ELAINE E. BUCKLO, District 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, and James S. Jorgensen, Administrator of the Funds (collectively herein referred to as the "Funds"), by their attorneys, hereby move for judgment of damages in sum certain against Defendant, Cottage Grove Glass 7403, Inc., pursuant to Rule 55 of the Federal Rules of Civil Procedure. In support of this Motion, Plaintiffs by and through their attorneys state the following:
1. On February 5, 2016, Plaintiffs filed a Complaint under Sections 502(e)(1) and (2) of the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1132(e)(1) and (2); Section 301(a) of the Labor Management Relations Act, as amended, 29 U.S.C. § 185(a); and 28 U.S.C. § 1331 alleging that at all material times the Defendant, Cottage Grove Glass 7403, Inc. (the "Company"), has an obligation, arising from a collective bargaining agreement ("CBA") to make contributions to Plaintiffs' funds, to submit to an audit upon demand, and to obtain and maintain a surety bond. Plaintiffs attached a copy of the CBA to the Complaint. In the Complaint, Plaintiffs specifically alleged that Defendant failed to report and pay contributions from September 2015 to the present. Plaintiffs' requested relief included producing books and records for an audit upon Plaintiffs' request (See Docket No. 1).
2. On February 18, 2016, the Summons and Complaint were served upon the Company's registered agent and president, Patricia King (See Docket No. 4, Affidavit of Service).
3. On June 1, 2016, the Court found the Defendant in default (See Docket No.7, Minute Order).
4. The Funds' selected the independent auditing firm of Richard J. Wolf and Company, Inc., to perform a compliance payroll audit as required by the CBA. The audit report dated May 25, 2016 is attached hereto as Exhibit 1 (See Exh. 1, Audit Report).
5. On May 31, 2016, a letter and a copy of the auditors' report was sent to the Company with a deadline for presenting any objections to the audit report on or before June 16, 2016 (See Exhibit 2, Demand Letter). The Company has failed to present evidence to support challenges to the audit— despite the undersigned counsel allowing the Company added time to present such evidence.
6. As established by the Funds' Field Department Director, Jean Mashos, the Funds' auditors review of the Defendant's records, reflects contributions due to the Funds for the period covering September 9, 2015 through March 31 2016, including principal contributions owed to the Welfare, Retiree Welfare, Pension, Training, LECET, LMCC and CAICA funds, and for Union dues in the total amount of $68,005.66 (See Exh. 3, Affidavit of Jean Mashos; and Exh. 2, Audit Report).
7. According to the CBA, the Master Agreement and the respective Trust Agreements to which Defendant is bound, payment is also owed for liquidated damages in the amount of twenty percent (20%) of the unpaid or late contributions to the Welfare, Welfare Retiree, Pension, and Training funds, and ten percent (10%) of the principal amount of delinquent contributions to the LECET, LMCC, CAICA funds and for Union dues. Additionally, interest is calculated at twelve percent (12%) and is owed for all delinquencies. As established by Ms. Mashos's Affidavit, the liquidated damages owed to the Welfare, Welfare Retiree, Pension and Training funds amount to $13,163.47 and the liquidated damages owed to the LMCC, CAICA and LECET funds, and for Union dues, amount to $218.82. And interest is due in the amount of $3,299.02 (See, Exh. 3, Mashos Affidavit at ¶¶6-7). These amounts are further detailed in the Funds' summary report that is attached hereto as Exhibit 4.
8. The cost of the audit billed to the Funds was $855.00, which the Defendant is also obligated to pay, based on the respective agreements to which it is bound (See Exh. 3, Mashos Affidavit at ¶8; and Exh. 2, Audit Report).
9. Plaintiffs are also entitled to attorneys' fees and costs under ERISA, 29 U.S.C. § 1132(g)(2)(B). The attached affidavit of Sara Stewart Schumann establishes the amount of attorneys' fees and costs incurred in this matter are $6,245.00 (See, Exhibit 5, Schumann Affidavit; and Exhibit 5A, Fee Report).
May 25, 2016
We have applied certain procedures, as discussed below, to the payroll records of Cottage Grove Glass Inc., a contributing employer to the Pension and Welfare Funds of Construction and General Laborers' District Council of Chicago and Vicinity, fox the period September 9, 2015 to March 31, 2016. The purpose of our inspection was to determine the accuracy of the employer's monthly contributions to the Trust Funds for the given period. The accuracy of the payroll records and reporting to the Funds is the responsibility of the [Employer].
The exceptions to employer contributions noted are detailed on the accompanying schedule. This was not a review of amounts owed for withdrawal liability under the Multi-employer Pension Plan Amendments Act,
The employer could not provide proof of a current wage and fringe benefit bond.
The Scope of this engagement was limited to records made available by the employer and would not necessarily disclose all exceptions in employer contributions to the Trust Funds. Any compensation paid to employees not disclosed to us or made part of the written records was not determinable by us and was not included in our review. Further, our procedures (id not extend to any financial statements of the contributing employer and were substantially less in scope than an audit of the financial statements of the contributing employer, the objective of which is the expression of an opinion on the contributing employer's financial statements. Accordingly, no such opinion is expressed.
The findings of this audit report should not be construed as an endorsement or ratification of any of the Employer's contribution practices. The findings are based solely on those documents that the Employer provided to the auditors. This firm has not been retained to provide, and does not provide, any interpretation of advice concerning any terms of the collective bargaining agreement between the Employer and the Union of the terms of the Funds' respective Agreement and Declarations of Trust. All questions concerning the Employer's contribution practices, or any contributions or benefits-related issue, should be directed to the Union or the Fund office, No failure to note an exception to any of the employer's contribution practices should be construed as a ratification of such practice or waiver of the Union or the Funds' ability to challenge such practice in the future.
These findings are not based on observation of employees doing actual work.
May 25, 2016
Amount due for services rendered and expenses incurred in connection with the fringe benefit contribution compliance audit of Cottage Grove Glass Inc., for the period from September 9, 2015 through March 31, 2016.
Dear Ms. King:
We are in receipt of a report on a payroll audit by the Funds' designated auditors for the period of September 9, 2015 through March 31, 2016. The report reflects delinquent contributions owed for the audit period. In addition to these principal amounts, the collective bargaining agreement and the Funds' Agreements and Declarations of Trust, provide for the payment of liquidated damages for all contributions paid late, plus interest and audit costs. The following amounts are owed at this time, for the period of September 9, 2015 through March 31, 2016:
Additionally, the collective bargaining agreement and the Funds' Trust Agreements require the payment of interest, at 12%, on all delinquent contributions from the date on which they were due until the date received by the Funds. Thus, the amount of accumulated interest (calculated above as to May 27, 2016), will continue to accrue until those delinquent contributions are paid. Also, as litigation was necessary to gain your Company's compliance with the audit, the Company is further responsible for the Funds' attorneys' fees and court costs, pursuant to statutory law under ERISA, as well as under the collective bargaining agreement and the Funds' Trust Agreements.
In the absence of reliable evidence to the contrary, the Funds are required to pursue collection of all amounts owed pursuant to the auditors' report. If you contest the results of the audit
you must provide the Funds' with a statement of the nature of your challenge, and any evidence in support of your position. Please provide all of your challenges to the audit report on or before June 16, 2016. In the absence of prompt payment of the amounts reflected by the report together with interest and liquidated damages, or evidence in support of your challenges to contest the report, we will move for judgment in the pending court matter to collect all such amounts, together with attorneys' fees and costs.
Please send the full amount
Jean Mashos being first duly sworn on oath, deposes and states as follows:
1. I am the Director of the Field Department, employed by the 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 (the "Funds"), Plaintiffs in the above referenced action. My responsibilities include oversight of the collection of amounts owed to the Funds by Cottage Grove Glass 7403, Inc. (the "Company"), and the Funds are authorized to act in the collection of unpaid Union work dues on behalf of the Construction & General Laborers' District Council of Chicago and Vicinity (the "Union"), This affidavit is submitted in support of the Funds' motion for damages against the Company.
2. The Company has been a signatory employer at least since September 9, 2015, as reflected by the Funds' records and as shown by the collective bargaining agreement. A copy of the Company's collective bargaining agreement was attached to the Complaint in the above captioned lawsuit, and is the true and correct copy of the agreement, which is on file with the Funds.
3. On or about February 5, 2016, the Funds filed the present action against the Company.
4. The Funds' selected the auditing firm of Richard J. Wolf & Company, Inc., to review the Company's records for a compliance audit period, covering September 9, 2015 through March 31, 2016,
5. The auditor's report dated May 25, 2016 reflects principal contributions owed to the Welfare, Retiree Welfare, Pension, Training, LMCC, CAICA and LECET funds and for Union dues in the total amount of $68,005.66. A copy of this audit report was sent to the Company with a letter demanding payment for the audit findings.
6. Based on the audit, a summary report was prepared and is attached to my affidavit and Plaintiffs' motion. This report reflects the amount of principal contributions, union dues, liquidated damages, accumulated interest, and audit costs that the Company owes pursuant to the governing collective bargaining agreement, the Master Agreement and the respective Trust Agreements. According to these Agreements, the Funds are entitled to liquidated damages at the rate of twenty (20) percent of the amount owed in principal contributions to the Pension, Welfare, Retiree Wel fare and Training funds; and at the rate of ten (10) percent of the amount owed in principal contributions to the LMCC, CAICA, I MET funds and for Union dues. Thus, $13,163.47 is owed for liquidated damages due to the principal contributions owed to the Pension, Welfare, Retiree Welfare and Training funds, and $218.82 is owed for liquidated damages for the amounts owed to the LMCC, CAICA and LECET fluids and for Union dues.
7. The Funds are also entitled pursuant to its Collective Bargaining Agreement and the respective Trust Agreements to the amount of twelve (12) percent accumulated interest for all amounts owed by the Company to date. The accumulated interest owed by the Company, according to the summary report is $3,299.02.
8. The Company is further obligated pursuant to its Agreements for the audit costs in the amount of $855.00 and also obligated by law for the reasonable attorneys' fees and court costs incurred by the Funds in obtaining judgment in this matter.
9. Additionally, these Agreements require employers to procure, early and maintain a surety bond in an amount that is satisfactory to the Union. This surety bond must be in excess of $5,000.00 to guarantee the payment of wages, Pension and Welfare Trust Contributions during the term of the Agreement. The Company must show proof of maintaining a surety bond as required by the contract.
FURTHER AFFIANT SAYETH NOT,
Sara Stewart Schumann, being first duly sworn on oath, deposes and states as follows:
1. 1 am an associate attorney at the law firm of Allison, Slutsky & Kennedy, P.C., counsel for the Plaintiffs Laborers' Pension Fund and I.aborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity (the "Funds") in the action against Cottage Grove Glass 7403, Inc. This affidavit is submitted to document attorneys' fees and costs incurred by the Laborers' Funds, covering the period of January 27, 2016 through September 12, 2016, for work performed in connection with obtaining contributions owed to the Funds.
2. Since January 27, 2016, this firm has billed the Laborers' Funds on an hourly basis for collection services rendered to the Funds, at a rate of $225.00 per hour for shareholders, $195.00 per hour for associates, and $110,00 per hour for clerks/paralegals. In this cause records kept for legal work on this matter were kept contemporaneously and are attached hereto as Exhibit 5A.
3. This fee report is attached hereto as Exhibit 5A and sets forth the time expended from January 27, 2016 through the present, by the firm's attorneys and paralegals in this matter. The billable entries were reviewed, and any duplicate entries were struck. As set forth in Exhibit 5A, the Funds have incurred legal fees to my firm in this matter in the amount of $6,245.00.
