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TOMCZYSCYN v. TEAMSTERS

July 10, 1984

JOHN TOMCZYSCYN and JOSEPHINE TOMCZYSCYN, Parents and Beneficiaries of GREGORY TOMCZYSCYN, Deceased
v.
TEAMSTERS, LOCAL 115 HEALTH AND WELFARE FUND



The opinion of the court was delivered by: LUONGO

 In this lawsuit, plaintiffs John and Josephine Tomczyscyn seek to recover a $15,000.00 death benefit allegedly due to them as beneficiaries of their deceased son Gregory Tomczyscyn. Plaintiffs allege that, at the time of his death, Gregory was a member of Teamsters Union Local 115, and that he was entitled to life insurance in the stated amount through a health and welfare plan administered by the union and decedent's employer. *fn1" Defendant, Teamsters Local 115 Health and Welfare Fund has filed a motion for summary judgment, arguing that plaintiffs have not exhausted their right to appeal within the Fund, and that the trustees' decision denying plaintiffs' claim was reasonable on the merits. Because I conclude that plaintiffs must, in the first instance, address their claims and supporting evidence to the Fund's trustees through the appeal procedure established by the Health and Welfare Plan, I will grant defendant's motion at this time. However, because I also conclude that the defendant Fund breached its obligation to provide plaintiffs notice of their right to appeal within the Fund, the motion will be granted without prejudice to plaintiffs' right to file a second lawsuit if the plaintiffs take such an appeal within sixty (60) days after entry of this Order and if the trustees thereafter deny benefits.

 Background

 On July 9, 1981, Gregory Tomczyscyn was hired by Air Master Corporation, an employer signatory to a collective bargaining agreement with Teamsters Union Local 115. Pursuant to the agreement, Air Master Corporation contributed to Local 115's Health and Welfare Fund, and bargaining unit members were entitled to the plan's benefits. *fn2" Among those benefits was the $15,000.00 death benefit now sought to be enforced by plaintiffs. *fn3"

 Employees covered by the collective agreement became eligible for benefits after sixty days from their date of hire if a participating employer made contributions on behalf of those employees for 45 days during the sixty-day period. *fn4" Defendant does not dispute that Gregory Tomczyscyn secured initial eligibility under the plan.

 On August 25, 1981, Gregory was injured severely as a result of an occupational accident. Although there is some suggestion in the record that Gregory "may have attempted to return to work on one or two occasions in August or September, 1981," *fn5" it is undisputed that he did not thereafter resume employment before his death in February, 1983.

 On March 4, 1983, plaintiffs, through their attorney, notified the Fund of their request for death benefits. *fn6" By letter dated April 7th, trustee Robert E. Zimmer denied plaintiffs' request, stating that Gregory's death occurred after his eligibility for benefits under the plan had lapsed. *fn7" No further correspondence between plaintiffs and the Fund took place until plaintiffs filed this suit on August 29, 1983.

 The Contentions

 Discussion

 It is now settled law in this Circuit that the policy favoring exhaustion of nonjudicial remedies applies in full measure to ERISA litigation. Wolf v. National Shopmen Pension Fund, 728 F.2d 182 (3d Cir. 1984). The exhaustion requirement, as developed in other areas of labor law, *fn8" permits officials of labor unions and employee benefit plans to meet the responsibilities properly entrusted to them. At the same time, exhaustion serves to reduce the volume of ERISA litigation, and to define the issues and evidence for those cases that reach a judicial forum. See generally Amato v. Bernard, 618 F.2d 559, 567-68 (9th Cir. 1980). See also Grossmuller v. International Union, United Automobile, Aerospace and Agricultural Implement Workers, 715 F.2d 853 (3d Cir. 1983); Wolfe v. J.C. Penney Company, Inc., 710 F.2d 388, 394 (7th Cir. 1983); Kross v. Western Electric Company, Inc., 701 F.2d 1238, 1243-1245 (7th Cir. 1983); Challenger v. Local Union No. 1 of the International Bridge, Structural, and Ornamental Ironworkers, 619 F.2d 645 (7th Cir. 1980).

 In keeping with the strong policies supporting exhaustion, the courts have created few exceptions to the requirement. In general, claimants seeking benefits under an ERISA plan will be excused from exhaustion only if the claimant is threatened with irreparable harm, *fn9" if resort to administrative remedies would be futile, *fn10" or if the claimant has been denied meaningful access to the plan's administrative procedures. *fn11"

 In the instant case, plaintiffs argue that they should be absolved from their failure to comply with the Fund's appeals procedure because the Fund did not notify them of their right to appeal in the letter which denied their request for benefits. This argument raises two questions: first, whether the Fund's denial letter was deficient, and second, whether any deficiencies in the letter operate to excuse plaintiffs from the exhaustion requirement.

 Considering the sufficiency of the Fund's denial letter, I note that the Secretary of Labor has promulgated regulations designed to ensure that ERISA participants and beneficiaries receive full and fair consideration of ...


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