Moriarty v. Consolidated Funeral Services, Inc.
| Decision Date | 23 September 1999 |
| Docket Number | No. 98 C 2232.,No. 98 C 2025.,98 C 2025.,98 C 2232. |
| Citation | 65 F.Supp.2d 853 |
| Court | U.S. District Court — Northern District of Illinois |
| Parties | Thomas J. MORIARTY, Trustee on behalf of the Trustees of the Local Union No. 727, I.B.T. Pension Trust, and the Trustees of the Teamsters Local Union No. 727 Health and Welfare Trust, Plaintiff, v. CONSOLIDATED FUNERAL SERVICES, INC., d/b/a/ Sheldon-Goglin Funeral Home, Defendant. Thomas J. Moriarty, Trustee on behalf of the Trustees of the Local Union No. 727, I.B.T. Pension Trust, and the Trustees of the Teamsters Local Union No. 727 Health and Welfare Trust, Plaintiff, v. Edgar Funeral Home, Ltd., Defendant. |
Jacobs, Burns, Sugarman, Orlove & Stanton (Sherrie E. Voyles), Chicago, IL, for Plaintiff.
McKenna, Storer, Rowe, White & Farrug (Lawrence A. Reich), Waukegan, IL, for Defendants.
This matter comes before the Court on Defendants' Motion for Summary Judgment, pursuant to Federal Rule of Civil Procedure 56. For the reasons set forth below, Defendants' Motion for Summary Judgment is granted.
Thomas J. Moriarty is a Trustee and a fiduciary for the Local Union No. 727 I.B.T. Pension Trust and the Teamsters Local Union No. 7271 Health and Welfare Trust ("Funds").2 Mr. Moriarty brought this action against Edgar Funeral Home, Ltd. ("Edgar II") and Consolidated Funeral Services, Inc. ("Sheldon II"), pursuant to § 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185, and § 502(a)(3) of ERISA, 20 U.S.C. § 1132(a)(3). (1st Am.Compl.¶ 1.) Mr. Moriarty seeks to compel a payroll audit and the collection of delinquent employer contributions to the Funds, which he alleges are owed by Defendants, Edgar II and Sheldon II. (1st Am.Compl.¶ 1.)
The Funds are third-party beneficiaries of collective bargaining agreements ("CBA[s]") entered into between the Funeral Directors Services Association of Greater Chicago ("FDSA") and the Union. (Plaintiff's Supplemental 12(N) [Pl.'s Supp. 12(N)] ¶ 5; 1st Am. Compl. ¶ 12.) The CBAs provide that each employer member of the FDSA is obligated to contribute to the Funds on behalf of each of its Union employees. (Pl.'s Supp. 12(N) ¶ 6; 1st Am. Compl. ¶ 15.)
Edgar II and Sheldon II are successor companies3 to Edgar Funeral Home ("Edgar I") and Sheldon-Goglin Funeral Home ("Sheldon I"). (Pl.'s Supp. 12(N) ¶¶ 3, 4; 1st Am. Compl. ¶¶ 7, 9.) Edgar I and Sheldon I were members of the FDSA before they were acquired by David Ruzich and Consolidated Funeral Services, Inc. (Pl.'s Supp. 12(N) ¶ 7; 1st Am. Compl. ¶¶ 17, 29.) As members, Edgar I and Sheldon I authorized the FDSA to negotiate on their behalf with the Union. (Plaintiff's 12(N) Additional Facts Section [Pl.'s 12(N) Addt'l Facts] ¶¶ 1, 12; 1st Am. Compl. ¶¶ 17, 29.) Therefore, Edgar I and Sheldon I were bound by the CBAs, which obligated them to make contributions to the Funds on behalf of Union employees, and allowed for audits of their books. (1st Am.Compl.¶¶ 17, 29.)
On April 3rd and 10th of 1998, Mr. Moriarty filed two separate Complaints; one against Edgar II and one against Sheldon II. On May 19, 1998, the two cases were consolidated into one case. (Defendants' Motion For Summary Judgment [Defs.' Mot. Summ. J.] ¶ 1.) On June 1, 1998, Edgar II and Sheldon II filed a Motion to Dismiss Under Rule 12(b)(6) of the Federal Rules of Civil Procedure, and, on October 20, 1998, the Court granted Defendants' Motion to Dismiss ("Opinion"), without prejudice.
Mr. Moriarty then filed a First Amended Complaint on November 6, 1998. Instead of answering, Defendants brought this Motion for Summary Judgment, on December 23, 1998. On February 10, 1999, Mr. Moriarty filed a Memorandum in Opposition to Motion for Summary Judgment, requesting specific discovery. (Plaintiff's Memorandum in Opposition to Motion for Summary Judgment [Pl.'s Mem. Opp.] at 1, 12.) In a Minute Order dated July 19, 1999, the Court granted Mr. Moriarty's requests for discovery.4 After discovery and pursuant to this Court's July 19, 1999 Order, Mr. Moriarty filed a Supplemental Memorandum in Opposition to Motion for Summary Judgment, on August 9, 1999, and Edgar II and Sheldon II filed a Response to Supplemental Memorandum in Opposition to Motion for Summary Judgment, on August 13, 1999. (Plaintiff's Supplemental Memorandum in Opposition to Motion for Summary Judgment [Pl.'s Supp. Mem. Opp.] at 1-2; Defendants' Response to Supplemental Memorandum in Opposition to Motion for Summary Judgment [Defs.' Resp. to Supp. Mem. Opp.] at 1.)
Specifically, in their Motion for Summary Judgment, Edgar II and Sheldon II claim that, although Mr. Moriarty has sufficiently alleged facts that Sheldon I and Edgar I were bound by their CBAs, he has failed to sufficiently allege that Edgar II or Sheldon II are bound by the substantive provisions of their predecessors' CBAs. (Defs.' Mot. Summ. J. at 4.) Defendants argue that they are not bound by their predecessors' CBAs. (Defs.' Mot. Summ. J. at 3-4.)
Therefore, the issue before this Court is whether, construing the facts in the light most favorable to him, Mr. Moriarty has raised a genuine issue of material fact, as to whether Edgar II and Sheldon II are liable for their predecessors' CBAs. Edgar II and Sheldon II are responsible for such contractual obligations agreed to by their predecessors if they, either explicitly or implicitly, "assumed" the CBAs of their predecessors, or have satisfied the requirements under the "Successorship" doctrine, as outlined by the Seventh Circuit Court of Appeals. This Court's October 20, 1998 Opinion explained that, because the "alter ego" doctrine is not at issue here, the only theories of liability that Mr. Moriarty could prevail on are the "assumption" theory of successor liability or the "Successorship" doctrine. (Opinion at 6-7.)
On November 4, 1992, David Ruzich and his wife, Judith Ruzich, purchased the assets of Edgar Funeral Home ("Edgar I") from Dwight Johnson. (Pl.'s Supp. 12(N) ¶¶ 9, 11.) The subsequent business, Edgar II, "engaged in the same business, is located at the same location, employed the same person,5 is utilizing the same name and there was no interruption in the operation of the business at the time that Edgar II began to operate the business." (Pl.'s Supp. 12(N) ¶ 3.) (Footnote added).
During negotiations for the sale of Edgar I, Mr. Moriarty asserts that Mr. Ruzich and Mr. Johnson "discussed Edgar's membership in the FDSA and the union obligations flowing therefrom." (Plaintiff's Supplemental 12(N) Additional Facts Section [Pl.'s Supp. 12(N) Addt'l Facts] ¶ 6; Ruzich Deposition [Ruzich Dep.] at 18.) Edgar II, however, states that Mr. Ruzich and Mr. Johnson merely discussed Edgar's membership in the FDSA. (Defendants' Reply to Plaintiff's Supplemental Rule 12N Statement or Defendants' Supplemental 12(M) [Defs.' Supp. 12(M)] ¶ 6.)6 During these negotiations, Mr. Ruzich and Mr. Johnson also "discussed the wages and benefits paid for, and on behalf of, Edgar I's employee, [Timothy] Landgrebe under the contract between the Union and the FDSA." (Pl.'s Supp. 12(N) Addt'l Facts ¶ 7.) Before the sale of Edgar I, Mr. Ruzich also told "an employee of Edgar I that he did not intend to reduce his wages."7 (Pl.'s Supp. 12(N) ¶ 8.)
On November 2, 1992, Mr. Landgrebe called Michael Coli, President of the Union, and told him that the funeral home was being sold to Mr. Ruzich. (Pl.'s Supp. 12(N) Addt'l Facts ¶¶ 17, 18.) Mr. Landgrebe also told Mr. Coli that the owner of Edgar I, Mr. Johnson, had told him, "that the sale would not be taking place because [Mr.] Landgrebe was a union member." Id. Mr. Coli then called the funeral home, and spoke with Mr. Johnson and Mr. Ruzich over a speaker phone. (Pl.'s Supp. 12(N) Addt'l Facts ¶ 19.) Mr. Ruzich "did most of the talking." Id. Mr. Coli relayed to Mr. Ruzich what Mr. Landgrebe had said — "that [Mr.] Landgrebe had to quit the union or be fired for the sale to go through." Id. Mr. Coli also told Mr. Ruzich that he thought that "Edgar Funeral Home was under contract and that the sale of the business did not constitute a termination of the contract ...." Id. Mr. Coli called Mr. Ruzich back about forty-five minutes later and asked him if he "wanted to reduce [Mr.] Landgrebe's wages," to which Mr. Ruzich replied "no." (Pl.'s Supp. 12(N) Addt'l Facts ¶ 20; Michael Coli Affidavit [M. Coli Aff.] ¶ 4.) Mr. Coli also asked Mr. Ruzich "if he intended to cut the benefits and he said no he intended to continue the benefit program." Id.
Before the purchase of Edgar II, Mr. Moriarty "advised [Mr.] Ruzich that he believed that Edgar II would be bound by the CBA." (Pl.'s Supp. 12(N) ¶ 9; Moriarty Affidavit [Moriarty Aff.] ¶ 5.) Mr. Moriarty states that Mr. Ruzich did not inform him, prior to purchasing Edgar I, that he did not consider himself to be an FDSA member, nor bound by the CBAs. Id. Mr. Ruzich contests this by alleging that he informed Mr. Moriarty "that he did not think he would be bound and that he did not want to be bound." (Defendants' 12(M) [Defs.' 12(M)] ¶ 9; Defs.' Supp. 12(M) ¶ 8; Ruzich Dep. at 35-36.)
Prior to Edgar II purchasing Edgar I, Mr. Ruzich "discussed" the Union with a "bargaining unit employee." (Pl.'s Supp. 12(N) Addt'l Facts ¶ 25; 1st Am. Compl. ¶ 19.)8 Prior to the sale date, one "bargaining unit employee" of Edgar I was "told" by Mr. Johnson, the owner of Edgar I, that Edgar II had "agreed to accept" the CBA. (Pl.'s Supp. 12(N) Addt'l Facts ¶ 26.)
The only liability assumed at the time of purchase, on November 4, 1992, was Edgar I's pre-arranged funeral trust fund, which was managed by the FDSA and was one of the benefits of FDSA membership. (Pl.'s Supp. 12(N) ¶ 11; Pl.'s 12(N) Addt'l Facts ¶ 8.) The purchase agreement "specifically excluded all other costs, liabilities, obligations...
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