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Board of Trustees of Automobile Mechanics' Local No. 701 v. Beland & Wiegers Enterprises, Inc.

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

October 29, 2014

BOARD OF TRUSTEES OF THE AUTOMOBILE MECHANICS' LOCAL NO. 701 UNION AND INDUSTRY WELFARE FUND; and BOARD OF TRUSTEES OF THE AUTOMOBILE MECHANICS' LOCAL NO. 701 UNION AND INDUSTRY PENSION FUND, Plaintiffs,
v.
BELAND & WIEGERS ENTERPRISES, INC., an Illinois Corporation, DANIEL J. BELAND, an individual, and BERNARD WIEGERS, an individual, Defendants.

MEMORANDUM OPINION & ORDER

JOAN B. GOTTSCHALL, District Judge.

On June 3, 2013, Plaintiffs Board of Trustees of the Automobile Mechanics' Local No. 701 Union and Welfare Fund and Board of Trustees of the Automobile Mechanics' Local No. 701 Union and Industry Pension Fund (collectively, "Plaintiffs") sued Defendants Beland & Wiegers Enterprises, Inc. ("B&W"), Daniel J. Beland ("Beland"), and Bernard Wiegers ("Wiegers"). Plaintiffs alleged that B&W breached its collective bargaining agreement ("CBA") in violation of ERISA and that all Defendants were responsible for the full amount of withdrawal liability as a result of B&W's complete withdrawal from the pension funds. After discovery, Plaintiffs moved for summary judgment. On August 21, 2014, this court entered summary judgment against B&W and denied summary judgment against Beland.

Now before the court is Plaintiffs' motion for reconsideration of the court's order denying summary judgment as to Beland as an individual. For the reasons detailed below, the court grants Plaintiffs' motion for reconsideration and vacates its August 21, 2014 Order.

I. FACTS[1]

Beland is the sole owner of B&W, an Illinois corporation. He became the sole owner in 2005 when his partner, Wiegers, retired and Beland instituted a buyout. In 2010, B&W entered into a CBA with the Automobile Mechanics' Local Union No. 701. As part of the CBA, B&W agreed to be bound by the provisions of the Agreements and Declarations of Trust ("Trust Agreements"), which in turn created a pension fund and a welfare fund ("Funds")[2]: the Automobile Mechanics' Local Union No. 701 and Industry Pension Fund and the Automobile Mechanics' Local No. 701 Union and Industry Welfare Fund.

The CBA and Trust Agreements required B&W to contribute monthly to the Funds for each week that a covered employee performed any work at the negotiated rate. If B&W failed to submit a timely monthly payment, the Trust Agreements required B&W to pay the contribution, liquidated damages (10 percent of the unpaid amount), and reasonable attorney's fees and costs.

On or about September 19th or 20th, 2012 - approximately two years into B&W's collective bargaining agreement with Plaintiffs - B&W ceased all covered work and ceased making contributions to Plaintiffs. As a result, B&W owed Plaintiffs $5, 020.50 (plus liquidated damages) for the unpaid contributions in September and October 2012. As a result, Plaintiffs notified Defendants that this constituted a complete withdrawal that triggered withdrawal liability under ERISA. In March 2013, Plaintiffs sent B&W a notice and demand for payment of withdrawal liability in the amount of $261, 052.00, along with a quarterly payment schedule. B&W failed to make its first quarterly payment, prompting this suit.

Defendants did not request a review of the withdrawal liability assessment or initiate arbitration to challenge Plaintiffs' assessment. Calculations for money owed based on the terms of the agreement include $5, 522.55 to Plaintiffs for the breach of contract claim, [3] $292, 867.13 for the withdrawal-liability claim, [4] and attorney's fees and costs.

At the time of B&W's withdrawal, Beland was the sole owner of both B&W and of property located at 11625 South Ridgeland, Alsip, Illinois. B&W operated out of the South Ridgeland property. According to Beland's deposition testimony, B&W paid Beland monthly rent to use the property for its business.

II. LEGAL STANDARD

Motions to reconsider serve the limited function of allowing the court to correct manifest errors of law or fact or to consider newly discovered material evidence. Seng-Tiong Ho v. Taflove, 648 F.3d 489, 505 (7th Cir. 2011). A "manifest error" occurs when "the [c]ourt has patently misunderstood a party, or has made a decision outside the adversarial issues presented to the [c]ourt by the parties, or has made an error not of reasoning but of apprehension." Bank of Waunakee v. Rochester Cheese Sales, Inc., 906 F.2d 1185, 1191 (7th Cir. 1990).

III. ANALYSIS

The following statutory regime lays out the pertinent rules governing employer liability under ERISA. A complete withdrawal from a multiemployer plan occurs when an employer permanently ceases to have an obligation to contribute under the plan or permanently ceases all covered operations. 29 U.S.C. § 1383(a). Once complete withdrawal occurs, the plan sponsor must notify the employer of the amount of liability, submit a payment schedule, and make a demand for payment in accordance with the schedule. 29 U.S.C. § 1399. If an employer defaults by failing to make timely payments, the plan sponsor:

[m]ay require immediate payment of the outstanding amount of an employer's withdrawal liability, plus accrued interest on the total outstanding liability from the due date of the first payment which was not timely made... if the failure is not cured within 60 days after the employer ...

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