Neca–Ibew Pension Trust Fund v. Bays Elec., Inc.

• Decision Date: 20 September 2012
• Docket Number: Case No. 08–CV–2133.
• Citation: 894 F.Supp.2d 1071
• Parties: NECA–IBEW PENSION TRUST FUND, NECA–IBEW Welfare Trust Fund, and International Brotherhood of Electrical Workers Local Union No. 725, Plaintiffs, v. BAYS ELECTRIC, INC., Premier Electrical Contractors, Inc., and their successors in interest, Dinki Electric Inc., Bays Company, LLC, and Denki Electric Corporation, Inc., Defendants.
• Court: U.S. District Court — Central District of Illinois

894 F.Supp.2d 1071

NECA–IBEW PENSION TRUST FUND, NECA–IBEW Welfare Trust Fund, and International Brotherhood of Electrical Workers Local Union No. 725, Plaintiffs,

v.BAYS ELECTRIC, INC., Premier Electrical Contractors, Inc., and their successors in interest, Dinki Electric Inc., Bays Company, LLC, and Denki Electric Corporation, Inc., Defendants.

Case No. 08–CV–2133.

United States District Court,

C.D. Illinois,

Urbana Division.

Sept. 20, 2012.

James P. Moody, John A. Wolters, Cavanagh & O'Hara, Springfield, IL, for Plaintiffs.

Michael E. Avakian, The Avakian Law Firm, Washington, DC, for Defendants.

OPINION

MICHAEL P. McCUSKEY, District Judge.

This case is before the court for ruling following the bench trial held on January 23, 24, and 25, 2012. This court has carefully reviewed the Stipulation of Uncontested Material Facts included in the Pretrial Order, the transcript of the trial, the exhibits admitted into evidence, and the written arguments submitted by the parties. Following this careful and thorough consideration, this court rules in favor of Plaintiffs, NECA–IBEW Pension Trust Fund, NECA–IBEW Welfare Trust Fund and International Brotherhood of Electrical Workers Local Union No. 725, and against Defendants, Bays Electric, Inc. (Bays Electric), Premier Electrical Contractors, Inc. (Premier Electric), Dinki Electric, Inc. (Dinki Electric), Bays Company, LLC (Bays Company) and Denki Electric Corporation, Inc. (Denki Electric), on all claims.

I. PROCEDURAL HISTORY

On June 16, 2008, Plaintiffs filed their Complaint (# 1) in this court against Bays Company, LLC d/b/a Bays Electric, Inc., Premier Electric, and their successor in interest, Denki Electric. The Complaint stated that the action was brought pursuant to the Employee Retirement Income Security Act of 1974 (ERISA), as amended, 29 U.S.C. § 1145, and the Labor Management Relations Act of 1947 (LMRA), as amended, 29 U.S.C. § 185(a). Plaintiffs attached copies of the letters of assent signed by Bays Electric and Premier Electric and the trust agreements which obligated Bays Electric and Premier Electric to pay contributions to the Pension Fund and Welfare Fund. Plaintiffs alleged that the controlling officers of Bays Electric and Premier Electric became the controlling officers of Denki Electric. Plaintiffs alleged that Denki Electric was the disguised continuation of its predecessor companies and was bound by the agreements to make contributions to the Pension Fund and Welfare Fund. Plaintiffs asked that Defendants be ordered to remit contribution reporting forms and the required contributions to the Pension Fund and Welfare Fund. Plaintiffs also sought delinquent contributions to the Pension Fund and Welfare Fund, liquidated damages, interest, and attorney's fees.

On November 20, 2008, Plaintiffs filed an Amended Complaint (# 18). In December 2008, Defendants Bays Electric, Denki Electric and Premier Electric filed Answers to the Amended Complaint (# 28, # 31, # 32). There were problems with discovery in this case and, on January 26, 2010, Magistrate Judge David G. Bernthal entered a Text Order and granted Plaintiffs' Motion to Compel. Judge Bernthal ordered Defendants to comply with the Order within 14 days and further ordered that the discovery period would be extended. On January 28, 2010, Judge Bernthal granted Plaintiffs' Motion to add Dinki Electric as a party to this action.¹ On April 1, 2010, 2010 WL 1416879, this court entered an Opinion (# 70) and denied Defendants' Motion for Summary Judgment (# 47). Defendants argued that they were entitled to summary judgment because this case is barred by a limitation of action pursuant to § 10(b) of the National Labor Relations Act (NLRA), 29 U.S.C. § 160(b). This court specifically concluded that the six-month statute of limitations discussed in Defendants' Motion for Summary Judgment was inapplicable to this case, finding that failing to remit funds to the Pension Fund and Welfare Fund does not constitute an unfair labor practice as described in 29 U.S.C. § 158, so that an action to enforce an agreement to remit funds is not subject to the six-month statute of limitations. On April 30, 2010, this court entered an Order (# 75) and denied Defendants' Request for Clarification (# 72), which challenged this court's reasoning and conclusion regarding the statute of limitations. This court referred to Plaintiffs' Response to the Motion to Clarify (# 74) and stated:

If this court's Opinion was not adequately clear, Plaintiffs thoroughly explained why the six-month statute of limitations applicable to an unfair labor practice or duty of fair representation claim under the National Labor Relations Act does not apply to Plaintiffs' claim, which is a delinquent contribution collection action based on a written contract and brought pursuant to ERISA, 29 U.S.C. § 1145. This court thoroughly agrees with Plaintiffs' clear explanation of this court's ruling.

On May 7, 2010, Plaintiffs filed a Second Amended Complaint (# 76). Plaintiffs added Dinki Electric as a Defendant and clarified that Bays Company is a successor in interest to Bays Electric. Plaintiffs alleged that Dinki Electric was the disguised continuation of its predecessor companies, Bays Electric and Premier Electric. Plaintiffs also alleged that Bays Company is the disguised continuation of its predecessor companies, Bays Electric and Dinki Electric and that Denki Electric is the disguised continuation of its predecessor companies, Premier Electric and Dinki Electric.

On July 8, 2010, Dinki Electric filed a Motion to Dismiss for failure to properly effect service within 120 days (# 83). Judge Bernthal entered a Report and Recommendation (# 95) which recommended that the Motion to Dismiss be denied. On October 29, 2010, 2010 WL 4683980, this court entered an Order (# 98) which accepted the Report and Recommendation and denied the Motion to Dismiss. This court stated that Plaintiffs had notified the court that they had effected service on Dinki Electric. This court stated:

Plaintiffs stated that Dinki's registered agent is Bill Hillis. According to the information Dinki provided to the Indiana Secretary of State, the registered agent's address is 650 E. Carmel Drive in Carmel, Indiana. Bill Hillis is also listed as the president of the company, with the same street address of 650 E. Carmel Drive. Plaintiffs stated that they retained Express Process Services, Inc. (Express) to serve Dinki. Plaintiffs provided documentation showing that Express's process server went to 650 E. Carmel Drive to serve Dinki's registered agent with the Summons and Second Amended Complaint. The process server could not find Hillis at that location. The other tenants in the building at 650 E. Carmel Drive never heard of Dinki Electric., Inc., or Bill Hillis. Plaintiffs stated that, accordingly, Dinki has failed to maintain a registered agent at the address shown in the Indiana Secretary of State's records.

Plaintiffs stated that they therefore have served Dinki by certified mail, return receipt requested. Plaintiffs stated, and provided documentation to show, that service was mailed to the president of the company, Bill Hillis, at 1173 Crawford Street, Terre Haute, IN 47807, which is the company's address according to the Indiana Secretary of State's records. Plaintiffs stated that they also mailed additional copies to the other addresses shown on the Secretary of State's records. Plaintiffs argued that they had effected service on Dinki under the applicable provisions of the Indiana Code.

This court stated that it “agree[d] wholeheartedly with Judge Bernthal that Dinki should not be rewarded for its attempts to evade service of process” and that “[u]nder the unique circumstances present here, this court concludes that Plaintiffs have effected service on Dinki.” On November 5, 2010, Dinki Electric filed its Answer to the Second Amended Complaint (# 99).

The parties filed cross motions for summary judgment and, on September 23, 2011, 2011 WL 4435575, this court entered an Opinion (# 115) which denied the motions. This court stated that Plaintiffs brought this action pursuant to ERISA and the LMRA to recover contributions to the Pension Fund and Welfare Fund which were required by written agreements enforceable against Bays Electric and Premier Electric. This court also stated, citing pertinent authority, that the Pension Fund and Welfare Fund are multiemployer plans and may sue under ERISA to recover required contributions in federal court. In addition, this court stated that, since the breach of a contract between a union and an employer is actionable under section 301 of the LMRA, Plaintiffs can base their claim on this section as well as ERISA.

This court then rejected Defendants' argument that this court lacked subject matter jurisdiction over Plaintiffs' claim. This court again rejected (for the third time) Defendants' argument that Plaintiffs' claim was barred by a six-month statute of limitations. This court also rejected Defendants' argument that Dinki Electric, Denki Electric and Bays Company cannot be liable under an alter ego theory, a successor employer theory or a single employer theory. This court concluded that the evidence presented on summary judgment could support a conclusion that Dinki Electric, Denki Electric and Bays Company were continuations of Premier Electric and Bays Electric and therefore liable for contributions to Plaintiffs. This court also specifically noted untrue statements and direct contradictions in the arguments and evidence provided by Defendants.

However, this court also rejected Plaintiffs' argument that they were entitled to summary judgment as to liability. This court stated:

Plaintiffs have made convincing arguments regarding the applicability of the alter ego doctrine and the single employer doctrine to the facts of this case. However, in considering Plaintiffs' Cross Motion for Partial Summary Judgment as to Liability, ...