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HIGGINS v. CARPENTERS HEALTH & WELFARE FUND OF PHI

October 19, 1981

Clarence HIGGINS
v.
CARPENTERS HEALTH & WELFARE FUND OF PHILADELPHIA AND VICINITY, et al.



The opinion of the court was delivered by: GILES

MEMORANDUM

INTRODUCTION

 This court has before it defendants' motion for summary judgment. The underlying action was commenced under section 301(a) of the Labor Management Relations Act, 29 U.S.C. § 185(a), and was properly removed to this court. The removal petition filed by defendant states that removal is based upon diversity of citizenship. Since this action was commenced in Pennsylvania and defendant is a resident of Pennsylvania, removal was inappropriate on diversity grounds as stated. See 28 U.S.C. § 1441(b). However, removal is proper under 28 U.S.C. § 1441(b) as a civil action of which this court has original jurisdiction, founded on a claim arising under the laws of the United States. Because the pension plan is an integral part of a collective bargaining agreement, the breach of a section 301 contract has been alleged. Thus, federal jurisdictional prerequisites under section 301(a) are satisfied. Rosen v. Hotel and Restaurant Employees & Bartenders Union, 637 F.2d 592, 596 (3d Cir. 1981).

 Basically, the complaint alleges that the pension trustees and health and welfare trustees who administered the pension and welfare plans in which plaintiff participated breached certain fiduciary duties allegedly owing to plaintiff and improperly denied plaintiff the benefits to which a vested participant would be entitled. Plaintiff essentially seeks either a determination by this court that he is entitled to pension benefits or an order compelling defendants to return to plaintiff all monies collected from employers on his behalf. Defendants have moved for summary judgment pursuant to Fed.R.Civ.Pro. 56(b), claiming that no genuine issue of material fact exists as to plaintiff's entitlement to benefits under the pension plan. It is defendants' position that plaintiff had insufficient credited service under the terms of the plan to be entitled to pension benefits and that, as a matter of law, defendants did not breach any fiduciary duties towards plaintiff.

 For the reasons which follow, defendants' motion for summary judgment is granted.

 FACTUAL BACKGROUND

 Plaintiff, Clarence Higgins is a carpenter and has been a member of the Metropolitan District Council of Philadelphia and Vicinity of the United Brotherhood of Carpenters and Joiners of America (hereinafter "Union") since 1937.

 Both funds are governed by their respective Plan of Benefits (hereinafter "the Plan"). These documents, which are created by the Trustees of the Pension Fund and Welfare Funds, describe precisely what benefits are made available through the Funds and how an individual is to achieve eligibility for those benefits. The parties have agreed that the 1962 Pension Plan will govern for purposes of this summary judgment motion, even though the Plan has been subsequently amended.

 From the inception of the Pension and Welfare Funds on May 1, 1962, an employee's eligibility for pension benefits has rested upon a specified period of "credited service." Essentially, an individual is given a year of "credited service" if he has engaged in "covered employment" for the requisite number of hours. "Covered employment" is employment for which the individual's employer is required by the terms of a collective bargaining agreement to make contributions to the Pension Fund on the individual's behalf. Section 3.3 of the 1962 Pension Plan required that an individual have 15 years of "credited service" in order to be eligible for pension benefits upon retirement at age 65. This was subsequently liberalized to require only 10 years of "credited service." The parties agree that plaintiff needed 10 years of credited service to be eligible for pension benefits upon his retirement. Although the vesting requirement was subsequently reduced, effective May 1, 1978, from 10 years to 5 years of credited service, plaintiff has not claimed to be eligible for this 5 year vesting requirement. To be eligible, an individual must have been an active participant of the work force at the time of the amendment or must have accumulated 400 hours of covered employment by the Plan year ending 4/30/80. It is undisputed that plaintiff was not a member of the work force on May 1, 1978, nor did he work in covered employment after that date.

 The dispute, then, is whether plaintiff has sufficient credited service to meet the 10 year vesting requirement. Plaintiff's employment record is undisputed. From 1937 to 1954, plaintiff worked for an employer who had a contract with the Union. From 1954 to 1970, however, plaintiff became self-employed and, as an employer, hired several persons to work for him. Beginning in 1962, when the Pension Fund was initiated, he made contributions to the Fund, as an employer, on behalf of his employees, but made no contributions on his own behalf. Furthermore, as an employer, he had no collective bargaining agreement with the Union. Plaintiff claims that in 1962 he contacted the Pension Fund Administrators asking if he could make contributions for himself. He was told that, as an employer, he could not make contributions on his own behalf. From 1970 to 1975, plaintiff ceased self-employment and became a "covered employee" for Plan purposes.

 In 1975, for health reasons, plaintiff retired at the age of 671/2. In June, 1975 he wrote to defendants stating that he had 5 years of credited service and that he wished to make retroactive contributions for the years 1962 through 1970, to allow him to qualify for pension benefits. His request was denied. When he ultimately applied for pension benefits, he was found not to be entitled to them, since he did not have the requisite 10 years of "credited service." The parties do not dispute that plaintiff has 5 years of credited service for the years 1970 to 1975. The dispute centers upon whether plaintiff has additional credited service.

 Plaintiff claims that he has the requisite years of credited service based on his employment and Union membership prior to 1970. Alternatively, he claims that in 1962 defendants breached their fiduciary obligation: (1) by not advising him to incorporate so that he could make contributions to the pension fund on his own behalf and (2) by later refusing his request to make retroactive contributions to the Pension Fund.

 Defendants have moved for summary judgment claiming that, under the express terms of the 1962 Pension Plan, plaintiff's Union membership and employment prior to 1970 cannot be credited towards accrual of pension benefits. Defendants also assert that, as a matter of law, they did not breach any fiduciary duty to plaintiff by not advising him to incorporate in 1962, since there was no fiduciary obligation to individually counsel plaintiff. Moreover, they claim that they could not have allowed plaintiff to make retroactive contributions in 1975 since to do so would compromise the Fund's integrity.

 LEGAL PRINCIPLES

 Rule 56(c) of the Federal Rules of Civil Procedure requires the trial court to enter summary judgment whenever it appears from the record evidence that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. The moving party bears the burden of demonstrating that no material issues of fact exist. Ettinger v. Johnson, 556 F.2d 692, 696 (3d Cir. 1977). The non-movant's allegations, supported by affidavits or other evidence, must be taken as true, and all inferences to be drawn from the underlying facts must be viewed in the light most favorable to the party opposing the motion. Scott v. Plante, 532 F.2d 939 (3d Cir. 1976), Moorehead v. General Motors Corp., 442 F. Supp. 873, 875 (E.D.Pa.1977). Even viewing the ...


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