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TEETER v. SUPPLEMENTAL PENSION PLAN OF CONRAIL

January 11, 1989

ROBERT L. TEETER
v.
SUPPLEMENTAL PENSION PLAN OF CONSOLIDATED RAIL CORPORATION



The opinion of the court was delivered by: CAHN

 EDWARD N. CAHN, UNITED STATES DISTRICT JUDGE

 Robert L. Teeter has been an employee of the Consolidated Rail Corporation (Conrail) and its predecessors in interest since April 15, 1949. Although he was entitled to join a forerunner of the defendant pension plan upon initial employment, the plaintiff did not elect membership until May 31, 1956. Plaintiff asserts that the only reason he failed to join the plan immediately was that no one informed him of his eligibility. The defendant grants prior service credit to employees who can show that a late election was caused by such an administrative error. The Pension Administration Committee (Committee) of the defendant, however, found that there was insufficient evidence of a mistake to warrant granting plaintiff's application for retroactive service credit.

 Plaintiff seeks a declaratory judgment that the Committee's decision was in violation of the Employee Retirement Income Security Act (ERISA), 29 U.S.C. § 1001 et seq. A trial was held on the merits, and defendant now asserts that plaintiff's claim is barred by laches or, in the alternative, that defendant complied with ERISA. Because I find that the claim is not barred by laches and that the defendant violated ERISA when it refused to consider certain of the plaintiff's evidence, I will remand this action to the defendant for reconsideration.

 BACKGROUND

 On April 15, 1949, the plaintiff took a position as an assistant engineer at the Springfield, Ohio district office of the New York Central Railroad (N.Y.C.). It is undisputed that he was entitled to join the N.Y.C. pension plan at that time. The plaintiff, however, asserts that while at Springfield he was never informed of the existence of the pension plan. Later, he was transferred to the N.Y.C. office in Cleveland, Ohio, where he was finally told of his eligibility for the plan. He elected to join immediately, and his participation became effective on June 1, 1956.

 Shortly after becoming a member, the plaintiff sent a hand-written letter to the plan administrator inquiring whether it would be possible to make retroactive contributions for the time during which he was unaware of his eligibility. The plan administrator replied with a form letter stating that the plan would not grant credit for service rendered prior to joining the plan. Plaintiff took no further action to enforce his claim at that time.

 On March 4, 1983, the plaintiff began the process which brought this case into federal court. He wrote to George J. Jacks, the administrator of the defendant pension plan, and requested a credit for prior service. The request was denied. The plaintiff then sought assistance from several of his associates at Conrail. These efforts eventually resulted in referral of his claim to the Committee.

 It is the actions taken by the Committee which are at the core of this dispute. The Committee has a policy of granting prior service credit to claimants that can demonstrate they did not join the plan when first eligible because N.Y.C. failed to provide election materials or accurate information about the plan. N.Y.C. administrative practice required employing officers to inform new employees of their right to join the plan and to assist them in electing membership. The Committee, however, will not grant retroactive service credit unless the claimant can demonstrate some tangible evidence of an administrative error. In the absence of contrary evidence the Committee simply assumes that N.Y.C. followed its policy of informing new employees of their eligibility for the plan. In this case the Committee wrote the plaintiff a letter denying his claim on the grounds that the plaintiff had not provided any evidence other than his unsubstantiated allegation. The Plaintiff was informed of his right of review and that he was permitted to submit pertinent documents and comments in writing.

 The Plaintiff asked for a review from the Committee's decision. In conjunction with the review, plaintiff submitted a polygraph examination corroborating his statement that he was unaware of his eligibility between 1949 and 1956. The Committee refused to hear the polygraph evidence on the ground that it was not reliable enough to be used in an adjudicatory setting. Plaintiff's claim was denied for a second time on February 20, 1986.

 On February 28, 1986, plaintiff wrote to the Committee and asked it to reconsider his claim. He specifically asked the plan administrator to have the Committee "advise of any way that I can convince them that my claim is just and truthful." Defendant sent a reply stating that tangible evidence was necessary before plaintiff's claim could be granted and that plaintiff had exhausted the review process. In early August of 1986, plaintiff made another attempt to have his claim reconsidered. He wrote a letter to the Committee and attached notarized statements made by three of his contemporaries at Springfield. Two of the employees had been hired within three months of the plaintiff and the other within 17 months. These employees stated that they too had not been given an opportunity to join the plan on initial employment. The statements obviously rebut the presumption of the Committee that all employees of N.Y.C. were told of the existence of the plan. Nevertheless, the Committee never considered these statements. The plan administrator merely sent a letter to the plaintiff informing him that he had exhausted his rights of appeal.

 Plaintiff then hired a lawyer and filed suit before this court. At trial other evidence tending to support his claim came to light. First, only one of the N.Y.C. employees at Springfield who started around the time when plaintiff began signed up for the pension plan immediately. In fact, that person was the employing officer, who, interestingly enough, was the individual charged with informing the other employees of the terms of the plan. In addition, there was evidence at trial that when a new employee did not want to join the pension plan, he was asked to ...


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