either facial or factual attacks on jurisdiction. Villasenor v. Industrial Wire & Cable, Inc., 929 F.

Supp. 310, 311 (N.D. IH. 1996). If defendant makes a factual attack on the plaintiff's assertion of
subject matter jurisdiction, it is proper for the court to look beyond the jurisdictional allegations
in the complaint and “view whatever evidence has been submitted on the issue to determine
whether in fact subject matter jurisdiction exists.” Capitol Leasing Co. v. F.D.LC., 999 F.2d 188,
191 (7" Cir. 1993) (per curiam); Barnhart v. United States, 884 F.2d 295, 296 (7" Cir. 1989).

To withstand such a motion, the plaintiff must offer “competent proof” that the court
has subject matter jurisdiction. NLFC, Inc. v. Deveom Mid-America, Inc,, 45 F.3d 231, 237 qa
Cir. 1995), cert. denied, 515 U.S. 1104 (1995) (quoting McNutt v. General Motors Acceptance
Corp. of Indiana, 298 U.S. 178, 189 (1936)). Put another way, the plaintiff must prove by “a
preponderance of the evidence or ‘proof to a reasonable probability’ that jurisdiction exists.” Id,

(quoting Gould v. Artisoft, Inc., 1 F.3d 544, 547 (7" Cir. 1993)).

In his motion, defendant argues that, (1) no collective bargaining agreement existed
between Carl Quanstrom (individually) and Local 150 or between Monee Nursery, LLC and
Local 150, and (2) because Monee Nursery is an LLC and Carl Quanstrom is only a member of
the corporation, he cannot be held personably liable.

With respect to his first argument, defendant directs the court’s attention to Laborers

Health & Welfare Trust Fund for Northern California v. Advanced Lightweight Concrete Co.

Inc., 484 U.S. 539, 544-45 (1988), in which the U.S. Supreme Court held that actions under
Section 515 of ERISA, 29 U.S.C. § 1145, are limited to the recovery of “promised
contributions,” and that no subject matter jurisdiction exists under ERISA to collect contributions

after the expiration of a collective bargaining agreement. Defendant argues that because he has



December 14, 2000, Monee Nursery filed a Complaint against Local 150 and the American
Arbitration Association in the Circuit Court of Cook County to vacate the arbitration award. On
January 26, 2001, Local 150 filed a Notice of Removal, and the case was subsequently removed to
this court. On September 12, 2002, Judge Norgle denied Monee Nursery’s motion for summary
judgment seeking to vacate the arbitration award and granted Local 150’s cross-motion for summary
judgment seeking enforcement of the arbitration award. On October 9, 2002, Monee Nursery filed
an appeal of Judge Norgle’s decision, which is still pending before the Seventh Circuit.

On June 10, 2002, Monee Nursery organized under the Illinois Limited Liability Company
Act. Plaintiffs allege that Monee Nursery, LLC maintains its offices at the same address and engages
in the same business as Monee Nursery, and that Monee Nursery, LLC has never made any
contributions to the Midwest Operating Engineers Fringe Benefit Funds. Plaintiffs allege that
defendant undertook to continue the business of Monee Nursery through Monee Nursery, LLC to
avoid the obligations of Monee Nursery, cognizant of Monee Nursery’s continuing liability to the
funds. Plaintiffs’ Amended Complaint alleges that Monee Nursery, LLC is the successor and/or alter
ego of Monee Nursery, which renders the LLC bound to the contract with Local 150, as well.

On March 18, 2003, plaintiffs filed their first amended complaint against defendant,
individually and d/b/a Monee Nursery, LLC, f/k/a Monee Nursery, seeking delinquent fringe benefit
contributions and an audit pursuant to ERISA.

DISCUSSION

Defendant has moved to dismiss plaintiffs’ first amended complaint pursuant to Fed. R.

Civ. P. 12(b)(1) for lack of subject matter jurisdiction, which provides that a court must dismiss

any action for which it lacks subject matter jurisdiction. Rule 12(b)(1) motions are premised on



not “promised contributions,” the court lacks subject matter jurisdiction over the plaintiffs’
claim. Defendant further argues that Section 301 of the National Labor Relations Act (“NLRA”),
29 U.S.C. § 185(a), and Section 502 of ERISA, as amended, 29 U.S.C. §§ 1132, 1145, require a
contract between an employer and labor organization. In his motion, defendant focuses on the
absence of a collective bargaining agreement between himself and Local 150 and argues that, as
in Advanced Lightweight, he has no contractual obligation to plaintiffs. The instant motion,
however, fails to confront the fact that defendant is alleged to have been the sole owner of Monee
Nursery, which an arbitrator and the Elinois Appellate Court have already found to be bound to
the Agreement with Local 150. Defendant’s motion further fails to acknowledge that another
court in this district has already upheld the arbitrator’s finding that the Agreement has not been
terminated pursuant to its terms, and thus remains in effect as to Monee Nursery as well as its
“successors and assigns,” which, based on plaintiffs’ allegations, would include Monee Nutsery,
LLC.

In support of his second argument, defendant cites to 805 ILCS 180/10-10, which
provides that “[a] member or manager is not personally liable for a debt, obligation or liability of
the company solely by reason of being or acting as a member or manager.” Monee Nursery, LLC
was formed on June 10, 2002. The period for which the plaintiffs have requested an audit is

from 1993 to date,” predating the formation of the LLC. Accordingly, defendant may be held

2Although the period of the audit is not specified in the amended complaint, in their
response to the instant motion, plaintiffs attached correspondence dated March 13, 2003, sent
from plaintiffs’ counsel to defendant’s counsel, indicating that plaintiffs sought an audit from
1993 to date. Plaintiffs are directed to amend their complaint to conform with this
representation.



Minute Order Form (06/97)

United States District Court, Northern District of Illinois

Name orcianed wets | Robert W. Gettleman | Sine ute oter

CASE NUMBER 03 C 254 DATE October 9, 2003
CASE William E. Dugan, et al v Carl M. Quanstrom, et al
TITLE

[In the following box (a) indicate the party filing the motion, ¢g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the nature
of the motion being presented. ]

MOTION:

DOCKET ENTRY:

(eo) Oo Filed motion of [ use listing in “Motion” box above.]

(2) im} Brief in support of motion due

@) oO Answer brief to motion due. . Reply to answer brief due.

(4) o Hearing

(5) a Status hearing set for 10/16/03, at 9:00 a.m.

(6) oO Pretrial conference[held/continued to] [set for/re-set for] on set for at
(7) QO Trial[set for/re-set for] on at :

(8) o [Bench/Jury trial] [Hearing] held/continued te at

(9) Oo This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OOFRCP4(m) OGeneral Rule21 OFRCP41(a)(1) OFRCP41(a)(2).

a0) «xf [Other docket entry]

Memorandum opinion and order entered. Defendant’s motion to dismiss
pursuant to Fed. R. Civ. P.12(b)91) for lack of subject matter jurisdiction
is denied.

al @ [For further detail see order attached to the original minute order.]

No notices required, advised in open court.

No notices required.

number of notices

X | Notices mailed by judge’s staff. OCT S 200.
Notified counsel by telephone.

date dockeiod

Docketing to mail notices

Mail AO 450 form. cathe initials | 5

Lynd LOWLSId SN —

Copy to judge/magistrate judge. Wwiai9
ate mailed notice
courtroom, Ply - |a0¢9
cos cour Zid 6- 19069
initials

S| Dateltime received in 13 14
central Clefk?d Office mailing deputy initiats



personally liable for acts occurring between 1993 and June 9, 2002. Defendant’s motion to
dismiss is therefore denied,

One remaining issue merits discussion, however. As plaintiffs implicitly acknowledge in
their response brief, there are no allegations in the amended complaint that would support
holding defendant personally liable for contributions owed by Monee Nursery, LLC.

Although plaintiffs alleged that Monee Nursery, LLC is a successor to Monee Nursery and
therefore is bound to the Agreement, plaintiffs have not alleged that defendant is the alter ego of
Monee Nursery, LLC. Plaintiffs therefore have failed to state a claim against defendant
individually for the obligations of Monee Nursery, LLC?

CONCLUSION

For the reasons stated herein, defendant’s motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(1) for lack of subject matter jurisdiction is denied. This matter is set for a report on status

on October 16, 2003, at 9:00 a.m.

ENTER: October 9, 2003

Wha, op

Robert W. Gettleman
United States District Judge

"In addition, notwithstanding plaintiffs’ representations to the contrary, their amended
complaint was filed against one defendant, Carl Quanstrom. Neither Monee Nursery nor Monee
Nursery, LLC have been served in the instant case, and the caption as well as the allegations of
the amended complaint refer to “defendant.”



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
WILLIAM E. DUGAN, et al, )
Plaintiffs, ) Obi &
) No. 03 C 0254
v. )
) Judge Robert W. Gettleman
CARL M. QUANSTROM, individually and d/b/a)
MONEE NURSERY, LLC, f/k/a MONEE )
NURSERY CO., and MONEE NURSERY & )
LANDSCAPE COMPANY, )
)
Defendant. )

MEMORANDUM OPINION AND ORDER

In their first amended complaint, plaintiffs, the Trustees of the Midwest Operating Engineers
Pension Trust Fund, allege that defendant Carl M. Quanstrom, individually and doing business as
(“d/b/a”) Monee Nursery, LLC, Monee Nursery Co. (“Monee Nursery”), and Monee Nursery &
Landscape Company (“Monee Nursery”), is liable under the Employee Retirement Income Security
Act of 1974 (“ERISA”), 29 U.S.C. §§ 1132, 1145, for neglecting obligations to an executed
Landscaping Memorandum of Agreement with International Union of Operating Engineers Local
150, AFL-CIO (“Local 150”). Defendant has moved to dismiss' the complaint for lack of subject
matter jurisdiction pursuant to Fed. R. Civ. P. 12(b)(1), arguing that, (1) defendant has no contractual
obligation to the plaintiff, and (2) because Monee Nursery, LLC is a limited liability corporation,

defendant, as a managing member of that corporation, cannot be held personally liable for its

1On June 30, 2003, the court sua sponte granted defendant an extension of time from May
8, 2003, to July 14, 2003, to file his reply brief concerning the instant motion. As of the date of
the instant ruling, however, defendant has not filed his reply. Thus, the instant ruling is based on

~ 2003

defendant’s initial motion and plaintiffs’ response. / 5



obligations. For the reasons stated below, the court denies defendant’s motion to dismiss in its
entirety.
FACTS

According to plaintiffs’ first amended complaint, Monee Nursery was owned by defendant’s
parents as co-owners, and then by defendant as a sole proprietor. On July 12, 1984, defendant’s
mother, Myrene Quanstrom, executed a Landscaping Memorandum of. Agreement with Local 150
as “co-owner” of Monee Nursery (the “Agreement”). The Agreement, which was attached as Exhibit
A to the first amended complaint, was entered into by Monee Nursery, its successors and assigns and
incorporated the Master Agreement with Local 150, which set the wages, benefits, and grievance
procedures between Local 150 and amember contractor. According to the first amended complaint,
the Master Agreement provides that the employer agrees to be bound by the terms of the Trust
Agreement of the Fringe Benefit Funds and to make prompt payment of the per-hour contributions
with respect to each Trust Fund. Plaintiff alleges that Monee Nursery has never made contributions
to the Midwest Operating Engineers Fringe Benefit Funds.

Concerned that Monee Nursery was performing bargaining unit work without using Local
150 unit operating engineers, Local 150 requested arbitration of a collective bargaining agreement
with Monee Nursery in December 1993. Monee Nursery subsequently filed suit in state court to stay
the arbitration proceedings, arguing that the Agreement was invalid and, alternatively, had been
abandoned by the parties. The circuit court ruled that Monee Nursery was bound to the Agreement.
This ruling was affirmed on appeal by the Illinois Appellate Court in October 1998.

On September 19, 2000, an arbitrator found that Monee Nursery violated the underlying

Master Agreement and failed to properly terminate the Agreement pursuant to its terms. On