REBECCA R. PALLMEYER, District Judge.
Plaintiffs MIKE SHALES, JOHN P. BRYAN, AL OROSZ, DAN BREJC, JEFF FROST and VERN BAUMAN as Trustees of THE FOX VALLEY LABORERS' HEALTH and WELFARE FUND ("Welfare Fund") and MIKE SHALES, JOHN P. BRYAN, AL OROSZ, JEFF FROST, VERN BAUMAN and DAN BREJC as Trustees of THE FOX VALLEY LABORERS' PENSION FUND ("Pension Fund") (collectively, "the Funds"), through their attorneys, Dowd, Bloch & Bennett, pursuant to Fed.R.Civ.P. 55(b)(2) and Fed.R.Civ.P. 54(b), respectfully move this court for entry of final judgment, in the form of the attached proposed order, against Defendant HUGH HENRY CONSTRUCTION, INC. ("Defendant Company") on Counts I and IV of the Complaint. In support of this motion, the Plaintiffs state as follows:
1. This is a claim against the Defendant Company for delinquent reports and contributions due to employee fringe benefit funds under Section 515 of ERISA, 29 U.S.C. §1145.
2. The Funds filed their four-count Complaint against Defendant Company and Tracey Biesterfeldt on January 16, 2014, seeking the following relief:
3. On January 31, 2014, the Funds served the summons and complaint on Katherine M. Galvin at 5901 W. Lawrence Avenue, Chicago, Illinois. Katherine M. Galvin is the registered agent for Defendant Company. (The return of service is attached hereto as Exhibit 1).
4. As of the filing of this motion, more than 21 days after the date of service, Defendant Company has failed to plead or otherwise defend the case.
5. On March 18, 2014, the Funds filed a Waiver of Service of Summons for Tracey Biesterfeldt at 5905 W. Lawrence Avenue, Chicago, Illinois (Docket #8). Defendant Tracey Biesterfeldt's answer is due on May 6, 2014. This motion does not seek any relief against Tracey Biesterfeldt.
6. The Funds are agents for the purpose of collecting employer contributions and deductions required to be paid on behalf of The Construction and General Laborers' District Council of Chicago and Vicinity's Work Dues Fund, the Laborers-Employers Cooperation and Education Trust ("LECET"), and the Laborers District Council Labor Management Cooperation Committee ("LDC/LMCC"), the IAF Fund, the CISCO Fund, the Apprenticeship Fund, and the Safety Fund (collectively, "the Affiliated Organizations"). (Affidavit of Pat Shales ¶5, attached hereto as Exhibit 2).
7. Notwithstanding its obligations under the Funds' respective Trust Agreements, the Defendant Company failed to correctly report and pay contributions to the Funds for the period of March 2013 and to October 2013, as shown in the audit report attached as Exhibit A to the Complaint, despite demand duly made. (Ex.2. Affidavit of Pat Shales ¶6 and Attachment A thereto).
8. Pursuant to the Funds' collection procedures, Employers who fail to report and/or remit contributions are liable for interest and liquidated damages of 20% for prior delinquent contributions owed to the Funds. The Defendant Company's obligations under the collective bargaining agreement are continuing, and for each month it continues to be delinquent, contributions will be due and owing to the funds and interest on the unpaid contributions continue to accrue until payment is made (Ex.2, Affidavit of Pat Shales ¶7 and Attachment B thereto).
9. Notwithstanding its obligations under the collective bargaining agreements, the Defendant Company failed to remit dues owed to the Laborers District Council for the period of March 2013 to October 2013, as shown in the audit report attached as Exhibit A to the Complaint. Defendant Company has also accumulated late fees owed the Laborers District Council and Affiliated Organizations for prior delinquent months. Employers who fail to remit dues and contributions to the Affiliated Organizations on a timely basis are liable to pay an additional 10% on dues owed for delinquent months. (Ex.2, Affidavit of Pat Shales ¶8 and Attachment B thereto).
10. As alleged in Count I, in addition to the delinquencies shown in the audit report attached as Exhibit A to the Complaint, the Defendant Company also submitted reports for March and April 2013 untimely. Reports for both months were received on or about August 21, 2013. Based on that receipt date:
(Ex.2, Affidavit of Pat Shales ¶9).
11. The Funds have received four checks issued by The George Sollitt Construction Company as joint checks to the Funds and the Defendant Company. The Funds have deposited these checks and acknowledge them as a credit toward the delinquencies shown in Exhibit A to the Complaint. The checks are in the amounts of $7,865.80, $20,554.45, $9,579.84, and $3,827.24. (Ex.2, Affidavit of Pat Shales ¶10).
12. Under ERISA Section 502(g)(2), 29 U.S.C. §1132(g)(2), the terms of the Agreement, and the Funds' and Affiliated Organizations' governing trust documents, the Defendant Company is liable to the Funds for unpaid contributions, interest, liquidated damages in the amount of 20%, and reasonable attorneys' fees and court costs as well as and to the District Council and the Affiliated Organizations for dues, contributions and liquidated damages of 10%. Liquidated damages and interest owed pursuant to the Funds' collection procedures and 29 U.S.C. §1132(g)(2) are a "mandatory rather than a discretionary determination on the part of the court."
13. Pursuant to the Funds' collection procedures and the Defendant Company's collective bargaining agreement, the Defendant Company must also provide the Funds and/or the Union with a bond to guarantee the payment of wages and fringe benefit contributions (Ex.2, Affidavit of Pat Shales ¶11 and Attachment B thereto).
14. In accordance with the Agreement and/or the Funds' collection procedures and based on its work force, the Defendant Company is required to post a bond in the amount of $25,000.00 (Ex.2, Affidavit of Pat Shales ¶12).
15. The form of the bond that is required by the Funds and the District Council was attached to the Complaint as Exhibit B. (Ex.2, Affidavit of Pat Shales ¶13 and Attachment C thereto).
16. Under the terms of the Funds' collection procedures, if an employer fails to provide a bond as required, it is required to pay all of the costs, including attorneys' fees, incurred in seeking to compel the bond (Ex.2, Affidavit of Pat Shales ¶14).
17. As alleged in Count IV of the Complaint, the Defendant Company has failed to post the $25,000.00 bond as required (Ex.2, Affidavit of Pat Shales ¶15).
18. Based on the audit findings in Exhibit A to the Complaint, the Defendant Company owes principal contributions as stated in the reports, plus Funds liquidated damages at 20%, dues liquidated damages at 10%, interest, audit fees, and a cash bond as follows:
(Ex.2, Affidavit of Pat Shales ¶16).
19. The Defendant Company is also obligated by the terms of the Agreement, to pay the attorneys' fees and costs incurred by the Funds for its efforts to collect these amounts from the Defendant Company.
20. Pursuant to Fed. R. Civ. Pro. 54(b), "[w]hen an action presents more than one claim for relief—whether as a claim, counterclaim, crossclaim, or third-party claim—or when multiple parties are involved, the court may direct entry of a final judgment as to one or more, but fewer than all, claims or parties only if the court expressly determines that there is no just reason for delay." A final judgment on only some claims is appropriate where the claims retained by the trial court for trial are sufficiently different from the claims on which final judgment is granted such that an appeal from each would not require the appellate court to "go over the same ground" in each appeal.
21. Based the work Plaintiffs' counsel has completed to date and the work Plaintiffs' counsel anticipates doing in the future to bring this matter to conclusion, the Plaintiffs' have incurred and will incur attorneys' fees and costs. Pursuant to the Funds' collection procedures and 29 U.S.C §1132(g)(2), Plaintiffs are entitled to an award for those fees. The Defendant Company is also liable for attorneys' fees based on the terms of the Note (Ex.2, Affidavit of Pat Shales ¶14). Plaintiffs request that they be awarded their fees at this time against Defendant Company and that the parties be directed to comply with Local Rules 54.1 and 54.3 to ascertain the precise amount of those fees, but that compliance with Local Rules 54.1 and 54.3 be deferred until after the Court has entered final judgment on Counts II and III of the Complaint.
WHEREFORE, for the reasons stated above, MIKE SHALES, JOHN P. BRYAN, AL OROSZ, DAN BREJC, JEFF FROST and VERN BAUMAN, as Trustees of THE FOX VALLEY LABORERS' HEALTH AND WELFARE FUND, and MIKE SHALES, JOHN P. BRYAN, AL OROSZ, JEFF FROST, VERN BAUMAN and DAN BREJC as Trustees of THE FOX VALLEY LABORERS' PENSION FUND respectfully request that the Court enter an order, in the form attached or otherwise, providing for the following:
an answer to the complaint which is herewith served upon you, within twenty-one (21) days after service of this summons upon you exclusive of the day of service. If you fail to do so, judgment by default will he taken against you for the relief demanded in the complaint. You must also file your answer with the Clerk of this Court within a reasonable period of time after service.
Thomas G. Bruton, Clerk
I, Patricia M. Shales, of full age, being duly sworn on my oath, hereby depose and say as follows:
1. I am the Administrative Manager of the Fox Valley Laborers Fringe Benefit Funds, (the "Funds") and in such capacity, I have personal knowledge of the matters contained in this affidavit, and if necessary, I could testify to the facts contained herein.
2. I have responsibility for maintaining Hugh Henry Construction, Inc.'s account with respect to the Funds in this matter. Furthermore, I am in charge of keeping and maintaining records of contribution reports and contributions received by the Funds from each person, firm and corporation required to make contributions to the Funds. I have similar responsibilities on behalf of Plaintiffs for employers who are signatory to collective bargaining agreements with the Laborers' District Council and/or Fox Valley area local unions requiring employer contributions to the Funds.
3. Pursuant to the terms of the collective bargaining agreements, signatory employers are required to make contributions to the Funds on behalf of their covered employees.
4. Defendant Hugh Henry Construction, Inc. (hereinafter "Defendant Company") is signatory on the collective bargaining agreements.
5. The Funds are agents for the purpose of collecting employer contributions and deductions required to be paid on behalf of The Construction and General Laborers' District Council of Chicago and Vicinity's Work Dues Fund, the Laborers-Employers Cooperation and Education Trust ("LECET"), and the Laborers District Council Labor Management Cooperation Committee ("LDC/LMCC"), the IAF Fund, the CISCO Fund, the Apprenticeship Fund, and the Safety Fund (collectively, "the Affiliated Organizations").
6. Notwithstanding its obligations under the Funds' respective Trust Agreements, the Defendant Company was delinquent in remitting its contributions to the Funds for the period of March 2013 to October 2013, as detailed in the audit report attached hereto as Exhibit A.
7. Pursuant to the Funds' collection procedures, which is attached hereto as Exhibit B, Employers who fail to report and/or remit contributions are liable to pay interest on the delinquent contributions, an additional 10% in liquidated damages, which increases to 20% once a lawsuit is filed, and all costs of collection, including reasonable audit expenses, attorneys' fees, and court costs.
8. Notwithstanding its obligations under the collective bargaining agreements, the Defendant Company failed to remit dues owed to the Laborers District Council for the period of March 2013 to October 2013, as shown in the auditors report attached as Exhibit A. Defendant Company has also accumulated late fees owed the Laborers District Council and Affiliated Organizations for prior delinquent months. Employers who fail to remit dues and contributions to the Affiliated Organizations on a timely basis are liable to pay an additional 10% on dues owed for delinquent months (Exhibit B).
9. In addition to the delinquencies shown in the audit report attached as Exhibit A, the Defendant Company also submitted reports for March and April 2013 untimely. Reports for both months were received on or about August 21, 2013. Based on that receipt date:
10. The Funds have received four checks issued by The George Sollitt Construction Company as joint checks to the Funds and the Defendant Company. The Funds have deposited these checks and acknowledge them as a credit toward the delinquencies shown in Exhibit A to the Complaint. The checks are in the amounts of $7,865.80, $20,554.45, $9,579.84, and $3,827.24.
11. Pursuant to the Funds' collection procedures and the Defendant Company's collective bargaining agreement, the Defendant Company must also provide the Funds and/or the Union with a bond to guarantee the payment of wages and fringe benefit contributions (Exhibit B).
12. In accordance with the Agreement and/or the Funds' collection procedures and based on its work force, the Defendant Company is required to post a bond in the amount of $25,000.00.
13. The form of the bond that is required by the Funds and the District council is attached hereto as Exhibit C; however, the Defendant Company may alternatively also post a cash bond.
14. Under the terms of the Funds' collection procedures, if an employer fails to provide a bond as required, it is required to pay all of the costs, including attorneys' fees, incurred in seeking to compel the bond.
15. The Defendant Company has failed to post the $25,000.00 bond as required.
16. Based on the audit findings in Exhibit A to the Complaint, the Defendant Company owes principal contributions as stated in the reports, plus Funds liquidated damages at 20%, dues liquidated damages at 10%, interest, audit fees, and a cash bond as follows:
I have read the foregoing affidavit and swear that it is true and correct to the best of my knowledge, information, and belief.
of ________________________________, Illinois, herein called the "Principal," and
and firmly bound unto the Various fringe benefit and industry funds identified in the collective bargaining agreement between the Construction and General Laborers District Council of Chicago and Vicinity, affiliated with the Laborers' International Union of North America (the "Union") and the Principal and any successor collective bargaining agreements, all of which funds are collectively referred to as the "Funds"; unto the Union; and unto all individuals employed by the Principal and represented for collective bargaining purposes by the Union, referred to as the "Union Employees" (the Funds, the Union, and the Union Employees are collectively referred to as the "Obligees") in the
obligations and undertakings hereinafter set forth, for the payment of which, well and truly to be made, we hereby jointly and severally bind ourselves, our successors, assigns, heirs, executors, and administrators.
Signed and sealed and dated on this _______ day of _____, _______.
If Surety is required to make payment to the Obligees pursuant to the bond, Surety shall have no claim or right of any sort against Obligees.
In the event that the aggregate amount due the Obligees shall exceed the amount of this bond, then the claims of the various Obligees shall be satisfied r:n a pro rata basis, proportionate to the amount of each Obligee's claim. Any disputes as to the proper distribution in such circumstances, and any disputes regarding the Principal's obligations to the Obligees, shall be resolved in accord with the dispute resolution mechanisms of the collective bargaining agreement between the Principal and the Union.
The Surety shall pay any claim made by the Obligees under this bond within 30 days from receipt of the claim. Should the Surety fail to issue payment within 30 days from receipt of a claim, the Surety shall be liable for the claimed amount and any reasonable attorneys' fees and costs incurred by Obligees in enforcing this bond.
This Bond may be canceled by the Surety 120 days after receipt by the Obligees of the Surety's written notice of cancellation by registered or certified mail.
A Power of Attorney and Notarial Acknowledgement must be submitted with this bond.
This matter coming before the Court on Plaintiffs' Motion for Entry of Default and for Final Judgment on Counts I & IV Against Defendant Hugh Henry Construction, Inc. and the Court having reviewed the motion along with the supporting materials, hereby FINDS, ORDERS, and ADJUDGES as follows:
1. That Defendant HUGH HENRY CONSTRUCTION INC. is in default.
2. Judgment is entered against Defendant HUGH HENRY CONSTRUCTIONS INC. on Counts I and IV of the Complaint in the amount of $205,300.81 for amounts due for outstanding contributions and dues from March 2013 through October 2013, as revealed in an audit, plus interest, liquidated damages, the audit fee, and a cash bond, less partial payments received, Defendant HUGH HENRY CONSTRUCTION INC. is ordered to submit $205,300.81 to the Plaintiffs within 10 days of the date of this Order for the following:
Pursuant to Federal Rule of Civil Procedure 54(b), the Court finding no reason for delaying enforcement or appeal, this judgment is a final judgment as to Counts I and IV of the Complaint.
3. The Funds are awarded their reasonable attorneys' fees and costs against Defendant HUGH HENRY CONSTRUCTION INC. in connection with this final judgment on Counts I and IV of the Complaint. The parties are ordered to comply with Local Rules 54.1 and 54.3 for the calculation of attorneys' fees and costs, but that compliance is deferred until after the Court has entered judgment on Counts II and III of the Complaint or until further order of the Court. This deferred compliance with Local Rules 54.1 and 54.3 shall have no effect on enforcement or appeal of this judgment in favor of the Funds and against Defendant HUGH HENRY CONSTRUCTION INC. on Counts I and IV of the Complaint.
SO ORDERED.
