Opinion
16 CV 11148
02-12-2018
CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, et al. Plaintiffs, v. COTTAGE GROVE GLASS COMPANY INCORPORATED, et al., Defendants.
PLAINTIFFS' MOTION FOR ENTRY OF JUDGMENT
Plaintiffs Chicago Regional Council of Carpenters Pension Fund et al.'s ("Plaintiffs") hereby move this Court to enter a judgment against defendants COTTAGE GROVE GLASS COMPANY INCORPORATED, a dissolved Illinois corporation and PATRICIA KING doing business as COTTAGE GROVE GLASS COMPANY INCORPORATED ("Defendants") pursuant to Federal Rule of Civil Procedure 55. In support of their Motion, Plaintiffs state as follows.
I. SUMMARY OF DAMAGES.
For the reasons explained more fully below, this Court should award Plaintiffs $16,621.67 in damages as follows:
| (A) Unpaid Fringe Benefit Contributions | $2,836.01 |
| (B) Interest | $361.67 |
| (C) Liquidated Damages | $902.94 |
| (D) Auditors' Fees | $2,565.00 |
| (E) Attorneys' Fees and Costs | $9,956.05 |
| Total | $16,621.67 |
II. ENTRY OF JUDGMENT.
A. Defendants' Default.
On December 7, 2016, Plaintiffs filed a complaint against the Defendants under the Employee Retirement Income Security Act ("ERISA") for unpaid fringe benefit contributions owed by Defendants pursuant to an audit conducted by Plaintiffs' designated auditor, Legacy Professionals, LLP ("Legacy") for the period October 19, 2015 through September 30, 2016. Plaintiffs' complaint also sought a judgment for all unpaid contributions, interest and liquidated damages, attorneys' fees and costs and auditors' fees pursuant to ERISA, the Area Agreements and the trust agreements to which Defendants are signatory.
The complaint was served on Defendants on January 3, 2017. See Affidavits of Service, Docket Nos. 5-6. The affidavits of service were filed with the Clerk of Court on January 4, 2017. See Affidavits of Service, Docket Nos. 5-6. Defendants failed to answer or appear. This Court entered an order of default against Defendants on May 4, 2017. See Order, Docket Report No. 18. That order provides in part that:
Pursuant to Federal Rule of Civil Procedure 55(a), an order of default is hereby entered in favor of the CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND ET AL. ("Trust Funds") and against defendants COTTAGE GROVE GLASS COMPANY INCORPORATED, a dissolved Illinois corporation; PATRICIA KING doing business as COTTAGE GROVE GLASS COMPANY INCORPORATED (collectively "Defendants"). Defendants are hereby ordered:
A. to provide the Trust Funds or their designated auditors, Legacy Professionals, LLP complete access to Defendant's books and records within twenty-one (21) days of the date of entry of this Order so that the Trust Funds may complete an audit of Defendant's fringe benefit contributions for the period October 19, 2015 through September 30, 2016;
B. to pay any and all amounts the Trust Funds may discover to be due pursuant to the audit, 29 U.S.C. §1132(g)(2)(A);
C. to pay auditor's fees incurred by the Trust Funds to complete the audit of Defendant's books and records, 29 U.S.C. §1132(g)(2)(E);
D. to pay interest on the amount that is due, 29 U.S.C. §1132(g)(2)(B);See Order, May 4, 2017, Docket Report No. 18. Defendant Martin Grant was dismissed without prejudice on May 4, 2017. See Plaintiffs' Ex Parte Motion to Dismiss Defendant Martin Grant Without Prejudice Pursuant to Federal Rule of Civil Procedure 4, Docket Report No. 12.
E. to pay interest or liquidated damages on the amount that is due, whichever is greater, 29 U.S.C. §1132(g)(2)(C); and
F. to pay reasonable attorneys' fees and costs the Trust Funds incurred in this action and attorneys' fees that the Trust Funds incur to obtain full compliance with this Order and to collect any amounts due and owing to the Trust Funds, 29 U.S.C. §1132(g)(2)(D).
It is further ordered that the Court reserves the right to award such other and further relief as the Court deems just and equitable.
After the entry of the order of default on May 4, 2017 and after entry of a rule to show cause, Plaintiffs were able to conduct an audit of Defendants' books and records which revealed unpaid fringe benefit contributions in the amount of $2,836.01. See Declaration of K. Guastaferri ¶¶6-7, Exhibit A; Order, June 30, 2017, Docket Report No. 21; Order, July 12, 2017, Docket Report No. 22; Order, August 2, 2017, Docket Report No. 25; Order, September 14, 2017, Docket Report No. 26.
After completion of the audit, Plaintiffs asked Defendants for additional information on December 22, 2017 but Defendants did not produce any additional documents in response to the audit. See Letter from K. McJessy to P. King, December 22, 2017, Exhibit D.
B. Damages for Unpaid Fringe Benefit Contributions.
Defendants are bound by the Area Agreement with the Chicago Regional Council of Carpenters ("Union"). See Declaration of K. Guastaferri ¶3, Exhibit A. Under ERISA, Defendants are liable to Plaintiffs for any unpaid fringe benefit contributions. ERISA states as follows:
In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan— (A) the unpaid contributions . . . .See 29 U.S.C. §1132(g)(2)(A). The audit of Defendants' books and records revealed unpaid fringe benefit contributions in the amount of $2,836.01. See Declaration of K. Guastaferri ¶¶6-7, Exhibit A; Order, May 4, 2017, Docket Report No. 18. Accordingly, this Court should award Plaintiffs $2,836.01 for unpaid fringe benefit contributions.
C. Interest.
Under ERISA, 29 U.S.C. §1132, Plaintiffs are entitled to collect interest on the unpaid contributions. Section 1132(g)(2)(B) provides as follows:
(2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan—
. . .
(B) interest on the unpaid contributions,
. . .See 29 U.S.C. §1132(g)(2). And, section 6621 of title 26 provides as follows:
For purposes of this paragraph, interest on unpaid contributions shall be determined by using the rate provided under the plan, or, if none, the rate prescribed under section 6621 of title 26.
(2) Underpayment rate. The underpayment rate established under this section shall be the sum of—
See 26 U.S.C. §6621.(A) the Federal short-term rate determined under subsection (b), plus
(B) 3 percentage points.
This is consistent with the trust agreements which also allow Plaintiffs to collect interest on the amount due. See Declaration of K. Guastaferri ¶¶8-10, Exhibit A. Therefore, Plaintiffs are entitled to recover interest based on the statute.
The amount due as interest on the fringe benefit contributions is $361.67. See Declaration of K. Guastaferri ¶¶8-10, 12, Exhibit A. Accordingly, this Court should award Plaintiffs interest in the amount of $361.67 pursuant to 29 U.S.C. §1132(g)(2).
D. Liquidated Damages.
Under ERISA, 29 U.S.C. §1132, Plaintiffs are entitled to collect liquidated damages on the unpaid contributions. Section 1132(g)(2)(C)(ii) provides as follows:
(2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan—
. . .
(C) an amount equal to the greater of—
. . .
(ii) liquidated damages provided for under the plan in an amount not in excess of 20 percent (or such higher percentage as may be permitted under Federal or State law) of the amount determined by the court under subparagraph (A),
This is consistent with the trust agreements which also allow Plaintiffs to collect liquidated damages of 1.5% monthly on the amount due. See Declaration of K. Guastaferri ¶¶8-10, Exhibit A.
The total liquidated damages calculated at 1.5% per month compounded equals $902.94. See Declaration of K. Guastaferri ¶¶8-10, Exhibit A. Accordingly, this Court should award Plaintiffs liquidated damages in the amount of $902.94 pursuant to 29 U.S.C. §1132(g)(2)(C)(ii).
E. Auditor's Fees.
Under the terms of the Trust Agreements and the Area Agreement, a signatory employer is liable for reasonable fees of auditors retained by Plaintiffs used to establish the amount of delinquent contributions to Plaintiffs. See Declaration of K. Guastaferri ¶11, Exhibit A.
Moreover, ERISA, 29 U.S.C. §1132, likewise provides that Plaintiffs are entitled to recover auditors' fees incurred to prove the amount of contributions owed:
ERISA itself grants the district court authority to award the plaintiffs their reasonable attorney's fees and costs in successful actions to collect unpaid fringe benefit contributions owed to multi-employer plans, 29 U.S.C. § 1132(g)(2)(D), along with 'such other legal or equitable relief as the court deems appropriate,' id. § 1132(g)(2)(E). This court, among others, has construed the latter provision to include an award of audit costs. Moriarty ex rel. Local Union No. 727, I.B.T. Pension Trust v. Svec, 429 F.3d 710, 721 (7th Cir. 2005) (citing Operating Eng'rs Pension Trust v. A-C Co., 859 F.2d 1336, 1343 (9th Cir. 1988)).See Trustees of the Chicago Plastering Institute Pension Trust v. Cork Plastering Co., 570 F.3d 890, 902 (7th Cir. 2009).
Plaintiffs incurred $2,565.00 in auditors' fees for the audit of Defendants' fringe benefit contributions to Plaintiffs during the Audit Period. See Declaration of K. Guastaferri ¶11, Exhibit A. Accordingly, this Court should award Plaintiffs $2,565.00 in reasonable auditors' fees for the audit of Defendants' books and records to determine that Defendant owed unpaid fringe benefit contributions.
F. Attorneys' Fees and Costs.
Under the terms of the Trust Agreements and the Area Agreement, Defendants are liable for reasonable attorneys' fees and costs incurred by Plaintiffs to collect delinquent contributions because Plaintiffs were required to hire counsel to compel the audit of Defendants and to collect the amount due from Defendants. See Declaration of K. Guastaferri ¶9, Exhibit A.
Defendants have a statutory obligation to pay attorneys' fees and costs. Under ERISA, 29 U.S.C. §1132, Plaintiffs are entitled to recover attorneys' fees and costs incurred to collect the unpaid contributions. Section 1132(g) provides as follows:
(g) Attorney's fees and costs; awards in actions involving delinquent contributions ... (2) In any action under this subchapter by a fiduciary for or on behalf of a plan to enforce section 1145 of this title in which a judgment in favor of the plan is awarded, the court shall award the plan—.... (D) reasonable attorney's fees and costs of the action, to be paid by the defendant ...See 29 U.S.C. §1132(g)(2) (emphasis added). Defendants are also liable for attorneys' fees and costs incurred by Plaintiffs to enforce any judgment entered in this matter. See Free v. Briody, 793 F.2d 807, 808-09 (7th Cir. 1986).
Here Plaintiffs incurred $9,956.05 in attorneys' fees and costs as stated in the affidavit and detailed billing statements accompanying this petition. See Declaration of K. McJessy ¶¶6-8, Exhibit B. Billing statements are admissible to show the reasonableness of attorneys' fees and costs in ERISA cases. See Trustees of the Chicago Plastering Inst. Pension Trust, 570 F.3d at 903 (relying on attorneys "time records"); Chicago Regional Council of Carpenters Pension Fund v. RCI Enterprises, Inc., 2011 U.S. Dist LEXIS *6-7 (N.D. Ill., July 20, 2011) (Feinerman, J.) (relying on billing time records for award of attorneys' fees).
Moreover, the fees charged here of $220/hour and $205/hour for attorney time are reasonable compared to the rates charged by other attorneys handling similar ERISA matters in the Northern District of Illinois. As a matter of law, the Northern District of Illinois has recognized that hourly rates of $195 per hour to $250 per hour are reasonable rates for attorney time for ERISA litigation. See Trustees of the Chicago Regional Council of Carpenters Pension Fund v. RCI Enterprises, Inc., 2011 U.S. Dist. LEXIS *6 (N.D. Ill.) (holding that attorney rates of $180/hr for a junior attorney to $250/hr for a partner are reasonable hourly rates for ERISA lawsuit by the Chicago Regional Council of Carpenters); Board of Trustees of the Rockford Pipe Trades Indus. Pension Fund v. Fiorenza Enters., 2011 U.S. Dist. LEXIS 28209, 21-22 (N.D. Ill. Mar. 18, 2011) ("the court finds that the hourly rates [of $195, $210 and $235 per hour] . . . are reasonable" for fringe benefit trust funds lawsuit against employer to collect unpaid contributions); Divane v. Mitchell Sec. Sys., 2008 U.S. Dist. LEXIS 27825 (N.D. Ill. Apr. 7, 2008) ("The court finds that the billing rates [of $220.00 to 240.00 for attorneys] are reasonable.").
Accordingly, this Court should award Plaintiffs $9,956.05 in reasonable attorneys' fees and costs for the audit of Defendants' books and records to determine that Defendants owed unpaid fringe benefit contributions.
III. CONCLUSION.
For the forgoing reasons, Plaintiffs respectfully request that this Court enter final judgment for Plaintiffs in the amount of $16,621.67 as follows:
A. $2,836.01 in unpaid contributions pursuant to the audit;Plaintiffs shall also recover reasonable attorney' fees and costs incurred by Plaintiffs in enforcing this order and any such further relief as this Court deems appropriate. See Free v. Briody, 793 F.2d 807, 808-09 (7th Cir. 1986). A proposed order is attached hereto as Exhibit C.
B. $2,565.00 for auditor's fees incurred by Plaintiffs to complete the audit of Defendant's books and records;
C. $361.67 in interest pursuant to 29 U.S.C. § 1132(g)(2)(B);
D. $902.94 in liquidated damages pursuant to 29 U.S.C. § 1132(g)(2)(C); and
E. $9,956.05 in reasonable attorneys' fees and costs Plaintiffs incurred in this action pursuant to 29 U.S.C. § 1132(g)(1) and/or § 1132(g)(2)(D).
CHICAGO REGIONAL COUNCIL OF
CARPENTERS PENSION FUND et al.
By: s/ Kevin P. McJessy
One of Their Attorneys Kevin P. McJessy
MCJESSY, CHING & THOMPSON, LLC
3759 North Ravenswood, Suite 231
Chicago, Illinois 60613
(773) 880-1260
(773) 880-1265 (facsimile)
mcjessy@MCandT.com
CERTIFICATE OF SERVICE
I, Kevin P. McJessy, an attorney, certify that I caused the foregoing Plaintiffs' Motion for Entry of Judgment to be served upon
Patricia Kingvia U.S. First Class Mail, postage prepaid, deposited in the United States Mail Depository located at 3759 N. Ravenswood, Chicago, Illinois on February 12, 2018.
President
Cottage Grove Glass Company, Inc.
7401 S. Cottage Grove
Chicago, Illinois, 60619
s/ Kevin P. McJessy
Kevin P. McJessy
Exhibit A
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EXHIBIT 1
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EXHIBIT 2
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EXHIBIT 3
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Exhibit B
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Exhibit 1
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Exhibit 2
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Exhibit C
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Exhibit D
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