UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF INDIANA

HAMMOND DIVISION

DAVID THARP, Board of Trustees )

Chairman, and DOUG ROBINSON, )

Board of Trustees Secretary, on )

behalf of INDIANA / KENTUCKY / )

OHIO REGIONAL COUNCIL OF )

CARPENTERS PENSION FUND; )

)

MARK McGRIFF, Board of Trustees )

Chairman, and GREG HAUSWALD, )

Board of Trustees Secretary, on )

behalf of INDIANA / KENTUCKY / )

OHIO REGIONAL COUNCIL OF )

CARPENTERS DEFINED )

CONTRIBUTION PENSION )

TRUST FUND; ) CASE NO. 2:14-CV-458-PRC

)

MARK McGRIFF, Board of Trustees )

Co-Chairman, and WILLIAM NIX, )

Board of Trustees Co-Chairman, on )

behalf of INDIANA / KENTUCKY / )

OHIO REGIONAL COUNCIL OF )

CARPENTERS WELFARE FUND; )

)

MARK McGRIFF, Board of Trustees )

Chairman, and JOE COAR, Board of )

Trustees Secretary, on behalf of )

INDIANA / KENTUCKY / OHIO )

REGIONAL COUNCIL OF )

CARPENTERS JOINT )

APPRENTICESHIP AND )

TRAINING FUND; )

)

DOUGLAS J. McCARRON, Board of )

Trustees Chairman, on behalf of )

UNITED BROTHERHOOD OF )

CARPENTERS APPRENTICESHIP )

TRAINING FUND OF NORTH )

AMERICA; and )

)
INDIANA / KENTUCKY / OHIO )

REGIONAL COUNCIL OF )

CARPENTERS, )

)

Plaintiffs, )

)

v. )

)

FIVE STAR FLOORING, L.L.C., )

)

Defendant. )

OPINION AND ORDER

On September 27, 2016, Plaintiffs Indiana / Kentucky / Ohio Regional Council of Carpenters

Pension Fund, Defined Contribution Pension Trust Fund, Welfare Fund, Joint Apprenticeship and

Training Fund, United Brotherhood of Carpenters Apprenticeship Training Fund of North America,

and Indiana / Kentucky / Ohio Regional Council of Carpenters of the United Brotherhood of

Carpenters and Joiners of America (the “Trust Funds” or the “Carpenters Union”) appeared by

counsel Thomas E. Moss and Suzanne C. Dyer. Defendant Five Star Flooring, L.L.C., appeared by

its General Manager Frank Mattei and by counsel Paul B. Poracky. A contested Bench Trial was

held. The Court received evidence.

Based upon the record of proceedings the Court FINDS, ORDERS, ADJUDGES, and

DECREES:

PROCEDURAL HISTORY

1. On December 23, 2014, Plaintiffs filed their Amended Complaint alleging two

Counts. [DE 5].

2. On September 23, 2015, Defendant Five Star Flooring filed its Answer to Complaint.

[DE 19].

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3. On September 12, 2016, the Final Pre-Trial Conference was held [DE 35].

4. On September 27, 2016, the Bench Trial was held [DE 37].

5. On October 4, 2016, an Amended Pre-Trial Order was filed [DE 40].

6. On November 9, 2016, Plaintiffs and Defendant Five Star Flooring filed their

respective Proposed Findings of Fact and Conclusions of Law [DE 43, 44].

7. The parties orally agreed on the record to have this case assigned to a United States

Magistrate Judge to conduct all further proceedings and to order the entry of a final judgment in this

case. Therefore, this Court has jurisdiction to decide this case pursuant to 28 U.S.C. § 636(c) [DE

23].

FINDINGS OF FACT

8. The Indiana / Kentucky / Ohio Regional Council of Carpenters of the United

Brotherhood of Carpenters and Joiners of America (“the Carpenters Union”) is a labor union

representing and acting for various carpenters in Indiana and elsewhere.

9. The Plaintiff Trust Funds are entities created under the Employee Retirement Income

Security Act (ERISA), 29 U.S.C. §§ 1001, et seq.; they are administered by the Carpenters Union.

10. Defendant Five Star Flooring, L.L.C., is a business based in Valparaiso, Porter

County, Indiana engaged in floor construction, repair, and replacement. From time to time it hires

carpenters to perform carpentry work.

11. On March 12, 2012, the Carpenters Union and the Northwest Indiana Contractor

Association of Indiana, Inc., entered a written contract known as the Collective Bargaining

Agreement (CBA) effective for the time period March 12, 2012, to May 31, 2015. Plaintiffs’ Exhibit

2. The CBA was drafted by the Carpenters Union.

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12. On June 5, 2013, the Carpenters Union and Five Star Flooring entered a written

contract titled a Memorandum of Agreement adopting and incorporating the CBA “and all approved

amendments.” Plaintiffs’ Exhibit 1. The Memorandum of Agreement was drafted by the Carpenters

Union.

13. The Memorandum of Agreement and CBA require Five Star Flooring to submit

monthly written reports of the hours of covered work done by carpenters and the various fringe

benefits owed to the various Trust Funds and the Union on behalf of the carpenters.

14. The Memorandum of Agreement and CBA require that Five Star Flooring deduct

certain amounts of money from the carpenters’ pay checks and forward the withheld money to a

third party depository.

15. The Memorandum of Agreement and CBA require that in the event of untimely

payment, or non-payment, by Five Star Flooring, it must pay the delinquent principal, interest,

liquidated damages, audit fees, attorney fees, and costs.

16. Patrick Cruickshank and Nicholas Landry began as “accepted applicants” with the

Carpenters Union, as probationary apprentice carpenters, both on May 24, 2013. Their probationary

time period was 180 days beginning that date.

17. The wording in the CBA at Article III, Section 3(b), page 5, does not exclude

accepted applicants or probationary apprentices as “employees.” Plaintiffs’ Exhibit 2. The Court

finds that Cruickshank and Landry were employees for the purposes of this case.

18. Sometime in 2013, the Carpenters Union adjusted the pay rates, and fringe benefit

rates, for its carpenters performing commercial carpentry work for the time period June 1, 2013, to

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May 31, 2014, and it drafted and issued an undated written schedule of the adjusted rates which was

received by Five Star Flooring. Plaintiffs’ Exhibit 4.

19. Cruickshank and Landry were hired by Five Star Flooring in 2013. They both

performed commercial carpentry work as floor layers and finishers for Five Star Flooring during

June, July, August, September, and October of 2013.

20. Five Star Flooring paid wages to, and fringe benefits on behalf of, Cruickshank and

Landry in 2013 and submitted written reports to the Carpenters Union. Plaintiffs’ Exhibit 10.

21. The Carpenters Union and the Trust Funds had an audit done for hours worked and

payment of wages and fringe benefits for the Carpenters Union members who worked for Five Star

Flooring. The audit was for the time period January 1, 2013, through December 31, 2013.

22. As a result of the audit, the Carpenters Union and the Trust Funds allege that they

were shortchanged by Five Star Flooring. The Carpenters Union and the Trust Funds allege, based

on the audit, that for the year 2013 Five Star Flooring is delinquent in payment of fringe benefits in

the amount of $7,205.64 in relation to Cruickshank and Landry and that Five Star Flooring also

owes audit fees of $6,350.00, interest of $740.58, and liquidated damages of $720.56 all in relation

to Cruikshank and Landry. The total of these amounts is $15,016.78. Amended Pre-Trial Order [DE

40], pages 4 and 5, paragraph 6.

23. The payroll audit done in this case at the request of the Carpenters Union and the

Trust Funds resulted in a billing of $6,350.00 by the auditor. The auditor billed for 63.5 hours at

$100.00 per hour. Plaintiffs’ Exhibit 8.

24. The audit involved an unspecified number of meetings of the auditor(s) with the

Plaintiffs and Plaintiffs’ attorneys but the number and length of the meetings are unknown.

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25. The auditor’s calculations of deficiencies in this case are mathematical computations

that do not appear to be complex. Plaintiffs’ Exhibit 8. The calculations were done by the auditor

using a Microsoft Excel spreadsheet computer program.

26. Plaintiffs did not present in evidence a specific itemization of the auditor’s time

spent, nor a specific itemized description of auditor’s work done, on this case.

27. The audit fee of $6,350.00 is unreasonably excessive. $2,116.66 is a reasonable

amount for the audit fee.

28. The CBA provides that:

If an audit of an employer’s payroll discloses a delinquency in any of the above

funds in excess of 5% of the total amount due . . . for the time period covered by the

audit, the employer shall be assessed the costs of the audit plus any additional

expenses incurred in the collection . . . including reasonable attorney’s fees and court

costs.

Plaintiffs’ Exhibit 2, Article III, Section 8(a), page 10. 

29. Although the total amount of fringe benefits owed by Five Star Flooring to

Cruikshank and Landry is not in evidence as an amount, the evidence reasonably implies, and the

Court finds, that the total of deficiencies owed them for fringe benefits exceeds 5% of the total

amounts of fringe benefits due by Five Star Flooring for the time period of the audit.

CONCLUSIONS OF LAW

30. The Employee Retirement Income Security Act (ERISA) of 1974, 29 U.S.C. §§ 1001,

et seq., as amended, applies, in part, to any multiemployer plan “which more than one employer is

required to contribute” to and “which is maintained pursuant to one or more collective bargaining

agreements.” ERISA § 1002(37)(A)(i), (ii).

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31. ERISA § 1145 provides, in part: “Every employer who is obligated to make

contributions to a multiemployer plan . . . under the terms of a collectively bargained agreement

shall . . . make such contributions.”

32. ERISA § 1132 authorizes civil actions (lawsuits) to enforce the provisions of ERISA.

33. The Labor Management Relations Act (LMRA) of 1947, 29 U.S.C. §§ 141, et seq.,

as amended, applies not only to most employees but also to labor organizations. LMRA § 152(3),

(5).

34. LMRA § 157 provides that employees and labor organizations may enter collective

bargained agreements (contracts) with employers.

35. LMRA § 185(a) authorizes civil actions (lawsuits) by labor organizations against

employers to enforce collective bargained agreements (contracts).

ANALYSIS

36. This case boils down to how to legally, factually, and reasonably interpret the

Carpenters Union’s document adjusting the wage and fringe benefit rates (Plaintiffs’ Exhibit 4).

37. At all times relevant to this case, Cruickshank and Landry were probationary

apprentice carpenters.

38. The undated document issued by the Carpenters Union adjusting the wage and fringe

benefit rates for the time period June 1, 2013, to May 31, 2014, (Plaintiffs’ Exhibit 4) is poorly

drafted.

39. On the rate adjustment sheet is a section titled “Carpenters Fringe Package” without

using the word “benefits.” Another section is titled “Apprentice Benefits” without using the word

“fringe”.

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40. On the wage adjustment sheet at the “Apprentice Wages” section, located next to the

“Apprentice Benefits” section, are five lines for five categories of apprentices:

1. Probationary 180 Days Apprentices;

2. 1st Year Apprentices;

3. 2nd Year Apprentices;

4. 3rd Year Apprentices;

5. 4th Year Apprentices.

41. At the “Apprentice Wages” and “Apprentice Benefits” sections, the wage adjustment

sheet establishes fringe benefit amounts for each of the five lines. At the first line for Probationary

180 Days Apprentices it states an Annuity rate and amount and a Pension rate and amount and by

asterisk designation it reasonably implies that the amount of the other kinds of fringe benefits remain

unchanged.

42. Five Star Flooring was required by the ERISA, the LMRA, the CBA, and the June

5, 2013, Memorandum of Agreement, in combination, to pay not only the Annuity amount and

Pension amount (as shown at the 180 days probationary apprentice line) but also the six other

“fringes” or “benefits” which are set forth in the “Carpenters Fringe Package” section on the rate

adjustment sheet.

43. Five Star Flooring breached its contractual obligations owed to the Carpenters Union

and the Trust Funds by not paying all of the fringe benefits due for Cruickshank and Landry as

required by the CBA, the June 5, 2013, Memorandum of Agreement, and the rate adjustment sheet,

in combination.

44. The amount of damages suffered by the Carpenters Union and the Trust Funds is

$7,205.64 in fringe benefits unpaid, $2,116.66 in audit fees (amount reduced by the Court), $740.58

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in interest, $720.56 in liquidated damages, for a sub-total of $10,783.44 together with attorney fees

in an undetermined amount.

45. Five Star Flooring alleges that Plaintiffs filed their Amended Complaint in bad faith.

The Court concludes that the claims of the Plaintiffs were not brought in bad faith.

46. Plaintiffs are the prevailing parties in this case.

CONCLUSION

47. The Court hereby ORDERS the Clerk to enter judgment in favor of the Plaintiffs

against Defendant Five Star Flooring, L.L.C., in the amount of $10,783.44 together with statutory

judgment interest from and after November 30, 2016, and together with attorney fees and court

costs. 

48. The Plaintiffs shall file with the Court by December 30, 2016, an itemization of their

attorney fees and court costs incurred in this case. Defendant Five Star Flooring shall have thirty

days from the date of Plaintiffs’ itemization filing within which to file an objection or other

response. No reply shall be filed by Plaintiffs unless the Court notifies otherwise.

So ORDERED this 30th day of November, 2016.

s/ Paul R. Cherry 

MAGISTRATE JUDGE PAUL R. CHERRY

UNITED STATES DISTRICT COURT

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