Chicago Regional Council of Carpenters Pension Fund v. Ruane Construction, Inc.
1:12-cv-09335
N.D. Ill.Aug 17, 2017Background
- Funds sue Ruane Construction under ERISA and Taft–Hartley for failing to report and pay fringe benefits for workers; audit conducted and disputed results narrowed; stipulated undisputed facts show no employment by Ruane and no written contracts with six contractors; payments to some workers were made via Ruane checks with unclear attribution; court finds liability only for Daly work totaling $1,858.19; court notes potential additional damages and fees to be set later.
- CBA obligates payment of fringe benefits for hours worked and if subcontracts or sublets, the employer assumes subcontractor obligations; required records and contributions for non-signatory workers and daily timekeeping for subcontractors.
- Beattie, Cahue, Rivera, Schneider Custom Stairs worked on Ruane residence; Soffit & Siding Master repaired third-party damage; Daly built Ruane’s office; all did not have contracts or payroll records linking them to Ruane Construction; payments made via Ruane checks; court finds no subletting as to Beatty/Cahue/Rivera/Schneider Custom Stairs or Soffit & Siding Master.
- Ruane’s failure to maintain daily records and to contribute for Daly violated Articles 3.2 and 3.5 of the CBA; Daly’s 76.5 hours supported by auditor’s calculation results in $1,858.19 due.
- Ruane Construction, Inc. is not liable for Beatty, Cahue, Rivera, Schneider Custom Stairs, or Soffit & Siding Master; liable for Daly’s $1,858.19; court may award liquidated damages, interest, and attorney’s fees later.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Were Beatty, Cahue, Rivera, or Schneider Custom Stairs subcontracts under the CBA? | Funds contend Ruane subcontracted these workers. | Ruane did not contract or subcontract; payments flowed from Ruane’s funds to individuals. | Not liable for contributions for these workers. |
| Was Soffit & Siding Master sublet by Ruane on the damaged third-party home project? | Funds argue subcontracting occurred through damages-related work. | No employment or contract; homebuilder arranged payment. | Not liable for contributions for Soffit & Siding Master. |
| Did Ruane violate the CBA by hiring Daly (non-signatory) without daily records and contributions? | CBA requires records and contributions for non-signatories. | Rule not explicitly permitting such engagement; no records. | Ruane violated the CBA; owes $1,858.19 for Daly. |
| What is the extent of Ruane’s overall liability for delinquent contributions? | Liability limited to Daly’s $1,858.19; other workers not liable. |
Key Cases Cited
- Illinois Conference of Teamsters & Employers Welfare Fund v. Steve Gilbert Trucking, 71 F.3d 1361 (7th Cir. 1995) (burden-shifting when employer fails to keep adequate records for delinquent contributions)
- Brick Masons Pension Trust v. Indus. Fence & Supply, 839 F.2d 1333 (9th Cir. 1988) (preponderance standard in evaluating damages for delinquent contributions)
- Combs v. King, 764 F.2d 818 (11th Cir. 1985) (evidence standard for employer liability when records are lacking)
- Ruttenberg v. U.S. Life Ins. Co., 413 F.3d 652 (7th Cir. 2005) (burden allocation on employer after fund shows delinquency and lack of records)