Opinion
Case No. 15 CV 09386
01-11-2016
CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND, et al., Plaintiffs, v. BRYN MAWR FLOORING, INC., a Pennsylvania corporation, Defendant.
CHICAGO REGIONAL COUNCIL OF CARPENTERS PENSION FUND et al. 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
Magistrate Judge Valdez PLAINTIFFS' PETITION TO PROVE UP DAMAGES AND FOR ENTRY OF FINAL JUDGMENT
This Court granted the plaintiffs Chicago Regional Council of Carpenters Pension Fund et al.'s ("Trust Funds") motion for a default order against defendant BRYN MAWR FLOORING, INC. ("Bryn Mawr") on December 16, 2015. See Docket Entry, Dec. 16, 2015, Docket No. 8. In order to obtain a final judgment, the Trust Funds hereby submit this Plaintiffs' Petition to Prove Up Damages and for Entry of Final Judgment ("Petition"). In support of their Petition, Trust Funds state as follows:
I. SUMMARY OF DAMAGES.
For the reasons explained more fully below, this Court should award the Trust Funds $8,465.61 in damages, which includes (A) unpaid fringe benefit contributions in the amount of $3,665.60, (B) interest in the amount of $116.99, (C) double liquidated damages in the amount of $727.18, (D) auditors' fees in the amount of $1,122.50, and (E) attorneys' fees and costs of $2,833.34.
II. ARGUMENT.
A. Damages for Non-Union Subcontracting Liability.
Bryn Mawr is signatory to the Chicago Regional Council of Carpenters ("Union"). See Declaration of J. Libby ¶3, Exhibit A. The Trust Funds conducted an audit of Bryn Mawr's books and records which revealed unpaid fringe benefit contributions in the amount of $3,665.60. See Declaration of J. Libby ¶¶4-8, Exhibit A.
Under ERISA, Bryn Mawr 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).
The audit report reveals that Bryn Mawr owes $3,665.60 in unpaid contributions for failing to accurately report contribution hours for two employees. See Declaration of J. Libby ¶8, Exhibit A. A detailed breakdown of the unpaid fringe benefit contributions is attached as Exhibit 1 to the declaration of J. Libby. Therefore, the amount due for unpaid fringe benefit contributions is $3,665.60.
B. 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—
(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 Decl. of J. Libby ¶9, 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 $116.99. See Declaration of J. Libby ¶11, Exhibit A. Accordingly, this Court should award the Trust Funds interest in the amount of $116.99 pursuant to 29 U.S.C. §1132(g)(2).
C. 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 Decl. of J. Libby ¶9, Exhibit A.
The total liquidated damages calculated at 1.5% per month compounded and capped at 20% equal $727.18. See Decl. of J. Libby ¶11, Exhibit A.
D. 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 J. Libby ¶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 $1,122.50 in auditors' fees for the audit of Bryn Mawr's fringe benefit contributions to the Trust Funds during the Audit Period. See Declaration of J. Libby ¶12, Exhibit A.
Accordingly, this Court should award the Trust Funds $1,122.50 in reasonable auditors' fees for the audit of Bryn Mawr's books and records to determine that Bryn Mawr owed unpaid fringe benefit contributions.
E. Attorneys' Fees and Costs.
Under the terms of the Trust Agreements and the Area Agreement, Bryn Mawr is liable for reasonable attorney fees incurred in collecting the delinquent contributions. See Declaration of J. Libby ¶10, Exhibit A.
In addition to Bryn Mawr's contractual obligation to pay legal fees, Bryn Mawr 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). Bryn Mawr 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 $2,833.34 in attorneys' fees and costs. As stated in the affidavit and detailed billing statements accompanying this petition, the total fees and costs are comprised of $2,040.00 for attorney time, $174.00 in paralegal time and $619.34 in costs. See Declaration of K. McJessy ¶¶2,4, 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 $160/hour and $220/hour for attorney time are not only incredibly reasonable but a great bargain and a below market rate 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 $175 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); Trustees of the Teamsters Union Local No. 142 Pension Trust Fund v. Actin, Inc., 2010 U.S. Dist. LEXIS 103434, 20-21 (N.D. Ind. Sept. 28, 2010) (awarding attorneys fees based on an hourly rate of $175.00 to $200.00 per hour for attorneys' time and $90 per hour for paralegal time); 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.").
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 $8,465.61 as follows:
A. $3,665.60 in unpaid 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). A proposed order is attached hereto as Exhibit C.
B. $1,122.50 for auditor's fees incurred by the Trust Funds to complete the audit of Defendant's books and records;
C. $116.99 in interest pursuant to 29 U.S.C. § 1132(g)(2)(B);
D. $727.18 in liquidated damages pursuant to 29 U.S.C. § 1132(g)(2)(C); and
E. $2,833.34 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' Petition to Prove Up Damages and for Entry of Final Judgment to be served upon
John Delia, Presidentvia U.S. Mail by depositing the same in the U.S. Mail depository located at 3759 N. Ravenswood with postage prepaid on this 11th day of January 2016.
Bryn Mawr Flooring, Inc.
113 W. Ridge Pike
Conshohocken, PA 19428
s/ Kevin P. McJessy
Kevin P. McJessy
15 CV 009386
Exhibit A
DECLARATION OF JOHN LIBBY
I, John Libby, 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 Manager, Audits & Collections for 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").
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 collective bargaining agreements 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.
3. BRYN MAWR FLOORING, INC., a Pennsylvania corporation ("Defendant") is an employer bound by a collective bargaining agreement with the Union ("Area Agreement"). A copy of the Agreement dated August 24, 2009 between Defendant and the Union by which Defendant agreed to be bound by the Area Agreement is attached as Exhibit 1. The Agreement binds Defendant to the Area Agreement with the Union and the trust agreements establishing the Trust Funds. The Agreement, the Area Agreement and the trust agreements 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 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.
7. Defendant produced records to Legacy. Legacy prepared a report of Defendant's fringe benefit contributions to the Trust Funds based on Legacy's review of the records produced by Defendant. Legacy delivered a copy of its Audit Report to the Trust Funds for Defendant's account. The Trust Funds made demand on Defendant to pay the amount due according the Audit Report.
8. Thereafter, Defendant produced additional documents to the Trust Funds in order to explain why it believed that it did not owe all of the contributions set forth in the original Audit Report prepared by Legacy. Based on the records produced by Defendant, the Trust Funds adjusted the original Audit Report. A copy of the adjusted Audit Report is attached as Exhibit 2. According to the adjusted Audit Report and based on the records produced by Defendant to Legacy and to the Trust Funds, Defendant owes $3,665.60 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 and capped at 20 percent. 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 attorney 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 as of December 21, 2015 is attached hereto as Exhibit 3. Defendant owes $116.99 in unpaid interest calculated pursuant to 26 U.S.C. §6621 and $727.18 in unpaid liquidated damages calculated in accordance with the Agreements.
12. The Trust Funds paid Legacy $1,027.50 as auditors' fees for Legacy to conduct its review of Defendant's books and records and to prepare the Audit Report.
13. I have personal knowledge of the matters stated in this affidavit and could testify competently to them. I declare under penalty of perjury that the foregoing is true and correct. /s/_________
John Libby Executed on: 1/7/16
Date
EXHIBIT 1
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