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Midwest Operating Engineers Welfare Fund v. Thomas Excavating & Welding, Inc.

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

November 15, 2016

MIDWEST OPERATING ENGINEERS WELFARE FUND;, Plaintiffs,
v.
THOMAS EXCAVATING & WELDING, INC., an Indiana Corporation;, Defendants.

          MEMORANDUM ORDER

          Milton I. Shadur Senior United States District Judge

         At the end of last week defendants Thomas Excavating & Welding, Inc. ("Thomas Excavating"), Kent Thomas ("Kent") and his wife Dawn Thomas ("Dawn") filed their Answer to the First Amended Complaint ("FAC") brought against them by a number of employee benefit funds (collectively the "Funds") and Local 150 of the International Union of Operating Engineers ("the Union") to collect substantial amounts due to the Funds, the Union and a labor management cooperative committee. This memorandum order is issued sua sponte because of some irregularities and other flaws in that Answer that require correction.

         To begin with, each of the seven counts in the FAC has been met with a challenge to the lodging of venue in this District Court, a challenge that this Court believes cannot be mounted in compliance with the obligation imposed by Fed. R. Civ. P. ("Rule") 11(b) that requires both subjective and objective good faith in pleading on the part of parties and their counsel. In that respect both Thomas Excavating and Kent have acknowledged, as they must, that the "Payment Plan" that provides the springboard for this action (an October 14, 2013 letter agreement, Ex. D to the original Complaint in this action and to the FAC as well) contains this provision as part of paragraph 3 of that document (with emphasis added):

In the event that the Funds elect to file suit to collect outstanding amounts, each individual consents to entry of judgment against her or him, and the company for the foregoing amounts, any other amounts to which the Funds are entitled (including all amounts on Schedule A) and the jurisdiction of the United States District Court for the Northern District of Illinois.[1]

         And here are the provisions of the venue statute that are relevant to this action, 28 U.S.C. § 1391(b)(2) and (3) (emphasis added):[2]

A civil action may be brought in --
***
(2) a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; or
(3) if there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to such action.

         As for Section 1391(b)(2), plaintiffs urge but defendants deny that it fits this case. But that need not be decided for present purposes, because if it does not Section 1391(b)(3) clearly does -- and Thomas Excavating is subject to personal jurisdiction here because it expressly agreed to be. Indeed, if the Payment Plan is read with even a modicum of common sense, it is plain that its reference to a consent to this District Court's "jurisdiction" over any defendant must embrace a consent to venue here as well.

         There are numerous added problems with the FAC, but this Court will not expend its time and resources in attempting an exhaustive chapter-and-verse exposition. Instead a few examples will be essayed here, on the premise that defense counsel is responsible for conducting a searching review and filing a self-contained Amended Answer. Here are some added examples:

1. Having admitted in Answer ¶ 9 to the allegations of Facts Common to All Counts that a judgment for over $132,000 was entered against Thomas Excavating, defendants can scarcely deny that, as the corresponding FAC ¶ 9 alleges:
Thomas Excavating & Welding, Inc. did not promptly pay the amounts required by the entry of judgment.
2. In the same way, the next response in Answer ΒΆ 10 hedges that response with some denials that are inconsistent ...

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