Laborers' Pension Fund v. Prop. Recycling Servs. Corp.

MEMORANDUM OPINION AND ORDER

Andrea R. Wood United States District Judge

Plaintiffs Laborers' Pension Fund, Laborers' Welfare Fund of the Health and Welfare Department of the Construction and General Laborers' District Council of Chicago and Vicinity, and Chicago Laborers' District Council Retiree Health and Welfare Fund are multiemployer benefit plans. They, along with their administrator Plaintiff Catherine Wenskus (collectively, “Funds”), brought this suit to collect unpaid contributions owed to the Funds by Defendant Property Recycling Services Corp. (“PRS”). In addition, the Funds seek to impose personal liability on Defendant Daniel Coyne, the sole officer and shareholder of PRS. The Funds assert their claims pursuant to § 515 of the Employment Retirement Income Security Act (“ERISA”), 29 U.S.C. § 1145, and § 301 of the Labor Management Relations Act of 1947 (“LMRA”), 29 U.S.C. § 185(a). Now before the Court are the Funds' amended motion for summary judgment (Dkt. No. 125) and Coyne's motion for summary judgment (Dkt. No. 141). For the reasons stated below, the Funds' motion is granted in part and denied in part and Coyne's motion is granted.

BACKGROUND

The following facts drawn from the parties' Local Rule 56.1 submissions are undisputed unless otherwise noted.

PRS was incorporated in October 2011 and ceased operations in 2017. (Pls.' Resp. to Def.'s Statement of Facts (“PRDSOF”) ¶ 1, Dkt. No. 146.) Coyne is an officer and the sole shareholder of PRS, where his responsibilities included hiring and supervising employees and contractors, preparing and negotiating contracts with customers, and purchasing construction materials, among other things. (PRDSOF ¶ 2; Def.'s Resp. to Pls.' Statement of Facts (“DRPSOF”) ¶¶ 14, 23, Dkt. No. 135.)

The parties' dispute stems from a collective bargaining agreement that PRS entered into effective June 17, 2014 (“Agreement”). (DRPSOF ¶ 6.) Under the Agreement, PRS was obligated to make contributions on behalf of certain employees for pension benefits, health and welfare benefits, retiree benefits, and a training fund. (Id. ¶ 8.) If it failed to do so, PRS agreed to pay liquidated damages and interest on unpaid contributions. (Id.) PRS was also required to submit monthly reports regarding its required payments and to submit its books and records to the Funds for audits. (Id. ¶¶ 8-9.)

Coyne previously ran other construction companies, including Aces Environmental Corporation, Aces Demolition Corporation, and Aces Environmental Consulting Corporation (“Aces Companies”). When PRS signed the Agreement, it also agreed to take on the debt that the Aces Companies owed to the Funds. (PRDSOF ¶ 10.) Those debts were substantial-in December 2017, the Funds obtained a judgment of $1.3 million against PRS, which had stipulated to the judgment, for debts accrued by the Aces Companies to the Funds. (DRPSOF ¶ 24.)

PRS failed to make numerous payments owed to the Funds under the Agreement in 2014, 2015, and 2016. (Id. ¶¶ 19, 20.) As a result, PRS owes principal contributions and dues to the

Funds in the amount of $680, 913; the total due is $1, 316, 226, including interest and liquidated damages. (Id. ¶¶ 34-35.)^[1]

The parties disagree on PRS's financial stability. PRS's income tax returns show a net income of $0 in 2012, $13, 939 in 2013, and $24, 207 in 2014. (PRDSOF ¶¶ 3, 5, 8.) But in 2015, PRS experienced a net loss of $191, 669, and in 2016, a net loss of $325, 513. (Id. ¶¶ 17, 20.) Coyne took no compensation from PRS in 2012 and was paid $24, 000 in 2013, $63, 600 in 2014, $62, 400 in 2015, $38, 400 in 2016, and nothing in 2017. (Id. ¶¶ 4, 6, 9, 18, 21, 24.) PRS also has a substantial (but unspecified) tax liability because it did not pay withholding taxes for its employees. (DRPSOF ¶ 33.)

The record shows that Coyne made some personal use of PRS's assets. PRS owned a 2007 Honda CR-V that Coyne occasionally used for personal purposes. (DRPSOF ¶ 26.) PRS also paid for transactions made on credit cards held by Coyne and his wife, but the parties dispute whether the cards were used for personal or corporate purposes. (Id. ¶ 29.) The disputed credit card transactions include approximately $1, 363 in charges across four credit cards in mid-to-late 2016 and additional transactions totaling around $1, 000. (PRDSOF ¶¶ 30-31.)^[2]

DISCUSSION

Under Federal Rule of Civil Procedure 56, “[a] party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary

judgment is sought.” Fed.R.Civ.P. 56(a). “The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Id. A genuine dispute of material fact exists when there is “sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986). Inferences drawn from the underlying facts “must be viewed in the light most favorable to the party opposing the motion, ” but the nonmoving party must establish more than just “some metaphysical doubt as to the material facts.” Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

Because both parties have moved for summary judgment, the Court adopts “a dual, Januslike perspective” on cross motions aimed at the same claim or defense. Hotel 71 Mezz Lender LLC v. Nat'l Ret. Fund, 778 F.3d 593, 603 (7th Cir. 2015) (internal quotation marks omitted). On one motion, the Court views the facts and inferences in the light most favorable to the nonmovant, but if summary judgment is not warranted, the Court gives the unsuccessful movant “all of the favorable factual inferences that it has just given to the movant's opponent.” Id. The Court also notes that PRS appeared in this matter through counsel early in the litigation, but its counsel withdrew in November 2017. (Dkt. No. 62.) Since then, PRS has been unrepresented and therefore unable to participate in the litigation. See Nocula v. UGS Corp., 520 F.3d 719, 725 (7th Cir. 2008) (“Corporations cannot appear pro se.”). By failing to respond to the Funds' motion, PRS has waived any argument against the requested relief. See Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir. 2010). However, the Funds still must demonstrate that they are entitled to judgment. Fed.R.Civ.P. 56(a).

I. PRS's Liability

In Count One, the Funds assert that PRS violated ERISA, 29 U.S.C. § 1145, and is liable for “delinquent contributions, liquidated damages, interest, audit costs, [and] reasonable attorneys' fees and costs.” (First Am. Compl. (“FAC”) ¶ 16, Dkt. No. 70.)^[3] In Count II, the Funds assert that PRS is liable for unpaid union dues. It appears that Count II is premised on the LMRA, 29 U.S.C. § 185(a), which confers jurisdiction to federal courts to resolve disputes between employers and unions. See Atchley v. Heritage Cable Vision Assocs., 101 F.3d 495, 498 (7th Cir. 1996).

Under ERISA, plan beneficiaries may bring civil actions “[t]o recover benefits due to [them] under the terms of [the] plan, to enforce [their] rights under the terms of the plan, or to clarify [their] rights to future benefits under the terms of the plan.” 29 U.S.C § 1132(a)(1)(B). ERISA provides that, when the Court enters judgment on behalf of a plan in an action brought by a fiduciary, such as the Funds, for or on behalf of a plan to enforce contribution obligations, “the court shall award the plan” the unpaid contributions, interest on the unpaid contributions, liquidated damages, reasonable attorney's fees and costs, and other damages the court deems appropriate. 29 U.S.C. § 1132(g)(2) (citing 29 U.S.C. § 1145). The Seventh Circuit has held that a plan's audit costs are also recoverable under 29 U.S.C. § 1132(g)(2). Moriarty ex rel. Loc. Union No. 727 v. Svec, 429 F.3d 710, 721 (7th Cir. 2005).

The Funds have provided supporting documents to show that PRS failed to make required payments to the Funds pursuant to a collective bargaining agreement. They have also provided declarations and documents demonstrating that PRS is liable for $680, 912.72 in principal

contributions and dues and total audits costs of $16, 125.00, and that the total amount due after interest and liquidated damages is $1, 316, 226.24. (Pls.' Suppl. Statement of Facts ¶¶ 34-35, Dkt. No. 126.) Even Coyne, who contests his own liability in this matter, does not dispute that the Funds' evidence establishes PRS's liability for a base amount of $680, 912.72 in contributions and union dues. (DRPSOF ¶ 34.) Coyne does object to the audit costs. But audit costs may be awarded under ERISA, and Coyne has no standing to object on PRS's behalf here.

As the Funds have established that PRS failed to make required contributions under the Agreement, summary judgment is entered in favor of the Funds against PRS on Counts I and II.

II. Coyne's Liability

In Count III, the Funds assert that Coyne is liable for PRS's debts because he disregarded its corporate form. Accordingly, they contend that they may pierce the corporate veil and obtain a judgment against him for the unpaid contributions at issue in Counts I and II.

“Veil-piercing is an equitable remedy” governed by the law of the corporation's state of incorporation-here, Illinois. Laborers' Pension Fund v. Lay-Com, Inc., 580 F.3d 602, 610 (7th Cir. 2009). To pierce the veil to reach Coyne, the Funds must satisfy a two-pronged test: “(1) there must be such unity of interest and ownership that the separate personalities of [Coyne and PRS] no longer exist; and (2) circumstances must be such that adherence to the...