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Chicago Regional Council of Carpenters Pension Fund v. Sports Equipment Installation, Inc.

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

April 19, 2017

CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, et al., Plaintiffs,
v.
SPORTS EQUIPMENT INSTALLATION, INC. and JAMIE R. DAHL, Defendants.

          CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND et al. Kevin P. McJessy One of their attorneys.

          PLAINTIFFS' MOTION FOR ENTRY OF JUDGMENT AGAINST DEFENDANT SPORTS EQUIPMENT INSTALLATION, INC. PURSUANT TO FEDERAL RULES OF CIVIL PROCEDURE 55 AND 56

          Chang Judge.

         Plaintiffs, Chicago Regional Council of Carpenters Pension Fund, Chicago Regional Council of Carpenters Welfare Fund, Chicago and Northeast Illinois Regional Carpenters Apprentice and Trainee Program Fund and Labor/Management Union Carpentry Cooperation Promotion Fund (hereinafter the "Trust Funds") move this Court pursuant to Federal Rules of Civil Procedure 55 and 56 to enter judgment against defendant Sports Equipment Installation, Inc. (“Sports Equipment”). This Court should enter judgment against Sports Equipment because Sports Equipment breached its collective bargaining agreement with the Chicago Regional Council of Carpenters (“Union”) that required Sports Equipment to pay fringe benefit contributions to the Trust Funds during the period January 1, 2012 through December 31, 2015 (“Audit Period”). Sports Equipment is liable to the Trust Funds for $344, 399.68 broken down as follows: unpaid fringe benefit contributions in the amount of $234, 323.29, liquidated damages in the amount of $46, 864.67, interest in the amount of $28, 250.99, auditors' fees in the amount of $3, 210.80 and attorneys' fees and costs in the amount of $31, 749.93.

         Summary of the Trust Funds' Motion

         Sports Equipment agreed to be bound by the collective bargaining agreement with the Union and therefore is a union employer. The collective bargaining agreement and the Employee Retirement Income Security Act (“ERISA”) require a union employer, like Sports Equipment, to pay fringe benefit contributions for each hour worked by employees performing bargaining unit work and to periodically submit to an audit of its books and records to ensure that the employer has complied with its obligation to pay fringe benefit contributions. The Trust Funds filed this lawsuit to compel Sports Equipment to submit to an audit and to pay any amounts due based on the audit. Sports Equipment failed to answer the Trust Funds' complaint so a default order was entered against Sports Equipment on February 10, 2015. The order of default has not been vacated and Sports Equipment has not filed an answer. An audit was completed of Sports Equipment revealing unpaid fringe benefit contributions. The Trust Funds issued two sets of admission requests to prove the findings in the audit. Sport Equipment failed to respond and this Court ruled that the facts set forth in the admission requests were deemed admitted by orders dated March 16, 2017 and April 6, 2017.[1] (Order, March 16, 2017, Ex. 3; Order, April 6, 2017, Ex. 4) The Trust Funds now bring this motion for entry of a final judgment pursuant to this Court's order of February 10, 2015 and pursuant to Federal Rules of Civil Procedure 55 and 56.

         I. UNDISPUTED FACTS

         A. Order of Default against Sports Equipment

         The Trust Funds filed a complaint against Sports Equipment to compel Sports Equipment to submit to an audit and to pay any amounts found due and owing. (Complaint, Docket Report No. 1) On February 10, 2015, this Court entered an order of default against Sport Equipment pursuant to Federal Rule of Civil Procedure 55 (“Rule 55”) which was never vacated. (Order, Feb. 10, 2015, Ex. 5)

Pursuant to Federal Rule of Civil Procedure 55(a), an order of default is hereby entered in favor of the Chicago Regional Council of Carpenters Pension Fund et al. (“Trust Funds”) and against defendants Sports Equipment Installation, Inc., a dissolved Wisconsin corporation and Jamie R. Dahl, individually and doing business as Sports Equipment Installation, Inc. (collectively Sports Equipment Installation, Inc. and Jamie R. Dahl are referred to herein as “Defendants”). Defendants are hereby ordered:
A. to provide the Trust Funds or their designated auditors, Legacy Professionals, LLP complete access to Defendants' books records within twenty-one (21) days so that the Trust Funds may conduct an audit of Defendants' fringe benefit contributions for the period January 1, 2012 through the present;
B. to pay any and all amounts the Trust Funds may discover to be due pursuant to the audit;
C. to pay auditor's fees incurred by the Trust Funds to complete the audit of Defendants' books and records;
D. to pay interest on the amount that is due;
E. to pay interest or liquidated damages on the amount that is due, whichever is greater; and
F. to pay reasonable attorneys' fees and costs the Trust Funds incurred in this action and attorneys' fees that the Trust Funds incur to obtain full compliance with this Order and to collect any amounts due and owing to the Trust Funds.

(Order, Feb. 10, 2015, Ex. 5). This order was never vacated, and Sports Equipment never filed an answer to the complaint in this lawsuit.

         B. The Trust Funds

         The Trust Funds provide pension, health and other benefits to Union members and others. (Libby Decl. ¶1, Ex. 6) Each of the Trust Funds are governed and administered pursuant to a trust agreement (hereinafter collectively "Trust Agreements"). (Libby Decl. ¶2, Ex. 6) The Trust Agreements also give the Trustees the authority to collect and manage contributions from employers who have agreed to be bound by the terms of the collective bargaining agreement (“Area Agreement”) for the Chicago Regional Council of Carpenters United Brotherhood of Carpenters and Joiners of America. (Libby Decl. ¶2, Ex. 6)

         C. Sports Equipment

         Sports Equipment signed a collective bargaining agreement in approximately 2007 and remained a signatory with the Union during the Audit Period. (Dep. of J. Dahl, pp. 38, 78, Ex. 7; Libby Decl. ¶¶3-4, Ex. 6) Pursuant to the collective bargaining agreement, Sports Equipment submitted fringe benefit contributions to the Trust Funds during the Audit Period affirming it is bound by the collective bargaining agreement. (Dep. of J. Dahl, pp. 30-31, 68, Ex. 7; Decl. of J. Libby ¶4, Ex. 6)

         During the Audit Period-which is the period which is the subject of this lawsuit-the aptly named Sports Equipment performed the removal (i.e., “demo” or demolition) of sports equipment and the installation of sporting equipment, including items such as gym curtains, gym pads, basketball backstops and the ceiling masts on which the backstops are mounted, volleyball equipment and batting cages using basic hand tools. (First Set of Admission Requests ¶¶1-300, Ex. 1; Dep. of J. Dahl, pp. 40-41, 64, 75-77, 95-96, Ex. 7) This is bargaining unit work that was performed within the geographical jurisdiction of the Union. (First Set of Admission Requests ¶¶1-300, Ex. 1; Decl. of R. Bonafiglio ¶¶4-7, Ex. 8)

         Sports Equipment submitted monthly fringe benefit contribution reports to the Trust Funds during the Audit Period. Sports Equipment reported a combined 160 hours of “Total Actual Hours Worked” on Sport Equipment's June and July 2014 Combined Fringe Benefit Funds and Dues Checkoff Report and paid $4, 419.36. (Second Set of Admission Requests ¶¶1- 4, Ex. 2; Dep. of J. Dahl, pp. 61-62, 65-68, Ex. 7; Libby Decl. ¶4, Ex. 6)

         Sports Equipment admits that it is required to maintain and produce books and records sufficient for the Trust Funds to determine whether Sports Equipment accurately reported and paid contributions Sports Equipment owes to the Trust Funds. (Second Set of Admission Requests ¶5, 6, Ex. 2) Sports Equipment has employees who work on its jobs other than Jamie Dahl, the owner of Sports Equipment. (Dep. of R. Bonafiglio, pp. 10-12, Ex. 9) Sports Equipment further admits that except for the 160 hours of fringe benefit contribution hours reported by Sports Equipment to the Trust Funds in June and July 2014, Sports Equipment does not have, did not maintain and did not produce any records to show the hours worked by its owner, Jamie Dahl, its employees or its independent contractors on the substantial number of projects that Sports Equipment performed within the jurisdiction of the Union during the Audit Period. (Second Set of Admission Requests ¶¶7-15, Ex. 2; Dep. of J. Dahl, pp. 57-59, 92, Ex. 7) Sports Equipment also did not maintain copies of the invoices issued to its customers for the work it performed. (Dep. of J. Dahl, pp. 56-59, Ex. 7)

         D. The Audit of ...


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