Chicago District Council of Carpenters Pension Fund v. P.M.Q.T., Inc.

169 F.R.D. 336, 1996 U.S. Dist. LEXIS 18517, 1996 WL 714514
CourtDistrict Court, N.D. Illinois
DecidedDecember 10, 1996
DocketNo. 94 C 6785
StatusPublished
Cited by13 cases

This text of 169 F.R.D. 336 (Chicago District Council of Carpenters Pension Fund v. P.M.Q.T., Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chicago District Council of Carpenters Pension Fund v. P.M.Q.T., Inc., 169 F.R.D. 336, 1996 U.S. Dist. LEXIS 18517, 1996 WL 714514 (N.D. Ill. 1996).

Opinion

MEMORANDUM OPINION AND ORDER

KEYS, United States Magistrate Judge.

This matter comes before the Court on Trust Funds’ Motion for Summary Judg[338]*338ment, pursuant to Federal Rule of Civil Procedure 56. For the following reasons, Trust Funds’ Motion is granted.

BACKGROUND

Plaintiffs are the Chicago District Council of Carpenters Pension Fund, Chicago District Council of Carpenters Welfare Fund, and the Chicago and Northeast Illinois District Council of Carpenters Apprentice and Trainee Program (collectively the “Trust Funds”). The Trust Funds provide medical, pension, and other benefits to covered carpenters and their dependents. (Trust Funds’ Statement of Uncontested Material Facts Pursuant to Local Rule 12(m) [Pls.’ 12(m)] ¶ 2; Affidavit of Robert Newell [Newell Aff.], ¶ 3.)

Defendants are P.M.Q.T., Inc., a company incorporated in Illinois in 1985 (“PMQT Illinois”), and P.M.Q.T./Nevada,'Inc., a company incorporated in Nevada in 1988 (“PMQT Nevada”). Both PMQT Illinois and PMQT Nevada subcontract carpenters to various trade shows to assist in assembling displays and exhibits. Peter Miles incorporated PMQT Illinois and PMQT Nevada, and is the president and sole shareholder of both entities.1 (Miles Dep. at 4-5, 16-17; Pis.’ 12(m), ¶ 16.)

This suit concerns Defendants’ liability for pension contribution payments, which the Trust Funds claim Defendants owe as part of a collective bargaining agreement with the Chicago and Northeast Illinois Carpenters Union (the “Union”) under the Employee Retirement Income Security Act of 1974 (“ERISA”), § 502, as amended, 29 U.S.C. § 1132. On September 29, 1985, PMQT Illinois entered into a multi-employer collective bargaining agreement (“CBA”) with the Union. Pursuant to that CBA, PMQT Illinois is required to make contribution payments to the Trust Funds for each hour worked by its carpenter employees. Additionally, PMQT Illinois is required to make contributions to the Trust Funds measured by the hours worked by subcontractors that are not signatory to the CBA with the Union. (Newell Aff., ¶¶ 4 & 5; Pls.’ 12(m), ¶¶ 3 & 11; Plaintiffs’ Requests for Admission [Req. for Admis.], ¶ 2.) PMQT Nevada was not a signatory to the CBA.

In 1993, in an effort to determine whether the requisite contributions were being made by PMQT Illinois, the Trust Funds exercised their authority under the CBA2 and requested that PMQT Illinois and PMQT Nevada turn over their records. The defendant companies refused the Trust Funds’ audit request. Thereafter, on November 14, 1994, the Trust Funds filed this action to compel both companies to submit to the requested audit, and to obtain a judgment for any contributions owed, as determined by the audit, as well as the related fees, costs, liquidated damages, and interest.

In their Complaint, the Trust Funds allege that PMQT Nevada is the alter ego of PMQT Illinois, and as such, PMQT Nevada is bound by the CBA. The Trust Funds allege that both companies breached the CBA by underpaying contributions owed to the Trust Funds. In support of their alter ego claim, the Trust Funds allege that: (1) the business transactions and operations of the two companies have been, and continue to be, intermingled; (2) PMQT Illinois employees have been paid for their work pursuant to the CBA from PMQT Nevada’s accounts; (3) PMQT Nevada has paid fringe benefit contributions for PMQT Illinois employees; (4) both companies are commonly controlled, operated, and managed; and (5) PMQT Nevada is merely a disguised continuance of PMQT Illinois.

In January of 1995, PMQT Illinois filed its Answer, denying the allegations, and PMQT Nevada moved to dismiss the lawsuit, asserting lack of subject matter and personal jurisdiction and failure to state a claim upon which relief could be granted. The Court denied PMQT Nevada’s motion and, thereafter, the Trust Funds proceeded with discovery on the limited issue of the corporate relationship between PMQT Nevada and [339]*339PMQT Illinois. (Memorandum Opinion and Order, March 27,1995.)

In July of 1995, the Trust Funds’ auditor completed an audit of both companies. The audit revealed contributions due in the amount of $35,267.27, based upon a finding that the companies failed to report and pay fringe benefit contributions for 6,606.84 hours of work performed from October of 1991 through March of 1995. (Pls.’ 12(m), ¶ 9; Appendix in Support of Pls.’ 12(m), Ex. E. [Auditor’s Report].)

During the course of discovery, the Trust Funds deposed several employees of the defendant companies, including Mr. Miles, the president of both companies, and Robert Burkum, the accountant for both companies. Messrs. Miles’ and Burkum’s depositions were continued because they failed to produce documentation or information to refute the alter ego claim. (Pls.’ 12(m), ¶ 27.) Although the Court’s March 4, 1996 Order directed Mr. Miles to produce, to the Trust Funds’ counsel, by March 13,1996, any documents refuting the auditor’s findings or the alter ego allegations, no such documents were ever produced by either PMQT Illinois or PMQT Nevada. (Pls.’ 12(m), ¶ 27; Affidavit of Janet Adams, ¶¶ 5, 8.)

Also during pre-trial discovery proceedings, on February 29, 1996, the Trust Funds served Defendants’ counsel with Requests for Admission, pursuant to Federal Rule of Civil Procedure 36. Although Defendants’ counsel withdrew from the ease on March 4, 1996, counsel forwarded the Requests for Admission to Mr. Miles, with an attached letter informing him that his answers to the Requests for Admission were due on March 30, 1996, and that failure to file timely answers could result in the Court finding that he had admitted all the facts alleged in the request.3 The letter made reference to Federal Rule of Civil Procedure 36. (Memorandum Opinion and Order, May 20, 1996, at 2-3.)

Despite the letter from counsel, Mr. Miles failed to timely file his response to the Requests for Admission, which was due on March 30,1996. Five weeks after a response was due, on May 8,1996, Defendants, by new counsel, filed an emergency motion, requesting leave to file their response to the Trust Funds’ Requests for Admission. In their motion, Defendants argued that, during the filing period, Mr. Miles was without an attorney and did not recognize the effect of his failure to respond. Defendants’ new counsel also argued that he did not learn of the Requests for Admission until the time to file the answers had expired.4 The Court denied Defendants’ motion, finding that the failure to timely respond was due to Mr. Miles’ “inexcusable neglect.”5 (Memorandum Opinion and Order, May 21, 1996, at 6.)

On June 5, 1996, the Trust Funds moved for summary judgment on the grounds that the defendant companies had admitted all material facts. The Trust Funds argue that, by failing to respond to the Requests for Admission, Mr.

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169 F.R.D. 336, 1996 U.S. Dist. LEXIS 18517, 1996 WL 714514, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chicago-district-council-of-carpenters-pension-fund-v-pmqt-inc-ilnd-1996.