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FOLEY v. IBEW LOCAL UNION 98 PENSION FUND

March 29, 2000

EDWARD J. FOLEY, SR.
V.
INTERNATIONAL BROTHERHOOD OF ELECTRICAL WORKERS LOCAL UNION 98 PENSION FUND, ET. AL. DEFENDANTS.



The opinion of the court was delivered by: Reed, S.J.

  MEMORANDUM

Plaintiff was denied a portion of his accrued pension benefits and now brings claims under the Employee Retirement Income Security Act, 29 U.S.C. § 1001, et seq. ("ERISA"), the Labor Management Reporting and Disclosure Act of 1974, 29 U.S.C. § 401, et. seq. ("LMRDA"), and the Internal Revenue Code,. 26 U.S.C. § 411 and 412. Now before this Court are the cross-motions of plaintiff Edward J. Foley, Sr. (Document No. 46), and defendants International Brotherhood of Electrical Workers Local Union 98 Pension Fund, et. al., (Document Nos. 44 and 45).

I. BACKGROUND

Edward Foley, Sr., was a union member who contributed to the International Brotherhood of Electrical Workers Local Union No. 98 Pension Fund from 1959-1971. He earned 12.5 years of pension credits during that time. In 1971, he was fired from employment covered under the plan (employment in the electrical industry), and from 1971 to 1981, Foley did not work in covered employment.*fn1 He claims that he continued to seek employment in the electrical industry during the 1971-81 by contacting union offices and members for job references. While Foley was not involved in covered employment and thus earned no pension credits from 1971-81, apparently he remained active in union affairs, voted in union elections, and taught courses for union members during that time. Foley returned to covered employment in 1981 and eventually became president of the union and a trustee of the pension fund. He retired and sought pension benefits in 1996.

The controversy in this case surrounds plaintiff's 1971-81 hiatus and its effect on the benefits plaintiff had accrued prior to it. The International Brotherhood of Electrical Workers Local Union No. 98 Pension Plan ("plan") contains a "break in service" provision under which accrued pension credits lapse when an individual fails to work 600 hours in covered employment for a consecutive two-year period. (Plaintiff's Motion for Partial Summary Judgment, Ex. A, International Brotherhood of Electrical Workers Local Union No. 98 Pension Plan, at 3) ("break-in-service provision"). It is undisputed that Foley failed to work for 600 hours in covered employment for more than two consecutive years during the 1971-81 period. However, Foley believed he qualified for an exception to the break-in-service provision, under which an individual who suffered a break in service may nevertheless collect pension credits accrued prior to the break in service if s/he can show that s/he was "continuously available for work within the jurisdiction of the Union and was unable to obtain covered employment." (Plaintiff's Motion for Partial Summary Judgment, Exh. A, International Brotherhood of Electrical Workers Local Union No. 98 Pension Plan, at 3) ("available-for-work exception").

In 1988, Foley raised his eligibility for the available-for-work exception to the trustees of the pension fund ("trustees"). The trustees passed a resolution to "change the pension records of Edward J. Foley . . . to reflect that Mr. Foley did not incur a break-in-service because he met the requirements of the Pension Plan [exception] . . . which provides a grace period and obviates the Plan's break-in-service provision." (Plaintiff's Motion for Partial Summary Judgment, Exh. B. Local 98 Pension Trust Fund, Minutes of the Meeting, Dec. 7, 1988, at 13). The matter lay dormant until 1995, when union member Fred Compton,*fn2 who plaintiff claims bore a grudge against plaintiff,*fn3 began raising questions about whether plaintiff was entitled to pension benefits for the years before his break in service. Compton submitted a letter to the pension fund trustees alleging that plaintiff may have misled them in 1988 about his availability for work during his break in service. The trustees reopened the matter and conducted an investigation into the 1988 vote, ultimately concluding that, while plaintiff had not committed misconduct and had produced sufficient evidence to qualify for the available-for-work exception for the most of the years during his break in service (1975-81), he had not proved that he was available for, but unable to, obtain covered work during the years 1972-74. Thus, the pension plan reversed its 1988 determination and concluded that plaintiff did not qualify for the available-for-work exception and was not entitled to credits accrued from 1959-71. (Plaintiff's Motion for Partial Summary Judgment, Exh. G, Letter from Trust Fund Counsel Laurance E. Baccini, Feb. 23, 1995).

The matter again entered a period of dormancy until plaintiff retired and actually applied for pension benefits in July 26, 1996. While his application was granted for benefits accrued from 1981 to 1996, his application for credits accrued during the years 1959-71 was denied in 1996, as were his appeals. Plaintiff then brought this action.

Plaintiff asserts claims under ERISA for recovery of benefits 29 U.S.C. § 1132 (a)(1)(B), and equitable relief under 29 U.S.C. § 1132 (a)(3), against the International Brotherhood of Electrical Workers Local Union 98 Pension Fund ("Pension Fund") and Scott Ernsberger, and John J. Dougherty, Edward Neilson, Joseph Agresti, Thomas J. Reilley, Jr., Dennis Link, William C. Rhodes, Roy Dantz, and Larry Bradley in their capacities as trustees (collectively, the "Plan Defendants"). He also names as defendants the International Brotherhood of Electrical Workers Local Union 98 ("Union") Dougherty and Nielson in their capacities as union officers (collectively, the "Union Defendants"). Plaintiff also asserts claims under the Labor Management Reporting and Disclosure Act, 29 U.S.C. § 412 ("LMRDA"). The Plan Defendants assert counterclaims against plaintiff for breach of fiduciary duty under ERISA.

II. ANALYSIS

The Union Defendants (Document No. 44) and the Plan Defendants (Document No. 45) have each filed motions for summary judgment as to all of plaintiff's claims. Plaintiff has filed a motion for partial summary judgment on his ERISA claims (Document No. 46). The Union Defendants' motion will be granted in full; the Plan Defendants' motion will be granted in part and denied in part; and plaintiff's motion will be granted in part and denied in part.

A. Summary Judgment Standard

According to Rule 56(c) of the Federal Rules of Civil Procedure, "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law," then a motion for summary judgment must be granted. The question before the Court at the summary judgment stage is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." See Anderson v. Liberty Lobby, 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2511 (1986). The Court's role at summary judgment is not to weigh the evidence, but to determine whether there is a genuine issue for trial; that is, an issue upon which a reasonable jury could return a verdict in the non-moving party's favor. See id. at 249, 106 S.Ct. at 2511.

The moving party "bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any,' which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553 (1986). The nonmoving party must then "go beyond the pleadings and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. at 2553.

In deciding whether there is a disputed issue of material fact, the "inferences to be drawn from the underlying facts . . . must be viewed in the light most favorable to the party opposing the motion." Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994 (1962)). On cross-motions for summary judgment, the court must determine separately on each party's motion whether judgment may be entered in accordance with the summary judgment standard. See Sobczak v. JC Penny Life Ins. Co., No. 96-3924, 1997 U.S. Dist. LEXIS 1801 (E.D.Pa. Feb. 14, 1997), aff'd, 129 F.3d 1256 (3d Cir. 1997) (citing 10A Charles Alan Wright, et al., Federal Practice and Procedure 2720, at 23-25 (2d ed. 1983)).

B. ERISA

Plaintiff asserts claims for recovery of benefits under 1132(a) (1)(B) and for injunctive relief under 1132(a)(3). In their motion for summary judgment, defendants assert that plaintiff's claims are procedurally barred and that they fail on the merits.

1. Procedural Objections

a. Timeliness

Defendants first assert that plaintiff did not appeal the trustees' denial of his benefits in a timely fashion and thus failed to exhaust his administrative remedies. Under the plan, defendants argue, Foley had 60 days to appeal the decision of the trustees to deny him credits accrued from 1959-71, and his appeal was received four days after the expiration of the 60-day period. Having failed to exhaust administrative remedies as required under ERISA, defendants contend, plaintiff cannot proceed to the merits of his claim.

The facts regarding the timeliness issue are somewhat convoluted. Plaintiff submitted his application for pension benefits, including credits accrued from 1959-71, on July 26, 1996. (Plaintiff's Motion for Partial Summary Judgment, Exh. L, Pension Application of Edward J. Foley). On September 4, 1996, the pension fund notified him that he would receive only the pension credits accrued from 1981-96, and would not receive credits accrued prior to his break in service. (Plaintiff's Motion for Partial Summary Judgment, Exh. M, Letter from Benefits Administrator, Sept. 4, 1996). On November 6, 1996, plaintiff filed what he believed was an appeal of the decision to deny him credits accrued from 1959-71 due to the break-in-service provision. (Plaintiff's Motion for Partial Summary Judgment, Exh. N, Letter from Edward J. Foley, Nov. 6, 1996). In a letter dated December 12, 1996, plaintiff was notified that his claim for pension benefits for the years 1959-71 was denied, and told he could appeal the denial. (Plaintiff's Motion for Partial Summary Judgment, Exh. Q, Letter from Scott A. Ernsberger, Plan Administrator, Dec. 12, 1996).

On February 5, 1997, plaintiff wrote a letter to the plan administrator, which plaintiff considered a second appeal. (Plaintiff's Motion for Partial Summary Judgment, Exh. P, Letter from Edward J. Foley, Feb. 5, 1997). On April 16, the pension fund administrators sent plaintiff a detailed letter setting forth the status of plaintiff's claim and again afforded plaintiff 60 days to file an appeal. (Plaintiff's Motion for Partial Summary Judgment, Exh. R, Apr. 16, 1997). Plaintiff received that letter on April 21. Plaintiff then submitted an appeal, including a memorandum and affidavits, which was received by the plan administrators on June 24, 1997, 4 days after the 60-day period set forth in the April 16 letter. (Plaintiff's Motion for Partial Summary Judgment, Exh. S, Petition Appeal of Edward J. Foley, June 23, 1997).

Plaintiff argues that he appealed the denial of benefits twice in a timely fashion (on November 6, 1996, and February 5, 1997) and that the information submitted on June 24, 1997, has no bearing on the timeliness issue. In order to establish whether plaintiff appealed the denial of benefits in a timely fashion, I must first decide when the denial of benefits took place. Plaintiff received three significant letters following his application for benefits in July 1996: the September 4 letter, the December 12 letter, and the April 16 letter. Plaintiff argues that the September 4 and December 12 letters constituted denials, and that he appealed from those letters in a timely fashion. Defendants argue that the April 16 letter was the denial, and that plaintiff's appeal from that letter was untimely.

I am persuaded by plaintiff's argument that the December 12 letter is a denial under the Plan. The Plan does not define "denial," but sets forth these requirements: a denial must be in writing, must set forth the reasons for the denial, and must inform the claimant of his or her right to appeal. (Defendants' Motion for Judgment on the Pleadings and for Summary Judgment, Exh. E, at 64). The December 12 letter did all of this, including informing plaintiff of his right to appeal the decision. (Plaintiff's Motion for Partial Summary Judgment, Exh. Q, Letter from Scott A. Ernsberger, Plan Administrator, Dec. 12, 1996).*fn4 Plaintiff submitted a letter on February 5, 1997, within 60 days of the December 12 letter, in which plaintiff stated, "[P]lease consider this letter as my formal written appeal from your December 12, 1996, decision." (Plaintiff's Motion for ...


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