The opinion of the court was delivered by: BY THE COURT; EDWARD N. CAHN
Plaintiff William McVeigh ("McVeigh"), who was employed as the co-pilot of John T. Dorrance's ("Dorrance") personal aircraft from 1979 until Dorrance's death in 1989, is suing Dorrance's executors ("Executors") under the Employment Retirement Income Security Act of 1974, 18 U.S.C. §§ 1001 et. seq. ("ERISA"), for pension benefits that he alleges vested in him during his employment. McVeigh alleges that, despite the absence of a written pension plan or any sign that Dorrance had performed any step to comply with the reporting requirements of ERISA, Dorrance had established a pension plan for his personal staff and that McVeigh was a participant in this plan. McVeigh's claim was tried before me without a jury on April 1-2, 1992. I find that even if had Dorrance established a pension plan under ERISA, (a question upon which this court has no opinion), there is no proof upon which I can conclude that McVeigh was either eligible to, or did in fact, participate in the alleged plan.
Dorrance, a member of the family that controlled the Campbell Soup Company, was a man of great wealth. He had a personal staff that performed a variety of tasks for him, ranging from gardening at his estate to flying his private airplane. He clearly was on very familiar terms with this staff (which numbered about 25 at his death) and seemed to take a personal interest in their well-being. On the other hand, he also seemed to be a very intimidating man: He did not rely very much on outside experts to advise him on the management of his personal estate and staff, and he did not disclose very much of his intentions with regard to the management of his estate and staff to others. Very little, it seems, was written down in any organized fashion.
Dorrance had a practice of retaining many of his employees on his payroll after he decided that they would be "permitted" to retire. He instructed his bookkeeper, Elizabeth Brown, to send paychecks to these employees and these payments were recorded in Ms. Brown's books as stipends sent to "pensioners." At the time of his death, eleven "pensioners" were receiving stipends. On the instruction of Alfred Novello, Dorrance's accountant, Ms. Brown recorded the "pensioners'" stipends on a W-4P form, rather than a W-2 form.
There is no evidence that Dorrance ever took a deduction under 26 U.S.C. § 401(a) for any contribution made by him on behalf of a participant in the alleged pension plan. It appears that Dorrance never placed in writing any description of the alleged plan or the criteria for eligibility under the alleged plan; nor did he establish a clearly demarcated source of funding for the alleged plan; nor did he submit the plan to the Internal Revenue Service to "qualify" it so that he could enjoy the tax benefits associated with 24 U.S.C. § 401(a).
It seems that every one of Dorrance's employees who were "retired" by Dorrance (always after reaching age 65 or older) began to receive checks in their capacity as "pensioners." At least two individuals who left Dorrance's employ to take other jobs apparently possessed no vested pension rights. Dorrance told at least one employee who asked--in order to determine whether to set up an Individual Retirement Account--that that employee had no pension through his employment with Dorrance.
After Dorrance's death, the Executors met and decided to terminate Dorrance's personal staff. They decided to offer severance packages to each employee consisting of a month of current salary for each year of service. They considered and rejected the claim made by McVeigh, Mr. Raef, Mr. Novello, and William Unhoch (Dorrance's Boat Captain), that there was a pension plan and that they qualified for vested benefits under ERISA. These employees as well as some or all of the others were asked to waive all claims to this alleged pension in exchange for their severance pay. The Executors considered the Dorrance estate's obligation to the "approximately ten former employees who were receiving continuing payments" during Dorrance's lifetime, and concluded that "the estate would continue to make these payments for the time being . . . ." See Minutes of Executors' Committee Meeting, August 22, 1988 P 6. McVeigh was offered a severance payment of $ 51,000, which he refused because he would not sign a release with regard to his rights to sue for vested benefits under ERISA.
II. This Court Does Not Need To Decide If There Was A Pension
As noted in this court's Order of February 28, 1992, McVeigh does not have to prove the existence of a written pension plan in order to prove the existence of a plan: Plaintiff may argue that "a pension plan came into existence through the statements and actions of Mr. Dorrance and his agents." McVeigh v. Philadelphia National Bank, No. 90-7943, slip. op. at 1 n.1 (E.D. Pa. Feb. 28, 1992). See also Donovan v. Dillingham, 688 F.2d 1367, 1373 (11th Cir. 1982) (en banc) (stating four part test to determine whether employer established an unwritten pension plan); Frank v. Colt Indus., Inc., 910 F.2d 90, 97-98 (3d Cir, 1990) (adopting Donovan test for establishment of pension plan).
The question of whether a employer can be found to have established a plan where there is no written record of the employer's intent requires careful evaluation of the particular facts of each case. See, e.g., Harris v. Arkansas Book Co., 794 F.2d 358 (8th Cir. 1986) (unwritten pension plan not found to exist despite plaintiff's claim that he was promised pension); James v. National Business Systems, 721 F. Supp. 169 (N.D. Ind. 1989) (unwritten pension plan found to exist), vacated and remanded on other grounds, 924 F.2d 718 (7th Cir. 1991).
In this case, the court declines the invitation of both parties to determine the difficult question of whether Dorrance had established a pension plan. This question is moot, since it is clear from the evidence that even if the pension plan McVeigh alleges existed, McVeigh has adduced insufficient evidence to prove by a preponderance of the evidence that he was either eligible for, or participated in, the alleged plan. Given that McVeigh cannot pass this first threshold, I need not reach the second--whether a plan existed at ...