~4-
Section 1145 of ERISA creates a cause of action against
employers who fail to make contributions under the terms of a
collective bargaining agreement. 29 U.S.C. § 1145. According to
the Seventh Circuit:
Corporate officers who are not parties to a pension
plan or a collective bargaining agreement requiring
contributions to a pension plan are personally liable
for pension contributions only to the extent they are
liable for general corporate debts under state

corporate law.

Plumbers’ Pension Fund, Local 130 v. Niedrich, 891 F.2d 1297 (7TM

Cir. 1989) (affirming dismissal of the complaint where the
plaintiff failed to allege any basis for establishing personal
liability upon the individual defendants). Therefore, we must
examine Illinois state corporate law to determine whether
Vorkapic may be held personally liable for making the relevant

contributions. See Chicago Title Inst. Welfare Fund v. Hermansen,

No. 94 C 7216, 1996 WL 131800 at *2 (N.D. Ill. March 21, 1996).

The plaintiff argues that Vorkapic is personally liable for
the contributions because MKI was not incorporated at the time
the first CBA was executed, and Vorkapic was operating MKI as a
dissolved corporation between December 1, 1999 and December 18,
2001. We will address only the second argument, as it provides a
clear basis for holding Vorkapic personally liable and,
therefore, for denying his motion to dismiss.

The Illinois Business Corporations Act states (BCA) that

“The administrative dissolution of a corporation terminates its


-7-
Therefore, we hold that Vorkapic cannot avoid personal
liability for contributions to the Funds during the period MKI
was a dissolved corporation.’ See Hermansen, 1996 WL 131800, at
*6 (holding sole stockholder and director of dissolved and
reinstated company personally liable under ERISA § 1145 for

fringe benefit contributions).

CONCLUSION
For the reasons explained above, the motion to dismiss
Vorkapic on the basis that he has no personal liability for

contributions to the Funds is denied.

DATE: April 8, 2002

John F, ady, United States District Jyfige

Y We do not decide today whether Vorkapic is individually liable for all
contributions on the basis that he signed the original CBA in May of 1995, two
months before MKI was incorporated.


-~3-
threaten the actuarial soundness of the pension funds and
threaten to deprive the beneficiaries of the welfare funds of
medical benefits.

Vorkapic brought this motion to dismiss on the basis that he
was never an individual party to the relevant CBAs or employee
benefit plans. He acknowledges that his corporation was
involuntarily dissolved on December 1, 1999 but states that MKI
was reinstated on December 18, 2001, and therefore, the corporate

shield protects him from liability in this matter.

ANALYSIS
The purpose of a 12(b) (6) motion to dismiss is to test the
sufficiency of the complaint, not to resolve the case on the
merits. 5A Charles Alan Wright & Arthur R. Miller, Federal
Practice and Procedure § 1356, at 294 (2d ed. 1990). When
evaluating such a motion, the court must accept as true all
factual allegations in the complaint and draw all reasonable

inferences in the plaintiff's favor. Hentosh v. Herman M. Finch

Univ. of Health Sciences, 167 F.3d 1170, 1173 (7th Cir. 1999).
Dismissal is appropriate only if “‘it is clear that no relief
could be granted under any set of facts that could be proved
consistent with the allegations.’” Ledford v. Sullivan, 105 F.3d

354, 356 (7th Cir. 1997) (quoting Hishon v. King & Spalding, 467

U.S. 69, 73 (1984)).


-5-
corporate existence and such a dissolved corporation shall not
thereafter carry on any business....” 805 ILCS § 5/12.40(c). The
BCA makes “[a]1l persons who assume to exercise corporate powers
without authority ... jointly and severally liable for all debts
and liabilities incurred or arising as a result thereof.” 805
ILCS 5/3.20. In addition:

The directors of a corporation that carries on its

business after the filing by the Secretary of State of

articles of dissolution, otherwise than so far as may

be necessary for the winding up thereof, shall be

jointly and severally liable to the creditors of such

corporation for all debts and liabilities of the

corporation incurred in so carrying on its business.
805 ILcCS § 5/8.65(a) (3). Plainly, Illinois corporate law imposes
personal liability on Vorkapic for operating the business of MKI
while it was a dissolved corporation. See Hermansen, 1996 WL
131800 at *3.

Vorkapic admits that his corporation was dissolved for a two
year period of time but argues that he cannot be held personally
liable for fund contributions because the corporation has been
reinstated. He quotes section 12.45(d) of the BCA, which
provides:

Upon the issuance of a certificate of reinstatement,

the corporate existence shall be deemed to have

continued without interruption from the date of the

issuance of the certificate of dissolution, and the

corporation shall stand revived with such powers,

duties and obligations as if it had not been dissolved;

and all acts and proceedings of its officers, directors

and shareholders, acting or purporting to act as such,

which would have been legal and valid but for such
dissolution, shall stand ratified and confirmed.


Minaie Order Focan (06:97)

United States District Court, Northern District of Illinois

Nan if As od Jud Sitting Judge if Othe
vor Magistrate Judge John F. Grady than Assigned Judge
CASE NUMBER 01 C 1617 DATE April 8, 2002
CASE Fox Valley Construction v. Michael Vorkapic, Inc.
TITLE

Un the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the

nature of the motion being presented.]

MOTION:

DOCKET ENTRY:

(1) oO Filed motion of [ use listing in “Motion” box above.]
(2) Go Brief in support of motion due
(3) a Answer brief to motion due . Reply to answer brief due
(4) a Ruling/Hearing on set for at
(5) Q Status hearing[held/continued to] [set for/re-set for] on set for at
(6) a Pretrial conference[held/continued to] [set for/re-set for] on set for at
(7) a Triallset for/re-set for] on at
(8) ia} [Bench/Jury trial] [Hearing] held/continued to at
(9) Q This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
O FRCP4(m) © General Rule 21 © FRCP41(a)(1) OO FRCP41(a)(2).
(10) a {Other docket entry] Defendant Vorkapic’s motion to dismiss the complaints against him [ | is
denied. ENTER MEMORANDUM OPINION.
(e00) x [For further detail see order (on reverse side of/attached to) the original minute order. ]
No notices required, advised in open court Document
Number
No notices required
number of notes
X | Notices MAILED by judge's staff.
Notified counsel by telephone. APR Al 200
Docketing t@ mail notices. Arey ine
asa
Mail AO 450 form,
tng depuis Wats
Copy
date mailed notice
courtroom, .
KAM deputy's Mk bbl lg i KAM
initials Date/time received in
central Clerk's Office railing deputy ivitiats

(Reserved for use by the Court)



-6-
805 ILCS 5/12.45(d). He argues that the plain meaning of this
language is to absolve the individual from liability where the
corporation has been reinstated.

It is clearly established law in Illinois, however, that
section 12.45(d) may not be used to relieve an individual of
personal liability for debts incurred while carrying on the
business of a dissolved corporation. The Illinois Appellate Court
has explained:

{I]f the reinstatement of the corporation were held to
"relate back" so as to nullify the personal liability
of the person who incurred the debts, a former officer
of a dissolved corporation could obtain credit, and
subsequently shift his personal liability to the
corporation simply by paying the arrearage in franchise
tax. [Citation omitted.] ... [S]uch a result is against
public policy because it would create a mechanism by
which just debts could be easily evaded. We hold that
the reinstatement of a dissolved corporation does not
“relate back" to the time of dissolution so as to
absolve the officers of personal liability for debts
incurred by them during the period of dissolution.

Plepel's Estate v. Industrial Metals, Inc., 450 N.E.2d 1244, 1246

(Ill. App. Ct. 1983); see also Cardem, Inc. v. Marketron Int’l.,

Ltd., 749 N.E.2d 477, 481 (Ill. App. Ct. 2001) (discussing Plepel
and subsequent cases); Hermansen, 1996 WL 131800, at *5 (“Given
that §§ 3.20 and 8.65 establish personal liability for actions
incurred in carrying on the corporation’s business while the
corporation is dissolved, § 12.45(d) at most would make the

corporation potentially liable in addition to the individual.”)


01-1048.021-MV April 8, 2001

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS POCKETED
EASTERN DIVISION APR 17 2002

BOARDS OF TRUSTEES OF THE
BRICKLAYERS LOCAL 74 FRINGE
BENEFIT FUNDS and BOARDS OF
TRUSTEES OF THE BRICKLAYERS
LOCAL 56 FRINGE BENEFIT FUNDS,

and
FOX VALLEY CONSTRUCTION WORKERS’
FRINGE BENEFIT FUNDS, and

MICHAEL T. KUCHARSKI, as
Administrative Manager,

Plaintiffs,

Vv.

MICHAEL J. VORKAPIC, INC., a
dissolved Illinois Corporation,
and MICHAEL J. VORKAPIC,
Individually and d/b/a MICHAEL J.
VORKAPIC, INC., J-A-M Masonry,
Inc., an Illinois corporation, and
EFRAIN PEREA, individually.

Defendants.

MEMORANDUM OPINION
Before the court is the motion of defendant Michael
Vorkapic, individually, to dismiss the complaints against him.

For the reasons explained below, the motion is denied.


-2-
BACKGROUND

The following facts are drawn from the complaints and are
taken as true for the purpose of deciding this motion. The
plaintiffs are fiduciaries and plan sponsors of employee fringe
benefit funds (“Funds”). Defendant Michael J. Vorkapic is the
President and owner of defendant Michael J. Vorkapic, Inc.,
(*MKI”), a bricklaying business incorporated in Illinois on July
14, 1995.

On May 15, 1995, Vorkapic signed a collective bargaining
agreement (“CBA”) on behalf of MKI with the Illinois District
Council No. 1 of the International Union of Bricklayers and
Allied Craftsmen (“District Council”). According to the CBA, the
defendants were required to make contributions to the plaintiff
Funds on behalf of employees performing bricklaying or
bricklaying-related work. The defendants failed to make the
requisite contributions a number of times, and the plaintiffs
initiated at least two lawsuits to compel compliance. MKI was
dissolved on December 1, 1999, but Vorkapic continued to operate
his bricklaying business under that name. Vorkapic signed another
CBA with the District Council in May of 2000. Once again, the
defendants failed to make the requisite contributions to the
Funds, and the plaintiffs filed this lawsuit for violations of
ERISA. See 29 U.S.C. § 1145, § 1132. The plaintiffs allege that

the defendants’ continuing failure to make fund contributions