United States District Court, N.D. Illinois, Eastern Division
Laborers' Pension Fund, Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity, The Chicago Laborers' District Council Retiree Health and Welfare Fund, and James S. Jorgensen, Administrator of the Funds, Plaintiffs,
Innovation Landscape, Inc., Defendant.
MEMORANDUM OPINION AND ORDER
S. SHAH, UNITED STATES DISTRICT JUDGE
Systems Landscaping, Inc. (which refers to itself as
“Fuerte”) was a union signatory company owned by
Rafael Hurtado that provided residential landscaping, public
park construction, and snow removal services in northeast
Illinois. Since 2011, two lawsuits-which concern unpaid union
obligations over two different time periods-have been filed
against Fuerte, including this one. These lawsuits made it
difficult for Fuerte to obtain new work, and Fuerte
eventually shut down in 2016. As Fuerte struggled, Nataly
Perez, Hurtado's stepdaughter, decided to open a nonunion
landscaping company, Innovation Landscape, Inc., in 2014.
With Hurtado's help, Innovation started as a residential
landscaping company and grew to provide public park
construction and snow removal services in northeast Illinois.
Plaintiffs filed this motion for partial summary judgment,
alleging that Innovation should be liable for Fuerte's
obligations under its collective bargaining agreement because
the two entities are the same company under an alter-ego or
judgment is appropriate when “the pleadings,
depositions, answers to interrogatories, and admissions on
file, together with the affidavits” show that there is
no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law.
Fed.R.Civ.P. 56; Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). A genuine dispute over a material fact
exists when a reasonable jury could return a verdict for the
nonmovant. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). All facts and reasonable inferences are
drawn in the light most favorable to the nonmovant.
Laborers' Pension Fund v. W.R. Weis Co., Inc.,
879 F.3d 760, 766 (7th Cir. 2018). If the movant bears the
burden of persuasion at trial, it must support its motion
with credible evidence that would entitle it to a directed
verdict if not controverted at trial. Celotex Corp.,
477 U.S. at 331.
ruling on summary judgment, “a court may not make
credibility determinations, weigh the evidence, or decide
which inferences to draw from the facts; these are jobs for a
factfinder.” Johnson v. Rimmer, 936 F.3d 695,
705-06 (7th Cir. 2019) (internal citation omitted). However,
parties cannot circumvent the purpose of summary judgment
“by creating ‘sham' issues of fact with
affidavits that contradict their prior depositions.”
Bank of Illinois v. Allied Signal Safety Restraint
Systems, 75 F.3d 1162, 1168 (7th Cir.1996) (collecting
cases). A court may disregard new sworn testimony when it 1)
contradicts that same witness's earlier sworn deposition
testimony and 2) fails to explain the contradiction or
resolve any disparities. Id. at 1167-68. See
also Kopplin v. Wisconsin Cent. Ltd., 914 F.3d 1099,
1103 (7th Cir. 2019) (citing Bank of Illinois and
applying the sham affidavit rule).
Rule 56.1 statements serve to streamline the resolution of
summary judgment motions by having the parties identify
undisputed material facts and cite the supporting evidence.
See Waldridge v. Am. Hoechst Corp., 24 F.3d 918, 922
(7th Cir. 1994). Because of this important function, district
courts can require strict compliance. Kreg Therapeutics,
Inc. v. VitalGo, Inc., 919 F.3d 405, 414 (7th Cir. 2019)
(citation omitted). I disregard improperly asserted facts and
deem undisputed any facts not properly controverted. N.D.Ill.
Local R. 56.1.
parties raise evidentiary issues based on the sham affidavit
rule, witness credibility, and improperly controverted facts.
I address below only those issues germane to the outcome of
Hurtado owned Fuerte from 2002 to 2016.  ¶¶ 5,
9;  ¶ 1. The company provided residential
landscaping for single-family homes, public park construction
for park districts and municipalities, and snow removal
services.  ¶ 6;  ¶¶ 6, 8. Fuerte
serviced customers in the northeast counties of Illinois,
such as Cook, Lake, DuPage, Will, Grundy, Kane, McHenry, and
Boone County.  ¶¶ 86-87.
was the sole owner and shareholder of Fuerte and served as
the company's president and treasurer.  ¶ 9;
 ¶ 1. In this role, Hurtado communicated with park
district representatives; attended construction meetings;
oversaw projects; tracked employee hours; prepared estimates
and bids; and interfaced with clients.  ¶ 10. Only
Hurtado had authority to hire and fire employees and make
binding decisions on behalf of the company. 
April 2004, Fuerte had been a party to successive collective
bargaining agreements with a general laborers and
construction workers union.  ¶ 1. Under the CBA,
Fuerte was required to make contributions on behalf of
covered employees to certain pension, health, and welfare
funds-the plaintiffs: Laborers' Pension Fund,
Laborers' Welfare Fund of the Health and Welfare
Department of the Construction and General Laborers'
District Council of Chicago and Vicinity, Chicago
Laborers' District Council Retiree Health and Welfare
Fund, and James S. Jorgensen, as the funds'
used nonunion employees to perform residential work, which
included landscaping, planting, mulching, and the
installation of brick paver patios, driveways, retaining
walls, and outdoor patio kitchens.  ¶ 3.
Fuerte's public park construction work was performed by
union employees and involved “retaining walls, paving,
drainage, landscaping, concrete work, excavating, playground
installation and park development.”  ¶¶
6-7. The CBA covered many of these residential and commercial
tasks, which were required to be performed by union
employees. Id. ¶ 8.
October 2011, the funds filed a lawsuit against Fuerte to
collect union dues and benefits owed from January 2008
through January 2012. Id. ¶ 3. The funds sought
over $4 million in back contributions, liquidated damages,
and interest. Id. In that case, the court entered
judgment against Fuerte in the amount of $3, 409, 308.11.
See Laborers' Pension and Welfare Funds, et al. v.
Fuerte Systems Landscaping, Inc., et. al., No.
11-CV-7401, Dkt. No. 210 (N.D. Ill. Aug. 29, 2018). In
October 2015, plaintiffs filed this lawsuit about unpaid
union dues and benefits from January 31, 2012, onwards. 
¶ 4. On March 21, 2016, I entered judgment against
Fuerte in the amount of $668, 236.99 in unpaid fringe
benefits and union dues. Id. ¶ 89.
Hurtado, Rafael Hurtado's wife and Fuerte's office
manager, explained that due to the lawsuits, as of March
2013, insurance companies refused to provide bonds Fuerte
needed to secure new public park construction work.
Id. ¶¶ 25-27. As a result, Hurtado had to
close Fuerte, which stopped providing services by February 2,
2016.  ¶ 27;  ¶ 45. Hurtado believed the
funds conspired to put Fuerte out of business: “the
Union went really dirty on me, ” he said.  ¶
90;  ¶ 6.
funds argue that Innovation Landscape, Inc., a nonunion
landscaping company owned by Hurtado's stepdaughter,
Nataly Perez, is a disguise for Fuerte, and should be held
responsible for Fuerte's legal obligations under the CBA.
;  ¶¶ 14, 37.
incorporating Innovation, Perez worked as a secretary at
Fuerte from June 2013 to February 2014.  ¶¶
14, 37. She performed clerical tasks only, like answering
phone calls, taking messages, and running errands.
Id. ¶ 14. After working as a secretary-and only
one year after graduating high school-Perez opened Innovation
in March 2014. Id. ¶¶ 37-38. She was the
sole shareholder and officer of Innovation and initially paid
herself $400.00 per week. Id. ¶ 38. Perez
testified that she made an initial $200.00 shareholder
contribution but did not obtain any business loans or
contemplate any type of business plan. Id.
¶¶ 39-40. Neither Fuerte nor Hurtado provided any
start-up capital, loans, or guarantees to Innovation. 
¶ 5. Innovation did, however, operate from Hurtado's
residence, on Mirage Avenue, Plainfield, Illinois, in 2014.
 ¶ 37.
2013, Fuerte stopped providing residential landscaping for
single-family residences.  ¶ 3. Instead, Fuerte
referred residential work, including warranty repair work, to
Innovation when it opened in 2014. Id. In one
instance, Fuerte admits it subcontracted residential warranty
repair work to Innovation and paid Innovation for this work.
 ¶ 45;  ¶ 4. Meanwhile, Innovation
provided the same residential landscaping services Fuerte had
provided.  ¶ 43. Innovation's largest
residential project that year was valued at approximately
$20, 000. Id. ¶ 47. Innovation did not own any
residential landscaping equipment in 2014, so Fuerte lent
Innovation the necessary equipment and tools for
free-including dingos, tampers, lasers, and a dump truck.
Id. ¶ 46. Additionally, one of Innovation's
first employees was Hurtado's son, Rafael Hurtado Jr.,
who served as Innovation's general manager from March to
November 2014. Id. ¶¶ 42,
ceased operations in either October or November 2014. 
¶ 50;  ¶ 21. In early November 2014, Fuerte
issued Innovation a check for $11, 300.  ¶ 50.
Perez said that the check was for residential warranty repair
work that Fuerte subcontracted to Innovation, as well as
taxes and debts Innovation owed to suppliers.  ¶
50; [111-3] at 75-76. Innovation stored its tools and materials
on Fuerte's premises, in Joliet, Illinois, in 2014. 
¶¶ 18, 52. Both Junior and Perez returned to work for
Fuerte in October 2014.  ¶ 51;  ¶¶
April 2015, Perez, in her personal capacity, purchased
property on Plainfield Road, Oswego, Illinois.  ¶
20. That August, Perez executed a two-year commercial lease
with her stepfather's company, Fuerte, starting on August
1, 2015. Id.; [111-4] at 1-5. At some point that
summer, the parties agree that Fuerte moved its office to the
Plainfield Road property, along with some equipment. 
¶ 19. Some equipment remained at Fuerte's Joliet
property. Id. Between August 2015 and September
2015, Fuerte paid to remodel the interior of the Oswego
residence and built a cabin on the premises.  ¶ 21;
 ¶ 7.
this lawsuit was filed in October 2015, Fuerte decided to
shut down, which took a few months.  ¶ 6. In
December 2015, Fuerte stopped performing public park
construction and sought legal counsel to terminate
operations. Id. That same month, Perez reopened
Innovation because Fuerte was “having problems”
and because Hurtado was available to assist running
Innovation.  ¶ 53. In her role as president of
Innovation, Perez testified that she reported to work at
“my house” on Plainfield Road, the same location
Fuerte had moved into that summer under a commercial
lease. [111-3] at 92;  ¶¶ 19-20,
immediately began helping Innovation get work. While many
facts about one commercial project are disputed, the parties
agree that in December 2015, Hurtado referred the project to
Innovation and actively helped Innovation obtain it, by
meeting with the client and using his expertise to develop
Innovation's proposal.  ¶¶ 54-56; 
¶¶ 23-24; [111-5] at 57.
last week of January 2016, Fuerte stopped providing snow
removal services, and Innovation started in February 2016.
 ¶ 58;  ¶ 6. While the parties dispute
many facts about one contract, they agree that initially
Fuerte entered into a contract with a client to provide snow
plowing and salting services from approximately October 2015
to May 2016.  ¶ 30. Hurtado either referred or
requested transferring the work to Innovation, and under a
separate contract, Innovation provided the remaining snow
removal services.  ¶¶ 9-10. To complete the