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Trustees of Michiana Area Electrical Workers Health & Welfare Fund v. TGB Unlimited Inc.

United States District Court, N.D. Indiana

December 18, 2017

TRUSTEES OF THE MICHIANA AREA ELECTRICAL WORKERS HEALTH & WELFARE FUND, TRUSTEES OF THE MICHIANA AREA ELECTRICAL WORKERS PENSION FUND and TRUSTEES OF THE MICHIANA AREA ELECTRICAL WORKERS MONEY PURCHASE PLAN, Plaintiffs,
v.
TGB UNLIMITED, INC. d/b/a S/T BANCROFT ELECTRIC and WESTBEND MUTUAL INSURANCE COMPANY, Defendants.

          OPINION AND ORDER

          THERESA L. SPRINGMANN UNITED STATES DISTRICT COURT CHIEF JUDGE

         This matter comes before the Court on the Plaintiffs' Motion for Damages [ECF No. 45]. On September 28, 2017, the Court issued an Opinion and Order [ECF No. 48] granting the Plaintiffs' Motion for Summary Judgment [ECF No. 35], but ordering the Clerk to withhold entry of judgment until the issues of damages, costs, a contractor's bond, and attorney fees were briefed by the parties and resolved by the Court. The parties have briefed the issues, which are now ripe for review.

         BACKGROUND

         The instant case began when the Plaintiff Funds[1] sought unpaid contributions from Defendant TGB Unlimited d/b/a S/T Bancroft Electric and a judgment against West Bend Mutual Insurance Company as a surety of Bancroft Electric's contractor's bond (the “Contractor's Bond”) under the Employment Retirement Income Security Act (“ERISA”). On September 28, 2017, the Court issued an Opinion and Order granting the Plaintiffs' Motion for Summary Judgment and found that there was no genuine issue of material fact concerning TGB's liability for the unpaid contributions. The Court further found that there was no genuine issue of material fact concerning West Bend's liability for the Contractor's Bond ($6, 500). The Court, however, ordered the Clerk to withhold judgment until the parties had briefed the issues related to damages, costs, contractor's bond, and attorney fees.

         The Plaintiffs have produced evidence that the unpaid contributions total $36, 164.40 (ECF No. 36-18), and that the accompanying payroll audit (the “Payroll Audit”) cost $514.30, (ECF No. 36-17). The Plaintiffs further provided an affidavit of itemized attorney fees ($32, 501.25) and costs ($2, 277.39). (See ECF No. 46, Exs. 2, 2-A.) The Plaintiffs further contend they continue to incur additional attorney fees totaling $1, 215.00 in reviewing recent filings by Defendants and in preparation of its Reply brief to the Motion for Damages. (See ECF No. 54, Ex. 2-B.)

         The Defendants object to the Motion for Damages on multiple grounds. First, the Defendants attempt to re-litigate whether the Plaintiffs' noncompliance with the parties' Collective Bargaining Agreement Collection Policy affects damages. Second, the Defendants raise a defense based on ERISA's de minimus rule, which applies to withdrawal liability rather than unpaid contributions. Third, the Defendants assert that, despite liability on the entirety of the Payroll Audit, they should be required to pay only the unpaid contributions to the funds present in the current litigation. Fourth, the Defendants argue that they should not have to pay past contributions to the Plaintiffs' Health and Welfare Fund. Finally, the Defendants assert that the Plaintiffs' attorney fees are unreasonable, and attack both the billing rate and specific itemized entries provided by Plaintiffs' counsel.

         DISCUSSION

         A. ERISA Remedies

         In its Opinion and Order, the Court found Defendant TGB liable for its unpaid contributions, which the Plaintiffs have shown to total $36, 164.40.[2] Delinquent contributions are enforceable under 29 U.S.C. § 1132. When the Court enters judgment on behalf of a plan in an action brought by a fiduciary, such as the Trustee-Plaintiffs, for or on behalf of a plan to enforce contribution obligations, “the court shall award the plan” unpaid contributions, interest on the unpaid contributions, double interest or liquidated damages, reasonable attorney fees and costs, and any other relief the Court deems appropriate. 29 U.S.C. § 1132(g)(2) (emphasis added). A multiemployer plan may recover audit costs under § 1132(g)(2)(E). Moriarty ex rel. Local Union No. 727 v. Svec, 429 F.3d 710, 721 (7th Cir. 2005). Here, the Plaintiffs submitted evidence that the audit cost is $514.30.

         The “double interest” provision provides that, on top of an initial interest award, the prevailing plan is entitled to either a second award of interest on the unpaid contributions or 20% of the unpaid contributions, whichever is greater. 29 U.S.C. § 1132(g)(2)(C)(i)-(ii). The interest penalty provision applies to contributions that are unpaid at the date of suit. See Operating Eng'rs Local 139 Health Benefit Fund v. Gustafson Constr. Corp., 258 F.3d 645, 654 (7th Cir. 2001). These statutory remedies are mandatory. See Moriarty, 429 F.3d at 720-21. In the instant case, the liquidated damages for the withdrawal liability total $7, 232.88.[3]

         The Plaintiffs have submitted evidence that their attorney fees total $33, 716.25, [4] with an additional $2, 277.39 in costs. The Court has wide discretion to determine whether attorney fees are reasonable. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). In the Seventh Circuit, district courts must examine whether attorney fees represent a large multiple of the damages claimed or recovered, and also explain the claimed hourly rate. Moriarty, 233 F.3d at 965, 968. However, attorney fees are not required to be calculated proportionally to damages. Anderson v. AB Painting & Sandblasting, Inc., 578 F.3d 542, 545 (7th Cir. 2009) (reversing district court that held $50, 000 in attorney fees could not be justified to collect $5, 000 in damages). Here, attorney fees are slightly below, but nearly equal to, the unpaid contribution amount.

         To date, Attorney Teresa A. Massa has worked 149.85 hours on the case. The case has spanned nearly two years, and the number of hours worked involved discovery, briefing for a summary judgment motion, and briefing for damages. Further, Plaintiffs have submitted a detailed time schedule and affidavit to support the attorney fees and cost calculation. Attorney Massa billed at $225.00 per hour, which is in line with rates for similar cases. See, e.g., Local 1546 Welfare Fund v. BBHM Mgmt. Co., No. 08 C 6133, 2011 WL 1740034, at *2 (N.D. Ill. May 5, 2011); Misch v. Piping Techs. N., Inc., No. 2:06-CV-425, 2010 WL 535713, at *1 (N.D. Ind. Feb. 4, 2010). The total time spent on the case is also in line with similar ERISA collection cases. See Chi. Reg'l Council of Carpenters Pension Fund v. Rink Sys., Inc., No. 13 C 4886, 2014 WL 5863156, at *2 (N.D. Ill. Nov. 12, 2014). Given the Plaintiffs' highly detailed submission, the Court can make the finding that the requested fees and costs are reasonable. The Defendants object on multiple grounds, and the Court will address each objection in turn.

         B. Defendants' Damages Objections

         The Court does not find the Defendants' objections to damages persuasive, but ...


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