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Murphy v. Heppenstall Co.

decided: December 10, 1980.

WILLIAM A. MURPHY, MARVIN PEASE, WILLIAM ROGERS, EDWARD BANACHOSKI, ALBERT BETTS, WILLIAM FAHERTY, ALBERT CHRISTMAN, ROMAN KRYSINSKI, CHARLES MANJEROVIC, WALTER REGAN, JOHN AUSTIN, JR., FRANK CONIGLIO, FRANK KUSH, LAWRENCE WIESEN, JOHN CHMILL AND SIDNEY ROBINSON
v.
THE HEPPENSTALL COMPANY, APPELLANT



ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA (D.C. Civil No. 79-0817)

Before Gibbons and Rosenn, Circuit Judges, and Hannum*fn* , District Judge.

Author: Gibbons

Opinion OF THE COURT

Heppenstall Company (the employer) appeals from a grant of partial summary judgment in favor of sixteen retired Heppenstall employees (the employees). The employees sought directly from the employer the difference between the pension payments guaranteed by the Pension Benefit Guaranty Corporation (PBGC), and those provided in the pension agreement negotiated between the employer and the United Steel Workers of America (the Agreement). Finding nothing in the Employee Retirement Income Security Act (ERISA) 29 U.S.C. § 1001 et seq., to preempt contract claims against the employer for pension benefits in excess of those guaranteed by PBGC, we affirm.

I. Facts and Proceedings Below

The underlying facts are the same as in Pension Benefit Guaranty Corp. v. Heppenstall Co., 633 F.2d 293, decided by this court July 30, 1980. In the present action, 16 retired employees brought their contract-based pension benefits claim to the district court two weeks before that court issued its order terminating the employees' pension plan. Invoking 29 U.S.C. § 1132(e) jurisdiction over actions to enforce rights under a pension plan, the employees argued the terms of the pension agreement obligated the employer itself, rather than a fund or an insurer, to pay pension benefits even after termination or expiration of the agreement.

The employer moved to dismiss, urging that the pension agreement did not make Heppenstall directly liable for pension benefits to its employees, that any claim for pension benefits must either be arbitrated, or be resolved in the proceeding terminating the pension plan, and that ERISA preempts contract claims against the employer for sums in excess of those guaranteed by the PBGC. The district court denied the motion to dismiss, and granted partial summary judgment for the employees, postponing the determination of amounts due the employees, but certifying that the summary judgment of liability was a controlling question which should be reviewed pursuant to 28 U.S.C. § 1292(b).*fn1

II. Discussion

The disputed portion of the Heppenstall-United Steel Workers' pension agreement provides:

Section 10.2

Any benefit properly payable pursuant to this Agreement shall continue to be payable, notwithstanding the termination or expiration of this Agreement.

In the event that this Agreement is terminated, in whole or in part, the rights of any participant with respect to whom such termination shall have occurred shall, from the date of such termination or partial termination, be fully vested and nonforfeitable, subject to divestment by reason of death or operation of law, in the benefits established under the Agreement as of the date of such termination or partial termination is effective to the extent those benefits are funded by the Company in accordance with the provisions of Section 8 of this Agreement.

Section 8.1 reads:

For the purpose of supplying the pension benefits herein provided, the Company may establish or cause to be established, a pension trust or trusts or may utilize any existing trust or trusts heretofore established by or on behalf of the Company. The Company is free to determine the manner and means of making ...


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