Johnson v. Western Amusement Corp.

• Decision Date: 19 June 1987
• Docket Number: No. 84-0593,84-0593
• Parties: , 109 Ill.Dec. 923, 28 Wage & Hour Cas. (BNA) 1257 Joseph E. JOHNSON, Alvin Wrobel, Harold Klein, and Bene Stein, as Officers of the Motion Picture Machine Operator's Beneficial Association, an Illinois Not-For-Profit corporation and Trustees of the Chicago Moving Picture Operator's Union, Local 110 of the I.A.T.S.E. and M.P.M.O. Severance Trust, a Pension Trustee, et al., Plaintiffs-Appellees, v. WESTERN AMUSEMENT CORPORATION, d/b/a the Oak Theatre, and Joel H. Ross, Individually, Defendants-Appellants.
• Court: United States Appellate Court of Illinois

Page 991

510 N.E.2d 991

157 Ill.App.3d 873, 109 Ill.Dec. 923,

28 Wage & Hour Cas. (BNA) 1257

Joseph E. JOHNSON, Alvin Wrobel, Harold Klein, and Bene Stein, as Officers of the Motion Picture Machine Operator's Beneficial Association, an Illinois Not-For-Profit corporation and Trustees of the Chicago Moving Picture Operator's Union, Local 110 of the I.A.T.S.E. and M.P.M.O Severance Trust, a Pension Trustee, et al., Plaintiffs-Appellees, v. WESTERN AMUSEMENT CORPORATION, d/b/a the Oak Theatre, and Joel H. Ross, Individually, Defendants-Appellants.

No. 84-0593.

Appellate Court of Illinois,

First District, Fifth Division.

June 19, 1987.

Rehearing Denied July 21, 1987.

L. Robert Artoe, Chicago, for defendants-appellants.

Edward S. Margolis, Teller, Levit & Silvertrust, P.C., Chicago, for plaintiffs-appellees.

Justice PINCHAM delivered the opinion of the court:

Defendant, Joel H. Ross, appeals from an order entered by the circuit court of Cook County which granted plaintiff's motion for summary judgment in the amount of $73,690 as damages for defendants' failure to pay the Chicago Moving Picture Operator's Union (the Union) and the Beneficial Association and Trust the dues and welfare contributions under the terms of their collective bargaining agreement and in violation of the Wage Payment & Collection Act (the Act) (Ill.Rev.Stat.1985, ch. 48, par. 39m-1 et seq.). We must determine whether the trial court's determination that Ross was personally liable for the dues and welfare contributions under section 14(a) of the Act was manifestly erroneous.

The facts are uncontested. In January 1980, Joel H. Ross, who was then president and chief operating officer of Western Amusement Corporation d/b/a the Oak Theatre ¹ (Western), entered into a collective bargaining agreement with plaintiffs which permitted defendants to withdraw funds from the salaries of employees for payment to the Union and Beneficial Association and Trust as dues and welfare contributions. Ross operated the Theatre, issued the paychecks, withdrew the union dues and welfare contributions and made all disbursements for Western. Although he was required to pay the union dues and welfare contributions from January 1980 until June 1982, he made them solely from February through September 1981. When plaintiffs claimed that there was an outstanding balance of $82,073, Ross replied that he did not have the money.

Plaintiff then filed the instant complaint which stated, inter alia, that Ross had withdrawn $82,073 for dues and welfare contributions from employees' salaries but had not paid it to plaintiffs in accordance with the collective bargaining agreement. Defendants filed an appearance and a response. Subsequently, Western filed a petition for bankruptcy and was declared bankrupt. Plaintiffs then filed a motion for summary judgment against Ross which, inter alia, alleged that he had sole authority to issue checks for Western, that Western had entered the collective bargaining agreement which required it to make certain dues and welfare contributions to the Union and Beneficial Association and Trust, that Ross made the payments only from February through September 1981, that $79,215 was owed to the Beneficial Association and Trust and that $2,859 was owed to the Union.

After considering the pleadings and arguments of counsel, the trial court entered a memorandum opinion and order that granted plaintiffs' motion for summary judgment in the amount of $73,689 against Ross and found that he was personally liable for the dues and welfare contributions owed to plaintiffs under the collective bargaining agreement which defendants had failed to pay in violation of the Act.

The contention presented by Ross on review is that he was not personally liable for dues and contributions owed to plaintiffs because the evidence did not establish that he acted with "knowledge" or that he had "wilfully refused" to pay the wages as required by section 14(a) of the Wage Payment and Collection Act. (Ill.Rev.Stat.1985, ch. 48, par. 39m-14(a).) However, plaintiffs argue that Ross became liable under the Act when he failed to make the wage payments as they became due.

Section 2 of the Act defines wages as "Any compensation owed to an employee by his employment contract or agreement * * *." (Ill.Rev.Stat.1985, ch. 48, par. 39m-2.) According to section 8, when provisions of a collective bargaining agreement require an employer to make contributions to an employee's benefit, trust or fund, the contributions are to be considered wages. Ill.Rev.Stat.1985, ch. 48, par. 39m-8.

Other relevant provisions of the Act are as follows:

"All wages earned by any employee during a semi-monthly or bi-weekly pay period shall be paid to such employee not later than 13 days after the end of the pay period in which such wages were earned. All wages earned by any employee during a weekly pay period shall be paid not later than 7 days after the end of the weekly pay period in which the wages were earned. All wages paid on a daily basis shall be paid insofar as possible on the same day as the wages were earned, or not later in any event than 24 hours after the day on which the wages were earned. Wages of executive, administrative and professional employees, as defined in the Federal Fair Labor Standards Act of 1938, may be paid on or before 21 calendar days after the period during which they are earned." Ill.Rev.Stat.1985, ch. 48, par. 39m-4.

* * *

* * *

"Any officers of a corporation or agents of an employer who knowingly permit such employer to violate the provisions of...