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Molnar v. Wibbelt

April 30, 1986

ELMER MOLNAR, INDIVIDUALLY AND AS A TRUSTEE OF PLUMBERS AND PIPEFITTERS LOCAL UNION 334 EDUCATION FUND AND BRUCE AURIEMMA, RAYMOND BENESKY, JAMES CORBETT, CHRISTOPHER GIBBON, ROBERT KEAL, JOSEPH MACDONALD, DENNIS MACDONALD, JOHN F. MACDONALD, EDWARD MCLEAVEY, ANTHONY MCLEAVEY, DAVID NOONAN AND CLIFFORD TREDWAY, INDIVIDUALLY AND AS PARTICIPANTS AND BENEFICIARIES OF PLUMBERS AND PIPEFITTERS LOCAL UNION 334 PENSION, WELFARE AND EDUCATION FUNDS, AND THE BOARDS OF TRUSTEES OF PIPEFITTERS LOCAL UNION NO. 274 PENSION, WELFARE AND EDUCATION FUNDS RESPECTIVELY, AND BOARDS OF TRUSTEES OF PLUMBERS LOCAL UNION NO. 14 PENSION, WELFARE AND EDUCATION FUNDS, RESPECTIVELY
v.
WILLIAM WIBBELT, INDIVIDUALLY AND AS A FORMER TRUSTEE OF PLUMBERS AND PIPEFITTERS LOCAL UNION 334 PENSION FUND AND AS A TRUSTEE OF PLUMBERS AND PIPEFITTERS LOCAL UNION 334 WELFARE FUND AND EDUCATION FUND RESPECTIVELY, AND THE BOARD OF TRUSTEES OF PLUMBERS AND PIPEFITTERS LOCAL UNION 334 WELFARE FUND, BOARD OF TRUSTEES PLUMBERS AND PIPEFITTERS LOCAL UNION 334 EDUCATION FUND, AND 301 EAST HANOVER HOLDING CORP., APPELLANTS



Appeal from the United States District Court for the District of New Jersey - Newark Civil No. 84-1728.

Author: Rosenn

Before: GIBBONS, BECKER, and ROSENN, Circuit Judges

Opinion OF THE COURT

ROSENN, Circuit Judge.

In 1977 the parent union of Plumbers and Pipefitters Local Union 334 ordered the local to merge into two new local unions. The local itself merged, but its three benefit funds -- pension, welfare, and education -- continued to exist as separate entities. In 1983, its pension fund merged with the pension funds of the new locals. The principal issue raised in the district court and on appeal is whether the trustees of the welfare and education funds of defunct Local 334 must merge the corpus of those funds with the new locals' welfare and education funds.

The plaintiffs, generally associated with the funds of the new locals, sued in the United States District Court for the District of New Jersey seeking an order under section 302 of the Labor Management Relations (Taft-Hartley) Act, 29 U.S.C. § 141 et seq. (1982), compelling the defendants, trustees of the Local 334 funds, to merge the funds with the courterpart funds of the successor locals. The district court granted the plaintiffs' motion for summary judgment and the defendants appealed. We affirm.

I.

In August 1977 the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada ordered nine northern New Jersey locals chartered and affiliated with it to consolidate into two new locals thereby creating a single plumbers local and a single pipefitters local. Plumber members of Local 334 were transferred to Plumbers Local 14, and pipefitter members of Local 334 became members of Pipefitters Local 274.*fn1

Local 334 had been a party to collective bargaining agreements creating and maintaining pension, education, and welfare funds. The agreements required employers to make payments to the funds for the benefit of Local 334 members. Like Local 334, the new locals also established and maintained pension, education, and welfare funds. As Local 334's collective bargaining agreements expired, the successor locals negotiated new labor agreements which covered, among others, former members of Local 334. The employers made payments only to the benefit funds of the new locals. Between 1977 and 1983 the benefit funds of all former locals, except 334, merged with the counterpart funds of new locals. Anomalously, although Local 334 itself had become defunct as a labor organization, its three funds remained extant. In 1983, Local 334's pension fund merged into the counterpart funds of the new locals, but its education and welfare funds did not.

The genesis of this case is the failure to merge the Local 334 education and welfare funds with the benefit funds of the new locals. The unions themselves are not parties. Plaintiffs are Elmer Molnar, a former member of Local 334, beneficiary of its education and welfare funds, and trustee of its education fund; twelve former members of Local 334 individually and as participants and beneficiaries of Local 334's three benefit funds; and the boards of trustees of the pension, welfare, and education funds of the successor locals. The defendants are William Wibbelt, individually and as a trustee of the Local 334 welfare and education funds and a former trustee of the Local 334 pension fund; the boards of trustee of the Local 334 education and welfare funds; and a New Jersey corporation (Holding Company) created to hold title to real property of the Local 334 Education Fund.

Plaintiffs filed a five-count complaint, each count alleging, inter alia, breach of fiduciary duty. count one sought to compel Wibbelt to transfer to plaintiffs all books, records, and assets of the Local 334 Pension Fund (already merged with the successor pension funds). Counts two and four sought a merger of Local 334's education and welfare funds respectively with those of the successor locals. Count three sought a transfer to the plaintiff-trustees of title to all assets held by the Holding Company. Count five sought an injunctive order restraining Wibbelt from administering the Local 334 education and welfare funds. The defendants filed a counterclaim in which they alleged, inter alia, a breach of fiduciary duty by plaintiff trustees, unfair labor practices, and malicious prosecution.

The plaintiffs moved for summary judgment on their complaint and defendants moved for summary judgment based upon lack of subject matter jurisdiction and failure to state a claim. The district court entered summary judgment granting the injunctive relief requested by the plaintiffs. On appeal, the defendants raise three issues. They assert that the district court lacked jurisdiction to order a merger of the Local 334 welfare and education funds with those of the new locals, that the district court erred in granting summary judgment for the plaintiffs, and that it erred in dismissing the defendants' counterclaim.

II.

We first address the issues of jurisdiction and standing. The plaintiffs asserted in their complaint that section 502 of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1132 (1982), provided the jurisdictional basis for their suit. Section 502(e) unquestionably granted the district court jurisdiction over the subject matter of the ...


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