pension Fund v. Reinke Insulation Co., 347 F.3d 262, 264 (7th Cir. 2003). But as defendant points out, the ultimate burden of persuasion remains with the plaintiffs, and a court should not simply accept an auditor's calculation if other evidence in the case provides a more precise accounting. See id.

1. Fringe Benefit Contributions

Plaintiffs calculate the amount of damages in non-union subcontracting liability by estimating the hours worked from the total amount of money the defendant paid the subcontractors for labor (often using a one-third estimate to arrive at a dollar amount for labor, and dividing that amount by the hourly wage rate) and multiplying those hours by the fringe benefit rate for the applicable time period. In one instance, a subcontractor (Timothy Wright Construction) maintained records of the actual number of hours worked, and plaintiffs' auditor calculated the contributions due by the simple arithmetic based on those hours. I address defendant's objections by each sub-contractor below.

a. Timothy Wright Construction

The individuals employed by Timothy Wright Construction performed 434 hours of jurisdictional work for defendant, and therefore the properly calculated damages amount for this subcontractor liability is $7, 161.00. Defendant does not dispute this, see [47] ¶ 13, [50] at 5, but points out that Timothy Wright Construction paid the fringe benefit contributions owed for that labor to plaintiffs, and those contributions were held in an escrow account for a time. Plaintiffs refunded the money to Timothy Wright because Timothy Wright did not have a written collective bargaining agreement. [49] ¶ 5. Defendant argues that the failure of the plaintiffs to hold onto the money amounts to a failure to mitigate the damages caused by defendant in using the non-union subcontractor labor. I disagree. Judge Coleman granted summary judgment on liability in favor of the plaintiffs on this issue, holding: "defendant... is responsible for the Wright contributions, even considering that they were initially paid to and then later returned by plaintiff." [45]. The plaintiffs' return of funds was not an act of allowing their damages to balloon after learning of defendant's breach; it was an issue between plaintiffs and Timothy Wright Construction. The damages caused by defendant's use of Timothy Wright Construction remain attributable to defendant.

b. Monda Window and Door Corporation

Plaintiffs calculate the damages from defendant's use of subcontractor Monda Window and Door Corporation to be $12, 449.25. Defendant does not dispute this calculation. [50] at 4-5.

c. Edward Don & Company

Plaintiffs estimate that Edward Don & Company (through other subcontractors it hired) performed 540 hours of jurisdictional work installing kitchen equipment and stainless steel shelving and countertops. This is based on the $20, 400 paid to the subcontractor at issue (Reid's Fire Equipment). Defendant contends that to the extent the work was for fire protection equipment, that work was not jurisdictional. [50] at 7. Plaintiffs concede that the installation of fire protection equipment is not jurisdictional work. [48] at 9. Defendant, citing testimony and documents that suggest a divide between the installation of fire protection systems and other restaurant equipment, argues that the subcontractor performed only 72 hours of jurisdictional work. [49] at ¶¶ 3-6. Defendant is not liable for damages based on the installation of fire protection systems, but based on my review of the underlying materials (to include the Berendt Deposition, [22-6], on which defendant primarily relies), I find that a clear divide between fire protection systems and jurisdictional work cannot be drawn simply from Berendt's testimony about a separation between Reid's Fire Equipment and its related entity, RB Hood. The $20, 400 invoice on its face ...


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