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Chicago Regional Council of Carpenters Pension Fund v. Rowlock Retail Construction, Inc.

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

October 12, 2016

CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND et al., Plaintiffs,
v.
ROWLOCK RETAIL CONSTRUCTION, INC., A NEVADA CORPORATION, Defendant.

          Chicago Regional Council of Carpenters Pension Fund, Plaintiff, represented by Kevin Patrick McJessy, McJessy, Ching & Thompson, LLC.

          Chicago Regional Council of Carpenters Pension Fund, Plaintiff, represented by John Joseph Sopata, McJessy Ching & Thompson, LLC.

          Chicago Regional Council of Carpenters Welfare Fund, Plaintiff, represented by Kevin Patrick McJessy, McJessy, Ching & Thompson, LLC & John Joseph Sopata, McJessy Ching & Thompson, LLC.

          Chicago and Northeast Illinois Regional Council of Carpenters Apprentice and Training Program, Plaintiff, represented by Kevin Patrick McJessy, McJessy, Ching & Thompson, LLC & John Joseph Sopata, McJessy Ching & Thompson, LLC.

          Labor/Management Union Carpentry Cooperation Promotion Fund, Plaintiff, represented by Kevin Patrick McJessy, McJessy, Ching & Thompson, LLC & John Joseph Sopata, McJessy Ching & Thompson, LLC.

          PLAINTIFFS' MOTION FOR ENTRY OF FINAL JUDGMENT

          GARY FEINERMAN, District Judge.

         This Court granted the plaintiffs Chicago Regional Council of Carpenters Pension Fund et al. 's ("Trust Funds") motion for a default order against defendant ROWLOCK RETAIL CONSTRUCTION, INC. ("Defendant" or "ROWLOCK") on November 19, 2015. See Order, Nov. 19, 2015, Docket No. 11. In order to obtain a final judgment, the Trust Funds hereby submit this Plaintiffs' Motion for Entry of Final Judgment ("Petition"). In support of their Motion, Trust Funds state as follows:

         I. SUMMARY OF DAMAGES.

         For the reasons explained more fully below, this Court should award the Trust Funds $886, 734.21 in damages as follows:

         

(A) Unpaid Fringe Benefit Contributions $708, 508.60 (B) Interest $31, 930.70 (C) Liquidated Damages $129, 193.74 (D) Auditors' Fees $2, 602.50 (E) Attorneys' Fees and Costs $14, 498.67 Total $886, 734.21

         II. ARGUMENT.

         A. Damages for Unpaid Fringe Benefit Contributions.

         ROWLOCK is bound by the Area Agreement with the Chicago Regional Council of Carpenters ("Union"). See Declaration of J. Libby ¶ 3, Exhibit A. The Trust Funds conducted an audit of ROWLOCK's books and records which revealed unpaid fringe benefit contributions in the amount of $708, 508.60. See Declaration of J. Libby ¶¶4-8, Exhibit A.

         Under ERISA, ROWLOCK is liable to the Trust Funds for any unpaid fringe benefit contributions. ERISA states as follows:

In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan-(A) the unpaid contributions....

See 29 U.S.C. § 1132(g)(2)(A).

         Accordingly, this Court should award the Trust Funds $708, 508.60 for unpaid fringe benefit contributions.

         B. Interest.

         Under ERISA, 29 U.S.C. §1132, Trust Funds are entitled to collect interest on the unpaid contributions. Section 1132(g)(2)(B) provides as follows:

(2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan-
...
(B) interest on the unpaid contributions,
...
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of title 26.

See 29 U.S.C. §1132(g)(2). And, section 6621 of title 26 provides as follows:

(2) Underpayment rate. The underpayment rate established under this section shall be the sum of-
(A) the Federal short-term rate determined under subsection (b), plus
(B) 3 percentage points.

See 26 U.S.C. §6621.

         This is consistent with the trust agreements which also allow the Trust Funds to collect interest on the amount due. See Decl. of J. Libby ¶ 9, Exhibit A. Therefore, the Trust Funds are entitled to recover interest based on the statute.

         The amount due as interest on the fringe benefit contributions is $31, 930.70. See Declaration of J. Libby ¶¶11, 13, Exhibit A. Accordingly, this Court should award the Trust Funds interest in the amount of $31, 930.70 pursuant to 29 U.S.C. §1132(g)(2).

         C. Liquidated Damages.

         Under ERISA, 29 U.S.C. §1132, the Trust Funds are entitled to collect liquidated damages on the unpaid contributions. Section 1132(g)(2)(C)(ii) provides as follows:

(2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan-
...
(C) an amount equal to the greater of-
...
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),

         This is consistent with the trust agreements which also allow the Trust Funds to collect liquidated damages of 1.5% monthly on the amount due. See Decl. of J. Libby ¶ 9, Exhibit A.

         The total liquidated damages calculated at 1.5% per month compounded equals $129, 193.74. See Decl. of J. Libby ¶¶ 11, 13, Exhibit A. Accordingly, this Court should award the Trust Funds liquidated damages in the amount of $129, 193.74 pursuant to 29 U.S.C. § 1132(g)(2)(C)(ii).

         D. Auditor's Fees.

         Under the terms of the Trust Agreements and the Area Agreement, a signatory employer is liable for reasonable fees of auditors retained by the Trust Funds used to establish the amount of delinquent contributions to the Trust Funds. See Declaration of J. Libby ¶12, Exhibit A.

         Moreover, ERISA, 29 U.S.C. §1132, likewise provides that the Trust Funds are entitled to recover auditors' fees incurred to prove the amount of contributions owed:

ERISA itself grants the district court authority to award the plaintiffs their reasonable attorney's fees and costs in successful actions to collect unpaid fringe benefit contributions owed to multi-employer plans, 29 U.S.C. § 1132(g)(2)(D), along with such other legal or equitable relief as the court deems appropriate, ' id. § 1132(g)(2)(E). This court, among others, has construed the latter provision to include an award of audit costs. Moriarty ex rel. Local Union No. 727, I.B.T Pension Trust v. Svec, 429 F.3d 710, 721 (7th Cir. 2005) (citing Operating Eng'rs Pension Trust v. A-C Co., 859 F.2d 1336, 1343 (9th Cir. 1988)).

See Trustees of the Chicago Plastering Institute Pension Trust v. Cork Plastering Co., 570 F.3d 890, 902 (7th Cir. 2009).

         The Trust Funds incurred $2, 602.50 in auditors' fees for the audit of ROWLOCK's fringe benefit contributions to the Trust Funds during the Audit Period. See Declaration of J. Libby ¶¶ 12, 13, Exhibit A. Accordingly, this Court should award the Trust Funds $2, 602.50 in reasonable auditors' fees for the audit of ROWLOCK's books and records to determine that ROWLOCK owed unpaid fringe benefit contributions.

         E. Attorneys' Fees and Costs.

         Under the terms of the Trust Agreements and the Area Agreement, ROWLOCK is liable for reasonable attorney fees and costs incurred by the Trust Funds to collect delinquent contributions because the Trust Funds were required to hire counsel to compel the audit of ROWLOCK and to collect the amount due from ROWLOCK. See Declaration of J. Libby ¶ 10, Exhibit A.

         ROWLOCK has a statutory obligation to pay attorneys' fees and costs. Under ERISA, 29 U.S.C. §1132, Trust Funds are entitled to recover attorneys' fees and costs incurred to collect the unpaid contributions. Section 1132(g) provides as follows:

(g) Attorney's fees and costs; awards in actions involving delinquent contributions... (2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan-.... (D) reasonable attorney's fees and costs of the action, to be paid by the defendant...

See 29 U.S.C. §1132(g)(2) (emphasis added). ROWLOCK is also liable for attorneys' fees and costs incurred by the Trust Funds to enforce any judgment entered in this matter. See Free v. Briody, 793 F.2d 807, 808-09 (7th Cir. 1986).

         Here the Trust Funds incurred $14, 498.67 in attorneys' fees and costs as stated in the affidavit and detailed billing statements accompanying this petition. See Declaration of K. McJessy ¶¶ 6-8, Exhibit B. Billing statements are admissible to show the reasonableness of attorneys' fees and costs in ERISA cases. See Trustees of the Chicago Plastering Inst. Pension Trust, 570 F.3d at 903 (relying on attorneys "time records"); Chicago Regional Council of Carpenters Pension Fund v. RCI Enterprises, Inc., 2011 U.S. Dist LEXIS *6-7 (N.D. Ill., July 20, 2011) (Feinerman, J.) (relying on billing time records for award of attorneys' fees).

         Moreover, the fees charged here of $160/hour and $220/hour for attorney time are reasonable compared to the rates charged by other attorneys handling similar ERISA matters in the Northern District of Illinois. As a matter of law, the Northern District of Illinois has recognized that hourly rates of $195 per hour to $250 per hour are reasonable rates for attorney time for ERISA litigation. See Trustees of the Chicago Regional Council of Carpenters Pension Fund v. RCI Enterprises, Inc., 2011 U.S. Dist. LEXIS *6 (N.D. Ill.) (holding that attorney rates of $180/hr for a junior attorney to $250/hr for a partner are reasonable hourly rates for ERISA lawsuit by the Chicago Regional Council of Carpenters); Board of Trustees of the Rockford Pipe Trades Indus. Pension Fund v. Fiorenza Enters., 2011 U.S. Dist. LEXIS 28209, 21-22 (N.D. Ill. Mar. 18, 2011) ("the court finds that the hourly rates [of $195, $210 and $235 per hour]... are reasonable" for fringe benefit trust funds lawsuit against employer to collect unpaid contributions); Divane v. Mitchell Sec. Sys., 2008 U.S. Dist. LEXIS 27825 (N.D. Ill. Apr. 7, 2008) ("The court finds that the billing rates [of $220.00 to 240.00 for attorneys] are reasonable.").

         Accordingly, this Court should award the Trust Funds $14, 498.67 in reasonable attorneys' fees and costs for the audit of ROWLOCK's books and records to determine that ROWLOCK owed unpaid fringe benefit contributions.

         III. CONCLUSION.

         For the forgoing reasons, the Trust Funds respectfully request that this Court enter final judgment for the Trust Funds in the amount of $886, 734.21 as follows:

A. $708, 508.60 in unpaid contributions pursuant to the audit;
B. $2, 602.50 for auditor's fees incurred by the Trust Funds to complete the audit of Defendant's books and records;
C. $31, 930.70 in interest pursuant to 29 U.S.C. § 1132(g)(2)(B);
D. $129, 193.74 in liquidated damages pursuant to 29 U.S.C. § 1132(g)(2)(C); and
E. $14, 498.67 in reasonable attorneys' fees and costs the Trust Funds incurred in this action pursuant to 29 U.S.C. § 1132(g)(1) and/or § 1132(g)(2)(D).

         The Trust Funds shall also recover reasonable attorney' fees and costs incurred by the Trust Funds in enforcing this order and any such further relief as this Court deems appropriate. See Free v. Briody, 793 F.2d 807, 808-09 (7th Cir. 1986). A proposed order is attached hereto as Exhibit C.

         15 CV 06413

         Exhibit A

et al.,

         DECLARATION OF JOHN LIBBY

         I, John Libby, hereby declare, under penalty of perjury pursuant to the laws of the United States, that the following statements are true to the best of my knowledge information and belief:

         1. I am the Manager, Audits & Collections for the Chicago Regional Council of Carpenters Pension Fund ("Pension Fund"), the Chicago Regional Council of Carpenters Health and Welfare Fund ("Health and Welfare Fund"), the Chicago and Northeast Illinois Regional Council of Carpenter Apprentice and Trainee Program ("Trainee Fund") and the Labor/Management Union Carpentry Cooperation Promotion Fund (collectively "the Trust Funds").

         2. As part of my duties, I am responsible for managing the collection of contributions for medical, pension and other benefits due from numerous employers pursuant to the collective bargaining agreement between the employers and the Chicago and Northeast Illinois Regional Council of Carpenters ("Union") and between employers and the United Brotherhood of Carpenters and Joiners of America. Accordingly, I am familiar with the terms of the current ...


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