# Illinois State Painters Welfare Fund v. AB Drywall, Inc.

> District Court, S.D. Illinois · December 17, 2020

URL: https://www.frixlaw.com/law-library/cases/10153043

## Case

- **Court:** District Court, S.D. Illinois
- **Decided:** December 17, 2020
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ILLINOIS
ILLINOIS STATE PAINTERS )
WELFARE FUND, PAINTERS )
DISTRICT COUNCIL #58 401k TRUST )
FUND, AND PAINTERS DISTRICT )
COUNCIL #58 FRINGE BENEFIT ) Case No. 19-CV-280-SMY
FUNDS, )
)
Plaintiffs, )
)
vs. )
)
AB DRYWALL, INC., )
)
Defendant. )
MEMORANDUM AND ORDER
YANDLE, District Judge:
Plaintiffs Illinois State Painters Welfare Fund, Painters District Count #58 401(k) Trust
Fund, and Painters District Council #58 Fringe Benefit Funds’ (collectively “Funds”) filed the
instant action alleging that Defendant AB Drywall, Inc. (“AB”) owes $20,536.80 in contributions
plus fees, interest, and other damages, pursuant to the Employment Retirement Income Security
Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq, and the Labor Management Relations Act
(“LMRA”), 29 U.S.C. § 151, et seq. Now pending before the Court is the Funds’ Motion for
Summary Judgment (Doc. 21) to which AB responded (Doc. 29). For the following reasons, the
motion is GRANTED in part.
Background
The following facts are undisputed: Defendant AB was incorporated in December 2003
and ceased operation in December 2017. AB was owned and operated by Larry Brummet who
managed its day-to-day affairs. Plaintiff Funds provide ERISA retirement, health, and welfare
benefits to employees of employers who are parties to Collective Bargaining Agreements (“CBA”)
with the Funds.
AB entered into a CBA with the Funds on August 9, 2017 (Doc. 22-1). Pursuant to the
CBA, AB reported and paid benefit contributions to the Funds on behalf of its bargaining unit
employees to the Funds. AB also reported and paid contributions on behalf of Brummet “for the
hours spent working with the tools and/or working as a supervisor” (Def. Statement of Material
Facts P 44).' Between 2013 and 2018, AB reported and paid contributions on behalf of Brummet
for the following hours: 0 hours in 2013; 415 hours in 2014; 320 hours in 2015; 964 hours in 2016;
952 hours in 2017; and 405 hours in 2018 (Doc. 22-8, p. 2). During the same time period, Brummet
finished drywall for AIES which was also a party to a CBA with the Funds.
The Funds conducted an audit of AB for the years 2013 to 2017. The audit found that
contributions for various months were due from AB for Brummet’s benefits (Doc. 22-17).? The
audit also found that AB underpaid contributions on behalf of its employee, Jared Shires, during
the relevant period (AB does not dispute this finding).>
Following the audit, on November 15, 2017, the Funds mailed a letter addressed to AB to
its accountant, Gateway Business Service (“Gateway”) (Doc. 22-7). Although AB regularly
received business correspondence through Gateway, Brummet did not see the letter until April
2018. The letter stated that in order for non-bargaining employees (like Brummet) to be covered

' Plaintiffs state that “A B Drywall reported and paid on ‘hours worked by Larry Brummet for the hours spent working
with the tools and/or working as a supervisor ... .’” (Plaintiffs’ Statement of Material Facts P 43). Plaintiffs also state
that “Larry Brummet did not hang, tape, sand, or paint drywall for A B Drywall.” (/d. P 9). Instead, he “’ figured jobs,
worked on tools, took checks out to a job, took material out, stuff like that’” — “worked on tools” meaning that he
repaired them. (/d. P 45).
2 For example, the audit found that in 2015, Brummit reported only 412 work hours and AB paid contributions for
that amount but owed additional contributions for 1,508 hours (/d.).
3 Defendant offers no argument that it underpaid contributions on behalf of its employee Shires. Accordingly,
Plaintiffs are entitled to judgment on that claim.

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by the ERISA plans, AB must sign a “participation agreement.” Attached to the letter were three
participation agreements entitled “Bargaining Unit Alumni Personnel Only,” “All Non-Bargaining
Unit Personnel Reporting”, and “All Working Owner Reporting,” from which AB could choose
(Id.). AB did not sign any of the participation agreements. Instead, AB ceased operations and
Brummet retired (Doc 29-1, PP 10).
AB disputes liability with respect to contributions for Brummet, but does not dispute
Plaintiffs’ calculation of $20,536.58 delinquent in contributions, $3,449.72 in interest, $4,107.36
in liquidated damages, $2,345.58 in audit costs, and $33,610.83 in attorney fees.
Discussion
Summary judgment is proper only if the moving party can demonstrate that there is no
genuine issue as to any material fact. Fed. R. Civ. P. 56(a); Celotex Corp. v. Catrett, 477 U.S.
317, 322 (1986). The moving party is entitled to summary judgment where the non-moving party
“has failed to make a sufficient showing on an essential element of her case with respect to which
she has the burden of proof.” Celotex, 477 U.S. at 323. If the evidence is merely colorable, or is
not sufficiently probative, summary judgment may be granted. Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 249-50 (1986). Any doubt as to the existence of a genuine issue of material fact
must be resolved against the moving party. Lawrence v. Kenosha County, 391 F.3d 837, 841 (7th
Cir. 2004).
Section 302 of the LMRA requires a written agreement “between the employer and the
employees’ representative governing the rights of employees on whose behalf the contributions
were made... .” Gariup v. Birchler Ceiling & Interior Co, Inc., 777 F.2d 370, 375 (7th Cir.
1985); 29 U.S.C. § 186(c)(5)(B). “An unsigned written agreement satisfies Section 302(c)(d)(B)’s
‘written agreement’ requirement.” Brown v. C. Volante Corp., 194 F.3d 351, 355 (7th Cir. 1999).

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However, in order to bind an employer, an ERISA fund must demonstrate that its “conduct
manifested an intent to adopt, or agree to, the unsigned” agreement.” Id.; Bricklayers local 21 of
Illinois Apprenticeship and Training Program v. Banner Restoration, Inc., 385 F.3d 761, (7th Cir.
2004).
Plaintiffs argue that AB conducted itself and paid contributions “’in accordance with’” the

participation agreements attached to the November 15, 2017 letter, and consequently, it is bound
by those agreements. They maintain that Brummet was a “working owner” and “worked with the
tools” for AIES during the relevant time period.4 Alternatively, they contend that Brummet
qualifies as an “alumni personnel” because while he did not work as a traditional painter, he had
at one time worked for a participating employer and is employed for at least 100 hours per month.5
Finally, Plaintiffs argue that regardless of the particular participation agreement that covers
Brummet, AB still owes contributions for a minimum of 160 hours/month during the relevant
reporting period. But these facts alone cannot support summary judgment on this point.
“Prior cases that have held an employer bound to a collective bargaining agreement as a

result of conduct have emphasized, among other factors, the payment of union wages, the
remission of union dues, the payment of fringe benefit contributions, the existence of other
agreements evidencing assent and the submission of the employer to union jurisdiction, such as
that created by grievance procedures.” Bricklayers Local 21, 385 F.3d at 766 (collecting cases).
Other relevant factors include submission of monthly contributions reports at the rates described
in the agreement and cooperation with an audit. Id. In the case cited by Plaintiffs, the Seventh
Circuit found agreement where the employer paid contributions at the rate described in a CBA and
tendered contribution reports for years. Line Const. Ben. Fund v. Allied Elec. Contractors, Inc.,

4 Thus, Plaintiffs argue that AB is bound by the “All Working Owner Reporting,” participation agreement.
5 Thus, Plaintiffs argue that AB is bound by the “Bargaining Unit Alumni Personnel Only” participation agreement.
591 F.3d 576, 580-581 (7th Cir. 2010).
Here, the only “evidence” presented by the Funds of AB’s purported consent to the
participation agreements is that Brummet reported 160 hours of work in certain months — the same
number of hours set forth in the participation agreements. While this suggests compliance with
the terms of the CBAs signed by AB and AIES, by itself, it is not sufficient evidence of agreement
through conduct. Plaintiffs essentially argue that Brummet never “worked with the tools” for AB
and that as a result, any contributions it paid must have been pursuant to a participation agreement
instead of the CBA. What is missing however is evidence of assent to the participation
agreements. Given this dearth of evidence, summary judgment cannot be entered against AB with
respect to its liability for contributions owed for Brummet’s benefit.
Conclusion
For the foregoing reasons, Plaintiffs’ Motion for Summary Judgment is GRANTED in
part. Judgment is granted as to Defendant’s liability for unpaid contributions on behalf on Jared
Shires; Plaintiffs shall submit proof of the amount due and owing as to this claim within 30 days
of the entry of this Order. Summary judgment is denied as to Plaintiffs’ remaining claims.
IT IS SO ORDERED.
DATED: December 17, 2020 foe Mf Cele
STACI M. YANDLE
United States District Judge

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10153043. Public record. Not legal advice.