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Laborers' Pension Fund v. Fuerte Systems Landscaping, Inc.

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

February 21, 2018

Laborers' Pension Fund, et al., Plaintiffs,
v.
Fuertes Systems Landscaping, Inc., et al., Defendants.

          MEMORANDUM OPINION & ORDER

          Honorable Thomas M. Durkin Judge

         Plaintiffs Laborers' Pension Fund and Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity (together, the “Funds”), along with the Funds' administrator James S. Jorgensen, sued defendants Fuertes Systems Landscaping, Inc., Fuerza Concrete, Inc., Hacienda Landscaping, Inc., and Rafael Hurtado, to recover delinquent contributions and other amounts allegedly owed to the Funds pursuant to Sections 502(e)(1) and (2) and 515 of the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132(e)(1) & (2), 1145.

         Currently before the Court is plaintiffs' motion for summary judgment. R. 113. In a status report filed on February 16, 2018 addressing defendant Hurtado's bankruptcy proceedings, plaintiffs explain that they have reached a tentative settlement that will resolve this case as to defendants Hurtado, Fuertes, and Fuerza. R. 172. Plaintiffs represent that “the sole remaining issue left for the Court to resolve” if the settlement proceeds as expected “will be the alleged liability of Defendant Hacienda Landscaping, Inc.” Id. The Court therefore addresses only the portion of plaintiffs' motion relevant to Hacienda's joint and several liability. Plaintiffs maintain that summary judgment is appropriate on the issue of whether Hacienda is jointly and severally liable as a single employer or alter ego of Fuertes.

         For the reasons set forth below, the Court denies plaintiffs' motion for summary judgment as to Hacienda's joint and several liability. The Court denies without prejudice the remaining portion of plaintiffs' motion in light of plaintiffs' representations in the February 16 status report.

         Background [1]

         A. Fuertes' Business and Collective Bargaining Agreement

         During the relevant period of 2008 to 2012, Fuertes performed residential and public construction work. FR & HR ¶ 20. Fuertes entered into a collective bargaining agreement (“CBA”) with the Construction and General Laborers' District Council of Chicago and Vicinity union, which binds Fuertes to certain trust agreements with the Funds. FR & HR ¶¶ 5, 11, 12. Those trust agreements in turn require Fuertes to submit monthly benefit reports and contribution payments “for each hour worked by all Employees covered by [the CBA].” Id.

         B. Relationship between Fuertes and Hacienda

         During the relevant period of 2008 to 2012, Hacienda was a landscaping company owned by defendant Hurtado's sister Maria Guzman. FR & HR ¶¶ 21, 48; PR-Hacienda ¶ 2. Hacienda's registered address was Guzman's home address. FR & HR ¶ 49.

         The precise relationship between Fuertes and Hacienda is disputed by the parties, in particular based on two affidavits Guzman submitted on behalf of herself and on behalf of Hacienda in support of Hacienda's opposition to summary judgment. Hacienda-Exs. 1, 16. These affidavits contest most of the factual points supported by the testimony of Fuertes employees on which plaintiffs rely.

         To begin, Guzman's actual managerial authority over Hacienda is contested. During her deposition, Guzman could not recall many details about Hacienda's operations, including what tools or equipment it rented, how many employees it had, or the names of three of its drivers. FR & HR ¶¶ 53-54. In Guzman's affidavit submitted on behalf of herself in support of Hacienda's summary judgment opposition, Guzman represented that based on her deposition notice, she was not aware that she would be asked questions about Hacienda's business and so was not prepared to answer those questions. Hacienda-Ex. 16 ¶ 20.

         Guzman's affidavit on behalf of Hacienda sets forth significantly more detail than her deposition about Hacienda operations. Hacienda-Ex. 1. Guzman represented that Hacienda at all times had its own insurance coverage, offices, storage space, computer system, office equipment, tools, and bank accounts. PR-Hacienda ¶ 6; Hacienda-Ex. 1 ¶¶ 12, 13, 14, 15, 16. Guzman's affidavit denied that Hacienda ever received money from Fuertes. PR-Hacienda ¶ 5.

         The extent of overlap among Fuertes and Hacienda management and employees also is contested by the parties. The parties dispute whether Hurtado told Fuertes employees that Hacienda was his other company, FR & HR ¶ 58, and whether he told them that union employees would work for Fuertes and non-union employees would work for Hacienda. FR & HR ¶ 41; P-Ex. K at 34-36; see also PR-Hacienda ¶ 3 (Hurtado testified that he had no involvement in Hacienda). The parties also dispute whether and to what extent Edgar Rubio acted as a superintendent for both Hacienda and Fuertes and directed work to employees of both companies. FR & HR ¶¶ 56-57.

         It is undisputed that for part of the relevant time period, Guzman served as the office manager for Fuertes while also serving as president of Hacienda. FR & HR ¶¶ 22, 24; PR-Hacienda ¶ 2. But her responsibilities as office manager of Fuertes are contested. It is clear that she processed weekly payroll for Fuertes, recorded daily employee hours, completed and submitted union benefit reports, filed and paid bills, and signed and issued checks. FR & HR ¶ 24. But it is disputed whether Guzman had authority to decide what information was placed on Fuertes payroll records or union reports, id., whether she was an officer of Fuertes, FR & HR ΒΆ 23, whether she attended any corporate meetings for ...


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