APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA.
Seitz, Chief Judge, Sloviter and Van Dusen, Circuit Judges.
VAN DUSEN, Senior Circuit Judge.
This appeal from a district court order restoring plaintiff's entitlement to disability benefits under his former employer's pension plan requires consideration of three issues. First, did the pension plan's claims procedure comply with the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1133 (ERISA)? Second, was it an abuse of discretion to award to the plaintiff benefits retroactive to the date of his termination from the plan's coverage? Third, was it an abuse of discretion to enjoin the pension plan from undertaking any prospective termination of plaintiff's benefits without adoption by the plan, and approval by the district court, of a claims procedure consonant with ERISA? We hold that the district court correctly concluded that the pension plan's claims procedure failed to satisfy ERISA requirements and properly awarded the plaintiff retroactive benefits. We also hold that the wording of the injunction prohibiting prospective termination of the plaintiff's benefits was ambiguous. Accordingly, the order of the district court will be affirmed in part and reversed in part and the matter will be remanded to that court for further proceedings consistent with this opinion.
In July of 1973 plaintiff (hereafter "Grossmuller") began receiving disability benefits under the terms of a consolidated retirement benefit plan which had been established by a collective bargaining agreement between his employer, the Budd Company, and the United Automobile, Aerospace and Agricultural Implement Workers of America. A local board, composed of three Budd Company and three union representatives, administered the plan locally by determining the rights of plan participants, by receiving and acting upon benefit applications, by authorizing payments and by notifying participants of any termination or suspension of benefits and the reasons therefor. The national board, consisting of four members appointed by the Budd Company and four by the union, provided forms to claimants to be used in filing and processing applications, heard and determined appeals from the local boards and interpreted the pension plan for participants.
To remain eligible for disability benefits, Grossmuller, a pensioned participant in the plan, could not engage in regular employment or in an occupation for remuneration or profit. In 1977 the Budd Company's personnel manager, a member of the local board, received information leading him to believe that Grossmuller was so employed and therefore no longer eligible for benefits. To investigate, the personnel manager contacted a private detective, who appeared personally before the board with movies allegedly showing Grossmuller tending bar at a country club. The detective also presented a report, based upon an interview with the owner of the club, that Grossmuller was working off a $3800. loan which he had received from the owner. On August 10, 1977, the board, on the basis of this evidence, voted unanimously to terminate Grossmuller's benefits. Five days later the board notified Grossmuller of the decision and cited gainful employment as the basis for terminating his benefits. The board did not apprise Grossmuller of what evidence it considered.
Grossmuller then went to the local union president, Henry Gryn, who was also a member of the local board. At trial, Gryn's and Grossmuller's recollections of their conversation differed. Grossmuller testified on direct examination that Gryn said that the local board had a meeting and found that Grossmuller had been gainfully employed. According to Grossmuller, Gryn gave him a form for filing an appeal but provided him with no other information about the decision.
Gryn, however, recalled that during the colloquy he explained to Grossmuller the evidence presented to the local board, as follows:
"I told him that the evidence was very strong. I told him about the film and the different things that were in the film.
"We also told him about the investigator's comments about the loan that he had. I also told him that he had an obligation to try to give us some evidence that would contradict what was in this film and what was said by the investigator.
"I also explained to him the appeal procedure but I did not give him a form . . . .
"Q But, when you described the appeal procedures to him, that during that conversation that you had with him, you didn't tell him that he had a right ...