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David Hatchigian v. I.B.E.W. Local 98

January 15, 2013

DAVID HATCHIGIAN PLAINTIFF,
v.
I.B.E.W. LOCAL 98, HEALTH & WELFARE FUND, ET AL. DEFENDANTS.



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

MEMORANDUM

Currently pending before the Court is the Motion for Summary Judgment of Defendants International Brotherhood of Electrical Workers Local Union No. 98 Health and Welfare Fund ("Welfare Fund") and the Board of Trustees of Local Union No. 98 Health & Welfare Fund ("Trustees"). For the following reasons, the Motion is granted.

I. FACTUAL AND PROCEDURAL BACKGROUND

This case arises out of Plaintiff David Hatchigian's claim that he was improperly denied benefits by Defendants who allegedly acted in an arbitrary and capricious manner.

The International Brotherhood of Electrical Workers, Local Union No. 98 Health and Welfare Fund is a trust fund established under 29 U.S.C. § 186(c)(5) to fund benefits for employees. (Defs.' Mot. Summ. J., Ex. 3, IBEW Revised Trust Agreement, D40201--D40230.) The Welfare Fund provides benefits to employees represented by a labor union, the IBEW Local Union No. 98, in collective bargaining with employers. (Defs.' Mot. Summ. J., Ex. 3, IBEW AFL-CIO Health and Welfare Fund Summary Plan Description ("Benefits Plan Description"), D20029.) Plaintiff David Hatchigian is a participant in the Welfare Fund. (Compl. ¶ 3; Answer ¶ 3.)

On August 17, 2007, Mr. Hatchigian received notice from the Welfare Fund that his benefits were being terminated because he did not meet the minimum requirement of three hundred and fifty hours worked during the previous quarter. (Defs.' Mot. Summ. J., Ex. 3, Aug. 17, 2007 Letter from Debra Rand-Gerber to David Hatchigian, D00058.) The notice also informed him that he could choose to elect continuing coverage through self-payment pursuant to the Consolidated Omnibus Budget Reconciliation Act (COBRA). (Id.)

In a letter dated September 21, 2007, Mr. Hatchigian then wrote to Harry Foy, President of IBEW Local Union 98, that he was appealing the termination of his benefits. (Defs.' Mot. Summ J., Ex. 3, Sept. 21, 2007 Letter from Hatchigian to Foy, D00060.) In this letter, Mr. Hatchigian claimed he was eligible for continued coverage under Section E of the Health and Welfare Benefits Plan. (Id.) Section E, entitled "Supplemental Coverage Under Emergency Economic Conditions," provides for continuing coverage to employees "who are on work layoff and cannot find work opportunities due to economic conditions." (Benefits Plan Description, D20056.) The Section notes that such supplemental coverage is available "[t]o the extent the Trustees determine that the Plan's assets are sufficient," and notes that the Trustees "may" provide for benefits for such individuals. (Id.) The Plan later states, however, that, "[u]pon determination that the Plan's assets are sufficient and economic conditions warrant, the Fund will provide supplemental coverage." (Id.) (Emphasis added) Finally, at the conclusion of the section, the Plan states that "the trustees have the power and duty to terminate coverage or to revise the conditions for coverage under this provision at any time they determine that such termination or revision is necessary to preserve the fund's assets or that economic conditions have changed." (Id., original text in bold typeface and all caps).

Mr. Foy responded to this letter on October 11, noting that the letter was misdirected to the wrong person and needed to be addressed to the Board of Trustees of the Health and Welfare Fund's Trustees. (Defs.' Mot. Summ. J., Ex. 3, Oct. 11, 2007 Letter from Foy to Hatchigian, D00061.) Mr. Hatchigian subsequently sent an appeal on November 19 to the Welfare Fund raising the same concerns as in his letter to Foy. (Defs.' Mot. Summ. J., Ex. 3, Nov. 19, 2007 Letter from Hatchigian to Welfare Fund, D00080--81.) This appeal was denied in a November 29 letter sent from Frank M. Vaccaro and Associates, administrators of the Welfare Fund. (Defs.' Mot. Summ. J., Ex. 1, Nov. 29, 2007 Letter from Vaccaro to Hatchigian, D00215--17.) In this letter, the Fund noted that the Trustees had decided not to invoke Section E:

[C]ontinued coverage under Section E is only provided if the Trustee's [sic] make a determination that the Plan's assets are sufficient and that economic conditions warrant the extension of coverage. The Trustees however, have not made a determination that economic conditions warrant the continuation of coverage in 2007 for individuals who are on layoff. Accordingly, the Trustees have not invoked the provisions of Section E. (Id.)

Mr. Hatchigian sent an amended communication to the Fund, reiterating his appeal from November 19 that he was eligible for Supplemental Coverage under Section E. (Defs.' Mot. Summ. J., Ex. 3, Nov. 30 2007 Letter from Hatchigian to Welfare Fund, D00095.) This second appeal was considered and denied by the Board of Trustees at their January 2008 meeting, and Mr. Hatchigian was subsequently notified of the decision in a January 22, 2008 letter. (Defs.' Mot. Summ. J., Ex. 3, Jan. 2008 IBEW Health & Welfare Fund Trustees' Meeting Minutes, D40129; Complaint ¶ 22--23; Answer ¶ 22--23.)

During the August 2007 quarter, Mr. Hatchigian was eligible for and elected to receive COBRA continuing coverage by self payment. (Defs.' Mot. Summ. J., Ex. 3, COBRA Application Checklist, Participant Contribution Inquiry, and Screen Printout Noting Coverage, D10051--53.) On November 6, 2007, the Welfare Fund notified Hatchigian that his COBRA coverage was terminated for August 2007 because he did not pay the required premium. (Defs.' Mot. Summ. J., Ex. 3, Nov. 6, 2007 Letter From Vaccaro to Hatchigian re: COBRA, D00070.) The subsequent two quarters, from November 2007 through April 2008, Mr. Hatchigian was eligible for benefits due to working the requisite number of hours. (Defs.' Mot. Summ. J., Ex. 3, Nov. 16, 2007 Draft Letter from Gerber to Hatchigian, D00079.)

In the January 2008 work quarter, Mr. Hatchigian again was under the minimum 350 hour requirement. (Defs.' Mot. Summ. J., Ex. 3, Nov. 2, 2010 Draft Letter from Gerber to Hatchigian, Attachment of Work Hours Printout, D00196.) Mr. Hatchigian was notified that he was ineligible for benefits and could again elect self-payment rights under COBRA. (Defs.' Mot. Summ. J., Ex. 3, May 27, 2008 Letter from Gerber to Hatchigian, D00102.) Though Mr. Hatchigian again elected to receive continuing coverage under COBRA, there is no record of any COBRA payment by Mr. Hatchigian for this benefit quarter. (Defs.' Mot. Summ. J., Ex. 3, May 27, 2008 COBRA Application Checklist, D10070.)

For the next eight quarters, Mr. Hatchigian was ineligible for benefits, as he did not meet the minimum 350 hours during any period. (Defs.' Mot. Summ. J., Ex. 3, Nov. 2, 2010 Draft Letter from Gerber to Hatchigian, Attachment of Work Hours Printout, D00193--96.) After being denied coverage during this time frame, Mr. Hatchigian eventually retired and was granted long term coverage for health benefits on June 1, 2010. (Complaint ¶ 28; Answer ¶ 28.)

Mr. Hatchigian brought suit on August 15, 2011 bringing two counts: (1) Violation of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. ("ERISA") and (2) Violation of the Labor Management Relations Act of 1947 ("LMRA"), 29 U.S.C. § 141 et seq. Defendants filed the current Motion for Summary Judgment on both counts on October 10, 2012. Plaintiff filed a Response in Opposition on November 26, ...


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