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Airco Industrial Gases Inc. v. Teamsters Health and Welfare Pension Fund of Philadelphia and Vicinity

argued: March 1, 1988.

AIRCO INDUSTRIAL GASES, INC. DIVISION OF THE BOC GROUP, INC., APPELLANT
v.
THE TEAMSTERS HEALTH AND WELFARE PENSION FUND OF PHILADELPHIA AND VICINITY, PENSION TRUST FUND OF PHILADELPHIA AND VICINITY



On Appeal from the United States District Court for the District of Delaware, D.C. Civil Action No. 84-0123.

Seitz, Higginbotham and Cowen, Circuit Judges.

Author: Higginbotham

Opinion OF THE COURT

A. LEON HIGGINBOTHAM, JR., Circuit Judge.

This appeal concerns an employer's suit to recover nearly seven years worth of erroneous overpayments to a multiemployer employee benefit plan. On cross-motions for summary judgment, the district court held that the plaintiff-employer had a federal common law cause of action to recover the overpayments, in the nature of an equitable action for unjust enrichment. After a bench trial, the district court ultimately entered judgment for the plaintiff-employer and ordered the benefit plan to refund the employer's overpayments, but only for the last four months of this seven-year mistake. Thus, while the employer sought to recover approximately $25,000, it recovered only $1,500.

We are unable to review the district court's legal conclusion concerning the existence of a federal common law cause of action, because the defendant-benefit fund has not cross-appealed from the district court's final judgment. The appeal that is before us, brought by the employer, seeks a larger refund than the district court awarded. The employer also appeals from those aspects of the district court judgment that deny interest on the refund award and attorneys' fees.

We hold that the district court's factual findings concerning the applicable refund policy and time period were clearly erroneous because the court disregarded a key pretrial admission of fact. Accordingly, we will vacate the refund award. On remand, the district court will enter a larger refund judgment that reflects the one year refund policy in effect at the time of the employer's refund request. We will affirm, however, the district court's legal conclusions concerning attorneys' fees and interest.

I. BACKGROUND

Appellant Airco Industrial Gases ("Airco"), a corporation located in Delaware, is an employer of unionized labor. Appellee, the Teamsters Health and Welfare Pension Fund of Philadelphia and Vicinity ("the Fund"), is a multiemployer employee benefit plan, as defined by the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §§ 1001-1401 (1982). During the time period in question, Airco was a party to two collective bargaining agreements. One of these agreements (and its predecessor agreements) obligated Airco to make contributions to the Fund on behalf of its driver employees. The other agreement obligated Airco to make pension contributions to a pension plan other than the Fund, on behalf of its production and maintenance employees.

The mix-up underlying this lawsuit began in 1976, when Airco erroneously informed the Fund that two of its employees, John Lucas and Walter Dobromilski, were covered by the collective bargaining agreement that required contributions to the Fund. Without verification, the Fund accepted Airco's representation that it owed the Fund monthly contributions for these two employees. From June 1976 to April 1983, Airco made contributions totaling $25,831.41 to the Fund on behalf of Lucas and Dombromilski. These men, however, were production and maintenance employees, not drivers. Airco, therefore, was not obligated to make any such contributions to the Fund.

During a review in 1983 of its corporate pension plan contributions, Airco discovered its error. On July 6, 1983, it notified the Fund of the situation and demanded a return of the mistaken contributions, with interest. A second such request was made in August 1983. In a letter dated September 26, 1983, the Fund rejected Airco's refund demand.*fn1 The letter declared that "the Trustees of the Teamsters Health and Welfare and Pension Funds of Philadelphia and Vicinity have concluded that no overpaid contributions shall be returned to any employer." Joint Appendix ("J.A.") at 934. The letter also announced the Fund's "further determin[ation] that no contributing employer shall be entitled to an offset against delinquent contributions due and owing." Id. The Fund's administrator stated to Airco, at a later date, that Lucas and Dombromilski, who were not covered by the relevant collective bargaining agreement, would never be eligible to receive benefits from the Fund.

Airco filed this federal lawsuit against the Fund on March 2, 1984 in the United States District Court for the District of Delaware. Airco's complaint alleged four distinct causes of action: (1) an action under section 301 of the Labor Management Relations Act ("LMRA"), 29 U.S.C. § 185 (1982); (2) an action under section 302 of the LMRA, 29 U.S.C. § 186 (1982); (3) an action under section 403(c) of ERISA, 29 U.S.C. § 1103(c) (1982); and (4) an action under the Delaware common law of unjust enrichment. On cross-motions for summary judgment, the district court held that Airco had no express or implied statutory cause of action under LMRA or ERISA. It further held, however, that Airco could maintain an action to recover its erroneous overpayments under "the federal common law of unjust enrichment." Airco I, 618 F. Supp. at 945. Accordingly, Airco was permitted to file an amended complaint, and the matter proceeded to trial.

At the conclusion of a four-day bench trial on the "unjust enrichment" cause of action and a post-trial hearing, the district court entered judgment for Airco. Airco Industrial Gases, Inc. v. Teamsters Pension Trust Fund of Philadelphia & Vicinity, 668 F. Supp. 893, 906 (D. Del. 1987) (" Airco II "). The district court found as a factual matter that the Fund had adopted a "no refund" policy in March 1981 which was still in effect in 1983 when it received Airco's refund request. Id. at 900. The district court also found, however, that due to an error in policy implementation, the Fund had paid refunds to other employers whose claims were for overpayments during the period January to July, 1983. Id. at 903. The district court thus held that, while the Fund's denial of Airco's 1983 refund request was not arbitrary and capricious in light of the "no refund" policy that was in effect at the time of the request, Airco was entitled to recoup its overpayments for the period when the Fund was in fact paying refunds. Id. The district court thus ordered "the Fund to return all excess contributions Airco made on behalf of Messrs. Dombromilski and Lucas from January to April, 1983. . . ." Id. Subject to the necessary audits, the district court estimated that Airco's overpayments during this period amounted to $1,568.00. Id.

Airco, but not the Fund, appealed to this Court. Our appellate jurisdiction is conferred by ...


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