THOMAS M. DURKIN, 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 Catherine Wenskus, Administrator of the Funds (collectively herein referred to as the "Funds" or "Plaintiffs"), by their attorneys, hereby move for judgment of damages in sum certain against Defendant, Gilco Mechanical Contractors, Inc. (the "Company" or "Defendant"), pursuant to Rule 55 of the Federal Rules of Civil Procedure. In support of this Motion, Plaintiffs state the following:
1. On June 27, 2017, 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 has an obligation, arising from a collective bargaining agreement ("CBA") to make contributions to the 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, as Exhibit A, specifically alleging, in the Complaint, that Defendant failed to report and pay contributions, as reflected by the audit report attached to the Complaint as Exhibit B (See Docket No. 1, Legacy Audit), which is also attached hereto for convenience as Exhibit 1.
2. On July 14, 2017, Summons and Complaint were served on the Company's registered agent and president, Leroy T. Gill Jr. ("Mr. Gill") at the registered agent's address of 2500 Oakwood Dr, Olympia Fields, IL 60461 (See Docket No. 7, Affidavit of Compliance).
3. On August 3, 2017, the Court entered an Answer, which was mailed to the Clerk of the Court, pertaining to Defendant, and signed by the corporate entity's president, Mr. Gill (See Docket No. 8).
4. On February 15, 2018, the independent auditing firm of Calibre CPA Group ("Calibre"), which was selected by the Funds to conduct a compliance audit of the Company, covering the period from July 1, 2015 through June 30, 2017, issued its revised audit report for that audit period (See Exhibit 2, Calibre Audit). Demand letters for the audit findings were sent to the Company on December 8, 2017 and March 15, 2018 with copies of the audit report (See Exhibit 3, Demand Letters). The Company presented some evidence in support of a challenge to the initial Calibre Audit, which the Funds accepted, so that the Calibre Audit attached hereto as Exhibit 2 is the revised audit report for the period covering July 1, 2015 through June 30, 2017.
5. On April 25, 2018, Plaintiffs moved for a default and to strike Mr. Gill's Answer, pursuant to Rule 12(f) of the Federal Rules of Civil Procedure, as it was insufficient and immaterial, and as it further failed to meet general pleading standards under Rule 8(b). Also, Plaintiffs noted that, as a corporation, the Company could not represent itself pro se, and had failed to retain counsel to defend this action, citing United States v. Hagerman, 545 F.3d 579, 581-82 (7th Cir. 2008) (See Docket No. 14, Plaintiff's motion at ¶ 4 and ¶ 5).
6. On May 9, 2018, the Court found the Defendant in default and struck its Answer (See Docket No. 16, Minute Order).
7. As established by the Funds' Field Department Representative Rocco Marcello, the Funds' audit reviews of the Defendant's records, reflect contributions due to the Funds for the period covering June 1, 2014 through May 31, 2015, in the total amount of $1,829.04 (Exh. 1, Legacy Audit) and for the period covering July 1, 2015 through June 30, 2017, the total amount of $31,463.46 (Exh. 2, Calibre Audit), including principal contributions owed to the Welfare, Retiree Welfare, Pension, Training, LECET, LMCC and CAICA funds, and for Union dues (See Exhibit 4, Affidavit of Rocco Marcello at ¶ 3, ¶ 5-6).
8. 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 Mr. Marcello's Affidavit, the liquidated damages owed to the Welfare, Welfare Retiree, Pension and Training funds amount to $351.36 from the Legacy Audit and $5,964.48 from the Calibre Audit; the liquidated damages owed to the LMCC, CAICA and LECET funds, and for Union dues, amount to $7.23 from the Legacy Audit and $164.11 from the Calibre Audit. Accumulated interest is due in the amount of $107.73 from the Legacy Audit and $3,219.67 from the Calibre Audit (Exh. 4, Marcello Affidavit at ¶ 7). These amounts are further detailed in the Funds' summary reports that are attached hereto as Exhibit 5 at pages one and two.
9. The total audit costs billed to the Funds were $2,359.50, which Defendant is also obligated to pay, based on the respective agreements to which it is bound (Exh. 4, Marcello Affidavit at ¶ 11; Exh. 1, Legacy Audit; Exh. 2, Calibre Audit).
10. Additionally, Defendant submitted to the Funds — but has not paid — monthly reports for July 2017 and August 2017 (See, Exh. 5, Reports, pp. 3-5). According to the Company's reports, it owes the Funds $4,341.58 for principal contributions for July 2017 and $3,520.20 for principal contributions for August 2017. However, as this period has yet to be audited, the Funds reserve the right to include any additional amounts for this period after such time as an audit of the period is conducted, and the Funds may include any such additional amounts as damages in a subsequent action. According to Mr. Marcello's review of the principal amounts reported, but unpaid by the Company for July and August 2017, liquidated damages are owed in the amount of $1,522.38, and accumulated interest in the amount of $777.96 is owed, as required by the CBA, Master Agreement and the respective Trust Agreements (See Exh. 4, Marcello Affidavit at ¶ 8; Exh 5, Reports, pp. 3-5). And because the Company also untimely submitted other monthly payments, it further owes $8,661.70 in accumulated liquidated damages to date (See Exh. 2, Calibre Audit, p. 1; Exh. 5, Reports, pp. 2, 6, 7; Exh. 4, Marcello Affidavit, at ¶ 10).
11. 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 $6,228.70 (See Exhibit 6, Affidavit of Sara S. Schumann; and Exhibit 6A, Fee Report; and Exh. 4, Marcello Affidavit, at ¶ 11).
Rocco Marcello being first duly sworn on oath, deposes and states as follows:
1. I am a Representative 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 by Gilco Mechanical Contractors, Inc. (the "Company") to the Funds, 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 Judgment Damages in the above captioned case.
2. The Company has been a signatory employer at least since 2011, as reflected by the Funds' records and as shown by the collective bargaining agreements, which was attached to the Complaint, and is a true and correct copy of the agreement between the Company and the Union that is on file with the Funds.
3. On or about June 27, 2017, the Funds, by and through its counsel, filed the current lawsuit against the Company for amounts owed to the Funds pursuant to an audit report that was attached to the Complaint, covering the audit period of September 1, 2013 through June 30, 2015. This audit, which was performed by the independent auditing firm of Legacy Professionals, LLP, reflected the Funds were owed the amount of $1,829.04 for unpaid principal contributions from June 1, 2014 through May 31, 2015.
4. Further, the Funds' lawsuit against the Company was filed in order to gain the Company's compliance with submitting timely payments as it was delinquent in submitting its monthly reports and payments for covered work for the unaudited period.
5. The Funds selected Calibre CPA Group ("Calibre"), another independent auditing firm, to conduct the audit of the Company, covering the period from July 1, 2015 through June 30, 2017. When the Calibre Audit report issued, the Company reviewed that report and presented some evidence that the Funds agreed warranted revising the audit findings down.
6. On February 15, 2018, Calibre issued the revised report, reflecting that $31,463.46 in principal amounts remained owing to the Funds from that audit period.
7. The respective Agreements and Declarations of Trust of the Laborers Funds, to which the Company is bound, require payment of liquidated damages in the amount of 20 percent of any delinquent principal contributions to the Welfare, Pension, and Training funds. The same agreements establish that liquidated damages are due in the amount of 10 percent of the principal amount of delinquent contributions to the LDCLMCC, CAICA and LECET funds, and for Union dues. Also, interest is calculated at twelve percent (12%) and is owed for all delinquencies. Thus, pursuant to the principal amounts owed from the Legacy and Calibre audits, the Company owes $358.59 in liquidated damages from the Legacy Audit and $6,128.59 in liquidated damages from the Calibre Audit. The Company also owes accumulated interest in the amount of $107.73 from the Legacy Audit and $3,219.67 from the Calibre Audit. In order to show the amounts attributable to each audit, I prepared a summary spreadsheet of the amounts owed pursuant to each of the audits, which are included with Plaintiffs' motion for damages as Exhibit 5 pages one and two.
8. Additionally, the Company failed to submit its payments for its monthly reports for July 2017 and August 2017, despite sending copies of those monthly reports to the Funds. The unpaid submitted reports reflect another $7,861.78 of principal is currently due, according to the Company. Thus, I also prepared a summary spreadsheet with the amounts owed based on the Company's submitted July and August 2017 reports that are included with Plaintiffs' motion for damages as Exhibit 5 at page three through five. My report reflects liquidated damages due in the amount of $1,522.38 as well as accumulated interest due in the amount of $777.96.
9. The Funds further reserve the right to audit the as yet unaudited period from July 1, 2017 through to the present for compliance, pursuant to the Company's obligations under its collective bargaining agreement with the Union and the respective Agreements and Declarations of Trust of the Funds. At a future date the Funds, may file a new lawsuit for any additional amounts discovered through an audit, provided that the Company will first have an opportunity to review the audit report, as well as a time period to raise any objections to the report for the Funds' consideration. If necessary, the Funds will pursue a new action to collect any unpaid amounts owed by the Company at that time for any unreported principal contributions, Union dues, liquidated damages and accumulated interest.
10. The Company is further obligated to pay the Funds the accumulated liquidated damages for any untimely payments made to the Funds or to the Union for dues, as well as for any shortages associated with those payments. Thus, there are spreadsheet reports, recording the Company's untimely payment history, reflecting $8,066.84 is due to the Funds, $594.86 is due from untimely and incorrectly paid dues. These amounts were included in Calibre's Audit, which is included as Exhibit 2 to Plaintiffs' motion, and are included in more detail in the Funds' reports included with Plaintiffs' motion as Exhibit 5, pages six through seven.
11. Pursuant to the collective bargaining agreement, Master Agreement and respective Trust Agreements, the Company is also responsible for the costs associated with the compliance audits, and for all reasonable attorneys' fees and court costs incurred by the Funds to enforce its obligations. The Funds have been billed $927.00 for the cost of the Legacy Audit, $1,432.50 for the cost of the Calibre Audit, and $6,228.70 for attorneys' fees and costs to date.
12. As required by Article IX, paragraph 1 of the collective bargaining agreement, all employers are required to procure, carry 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.
Sara Stewart Schumann, being first duly sworn on oath, deposes and states as follows:
1. I am an associate attorney at the law firm of Allison, Slutsky & Kennedy, P.C., counsel for 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 (the "Funds") in the action against Gilco Mechanical Contractors, Inc. (the "Company"). This affidavit is submitted to document attorneys' fees and costs incurred by the Laborers' Funds, in regard to the above captioned action, covering work performed from the date Plaintiffs' lawsuit was filed until the present.
2. Since June 27, 2017, 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 law clerks and paralegal work. In this cause records kept for legal work on this matter were kept contemporaneously and are attached hereto as Exhibit 6A.
3. The fee report attached hereto as Exhibit 6A sets forth the time expended from June 27, 2017 through the present, by the firm's attorneys, law clerk or paralegals on this matter. I reviewed the billable entries, and struck any duplicate entries. As set forth in Exhibit 6A, the Funds have incurred legal fees and costs to my firm in this matter in the total amount of $6,228.70.
This cause coming before the Court on motion of 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 and Catherine Wenskus, Administrator of the Funds (collectively herein the "Funds") and the Court having found that the Defendant, Gilco Mechanical Contractors, Inc., was given due notice and properly served.
A Judgment is entered on behalf of the Funds and against Defendant, Gilco Mechanical Contractors, Inc., in the total amount of $70,519.10, which consists of:
The Court also orders the Defendant to obtain and maintain its surety bond in the amount of $5,000.00, to guarantee the payment of wages, pension and welfare contributions as required by the collective bargaining agreement. It is further ordered that within 60 days of the date of this judgment order, the Company, by and through its President,
