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Wise v. United Mine Workers of America Health and Retirement Funds

September 18, 2006

HERBERT J. WISE, PLAINTIFF,
v.
UNITED MINE WORKERS OF AMERICA HEALTH AND RETIREMENT FUNDS, AND A. FRANK DUNHAM, TRUSTEE, MICHAEL H. HOLLAND, TRUSTEE, MARTY HUDSON, TRUSTEE AND ELLIOT A. SIEGAL, TRUSTEE, DEFENDANTS.



The opinion of the court was delivered by: Conti, District Judge.

MEMORANDUM ORDER

Pending before the court are cross-motions for summary judgment filed by plaintiff Herbert J. Wise ("plaintiff") and defendants United Mine Workers of America Health and Retirement Funds (the "Funds")*fn1 and the trustees of the UMWA 1993 Benefit Plan (the "Trustees" or the "1993 Benefit Plan Trustees")*fn2 -- Frank Dunham, Michael H. Holland, Marty Hudson, and Elliot A. Siegal -- (collectively the Funds and the Trustees are referred to as "defendants"). The cross-motions concern the denial of plaintiff's claim for health benefits. The central issue in this case is whether the Trustees acted in an arbitrary and capricious manner by denying plaintiff health benefits.

Plaintiff moves for summary judgment (Doc. No. 14) arguing that the Trustees' decision to deny him health benefits was arbitrary and capricious. Defendants also move for summary judgment (Doc. No. 11) arguing that the Trustees' decision to deny plaintiff health benefits was not arbitrary and capricious because the Trustees acted in accordance with collectively-bargained eligibility requirements. The court will affirm the Trustees' determination to deny plaintiff health benefits because defendants did not act arbitrarily or capriciously in denying plaintiff health benefits pursuant to the 1993 Benefit Plan guidelines. The guidelines explicitly state that deferred vested pensioners with less than twenty years of service like plaintiff are not eligible for health benefits and by acting in accordance with the guidelines the Trustees did not violate their fiduciary duties when plaintiff was denied health benefits.

Factual Background

I. Plaintiff's Employment

Plaintiff worked in signatory "classified employment" in the coal industry for the Consolidation Coal Company between March 31, 1951, and February 26, 1953. Joint Statement of Facts ("J.S.") ¶ 2. Signatory "classified employment" or signatory "classified service" refers to work performed in the coal industry under the provisions of the National Bituminous Coal Wage Agreement (the "NBCWA"), the collective bargaining agreement that has been negotiated and signed by the United Mine Workers of America (the "UMWA") and the Bituminous Coal Operators' Association (the "BCOA") for many years. Id.

The NBCWAs*fn3 govern the terms and conditions of employment for miners in signatory classified employment in the coal industry. Id. ¶ 3. The NBCWAs, in addition, provide for certain pension and retiree health benefits for eligible retired coal miners who meet the eligibility requirements of the collectively-bargained pension and health benefit plans incorporated into the NBCWAs. Id.

Plaintiff was a member of the UMWA during the period that he was employed in signatory classified service in the coal industry. Id. ¶ 4. In 1953 he left signatory classified service in order to join the United States Army. Id. After completing his military service in 1955, plaintiff worked outside of the coal industry for approximately fifteen years before he returned to signatory classified employment in the coal industry in November 1970 with the Vesta Mining Company ("Vesta Mining"). Id. Plaintiff continued to work for Vesta Mining for fourteen years, from November 23, 1970, until January 1984. Id. A few months later, in July 1984, plaintiff briefly was recalled to Vesta Mining for two months before Vesta Mining laid him off again.Id.

In February 1985, plaintiff obtained signatory classified employment in the coal industry with High Tech Collieries ("High Tech"). Id. ¶ 6. Plaintiff worked for High Tech from February 1985 until he was laid off in March 1986. Id. At the time plaintiff was laid off, he was 53 years old and had a total of approximately 17.25 years of signatory credited service in the coal industry.*fn4 Id. Following plaintiff's layoff in March 1986, Interstate Thermal Energy Conversion Corporation ("ITEC") acquired High Tech's coal preparation plant. Id. ¶ 8. In light of this acquisition, ITEC assumed High Tech's obligation to honor plaintiff's panel rights as a laid-off employee. Id.

In early June 1993, plaintiff received a letter dated June 10, 1993, to "All Panel Member Being Considered for Recall" from Mark A. Sharpe, the General Manager of ITEC, that informed plaintiff "[t]here will be an 8 hour 'Annual Refresher Training Class' . . . on Tuesday, June 15, 1993." Id. ¶ 9. Defendants assert, and the letter provides, that this letter notified recipients "[i]f you are determined eligible for recall your attendance at the class will assist in your ability to return to work at an earlier date." See id.; Exhibit to J.S. ("Ex.") 1 at 00198 (June 10, 1993 Letter from Mark Sharpe). Defendants assert, although plaintiff disputes, that the retraining offered to plaintiff and other miners on the High Tech panel was both voluntary and unpaid, and that a miner's participation or lack thereof in the voluntary retraining had no effect on a minor's panel rights. See id.

Plaintiff attended and participated in this voluntary refresher training class. Id. ¶ 10. Plaintiff did not receive any wages, benefits or other compensation for his attendance. Id. Plaintiff acknowledges that he did not work in the coal industry following this course. See id. ¶ 10-11 (Plaintiff disputes that he "was not recalled to work at the mine," but acknowledges that his last classified employment in the coal industry occurred in March 1986 when High Tech shut down); see also J.S. Ex. 1 at 00001-6 (Plaintiff's June 23, 1993 Application) (In space provided to describe the reason he stopped working, plaintiff answered "Mine Shutdown Hytech Collery [sic] shut their facility down." In addition, plaintiff indicated when listing his employment history on this form that his last employment was with High Tech from February 1985 to March 1986.).

II. Plaintiff's 1974 Pension Plan Requests

Plaintiff first applied for a pension from the UMWA 1974 Pension Plan ("1974 Pension Plan") on June 23, 1993.*fn5 Id. ¶ 11. The 1974 Pension Plan was created under the NBCWA and provides pension benefits to eligible coal miners who otherwise meet the 1974 Pension Plan's eligibility criteria.*fn6 Id. At the time he initially applied for a pension from the 1974 Pension Plan on June 23, 1993 (eight days after taking the training course), plaintiff indicated that his last classified employment in the coal industry occurred in March 1986 when High Tech shut its facility down. Id. ¶ 11. The 1974 Pension Plan trustees, after reviewing plaintiff's application and his work history, determined that he was eligible for a deferred vested pension with an effective date of June 1, 1993, based on his 17.25 years of service in the coal industry. Id. ¶ 13. The deferred vested pension is:

[p]ayable to any participant who is not eligible to receive a pension under any other provision whose employment in a classified job with an Employer is terminated for any reason, and who, at the time of retirement has at least 10 years of signatory service, or at least 20 years of credited service.

Id. ¶ 12.*fn7 Under the 1974 Pension Plan, "retirement" is defined as the last day that a participant earns credited service, not the day that benefits commence. Id. n.3; see also J.S. Ex. 3 at 4 (1974 Pension Plan, Article II.B) ("When Retirement Occurs") ("[R]etirement shall be considered to occur on the last day of credited service . . . provided that on such day he was eligible for an immediate or deferred pension under this Plan."). Plaintiff did not appeal this determination. Id.

¶ 14.

In 1996, plaintiff, having been awarded deferred vested pension benefits in 1993, applied for a disability pension from the 1974 Pension Plan. Id. ¶ 15. Plaintiff's application was unsuccessful. See id.; see also J.S. Ex. 1 at 00050 ("Mr. Wise not sure he wants to pursue . . . . He's not sure he would be disabled [from a mining accident] . . . . Hold open for 90 days. Void if no response in that time.").

In 1999, plaintiff requested that the 1974 Pension Plan award him pension service credit for the two years he had served in the United States Army from 1953 to 1955. Id. ¶ 16; J.S. Ex. 1 at 00055-57. Plaintiff's request was denied. Id. ¶ 17. On September 28, 1999, the 1974 Pension Plan held a pre-hearing conference at the Washington, Pennsylvania, Field Service Office with plaintiff regarding the denial of pension service credit for his past military service. Id. ¶ 17; J.S. Ex. 1 at 00055-62. At this conference, and in the "Decision on Review" that followed, the 1974 Pension Plan representatives explained that, under the terms of the 1974 Pension Plan, a participant must return to classified employment within twelve months after the date of separation from the military to receive pension credit for the military service. Id. Plaintiff subsequently appealed this decision and invoked his right to a hearing which was held on January 28, 2000. Id. ¶ 18; J.S. Ex. 1 at 00056. After review of plaintiff's application, it was determined on appeal that plaintiff was not eligible for the service credit based upon his military service because he was discharged from the military in March 1955 and had not returned to classified employment within the required twelve-month period, but instead had returned to work approximately fifteen years later in 1970. Id.

Later in 2000, plaintiff sought to change his 1974 Pension Plan benefit from a deferred vested pension to an age 55 pension based upon his attendance at the ITEC voluntary refresher training class during June 1993. Id. ¶ 19; J.S. Ex. 1 at 00199 (March 22, 2002 Letter from Kyu W. Lee to Plaintiff). In late 2001, the trustees of the 1974 Pension Plan concluded that plaintiff was not entitled to an age 55 pension because his last date of credited service in the coal industry had occurred in 1986 when plaintiff was 53 years old. Id. ¶ 20. The trustees of the 1974 Pension Plan did not grant plaintiff any service credit for his one day voluntary unpaid retraining with ITEC during June 1993. Id.; ...


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