Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Trustees of Automobile Mechanics Industry Welfare and Pension Funds of International Association of Mechfnists v. Dodge of Naperville, Inc.

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

November 15, 2016

TRUSTEES OF THE AUTOMOBILE MECHANICS INDUSTRY WELFARE AND PENSION FUNDS OF THE INTERNATIONAL ASSOCIATION OF MECHFNISTS AND AEROSPACE WORKERS AFL-CIO, LOCAL 710, Counter-Claimants,
v.
DODGE OF NAPERVILLE, INC., Counter-Defendant. TRUSTEES OF THE AUTOMOBILE MECHANICS INDUSTRY WELFARE AND PENSION FUNDS OF THE INTERNATIONAL ASSOCIATION OF MECHINISTS AND AEROSPACE WORKERS AFL-CIO, LOCAL 710, Third-Party Plaintiffs,
v.
BURKE AUTOMOTIVE GROUP, Third-Party Defendant.

          OPINION AND ORDER

          Hon. Charles R. Norgle Judge.

         When the Chrysler Group filed for bankruptcy in 2009, the unintended consequences rippled across the country and befell local car dealership owners and their employees. In this case, the Trustees of the Automobile Mechanics Industry Welfare and Pension Funds of the International Association of Machinists and Aerospace Workers AFL-CIO, Local 710 (the "Trustees") are fighting to preserve the welfare and pension benefits promised to their union members. Before the Court is the Trustees' motion for summary judgment; for the following reasons, it is granted.

         I. BACKGROUND

         The entity Dodge of Naperville Inc. owned and operated a Chrysler Group car dealership in Naperville, Illinois. Dodge of Naperville was a subsidiary of Burke Automotive Group (collectively, the "Employer"), which owned a second dealership in Lisle, Illinois. Ed Burke ("Burke") was the President and sole owner of Burke Automotive Group. In September 2005, the Automobile Mechanics Local No. 701, International Association of Machinists and Aerospace Workers, AFL-CIO (the "Union") and Dodge of Naperville executed a collective bargaining agreement ("CBA") and its terms "were in full force and effect from August 1, 2005 to and including July 31, 2009." CBA at 34, Dkt. [65-5]. The terms of the CBA were to "continue from year to year according to its original terms" unless "either party" provided notice to "modify or terminate" at least sixty days before the designated expiration of the CBA. Id. The CBA applied to six mechanics (the "Union mechanics") who worked at Dodge of Naperville. On behalf of its members, the Trustees are authorized to: (1) receive welfare and pension contributions owed under the CBA; (2) manage the Welfare and Pension Funds; and (3) pursue collection of delinquent contributions.

         Article 11 of the CBA addressed welfare contributions and required Dodge of Naperville to make weekly contributions to the Welfare Fund at a rate that escalated annually. After August 1, 2008, Dodge of Naperville was required to pay $215.00 "per week for each employee to the Welfare Fund." CBA at 23, Dkt. [65-5]. The CBA also obligated Dodge of Naperville "to sign any Participation Agreement required by the Welfare Fund" as long as the Participation Agreement was not inconsistent with the CBA. Id., at 24. Article 12 of the CBA governed pension contributions in a fashion similar to Article 11. After August 1, 2008, the CBA required Dodge of Naperville to pay $89.00 "per week for each employee to the Pension Fund." Id. at 25. Like Article 11, Dodge of Naperville had to sign a Participation Agreement with the Pension Fund as well.

         Following the terms of Articles 11 and 12, Burke signed separate Participation Agreements with the Pension and Welfare Funds on behalf of Dodge of Naperville on September 22, 2005. The two Participation Agreements are each a single page in length-six paragraphs- and are written verbatim. The Participation Agreements reiterate that Dodge of Naperville must pay contributions as delineated in the CBA. The Participation Agreements incorporate the terms of Trust Agreements that initially formed the Welfare and Pension Funds back in the 1950's, and have been amended since. And, the last substantive paragraph of the Participation Agreements warn that if Dodge of Naperville does not provide the Trustees with a timely termination notice, Dodge of Naperville "shall be bound to the provisions of this Agreement for the period of the next Collective Bargaining Agreement and thereafter until proper notice is given but in no event less than three years unless terminated by the Trustees." Pension Fund Participation Agreement at ¶ 6, Dkt. [65-6]; Welfare Fund Participation Agreement at ¶ 6, Dkt. [65-7]. The Participation Agreements also informed Dodge of Naperville that "[t]he rate at which contributions are to be made during any renewed term shall be set by the Board of Trustees." Id.

         As part of the Chrysler Group's bankruptcy reorganization in 2009, Chrysler planned to close roughly twenty-five percent of its dealerships around the nation. Chrysler originally selected Burke Automotive Group's facility in Lisle for closure. In the end, however, Burke convinced the Chrysler Group to permit him to temporarily close his Dodge of Naperville facility for seventeen months to allow him to remodel the Naperville dealership. Burke promised to resume operations at the Naperville location after the renovations concluded.

         Before the Naperville dealership closed, and well in advance of the sixty-day notice deadline, the Union mailed a letter dated April 30, 2009 to an agent of Dodge of Naperville notifying the dealership of its "wishes to terminate the existing labor agreement for the purpose of negotiating the terms of a new labor agreement." The Union's Termination Letter at 1., Ex. 6, Dkt. [66-1]. The letter noted that the CBA did not expire until July 31, 2009. The attorney for Dodge of Naperville responded to the Union by fax, and mail, that Dodge of Naperville also "desire[d]...to terminate [the CBA] on July 31, 2009." The Employer's Termination Letter at 1, Ex. 9, Dkt. [66-1]. There is no evidence in the record that Dodge of Naperville, Burke Automotive Group, Burke, or an agent thereof, sent a termination notice to the Trustees.

         On June 20, 2009, Dodge of Naperville shuttered its facility, but offered employment to the six Union mechanics at the Lisle location. However, a major distinction existed between the two facilities; the employees at the Lisle dealership were not members of a union. The Union mechanics' prospective employment at the Lisle facility was conditioned on their ending their Union membership and waiving their Union-negotiated wages and benefits. Two of the six mechanics rejected the offer of employment at the Lisle facility; the other four took the offer and began working at the Lisle facility.

         On July 8, 2009, the Union filed a complaint against Dodge of Naperville and Burke Automotive with the National Labor Relations Board (the "Board"), alleging that the relocation of the Union mechanics from Naperville to Lisle violated the National Labor Relations Act (the "NLRA" or the "Act"). On August 2, 2010, the Administrative Law Judge ("ALJ") ruled in favor of the Union. The ALJ found that Dodge of Naperville and Burke Automotive Group "constitute a single employer for the purposes of the Act and are jointly and severally liable for the violations of the Act." ALJ Decision at 25, Dkt. [65-9]. The ALJ also found that the manner in which the Employer relocated the Union mechanics violated Sections 8(a)(1), (3) and (5) of the Act. As a remedy, the ALJ recommended to the Board that the Employer be ordered to "honor the terms of the most recent collective bargaining agreement[, ]" negotiate a new contract with the Union, and "make the [Union mechanics] whole for any losses of wages, health insurance benefits, vacation pay, pension benefits, and other benefits they may have incurred as a result of the unilateral changes...." Id. at 26.

         On November 17, 2010, Dodge of Naperville and two of the Union mechanics filed a Complaint in federal court against the Trustees seeking injunctive and declaratory relief. The Trustees subsequently filed a Cross-claim against Dodge of Naperville and Burke Automotive Group. Dodge of Naperville then moved to dismiss the Cross-claim. The Court denied Dodge of Naperville's motion and entered a stay pending the final resolution of the ongoing litigation before the Board.

         The Board reviewed the ALJ's decision and made technical changes to conform the ALJ's decision to the Board's standard remedial language. The changes required the monetary damages to be paid with interest compounded daily and distinguished the Board's rationale from that of the ALJ. But the Board relied on the ALJ's factual findings, did not change the ALJ's legal conclusions, and ultimately "adopt[ed] the recommended Order of the [ALJ] as modified...." NLRB Decision at 4, Dkt. [65-11]. The Board also ordered the Employer to "remit all payments to health care, pension, and/or other funds, that [the Employer was] required to make under the most recent collective-bargaining agreement with the Union, but which [it] failed to make." Id. at 9.

         The Employer appealed the Board's Order and argued before the U.S. Court of Appeals for the D.C. Circuit on May 8, 2015. For reasons explained in the detailed opinion issued on August 4, 2015, the D.C. Circuit found that "all of [the Employer]'s arguments must be rejected" and the court affirmed the Board's Order in its entirety. D.C. Cir. Opinion at 12, Dkt. [65-12], see also Dodge of Naperville, Inc. v. N.L.R.B., 796 F.3d 31, 39 (D.C. Cir. 2015). The U.S. Supreme Court denied certiorari on March 21, 2016.

         After roundtrip litigation from Chicago to Washington D.C, the parties returned to the proceedings before this Court. On December 4, 2015, the Court lifted the stay. The next week the Trustees filed an Amended Counterclaim against Dodge of Naperville and a Third-Party Complaint against Burke Automotive Group. On February 19, 2016, the parties stipulated that Dodge of Naperville's Complaint filed in November 2010 would be dismissed with prejudice, and only the Trustees' claims against Dodge of Naperville and Burke Automotive Group would remain. The Trustees' remaining claims allege that Dodge of Naperville and Burke Automotive Group are jointly and severally liable for violating Section 515 of the Employee Retirement Income Security ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.