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decided: March 18, 1975.



William M. Barnes, Schnader, Harrison, Segal & Lewis, Paul C. Madden, James D. Crawford, James J. Leyden, Philadelphia, for appellants; Edward Davis, Philadelphia, of counsel.

William J. Toy, Philadelphia, for appellee.

Jones, C. J., and Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Nix and Manderino, JJ., dissent.

Author: Eagen

[ 460 Pa. Page 413]


This is an appeal from a final decree in equity granting the appellee, Michael Blofsen, pension benefits from the Teamsters Pension Trust Fund of Philadelphia and Vicinity [Pension Fund].*fn1

On September 17, 1965, Blofsen, age 63 and a member of the Teamsters Union since 1938, submitted an application for normal retirement pension benefits. In this application, Blofsen indicated he worked for the American Ice Company [American] from 1923 to 1955, and for the Terminal Ice Company [Terminal] from 1955 to the date of the application. The Pension Fund Trustees [Trustees]*fn2 rejected the application stating Blofsen was

[ 460 Pa. Page 414]

    ineligible for benefits because his employment with Terminal was not as an employee, but as an employer. Blofsen then instituted this action in equity seeking all benefits due him from the Pension Fund, and an evidentiary hearing followed. The chancellor, while holding that Blofsen failed to meet the eligibility requirements established by the Trustees, nevertheless entered a decree nisi granting the requested relief. The chancellor ruled the Trustees, having accepted contributions to the Pension Fund made on behalf of Blofsen, were estopped from invoking the eligibility requirements. Exceptions thereto were later dismissed by a court en banc, and the decree nisi was made a final decree. This appeal was then filed.

The trial testimony*fn3 established that Blofsen entered the ice delivery industry in 1928 as a truck driver for American. However, by June 26, 1953, Blofsen had clearly lost the status of employee. On that date a certificate was filed with the Prothonotary of Philadelphia County stating that Blofsen and James McCaughan were engaged in the business of hauling and delivering ice under the name of "Terminal Ice Company".*fn4 From that date until June 20, 1963, when a certificate of incorporation was granted to "Terminal Ice Company, Inc.", it is clear from the testimony that Blofsen's status was that of an employer. Blofsen testified he purchased several trucks from American for use in the business. He admitted having several employees on the payroll. Blofsen signed collective bargaining agreements with the union, representing himself as the "employer". And Blofsen's

[ 460 Pa. Page 415]

    earnings were commensurate with employer status. For example, in 1954, the year after Terminal was formed, he earned nearly twice the wages paid the highest paid laborer in the industry, covered by union contract.

In order to be eligible for normal retirement pension benefits, certain preconditions must be met. One such requirement is the completion of "20 years of Continuous Service".*fn5 In computing "Continuous Service", provision is made for including employment engaged in both before and after an individual has become covered by the Pension Plan.*fn6 All employment engaged in prior to an individual becoming covered by the Pension Plan is added to all employment after an individual has become covered, provided the prior employment was pursuant to a collective bargaining agreement to which any union covered by the Pension Plan was a party. However, if a "Break in Service" occurs, the individual loses credit for all work performed prior to the break.

When Blofsen applied for a pension, "Break in Service" was defined as follows:

"(a) After first Covered Day

An Employee shall be considered to have a Break in Service after his first Covered Day if he is not in Covered Employment for a period of 104*fn7 or more consecutive calendar weeks.

[ 460 Pa. Page 416]

"(b) Prior to first Covered Day

An Employee shall be considered to have a Break in Service prior to his first Covered Day if his period of Continuous Employment in the Industry as defined in a Collective Bargaining Agreement or by the Union is broken for a period of 104*fn8 or more consecutive calendar weeks."

The record indicates that Blofsen did have such a "Break in Service" prior to his first "Covered Day".*fn9 which could have been no earlier than June 19, 1963.*fn10 Between June 26, 1953, and June 10, 1963, Blofsen was an employer, associated with Terminal. As only employees can be engaged in "Continuous Employment in the Industry as defined in a Collective Bargaining Agreement or by the Union," Blofsen, as an employer, must be considered to have had a "Break in Service" during that period. Having had a "Break in Service", Blofsen loses credit for all work performed prior to the break and, therefore, fails to have the requisite "20 years of Continuous Service".

Blofsen argues that regardless of whether he is eligible under the Pension Plan, the Trustees, having accepted contributions to the Pension Fund on his behalf without complaint, should be estopped from asserting his non-eligibility. He contends the Trustee's actions constituted a tacit representation that he would be eligible for pension benefits and that he relied upon this representation to his detriment as he felt no need to purchase other retirement

[ 460 Pa. Page 417]

    security.*fn11 The trial court agreed with this position.

Equitable estoppel applies to prevent a party from assuming a position or asserting a right to another's disadvantage inconsistent with a position previously taken. P.L.E. Estoppel ยง 21. When a party "by his acts, representations, or admissions, or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief, so that he will be prejudiced if the former is permitted to deny the existence of such facts . . . the person inducing the belief in the existence of a certain state of facts is estopped to deny that the state of facts does in truth exist, aver a different or contrary state of facts as existing at the same time, or deny or repudiate his acts, conduct, or statements." Northwestern National Bank v. Commonwealth, 345 Pa. 192, 196-197, 27 A.2d 20, 23 (1942). See also Tallarico Estate, 425 Pa. 280, 288, 228 A.2d 736 (1967). It is well-established, however, that the burden rests on the party asserting the estoppel to establish such estoppel by clear, precise and unequivocal evidence. Funds for Business Growth, Inc. v. Maraldo, 443 Pa. 281, 288, 278 A.2d 922 (1971); Ham v. Gouge, 214 Pa. Super. 423, 428, 257 A.2d 650 (1969). See also Albert v. Lehigh Coal and Navigation Company, 431 Pa. 600,

[ 460 Pa. Page 418246]

A.2d 840 (1968). We rule Blofsen failed to sustain this burden.

The essential elements of estoppel are "an inducement by the party sought to be estopped to the party who asserts the estoppel to believe certain facts to exist -- and the party asserting the estoppel acts in reliance on that belief." [Emphasis in original.] Sabino v. Junio, 441 Pa. 222, 225, 272 A.2d 508, 510 (1971). Instantly, no evidence was introduced demonstrating that Blofsen's actions were in reliance upon the Trustees' representations, rather than as the result of his own judgment. Northwestern National Bank v. Commonwealth, supra, 345 Pa. at 197, 27 A.2d at 23. There was no evidence which indicated Blofsen acted any differently than he would have acted had he known he was ineligible for pension benefits. In fact, there was nothing in the record to indicate Blofsen had not secured other retirement security. Under the circumstances, we find no basis upon which to apply the doctrine of equitable estoppel.

Finally, Blofsen contests the validity of the "Break in Service" provision. While trustees of an employee pension fund do possess a large measure of discretion in prescribing conditions of eligibility for benefits, they do owe a fiduciary duty to the employees whom they represent and may neither impose unreasonable conditions of eligibility nor act arbitrarily in determining who is eligible. Lee v. Nesbitt, 453 F.2d 1309, 1311 (9th Cir. 1972); Roark v. Boyle, 141 U.S.App.D.C. 390, 439 F.2d 497 (1970). Blofsen contends the "Break in Service" provision, which causes forfeiture of all credit for employment prior to the break, unjustly deprives an individual of his hard-earned pension. Citing Roark v. Boyle, supra, he argues that eligibility for pension benefits would be more equitable if the eligibility requirements were geared to an individual's "entire contribution history".

[ 460 Pa. Page 419]

We need not address Blofsen's contention for it is clear that, even under the test he proposes, Blofsen had only thirty-six months of "contributory employment".*fn12

Decree reversed. Costs on Blofsen.

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