Opinion
17 CV 04076
09-01-2017
CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, et al., Plaintiffs, v. J R JONES FIXTURE CO., a Minnesota corporation, Defendant.
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
PLAINTIFFS' MOTION FOR ENTRY OF JUDGMENT
Plaintiffs Chicago Regional Council of Carpenters Pension Fund et al.'s ("Trust Funds") hereby move this Court to enter a judgment by default against defendant J R JONES FIXTURE CO., a Minnesota corporation ("Defendant") pursuant to Federal Rule of Civil Procedure 55. In support of their Motion, Trust Funds state as follows.
I. SUMMARY OF DAMAGES.
For the reasons explained more fully below, this Court should award the Trust Funds $17,399.30 in damages as follows:
| (A) Unpaid Fringe Benefit Contributions | 5,798.49 | |
| (B) Interest | 635.37 | |
| (C) Liquidated Damages | 1,159.70 | |
| (D) Auditors' Fees | 5,407.50 | |
| (E) Attorneys' Fees and Costs | 4,398.24 | |
| Total | 17,399.30 |
II. ARGUMENT.
A. Defendant's Default.
On May 30, 2017, the Trust Funds filed a complaint against the Defendant under the Employee Retirement Income Security Act ("ERISA") for unpaid fringe benefit contributions owed by Defendant pursuant to an audit conducted by the Trust Funds' designated auditor, Legacy Professionals, LLP ("Legacy") for the period January 1, 2014 through December 31, 2014.
The Trust Funds' complaint also seeks 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 Defendant is signatory.
On July 13, 2017, this Court granted the Trust Funds' motion to serve Defendant by alternative means. See Order, July 13, 2017, Docket No. 7. The complaint was served on Defendant on or about July 27, 2017. See Affidavit of Service, Docket No. 8. The affidavit of service was filed with the Clerk of Court on or about August 14, 2017. See Affidavit of Service, Docket No. 8.
Defendant failed to answer or appear.
B. Damages for Unpaid Fringe Benefit Contributions.
Defendant is bound by the Area Agreement with the Chicago Regional Council of Carpenters ("Union"). See Declaration of K. Guastaferri ¶3, Exhibit A. The Trust Funds conducted an audit of Defendant's books and records which revealed unpaid fringe benefit contributions in the amount of $5,798.49. See Declaration of K. Guastaferri ¶¶6-7, Exhibit A.
Under ERISA, Defendant is liable to the Trust Funds 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). Accordingly, this Court should award the Trust Funds $5,798.49 for unpaid fringe benefit contributions.
C. Interest.
Under ERISA, 29 U.S.C. §1132, Trust Funds 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 the Trust Funds to collect interest on the amount due. See Declaration of K. Guastaferri ¶¶9-11, Exhibit A. Therefore, the Trust Funds are entitled to recover interest based on the statute.
The amount due as interest on the fringe benefit contributions is $635.37. See Declaration of K. Guastaferri ¶¶9-11, Exhibit A. Accordingly, this Court should award the Trust Funds interest in the amount of $635.37 pursuant to 29 U.S.C. §1132(g)(2).
D. Liquidated Damages.
Under ERISA, 29 U.S.C. §1132, the Trust Funds 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 the Trust Funds to collect liquidated damages of 1.5% monthly on the amount due. See Declaration of K. Guastaferri ¶¶9-11, Exhibit A.
The total liquidated damages calculated at 1.5% per month compounded equals $1,159.70. See Declaration of K. Guastaferri ¶¶9-11, Exhibit A. Accordingly, this Court should award the Trust Funds liquidated damages in the amount of $1,159.70 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 the Trust Funds used to establish the amount of delinquent contributions to the Trust Funds. See Declaration of K. Guastaferri ¶12, Exhibit A.
Moreover, ERISA, 29 U.S.C. §1132, likewise provides that the Trust Funds 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).
The Trust Funds incurred $5,407.50 in auditors' fees for the audit of Defendant's fringe benefit contributions to the Trust Funds during the Audit Period. See Declaration of K. Guastaferri ¶12, Exhibit A. Accordingly, this Court should award the Trust Funds $5,407.50 in reasonable auditors' fees for the audit of Defendant's 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, Defendant is liable for reasonable attorney fees and costs incurred by the Trust Funds to collect delinquent contributions because the Trust Funds were required to hire counsel to compel the audit of Defendant and to collect the amount due from Defendant. See Declaration of K. Guastaferri ¶10, Exhibit A.
Defendant has a statutory obligation to pay attorneys' fees and costs. Under ERISA, 29 U.S.C. §1132, Trust Funds 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). Defendant is also liable for attorneys' fees and costs incurred by the Trust Funds to enforce any judgment entered in this matter. See Free v. Briody, 793 F.2d 807, 808-09 (7th Cir. 1986).
Here the Trust Funds incurred $4,398.24 in attorneys' fees and costs as stated in the affidavit and detailed billing statements accompanying this petition. See Declaration of K. McJessy ¶¶5-7, 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 fee charged here of $220/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 the Trust Funds $4,398.24 in reasonable attorneys' fees and costs for the audit of Defendant's books and records to determine that Defendant owed unpaid fringe benefit contributions.
III. CONCLUSION.
For the forgoing reasons, the Trust Funds respectfully request that this Court enter final judgment for the Trust Funds in the amount of $17,399.30 as follows:
A. $5,798.49 in unpaid contributions pursuant to the audit;
B. $5,407.50 for auditor's fees incurred by the Trust Funds to complete the audit of Defendant's books and records;The Trust Funds shall also recover reasonable attorney' fees and costs incurred by the Trust Funds 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.
C. $635.37 in interest pursuant to 29 U.S.C. § 1132(g)(2)(B);
D. $1,159.70 in liquidated damages pursuant to 29 U.S.C. § 1132(g)(2)(C); and
E. $4,398.24 in reasonable attorneys' fees and costs the Trust Funds 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
J R Jones Fixture Co.via U.S. First Class Mail, postage prepaid, deposited in the United States Mail Depository located at 3759 N. Ravenswood, Chicago, Illinois on September 1, 2017.
c/o Douglas Jones, CEO
3216 Winnetka Ave. North
Minneapolis, MN 55427
J R Jones Fixture Co.
c/o Douglas Jones, CEO
13977 Eidelweiss St. NW
Andover, MN 55304
s/ Kevin P. McJessy
Kevin P. McJessy
Exhibit A
DECLARATION OF KRISHNA M. GUASTAFERRI
I, Kristina M. Guastaferri, hereby declare, under penalty of perjury pursuant to the laws of the United States, that the following statements are true to the best of my knowledge information and belief:
1. I am the Administrator for the Chicago Regional Council of Carpenters Pension Fund ("Pension Fund"), the Chicago Regional Council of Carpenters Health and Welfare Fund ("Health and Welfare Fund"), the Chicago and Northeast Illinois Regional Council of Carpenter Apprentice and Trainee Program ("Trainee Fund") and the Labor/Management Union Carpentry Cooperation Promotion Fund (collectively "the Trust Funds").
2. As part of my duties, I am responsible for managing the collection of contributions for medical, pension and other benefits due from numerous employers pursuant to the collective bargaining agreement between the employers and the Chicago and Northeast Illinois Regional Council of Carpenters ("Union") and between employers and the United Brotherhood of Carpenters and Joiners of America. Accordingly, I am familiar with the terms of the current collective bargaining agreement ("Area Agreement") and the trust agreements establishing the Trust Funds.
3. J R JONES FIXTURE CO., a Minnesota corporation ("Defendant"), is an employer bound by the Area Agreement with the Union because Defendant signed an Agreement with the Union. A copy of the Agreement with the Union signed by Defendant binding the Defendant to the Area Agreement is attached as Exhibit 1. The Agreement further provides that Defendant agreed to be bound by the Trust Agreements establishing the Trust Funds and by the rules and regulations adopted by the Trustees of each Trust Fund. The Area Agreement, the Trust Agreements and the rules and regulations are collectively referred to herein as "Agreements."
4. Pursuant to the Agreements, Defendant is required to pay fringe benefit contributions to the Trust Funds for work performed by Defendant's employees and Defendant's non-union subcontractors performing work falling within the jurisdiction of the Union.
5. Pursuant to the Agreements, Defendant also agreed to submit to a periodic audit of its books and records in order to verify the accuracy of the contributions reported and paid to the Trust Funds.
6. The Trust Funds engaged Legacy Professionals, LLP ("Legacy") to conduct an audit of Defendant's fringe benefit contributions to the Trust Funds for the period January 1, 2014 through December 31, 2014 ("Audit Period").
7. Legacy prepared a report ("Audit Report") of Defendant's fringe benefit contributions to the Trust Funds based on Legacy's review of Defendant's records. Legacy delivered its Audit Report to the Trust Funds. A true and accurate copy of the Audit Report maintained in the Trust Funds' records is attached as Exhibit 2. According to the Audit Report and based on the records produced by Defendant, Defendant owes $5,798.49 in unpaid fringe benefit contributions to the Trust Funds.
9. The Agreements provide that the Trust Funds collect liquidated damages on unpaid fringe benefit contributions at a rate of 1½ percent compounded monthly. The Agreements also provide that the Trust Funds collect interest on unpaid fringe benefit contributions as allowed by law.
10. Because Defendant failed to comply with the terms of the Agreements, the Trust Funds have had to employ the services of the law firm McJessy Ching & Thompson, LLC. As a result, the Trust Funds incurred attorneys' fees and costs.
11. A summary of the updated calculations of accrued interest and liquidated damages for unpaid contributions owed according to the Audit Report as of August 29, 2017 is attached hereto as Exhibit 3. Defendant owes $635.37 in unpaid interest calculated pursuant to 26 U.S.C. §6621 and $1,159.70 in unpaid liquidated damages calculated in accordance with the Agreements.
12. The Trust Funds paid Legacy $5,407.50 in fees for Legacy to conduct its review of Defendant's books and records and to prepare the Audit Report.
13. In sum, based on the records produced by Defendant, Defendant owes unpaid contributions of $5,798.49, interest of $635.37, liquidated damages of $1,159.70, auditors' fees of $5,407.50 plus the attorneys' fees and costs incurred by the Trust Funds in this lawsuit.
14. I have personal knowledge of the matters stated in this affidavit and could testify competently to them. /s/_________
Kristina M. Guastaferri, CPA Executed on: August 30, 2017
Date
Exhibit A-1
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Exhibit A-2
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Exhibit A-3
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Exhibit B
DECLARATION OF KEVIN P. MCJESSY
I, Kevin P. McJessy, hereby declare, under penalty of perjury pursuant to the laws of the United States, that the following statements are true:
1. I am one of the attorneys representing the Chicago Regional Council of Carpenters Pension Fund, the Chicago Regional Council of Carpenters Welfare Fund, the Chicago and Northeast Illinois Regional Council of Carpenter Apprentice and Trainee Program, and the Labor/Management Union Carpentry Cooperation Promotion Fund (collectively "the Trust Funds") in the above-captioned lawsuit ("Lawsuit") against J R JONES FIXTURE CO., a Minnesota corporation ("Defendant").
2. I have been licensed to practice law in the State of Illinois and the United States District Court for the Northern District of Illinois since 1995. I am an attorney with McJessy, Ching & Thompson, LLC ("MC&T").
3. As part of my practice, I handle claims under ERISA. I personally represented the Trust Funds in this Lawsuit. I have represented the Trust Funds in this Lawsuit since its inception. As such I am familiar with the matters set forth in this declaration.
4. Sheila Keating is a paralegal with MC&T. She has been a paralegal since 1987.
5. The Trust Funds have incurred $4,398.24 in fees and expenses to compel Defendant to comply with its obligations under the terms of the Collective Bargaining Agreement and applicable trust agreements.
6. The Trust Funds have collectively incurred fees totaling $3,234.00 for 14.70 hours of attorney services and $400.00 for 4.00 hours of paralegal services. A copy of the client ledger showing the time spent and a description of the work performed is attached as Exhibit 1.
| Name | Services | Hours | Rate | Total |
| Kevin McJessy("KM") | Attorney | 14.70 | $220/hr. | $3,234.00 |
| Sheila Keating("SK) | Paralegal | 4.00 | $100/hr. | $400.00 |
|---|---|---|---|---|
| Total | 3,634.00 |
7. The Trust Funds incurred $764.24 in expenses for the filing fee, process server charges, courier charges and photocopy charges. A detailed description of all expenses incurred by the Trust Funds in this matter is shown in the fee summary attached as Exhibit 1.
8. The attorneys' fees, paralegal fees and costs charged to the Trust Funds in this matter are consistent with MC&T's regular charges for services to the Trust Funds on similar matters.
9. I have personal knowledge of the matters stated in this affidavit and could testify competently to them. FURTHER AFFIANT SAYETH NOT. /s/ Kevin P. McJessy September 1, 2017
Kevin P. McJessy Date
Exhibit B-1
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Exhibit C
JUDGMENT
Plaintiffs Chicago Regional Council of Carpenters Pension Fund et al.'s ("Trust Funds") motion for entry of final judgment is granted and judgment is entered in favor of the Trust Funds and against defendant J R JONES FIXTURE CO., a Minnesota corporation ("Defendant") in the amount of $17,399.30 as follows:
A. $5,798.49 in unpaid fringe benefit contributions pursuant to the audit;The Trust Funds shall also recover reasonable attorney' fees and costs incurred by the Trust Funds 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). __________
B. $5,407.50 for auditor's fees incurred by the Trust Funds to complete the audit of Defendant's fringe benefit contributions;
C. $635.37 in interest pursuant to 29 U.S.C. § 1132(g)(2)(B);
D. $1,159.70 in liquidated damages pursuant to 29 U.S.C. § 1132(g)(2)(C); and
E. $4,398.24 in reasonable attorneys' fees and costs the Trust Funds incurred in this action pursuant to 29 U.S.C. § 1132(g)(1) and/or § 1132(g)(2)(D).
Date
/s/_________
Judge Ronald A. Guzman