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LEHNER v. CRANE CO.

March 28, 1978

WILLIAM A. LEHNER
v.
CRANE CO.



The opinion of the court was delivered by: DITTER, JR.

 DITTER, J.

 In this action, plaintiff seeks a declaratory judgment that he is entitled to increased pension benefits under a plan which became effective after his last day of work but prior to the expiration of his accrued vacation time. On the basis of the entire record, I conclude the failure of plaintiff's employer to disclose to him that changes in its retirement plan were imminent is of no moment; plaintiff's employment was not extended beyond the effective date of his resignation by the receipt of accrued vacation pay; and plaintiff's eligibility for benefits is to be determined by the plan in effect when his employment ended and not by the plan which became effective thereafter. Accordingly, judgment must be entered in favor of defendant.

 For all practical purposes, the facts of this matter are not in dispute. *fn1" William A. Lehner, plaintiff, was first employed by defendant, Crane Co., on June 8, 1942. Crane's main office is in New York and it has 16 plants nationwide. In 1974, plaintiff became dissatisfied with his prospects for advancement with Crane. He obtained another job which was to begin April 1, 1974. On or about March 1, 1974, Lehner orally notified his immediate supervisors at Crane that he had accepted a new position and that he intended to terminate his employment at Crane as of March 15. At the urging of these supervisors, he agreed to stay on until March 29, 1974. Written notice of his intention to terminate was not given.

 Sometime prior to March 29, plaintiff completed two forms, a "Termination of Employment" form and a "Change of Employee Status" form. Both stated that plaintiff's last day of work would be March 29, 1974. There was also a notation that plaintiff would receive "vacation pay for 9/12 of 4 weeks." *fn2" On March 29, plaintiff received two checks, one for the pay period March 16 through March 29, and the second for the vacation time. Plaintiff was normally paid semi-monthly, on the fifteenth day and last working day of the month, and certain authorized deductions were taken out of each check for voluntary fringe benefits. *fn3" Lehner was removed from Crane's payroll as of March 29, 1974.

 On several occasions prior to 1974, John Hukill, Crane's manager of employee benefits, had urged management to consider increases *fn4" in the pension program but without success. However, on March 15, 1974, he was instructed to prepare a plan which would substantially increase pension payments. He did so and sent it to Crane's president on March 20, 1974. The proposal was reviewed by Crane executives, submitted to its board of directors, and approved during a board meeting at the company's main offices in New York on March 25. Immediately after the plan was adopted, Hukill drafted a letter for the president's signature to announce the increases. This letter, addressed to the plant managers and industrial relations directors at Crane's facilities, was not mailed until April 1, the date the new plan was to go into effect.

 John A. Hughes, the manager at the King of Prussia plant where plaintiff had been employed, first learned on April 2, 1974, that there were going to be increases in the pension plan when he received a memorandum written in New York and dated March 25. The memo mentioned the directors' action but gave no details. It also contained a handwritten note from Hughes' superior that Hughes was not to make a local announcement until he had heard from B. M. Hutlinger, Crane's director of industrial relations. On April 10, 1974, Hughes received a Hutlinger memorandum directing him to hold meetings with plant employees to explain the changes. Hughes did so before the end of the month.

 Prior to his termination, plaintiff met with both Hughes and Charles Scuron, the comptroller of the King of Prussia plant, but did not make any specific inquiries as to pending changes in the pension program. *fn5"

 Shortly after his leaving, plaintiff was informed of the pension increases by a Crane employee. Plaintiff then wrote to his former supervisor and to the employee responsible for calculating pension benefits inquiring as to what his entitlement would be on July 7, 1989, when he would reach age 65, *fn6" and representing that his employment had terminated on April 24, 1974, the date his accrued vacation time had expired. He received no response to these letters. On March 16, 1976, Lehner wrote to Hukill who replied that the amount would be $242. per month, a calculation which was based on the formula applicable to employees terminating prior to April 1, 1974. Under the formula applicable to employees terminating on or after April 1, 1974, an employee with plaintiff's time and pay bracket would receive $440. per month.

 Plaintiff now seeks a declaratory judgment that he is entitled to the greater pension on three grounds: 1) Crane is estopped from denying him the benefit; 2) his receipt of the accrued vacation pay postponed his retirement until after the effective date of the increases; and 3) the date he terminated work is of no significance -- rather, under the plan, the important date is the one on which an employee "qualifies," that is, attains a stated age and applies for the pension. I shall consider each argument separately.

 2. Crane was under no duty to disclose the impending increases.

 The first aspect of plaintiff's claim is that defendant had some duty to advise him of significant information, known to defendant but not to plaintiff, which would have had a direct bearing on plaintiff's decision to leave Crane. Although plaintiff has not pointed to any specific theory or case on which he relies, it appears that Section 551 of the Restatement (Second) of Torts, *fn7" which defines the circumstances in which liability for nondisclosure may be imposed, is applicable. It provides that not only must there be knowledge but also a duty to disclose this information. Under the circumstances of this case, neither element was present.

 First, Crane had no knowledge and Lehner has not shown that his lack of knowledge was relevant. Lehner's decision to resign was made before Crane decided to change its pension plan -- in fact, Lehner's decision was made and communicated to his supervisors even before Hukill was directed to submit a proposal for increased benefits to Crane's president. Moreover, none of the people who were aware of the pension increases knew that plaintiff had decided to terminate his employment, and none of the individuals who were aware of Lehner's decision to resign had any idea that the corporation's executives had the slightest thought about a change in the pension program. Then too, plaintiff has not shown that even had he been informed of the increased benefits he could have retained his job just because at that point he may have wished to do so, -- after all, the board's action in adopting the change was not made until March 25, four days before Lehner's last day of work. It is entirely ...


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