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Trustees of Chicago Painters and Decorators Pension Fund v. Ngm Servinces, Inc.

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

December 22, 2014

TRUSTEES OF THE CHICAGO PAINTERS AND DECORATORS PENSION FUND; TRUSTEES OF THE CHICAGO PAINTERS AND DECORATORS WELFARE FUND; TRUSTEES OF THE CHICAGO PAINTERS AND DECORATORS SAVINGS FUND; TRUSTEES OF THE CHICAGO PAINTERS AND DECORATORS SCHOLARSHIP FUND; and TRUSTEES OF THE CHICAGO PAINTERS AND DECORATORS JOINT COOPERATION TRUST FUND, Plaintiffs,
v.
NGM SERVINCES, INC., Defendant.

MEMORANDUM OPINION AND ORDER

JAMES F. HOLDERMAN, District Judge.

On July 25, 2014, plaintiffs Trustees of the Chicago Painters and Decorators Pension Fund and its related funds (collectively, the "Funds") filed a complaint ("Complaint") (Dkt. No. 1 ("Compl.")) against defendant NGM Services, Inc. ("NGM") pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"). The Funds' Complaint seeks an order declaring NGM to be a successor or alter ego of the now bankrupt Geno's Decorating, Inc. ("Geno's"), and an order requiring NGM to submit all necessary books and records to the Funds' accountant for the purpose of determining whether or not NGM is in compliance with its purported obligation to the Funds.[1]

On August 4, 2014, the Funds moved for a default judgment and audit order (Dkt. No. 8) based on NGM's failure to respond to the Complaint. On September 1, 2014, NGM filed an answer (Dkt. No. 10) denying every allegation in the Complaint, including allegations concerning the Funds' identity, the identity of past and current officers of NGM and Geno's, and the existence of material publicly available on NGM's website. ( Id. ) On September 16, 2014, at the court's instruction, NGM filed an amended answer ("Amended Answer") (Dkt. No. 13 ("Am. Ans.").) On September 23, 2014, the Funds moved for judgment on the pleadings and for an audit pursuant to Federal Rule of Civil Procedure 12(c). (Dkt. No. 15.) For the reasons explained below, the Funds' motion (Dkt. No. 15) is denied.

FACTUAL BACKGROUND[2]

Until its bankruptcy filing on March 30, 2010, Geno's operated as a commercial, residential, and industrial painting business. (Compl. & Am. Ans. ¶¶ 3, 14.) On August 1, 2009, Geno's renewed its collective bargaining and trust agreements with Painters District Council #14 (the "Union"), which required Geno's to make contributions to the Funds on behalf of Geno's employees, as Geno's had done throughout its 14 years as a signatory contractor with the Union. (Compl. & Am. Ans. ¶¶ 1, 7, 9.) Despite the agreements, Geno's failed to make the requisite contributions between August 1, 2009 and November 30, 2009. (Compl. & Ans. ¶ 10.) On February 3, 2010, the Funds filed a lawsuit against Geno's and its president and owner, Gene Mondello ("Mondello"), to recover $13, 256.63 in delinquent contributions, liquidated damages, and audit costs. (Compl. ¶¶ 1-12.) See also Trustees of Chicago Painters and Decorators Pension Fund v. Geno's Decorating, Inc. , No. 10 C 717 (N.D. Ill.) (Lindberg, J.) (" Geno's I ").

On March 17, 2010, two days after Geno's answer to the Funds' complaint was due, NGM registered for the first time as an Illinois corporation.[3] (Compl. Ex. A.) NGM, like Geno's, provides commercial, residential, and industrial painting services. (Compl. & Am. Ans. ¶ 19.) Unlike Geno's, NGM also provides handyman and snow removal services. (Am. Ans. ¶ 17.) NGM's business address is the same as Geno's former business address. ( Id. ¶ 19.) Mondello is NGM's president and owns and "undisclosed percentage" of NGM. ( Id. ¶ 21.) NGM's corporate secretary is Mondello's wife, Nancy Mondello. ( Id. ¶ 22.) And Geno's former phone number now rings to NGM. ( Id. ¶ 20.)

On March 30, 2010, thirteen days after NGM's incorporation, Geno's filed for Chapter 7 bankruptcy. ( Id. ¶ 20.) One day later, on March 31, 2010, the district court granted the Funds' request to dismiss all claims against Geno's and entered a default judgment against Mondello in the amount of $13, 256.64. See Geno's I , No. 10 C 717 (Dkt. No. 12). On May 5, 2010, the Funds served Mondello with a citation to discover assets following the Geno's I judgment. Geno's I , No. 10 717 (Dkt. Nos. 14, 15). Mondello never responded. Id.

On June 4, 2010, the trustee closed Geno's bankruptcy case after reporting that he had received no property or money from Geno's and had determined, after a diligent inquiry, that there was no property available for distribution to Geno's creditors. (Compl. & Am. Ans. ¶ 23) See also In re Geno's Decorating, Inc. , 10 BK 13858 (Bankr. N.D.Ill. June 4, 2010) (Dkt. Nos. 7, 8.) The Funds "believe" that all of Geno's supplies and equipment transferred to NGM before Geno's filed for bankruptcy. (Compl. ¶ 23.) NGM does not deny the Funds' allegation and admits that "NGM may have purchased some assets from Geno's." (Am. Ans. ¶ 23.)

NGM continues to operate as a commercial, residential, and industrial painting service, using Geno's personnel, location, equipment, and phone number. (Compl. & Ans. ¶¶ 19-22.) Unlike Geno's, however, NGM is a non-union employer. ( Id. ¶ 25.) On July 9, 2014, after more than four years of inactivity, the Funds served NGM with a citation to discover assets in connection with the default judgment entered against Mondello in Geno's I . See Geno's I , 10 C 717 (Dkt. Nos, 16, 17.) On July 25, 2014, following NGM's failure to respond to the citation, the Funds filed a new action-the action currently before the court-seeking a declaration that NGM is a successor or alter ego of Geno's, and thus liable for Geno's outstanding ERISA obligations. (Compl. ¶ A.)

NGM's Amended Answer admitted a number of the facts alleged in the Funds' Complaint, prompting the Funds to move for judgment on the pleadings pursuant to Rule 12(c).

LEGAL STANDARD

In ruling on a Rule 12(c) motion that seeks to dispose of the case on its substantive merits, "the appropriate standard is that applicable to summary judgment, except that the court may consider only the contents of the pleading." Alexander v. City of Chicago , 994 F.2d 333, 336 (7th Cir. 1993). The court may also consider documents attached or referenced to the pleadings, and the court may take judicial notice of matters of public record. United States v. Wood , 925 F.2d 1580, 1582 (7th Cir. 1991). All well-pleaded allegations in the non-movant's pleadings must be taken as true, and all facts and reasonable inferences from those facts must be construed in the light most favorable to the non-movant. Alexander , 994 F.2d at 336. Legal characterizations of the facts by the non-movant, however, are not binding. Nat'l Fid. Life Ins. Co. v. Karaganis , 811 F.2d 357, 358 (7th Cir. 1987).

ANALYSIS

Before evaluating the merits of the Funds' motion, the court must address NGM's contention that the court lacks subject matter over the Funds' claim and that the Funds lack ...


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